Strength of debt metrics 31 Mar 30 Sept Proportionally Consolidated 2017 2017 Loan to value (LTV) 29.9% 26.9% Weighted Average Interest Rate 3.1% 3.0% Interest Cover 3.6x 4.0x Available Undrawn Facilities £1.0bn £1.5bn Weighted Average Maturity of Drawn Debt (years) 7.7 8.9 31
£76m De-risked development pipeline ERV of Committed & Near Term Developments • Committed pipeline £m – ERV Pre-let or under offer - ERV of £55 million 70 ERV - Almost 60% pre-let or 60 Plymouth £55m (Leisure) under offer 50 - Speculative exposure just 4% 40 - 85% costs to go covered by Clarges residential receipts 30 ERV Teesside £21m (Leisure) • Near term pipeline Bradford (Leisure) 20 - Over 20% let or under offer 10 on ERV of £21 million 0 Committed Near Term Costs to go £446m Costs to go £218m 32
Illustrative future income profile – 5 year basis Annualised Gross Rents Cash Flow Accounting Basis Basis £m £m Current Passing Rent 588 Contracted Uplifts 39 585 Total Contracted Rent 627 Letting of Completed Developments 4 3 Sales completed post period end (5) (5) Lease Expiries – Development pipeline (13) (12) Letting of Committed Developments – let or under offer 32 26 £55m Letting of Committed Developments – to let 23 20 Letting of Near Term Developments (of which £4m let or under offer) 21 17 RPI Linked Leases 1 10 10 Reversion 2 34 32 Exclud es the im p a ct of future sa les a nd p urcha ses Letting of Medium Term Developments (excl. Canada Water) 109 92 On a proportionally consolidated basis including Group’s share of joint ventures and funds. Figures based on valuation rent and include assumptions on outstanding rent review settlements. 1 Assumed at 2.8% per annum and uplift at rent review based on ERVs determined by the Group’s valuers. 2 Includes reversion on expiries and open market rent reviews within 5 years and current portfolio vacancies. 33
Summary - Robust financial platform Over the last 6 years: - LTV reduced from almost 45% to under 27% - Weighted average interest rate reduced from 4.9% to 3.0% - Interest cover almost doubled from 2.2x to 4.0x - Financing costs reduced by 38% - 50% growth in profits 4 Kingdom Street, Paddington - Dividend growth and improved payout ratio 34
Positioned for Growth Chris Grigg Chief Executive
Canada Water: a unique opportunity in central London 36
Canada Water 46 acre m ixed use opportunity in Central London 37
Canada Water Masterplan 5.5 m sq ft Net internal area 2 m sq ft Com m ercial 1 m sq ft Retail & Leisure 3,50 0 New hom es 38
Canada Water Phase 1 1.8 m sq ft Net Internal Area 1 m sq ft Com m ercial 250 k sq ft Retail & Leisure 650 New hom es 39
Substantial growth opportunities Nea r term p ip eline Med ium term p ip eline £ 21 m 135 Bishopsgate, Broadgate Eden Walk Kingston Additional rent Gateway, Paddington 2&3 Finsbury Avenue Leisure-led Retail opportunities 3.2 m 5 Kingdom Street sq ft Stockton, Teesside 40
London Campuses: a winning strategy 41
Capital discipline • Disciplined approach Broadgate to capital allocation Investing in opportunities – that deliver long term value • Expect to be a net seller this year • Our options include Development – Hem pel Gardens Acquisitions – Returning capital – • Flexibility in our decisions Dividend cover highest in 8 years – 42
Positioned for Growth Three distinct advantages: 10 0 Liverpool Street 1. Our strategy Attracting a broader occupier mix – 2. Our financial strength and flexibility Long-term income – Resilient balance sheet – Lower leverage – 3. Attractive development pipeline Diverse and well-funded – Delivering long term, secure income – 43
Appendices
Our Strategy British Land is a leading UK com m ercial property com pany focused on high quality retail and London offices Custom er Orienta tion Right Pla ces We use our insight into We design engaging, custom ers’ needs and identify sustainable places w hich m ajor long term trends to bring people together create environm ents in tune through the right m ix of w ith changing lifestyles occupiers, services and activities Pla ces Peop le Prefer Exp ert Peop le Ca p ita l Efficiency We em ploy expert people We allocate our capital, and w ork w ith specialist m anage our finances and partners to create insight, partner w ith like-m inded develop skills and build organisations to deliver capability sustainable long-term value By m anaging our business to be resilient, sustainable and responsive, w e create enduring dem and for our properties and value for our stakeholders 45
Sustainability – half year highlights Custom er Orientation Right Places W ellbeing Com m unity • Independent consultancy Happy City report highlighting • Young Readers Programme with the National Literacy the positive impact on wellbeing and productivity of our Trust expanded to 28 assets; over 7,500 children took £10m public realm improvements at Paddington Central part in fun, educational literacy events at our places • New facilities launched which support the wellbeing of • “Down Memory Lane” dementia friendly project construction workers at Broadgate, designed by local expanded to eight assets, benefiting 130 local students at the University of East London residents and fostering links with local communities Capital Efficiency Expert People Futurep roofing Skills a nd op p ortunity • 1,100 solar panels installed at Serpentine Green, • Meadowhall refurbishment contributed £32m fulfilling 22% of electricity demand in common areas to the regional economy with 70% of spend and and car parks and saving 3,289 tonnes of CO 2 over 1 in 3 construction jobs staying in Sheffield 25 years • 110 unemployed young people benefitted from our • 100 suppliers took part in our Broadgate Framework Bright Lights “Starting Out” training programme at ten Forum, raising awareness of the social and retail centres, creating positive futures for themselves environmental standards we expect from our suppliers and securing skills our retail and leisure occupiers need 46
Sustainability Indices 2017 performance vs. benchmark . Global Real Estate MSCI ESG Ratings Sustainability Benchmark 2017: ESG Leaders Index. 2017: Five star rating AAA rating for the 2 nd year Green star for 8 th year DJSI World & Europe 1 EPRA Sustainability 2017: 91 st percentile Reporting Awards 2017: Gold for 6 th year Sustainalytics FTSE4Good 1 ESG Ratings 1 2017: 96 th percentile 2017: 98 th percentile . Other benchmarks and awards MSCI disclaimer available http://www.britishland.com/sustainability/performance/benchmarks 1 Sector specific percentile ranking. 47
Placemaking Framework applied across the business We We We We Connect Design Enhance Enliven Com m unication Form Custom er service Occupier m ix On-site hospitality Digital connectivity, Efficient and effective Occupiers and campus branding and marketing buildings and spaces & customer service community Accessibility Authenticity Segm ent m ix Events Convenience How our users feel and Balance of different Bringing people together and access interact with the space segments and uses and attracting visitors Occupier service Com m unity Function Mem orable Facilities and safety Supporting occupiers Supporting experience and British Land value add communities for local Creating lasting, people and occupiers positive impressions 48
Portfolio evenly split between London Offices and Retail; 65% situated in London & South East Offices Retail & Leisure £6.5bn £6.6bn Further £0.3bn at Canada Water and £0.1bn of standalone Residential assets Figures shown on a proportionally consolidated basis including the group's share of properties in Joint Ventures & Funds. 49
Retail Multi-let Portfolio Our two core products each fulfil specific shopper missions Regiona l Loca l Attracting visitors from a wide catchment Fitting into the daily life for a planned trip of local communities Missions include Leisure-dom inated Trips, Missions include Local Neighbourhood Shopper, Fam ily Day Out and The Big Ticket Shop Convenient Leisure and Single Item Pick-Up Typically >30 occupiers Typically 15– 30 occupiers Footfall >10 m , spend >£ 10 0 m p.a . Footfall often <8 m , spend <£ 10 0 m p.a. Drive-time >20 m ins Drive-time <15 m ins Dwell >6 0 m ins Dwell <60 m ins Retail offer covers multiple categories Retail offer covers multiple categories with depth of choice in each & includes local services and am enities Significant leisure and F&B Convenient leisure and F&B e.g. restaurants, cinema e.g. gym and coffee shops 50
Multi-let Retail assets Regiona l Loca l Attracting visitors from a wide catchment Fitting into the daily life for a planned trip of local communities Southgate, Bath Mayflower, Basildon Beaumont, Leicester Broughton, Chester 1 Weston Lock, Bath Valentine, Lincoln 1 Fort Kinnaird, Edinburgh 1 Mostyn Champneys, Llandudno 1 Cornerhouse, Barrow Glasgow Fort 1 Hindpool, Barrow St. Peter’s, Mansfield St. Stephen’s, Hull Forster Square, Bradford Kingston Centre, Milton Keynes Eden Walk, Kingston Woodfields, Bury Studlands, Newmarket Giltbrook, Nottingham Gallagher, Cheltenham 1 Harlech, Newport Serpentine Green, Peterborough Tollgate, Colchester Elk Mill, Oldham Drake Circus, Plymouth Prospect Place, Dartford 1 Nugent, Orpington Meadowhall, Sheffield Crown Point, Denton Botley Road, Oxford New Mersey, Speke 1 Wheatley, Doncaster Deepdale, Preston 1 Teesside, Stockton Ealing Broadway Queens, Stafford 1 Whiteley, Fareham Orbital, Swindon Crown Wharf, Walsall 1 Old Market, Hereford Inverness 1 Lion, Woking Westside, Leeds 1 Assets held within Hercules Unit Trust or its subsidiaries and joint ventures. 51
Our portfolio is well positioned to meet both consumer and retailer demands BL local centres Potential to reach BL regional 59% centres BL asset of the population catchments Annual footfall of 315 m Average rent to sales ratio 10 % Occupancy cost ratio 16 % Source: CACI Retail Footprint 2017. 52
Online sales increasingly integrated with physical stores 89% of UK retail sales touch the store Retail sa les by cha nnel (UK, a ll sectors, 20 15) Online Mail order & Online sales pureplay TV shopping not browsed sales Online sales Click & in store browsed £4 bn Collect in store £13 bn sales £18 bn £8 bn £5 bn True 8 9 % of total Physical Total Boost Value of retail sales in store sales retail sales Stores +5% £265 bn £313 bn 20 15 £278 bn Total online sales Online sales of store operators Online that touched the store Source: GlobalData/British Land. 53
Physical store openings significantly boost retailers’ online presence Postal area share of retailer website visits Indexed vs. start of store opening period 170 160 150 140 130 +52% 120 110 100 90 80 -20 weeks -15 -10 -5 Store Opening 5 10 15 +20 weeks Note: Based on a sample of 29 retailers opening at British Land centres between April 2014 and December 2016. For retailers with fewer than 30 UK stores, there is a 84% boost to online presence, based on a sample of 7 retailers. Source: British Land/Connexity Hitwise. 54
+340 bps BL footfall performance vs benchmark Outperformance in H1 FY18 Jan-10 = 100 115 110 105 100 95 90 85 80 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 British Land UK Market (ShopperTrak UK National Index) 55
1.1 Continued polarisation in Retail % Rental growth on multi-let assets in ERV growth vs IPD H1 FY18 Index Mar-14 = 100 111 BL Multi-let ERV IPD Prime 109 107 105 IPD All Retail 103 101 99 IPD Secondary 97 95 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Source: IPD. 56
Major property holdings At 30 September 2017 BL Share Sq ft £m pa 1 Occupancy Rent Lease Rate % 2,4 % 000’s Length yrs 3,4 1 Broadgate 50 4,850 180 98.4 8.3 2 Regent's Place 100 1,740 75 97.2 7.7 3 Paddington Central 100 958 41 93.8 6.8 4 Meadowhall, Sheffield 50 1,500 85 97.8 6.7 Teesside, Stockton 5 100 569 17 95.5 5.5 Drake Circus, Plymouth 6 100 20 97.9 8.8 1,082 Sainsbury's Superstores 5 7 51 1,742 40 100.0 9.8 Ealing Broadway 6 8 100 540 14 94.9 5.2 9 Glasgow Fort 77 510 21 99.0 6.2 10 10 Portman Square 100 134 10 100.0 7.6 1 Annualised EPRA contracted rent including 100% of Joint Ventures & Funds. 2 Including accommodation under offer or subject to asset management. 3 Weighted average to first break. 4 Excludes committed and near term developments. 5 Comprises standalone stores. 6 Includes 10-40 The Broadway acquired during the period. 57
Top 20 occupiers & occupier split by industry Occupier Split by Industry (%) As at % of Contracted Rent 30 September 2017 Fashion Other 7% Tesco plc 4.6 & Beauty J Sainsbury plc 4.3 17% DIY 8% UBS AG 3.6 Debenhams plc 3.5 Kingfisher (B&Q) 3.0 TMT 8% HM Government 2.8 Next plc 2.5 General Retail 16% Grocery & Facebook 1.9 Convenience Dentsu Aegis 1 1.8 9% M&S plc 1.7 Spirit Group 1.7 Professional Wesfarmers 1.6 & Corporate Banks & Financial Alliance Boots 1.6 10% services 14% Visa Inc 1.6 Food/Leisure 11% Dixons Carphone 1.5 Arcadia Group 1.4 Herbert Smith 1.3 UBS – 5 Broadgate 4% TK Maxx 1.2 Other banks 3% David Lloyd Leisure 1.1 Total banks 7% Gazprom 1.1 Asset Management & Other Financial 7% 1 Represents current occupation of 10 Triton Street covering 118,000 sq ft of space. Taking into account their post period end letting of 310,000 sq ft at 1 Triton Square, % of contracted rent would rise to 5.2%. As part of this new letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option 58 is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land.
Broadgate Campus 2–3 Finsbury Avenue • 2 Finsbury Avenue – Emerging FinTech cluster • 3 Finsbury Avenue – expected lease break in late 2018 • Current size: 189k sq ft • Potential size: 563k sq ft 1 Finsbury Avenue • Lease expired in Dec 2016 • Current size: 288k sq ft 135 Bishopsgate • RBS leases surrendered in June 2017 • Current size: 325k sq ft 100 Liverpool Street • Lease expired in Dec 2016 • Current size: 380k sq ft • Redevelopment: 522k sq ft 36% of Broa d ga te com m itted a nd nea r term d ev elop m ents p re-let or und er offer 59
Paddington Central Campus 60
Regent’s Place Campus 61
£1.2bn Capital Activity Gross investment activity in H1 FY18 Net Spend £52m £648m (£267m) £31m (£461m) (£777m) £m 1,600 1,200 800 400 - (400) (800) (1,200) (1,600) (2,000) 2017 1 H1 2018 Financial Year 2013 2014 2015 2016 Disposals Capital Investment Acquisitions Net Spend 1 2017 restated to exclude transactions completing after 1 April 2017. 62
Capital Activity Since 1 April 2017 Retail Offices Residential Canada Water Total £m £m £m £m £m Purchases 92 – – – 92 Sales 1 (298) (575) (119) – (992) Development Spend 8 62 3 11 84 Capital Spend 35 4 – – 39 Net Investment (163) (509) (116) 11 (777) Gross Investment 433 641 122 11 1,207 On a proportionally consolidated basis including the Group’s share of joint ventures and funds. 1 Includes £575m Leadenhall Building disposal exchanged during the year ended 31 March 2017 and completed this period. 63
Acquisitions Since 1 April 2017 Sector Price Price Annual (100%) (BL Share) Passing £m £m Rent £m 2 Completed Tesco, Brislington – Tesco exchange transaction 1 Retail 46 23 2 Harlech, Newport – Tesco exchange transaction 1 Retail 41 20 1 10-40 The Broadway, Ealing Retail 49 49 2 Total 136 92 5 1 Part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets. 2 BL share of annualised rent topped up for rent frees. 64
Disposals Since 1 April 2017 Sector Price Price Annual (100%) (BL Share) Passing £m £m Rent £m 6 Completed The Leadenhall Building 1 Offices 1,150 575 17 Superstores 2,3 Retail 428 242 15 B&Q, Bury & Grimsby 4 Retail 56 56 4 The Hempel Collection Residential 50 50 – Exchanged Clarges, Mayfair 5 Residential 66 66 – The Hempel Collection Residential 2 2 – Aldgate Place Residential 2 1 – Total 1,754 992 36 1 Exchanged during the year ended 31 March 2017. 2 Of which £116m was part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets. 3 Of which £21m exchanged in period and completed post period end. 4 Exchanged in period and completed post period end. 5 Exchanged post period end. 6 BL share of annualised rent topped up for rent frees. 65
H2 18 income statement guidance • Gross Rents • Operating costs Annualised accounting gross rent of £582m as Administrative costs expected to be at, or slightly – – at 30 September 2017 below, H1 level Transactions already exchanged but completing – after 30 September 2017 are expected to reduce • Dividend annualised rents by £5m (H2 FY18 impact £3m) As announced in May 2017, the dividend for the – Rental income growth will be driven by like-for-like – year ending 31 March 2018 is increased by 3% growth to 30.08 pence per share (quarterly dividend of 7.52 pence per share) • Financing • Other Weighted average interest rate now 3.0% – on gross debt of £4.0bn Capital activity has the potential to significantly – impact profits. For example, selling/acquiring £100m of assets would reduce/increase profits • Share Buyback by c.£3.5m and LTV by c.0.5%. This is based Based on period end share price of 602p and – on an average portfolio topped up NIY of 4.6% expected H2 share purchases of £235m, number of and marginal cost of debt of 1.0% shares would decrease by 39m by 31 March 2018 Expected impact for the full year to 31 March 2018 – of c.0.3p on EPS and 17p on NAV (of which 4p recognised in current period) 66
Illustrative future income profile breakdown (cash basis) For the year to 31 March 2018 2019 2020 2021 2022 Total At 30 September 2017 £m £m £m £m £m £m Contracted rent 627 Letting of completed developments 4 – – – – 4 Sales and purchases completing post year end (5) – – – – (5) Lease Expiries – Development pipeline (3) (9) (1) – – (13) Letting of Committed Developments 1 1 9 22 23 – 55 Letting of Near Term Developments 1 – 9 1 5 6 21 RPI Linked Leases 2 2 2 2 2 2 10 Reversion 3 4 3 2 4 7 20 Vacancies 14 Letting of Medium Term Developments (excl. Canada Water) 109 On a proportionally consolidated basis including the Group’s share of joint ventures and funds. Figures based on valuation rent and include assumptions on outstanding rent review settlements. 1 Assumed lettings contracted at practical completion. 2 Assumed at 2.8% per annum. 3 Includes reversion on expiries and open market rent reviews within 5 years. 67
Gross rental income 1 Accounting Basis £m 6 months to 30 September 2017 Annualised as at 30 September 2017 Group JVs & Total Group JVs & Total Funds Funds Regional 31 44 59 87 75 146 Local 45 15 92 27 60 119 Multi-let 76 59 135 151 114 265 Department Stores 23 – 23 38 – 38 and Leisure Superstores 2 12 14 5 21 26 Solus and Other 10 – 10 21 – 21 Retail 111 71 182 215 135 350 West End 65 – 134 – 65 134 City 3 60 5 81 63 86 Offices 68 60 128 139 81 220 Residential 2 2 – 4 – 2 4 Offices and Residential 70 60 130 143 81 224 Canada Water 4 – 4 8 – 8 Total 185 131 316 366 216 582 On a proportionally consolidated basis including the group's share of joint ventures and funds. 1 Gross rental income differs from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives. 2 Standalone residential. 68
Administrative expenses HY to 30 September H1 2017 H1 2018 £m £m 26 26 Personnel costs 3 2 Share scheme costs 14 14 Other administrative expenses Total – British Land 43 42 Broadgate Estates 2 2 Total – Group 45 44 Capitalised costs (2) (3) Total administrative expenses 43 41 On a proportionally consolidated basis including the Group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. 69
Operating costs metric HY to 30 September H1 2017 H1 2018 £m £m 15 19 Property operating expenses 43 41 Administrative expenses (8) (8) Net fees and other income (1) (1) Ground rent costs EPRA Costs (including direct vacancy costs) 49 51 Gross rental income 327 316 Ground rent costs (1) (1) Gross Rental Income (EPRA basis) 326 315 EPRA Cost Ratio (including direct vacancy costs) 15.0% 16.2% On a proportionally consolidated basis including the Group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. 70
Reconciliation of Underlying Profit HY to 30 September (£m) H1 2017 H1 2018 IFRS (loss)/profit before tax (205) 238 Net valuation loss/(profit) 462 (167) Profit on disposal of investment and trading properties (42) (20) Capital financing (income)/costs (9) 153 Non-controlling interests (7) (6) Underlying Profit and EPRA Earnings 199 198 On a proportionally consolidated basis including the Group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries.. 71
Number of shares As at (m) 31 Mar 2017 30 Sept 2017 IFRS Basic Weighted average 1 1,029 1,028 IFRS Diluted Weighted average 2 1,091 1,031 Underlying/EPRA diluted Weighted average 3 1,033 1,031 Year/Period end 4 1,038 1,027 1 For use in IFRS basic earnings per share. 2 For use in IFRS diluted earnings per share. 3 For use in Underlying/EPRA diluted earnings per share. 4 For use in EPRA NAV per share and EPRA NNNAV per share. 72
EPRA balance sheet £m 31 March 17 Group JVs & Funds 30 September 17 Total properties 9,502 4,013 13,940 13,515 Adjusted net debt (4,223) (2,491) (1,200) (3,691) Other net liabilities (106) (72) (219) (178) EPRA Net Assets 9,498 6,905 2,741 9,646 Loan to value (LTV) 1 29.9% 20.1% 26.9% Weighted average interest rate 3.1% 2.1% 3.0% Interest cover 3.6x 5.1x 4.0x Weighted average maturity of drawn debt (years) 7.7 8.3 8.9 1 Group LTV based on Group Properties and net investment in JV & Funds, and Group net debt. 73
Reconciliation of EPRA NAV & NNNAV 31 March 17 30 September 17 £m pence £m pence IFRS Net Assets 9,476 921 9,632 945 Deferred tax arising on revaluation movements 3 5 Mark to market on effective cash flow hedges 155 137 and related debt adjustments Adjust to fully diluted on exercise of share options 36 36 Surplus on trading properties 83 90 Non-controlling interests (255) (254) EPRA NAV 9,498 915 9,646 939 Deferred tax arising on revaluation movements (19) (23) Mark to market of debt and derivatives (541) (506) EPRA NNNAV 8,938 861 9,117 888 74
Gross and net debt reconciliation As at 30 September 2017 Group JVs & Funds Less non- Total £m £m controlling £m interests £m Gross Debt (principal) (2,711) (1,422) 132 (4,001) IFRS adjustments: Issue costs and premia 17 3 (1) 19 Fair value hedges (190) – – (190) Other Items 12 3 – 15 IFRS gross debt (2,872) (1,416) 131 (4,157) Market value of derivatives 44 (31) 2 15 Cash 119 203 (8) 314 IFRS net debt (2,709) (1,244) 125 (3,828) Adjustments: Remove market value of derivatives (15) Remove fair value hedges 164 Other adjustments (12) Adjusted net debt (3,691) 75
Loan to value (LTV) As at Valuation Acquisitions Capital Disposals Other As at 31 March movement spend 30 September 2017 2017 £m £m Total 13,940 180 92 118 (815) – 13,515 properties Other 151 3 – – – 1 155 investments LTV assets 14,091 183 92 118 (815) 1 13,670 Adjusted 4,223 – 92 118 (828) 86 3,691 net debt Other (16) – – – – 9 (7) LTV liabilities 4,207 – 92 118 (828) 95 3,684 LTV 29.9% (0.4%) 0.5% 0.6% (4.4%) 0.7% 26.9% On a proportionally consolidated basis including the Group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. 76
Strength of debt metrics Proportionally Consolidated 31 Mar 2017 30 Sept 2017 Loan to value (LTV) 29.9% 26.9% Weighted Average Interest Rate 3.1% 3.0% Interest cover 3.6x 4.0x Weighted Average Maturity of Drawn Debt (years) 7.7 8.9 Group 31 Mar 2017 30 Sept 2017 Loan to value (LTV) 22.6% 20.1% Available undrawn facilities £1.3bn £1.5bn Weighted Average Interest Rate 2.4% 2.1% Interest cover 4.5x 5.1x 77
Debt maturity (£m) £m 1,600 1,400 1,200 1,000 800 600 400 200 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Year to March Convertible Bond (Unsecured) JVs – Securitisations Bank RCF Drawn (Unsecured) US Private Placements (Unsecured) Funds – Bank drawn (Secured) Bank RCF Undrawn (Unsecured) Debenture & loan notes (Secured) Sterling Bond (Unsecured) On a proportionally consolidated basis including the group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. 78
Debt financing – diverse profile £4.0bn Drawn Debt 1 (30 September 2017) • LTV reduced from 30% to 27% £0.2bn £0.4bn • Weighted average interest rate reduced from 3.1% to 3.0% £0.6bn • Issued £300 million unsecured Sterling bond at 2.375% coupon £0.4bn £1.3bn • Repaid £400 million 1.5% convertible bond at maturity £0.3bn • Average drawn debt term 8.9 years £0.8bn • The Group has no requirement Bank RCFs Drawn Debentures & loan notes (Unsecured) (Secured) to refinance until early 2021 US Private Placements JVs Securitisations (Unsecured) (Secured) Convertible Bond JV & Funds bank loans (Unsecured) (Secured) 2 Sterling Bond (Unsecured) 1 Proportionally consolidated. 2 HUT’s debt shown at our share (£0.4 billion) within JV & Funds. 79
Portfolio valuation by sector JVs & Funds At 30 September 2017 Group Total H1 Movement % 1 £m £m £m £m Regional 1,121 1,866 2,987 0.1 2 Local 1,745 461 2,206 (0.9) (21) Multi-let 2,866 2,327 5,193 (0.4) (19) Department Stores and Leisure 588 1 589 2.4 14 Superstores 130 315 445 0.8 5 Solus and Other 365 – 365 5.8 20 Retail 3,949 2,643 6,592 0.3 20 West End 4,137 – 4,137 3.2 128 City 113 2,269 2,382 1.7 50 Offices 4,250 2,269 6,519 2.6 178 Residential 2 116 18 134 3.6 7 Offices and Residential 4,366 2,287 6,653 2.6 185 Canada Water 270 – 270 (4.5) (13) Total 8,585 4,930 13,515 1.4 192 Standing Investments 7,827 4,587 12,414 1.2 157 Developments 758 343 1,101 3.3 35 On a proportionally consolidated basis including the group's share of joint ventures and funds. 1 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales. 2 Standalone residential. 80
Portfolio weighting At 30 September 2016 2017 (current) 2017 (current) 2017 (pro-forma 1 ) % % £m % Regional 20.7 22.1 2,987 20.8 Local 16.3 16.3 2,206 15.4 Multi-let 37.0 38.4 5,193 36.2 Department Stores and Leisure 4.6 4.4 589 4.1 Superstores 4.9 3.3 445 3.1 Solus and Other 2.5 2.7 365 2.5 Retail 49.0 48.8 6,592 45.9 West End 27.8 30.6 4,137 32.2 City 19.8 17.6 2,382 19.1 Offices 47.6 48.2 6,519 51.3 Residential 2 1.4 1.0 134 0.9 Offices and Residential 49.0 49.2 6,653 52.2 Canada Water 2.0 2.0 270 1.9 Total 100.0 100.0 13,515 100.0 Of which London 58% 57% 8,627 60% On a proportionally consolidated basis including the group's share of joint ventures and funds. 1 Pro forma for developments under construction and committed developments at estimated end value (as determined by the Group’s external valuers). 2 Standalone residential. 81
Lease length and occupancy Occupancy Rate (%) 1 At 30 September 2017 Average Lease Length (yrs) Occupancy 2 To Expiry To Break EPRA Occupancy Regional 7.9 6.8 96.9 97.4 Local 7.7 6.7 97.6 98.4 Multi-let 7.8 6.7 97.2 97.9 Department Stores and Leisure 16.9 16.9 99.7 99.7 Superstores 10.7 10.0 100.0 100.0 Solus and Other 12.1 12.0 100.0 100.0 Retail 9.2 8.3 97.7 98.3 West End 8.9 7.3 95.8 96.1 City 9.4 8.2 97.2 98.1 Offices 9.1 7.7 96.3 96.9 Canada Water 6.4 6.3 95.5 97.3 Total 9.1 8.0 97.1 97.6 On a proportionally consolidated basis including the group's share of joint ventures and funds. 1 Space allocated to Storey is shown as occupied where there is a Storey tenant in place otherwise it is shown as vacant. Offices occupancy would rise from 96.9% to 97.5% and total occupancy would rise from 97.6% to 97.9% if Storey space assumed to be fully let. 2 Including accommodation under offer or subject to asset management. 82
Portfolio net yields 1,2 At 30 September 2017 EPRA EPRA Overall Net Net Net ERV net initial topped up topped up equivalent equivalent reversionary Growth 5,6 yield % net initial net initial yield % yield yield % % 3 4 yield % yield % movement 6 bps Regional 4.4 4.7 4.8 4.9 4 5.0 1.2 Local 5.1 5.3 5.4 5.5 11 5.6 1.1 Multi-let 4.7 5.0 5.0 5.2 7 5.2 1.1 Department Stores 5.8 5.8 7.0 5.8 (11) 4.6 5.9 and Leisure Superstores 5.8 5.8 5.8 5.5 (7) 5.3 (1.2) Solus and Other 5.3 5.3 5.3 5.4 16 4.2 (5.8) Retail 4.9 5.1 5.3 5.3 5 5.1 1.0 West End 3.4 3.8 3.8 4.3 (11) 4.7 1.0 City 4.3 4.3 4.3 4.5 1 4.9 1.3 Offices 3.7 4.0 4.0 4.4 (6) 4.8 1.2 Canada Water 2.8 2.9 2.9 3.6 11 3.7 (1.1) Total 4.3 4.6 4.7 4.8 – 5.0 1.0 On a proportionally consolidated basis including the group's share of joint ventures and funds. 1 Including notional purchaser's costs. 2 Excluding committed developments, assets held for development and residential assets. 3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth. 4 Including fixed/minimum uplifts (excluded from EPRA definition). 5 As calculated by IPD; 6 months to 30 September 2017. 6 Excludes Euston Tower; as we move closer to tenant break in 2021, valuation now reflects refurbishment assumption which, if included, would distort these movements. 83
Annualised rent & estimated rental value (ERV) At 30 September 2017 Annualised Rents ERV Average Rent (Valuation Basis) £m 1 £m (£psf) Group JVs & Funds Contracted 2 Total Total ERV Regional 61 86 147 166 31.5 33.7 Local 95 26 121 132 25.3 26.5 Multi-let 156 112 268 298 28.4 30.0 Department Stores 36 – 36 29 14.8 12.0 and Leisure Superstores 7 19 26 24 21.3 19.7 Solus and Other 21 – 21 16 20.1 16.0 Retail 220 131 351 367 24.9 25.2 West End 3 128 – 128 176 57.8 61.6 City 3 5 89 94 108 51.1 57.2 Offices 3 133 89 222 284 54.8 59.7 Residential 4 5 – 5 4 Offices and Residential 138 89 227 288 Canada Water 8 – 8 10 16.1 20.8 Total 366 220 586 665 31.0 33.3 On a proportionally consolidated basis including the group's share of joint ventures and funds, excluding committed, near term and assets held for development. 1 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group’s external valuers), less any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift. 2 Annualised rent, plus rent subject to rent free. 3 £psf metrics shown for office space only. 4 Standalone residential. 84
Rent subject to open market rent review For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Regional 7 17 11 17 14 35 66 Local 16 17 11 12 6 44 62 Multi-let 23 34 22 29 20 79 128 Department Stores – – – – – – – and Leisure Superstores 3 5 8 7 1 16 24 Solus and Other – – – – – – – Retail 26 39 30 36 21 95 152 West End 12 27 15 10 9 54 73 City 2 13 4 9 – 19 28 Offices 14 40 19 19 9 73 101 Canada Water 1 1 – – – 2 2 Total 41 80 49 55 30 170 255 On a proportionally consolidated basis including the group's share of joint ventures and funds. 85
Rent subject to lease break or expiry For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Regional 10 10 13 10 15 33 58 Local 7 8 10 9 12 25 46 Multi-let 17 18 23 19 27 58 104 Department Stores – – – – – – – and Leisure Superstores – – – – – – – Solus and Other – 1 – – – 1 1 Retail 17 19 23 19 27 59 105 West End 2 4 4 17 21 10 48 City – 13 9 8 1 22 31 Offices 2 17 13 25 22 32 79 Canada Water 1 1 1 1 – 3 4 Total 20 37 37 45 49 94 188 % of contracted rent 3.2% 6.0% 6.0% 7.3% 8.0% 15.2% 30.5% On a proportionally consolidated basis including the group's share of joint ventures and funds. 86
Rent subject to lease break or expiry – Developments detail For year to 31 March 2018 2019 2020 2021 2022 2018–22 At 30 September 2017 £m £m £m £m £m £m 1 Triton Square 2 – – – – 2 Committed developments 2 – – – – 2 2&3 Finsbury Avenue – 3 – – – 3 1&2 Broadgate – 6 – – – 6 10 – 40 The Broadway, Ealing 1 – 1 – – 2 Medium Term developments 1 9 1 – – 11 On a proportionally consolidated basis including the group's share of joint ventures and funds. 87
Contracted rental increases (cash flow basis) For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Expiry of rent free periods 11 14 5 – – 30 30 Fixed uplifts (EPRA basis) 1 1 – – – 2 2 Fixed & minimum uplifts – 1 1 1 1 2 4 Total 12 16 6 1 1 34 36 On a proportionally consolidated basis including the group's share of joint ventures and funds. 88
Total Property Return (as calculated by IPD) 6 months to 30 September 2017 Retail Offices Total % British British British IPD IPD IPD Land Land Land Capital Return 0.3 0.9 2.9 2.2 1.5 2.6 - ERV Growth 1.0 0.5 1.2 0.6 1.0 1.0 - Yield Movement 1 5 bps -6 bps -6 bps -10 bps 0 bps -13 bps Income Return 2.7 2.5 1.9 1.9 2.3 2.3 Total Property Return 3.0 3.4 4.8 4.1 3.8 5.0 1 Net equivalent yield movement. 89
BL property performance vs IPD – 5 years 5 years ended 30 September 2017 Relative performance bps p.a. 300 250 240 200 150 150 100 70 50 60 40 1 0 Retail Offices Total Capital Returns Total Returns 90
Committed developments At 30 September 2017 Sector BL Sq PC Current Cost to ERV Let & Share ft Calendar Value Come Under Offer Year £m £m 1 £m 2 % '000 £m Clarges Mayfair – Mixed 100 104 Q4 2017 402 26 0.8 – Retail & Residential 3 Use 100 Liverpool Street Office 50 522 Q4 2019 132 136 18.8 5.1 1 Triton Square 4 Office 100 366 Q4 2020 182 196 23.1 21.8 1 Finsbury Avenue Office 50 288 Q1 2019 85 32 7.8 2.2 Speke (Leisure) Retail 67 66 Q3 2018 9 8 1.1 0.9 Plymouth (Leisure) Retail 100 107 Q4 2019 – 48 3.1 1.5 Total Committed 1,453 810 446 54.7 31.5 Retail Capital Expenditure 5 79 On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%). 1 From 1 October 2017. Cost to come excludes notional interest as interest is capitalised individually on each development at our capitalisation rate. 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives). 3 Current value includes units exchanged and not completed of £278m. Further sales of £66m exchanged post period end. 4 ERV let & under offer of £21.8m represents space taken by Dentsu Aegis. As part of this letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land. 5 Capex committed and underway within our investment portfolio relating to leasing and asset management. 91
Near term development pipeline At 30 September 2017 Sector BL Sq Expected Current Cost to ERV Let & Planning Status Share ft Start on Value Come Under Site Offer £m £m 1 £m 2 % '000 £m Near term Pipeline Office 50 325 Q4 2017 89 49 9.1 4.4 Consented 135 Bishopsgate – Resolution Leisure 100 105 Q3 2018 7 105 6.0 Gateway Building to grant – Pre- Bradford (Leisure) Retail 100 49 Q3 2018 1 16 0.9 submission – Resolution Teesside (Leisure) Retail 100 83 Q3 2018 34 48 4.6 to grant Total Near Term 562 131 218 20.6 4.4 Retail Capital 95 Expenditure 3 On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%). 1 From 1 October 2017. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate. 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives). 3 Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement. 92 92
Medium term development pipeline Sq ft Planning status At 30 September 2017 Sector BL Share % '000 Medium term Pipeline 563 Resolution 2-3 Finsbury Avenue Office 50 to Grant 1-2 Broadgate Office 50 471 Pre-submission Blossom Street Office 100 340 Consented 332 Consented 1 5 Kingdom Street Office 100 330 Resolution Meadowhall (Leisure) Retail 50 to Grant Peterborough (Leisure) Retail 100 204 Submitted Ealing – 10-40 The Broadway Retail 100 298 Pre-submission Aldgate Place Phase 2 Residential 50 145 Consented Eden Walk Retail & Residential Mixed Use 50 533 Consented Total Medium Term excl. Canada Water 3,216 Canada Water Phase 1 2 Mixed Use 100 1,835 Pre-submission 1 Planning consent for previous 240,000 sq ft scheme. 2 Canada Water site covers 5.5m sq ft in total based on net area based on gross area of up to 7m sq ft. 93 93
Estimated future development spend and capitalised interest At 30 September 2017 PC Cost to Come £m Calendar (excluding notional interest) – 6 months breakdown Year Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sept-20 Clarges Mayfair – Q4 2017 20 4 2 – – – Retail & Residential 100 Liverpool Street Q4 2019 24 36 33 22 9 8 1 Triton Square Q4 2020 6 21 38 49 42 19 1 Finsbury Avenue Q1 2019 8 10 12 1 1 – Speke (Leisure) Q3 2018 8 – – – – – Plymouth (Leisure) Q4 2019 15 15 11 6 – – Total Committed 81 86 96 78 52 27 135 Bishopsgate 2019 11 17 18 2 1 – Gateway Building 2022 3 3 3 3 3 8 2019 2 7 7 – Bradford (Leisure) – – Teesside (Leisure) 2020 13 13 14 9 – – Total Near Term 29 40 42 14 4 8 Indicative Interest Capitalised 4 5 5 4 2 1 on above at attributable rates 1 Contracted Residential receipts to come 202 52 – – – – 1 Assumes interest capitalised at 4% on qualifying expenditure for developments. 94
Central London development pipeline Q3 2017 m sq ft 9m sq ft (2.25 years of average supply) 12.0 deferred since Referendum 10.0 8.0 6.0 4.0 2.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE 10 year average new and Completed Pipeline Pre-let Potential Speculative under-construction take-up U/C Pre-let U/C – Speculative Movement since Referendum 10 year average development completions Note: Forecast reflects CBRE’s estimate of earliest completions. Central London comprises the City, Docklands, Midtown, Southbank and West End areas. 95
West End development pipeline Q3 2017 m sq ft 2.5 2.0 1.5 1.0 0.5 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE 10 year average new and Completed Pipeline Pre-let Potential Speculative under-construction take-up U/C Pre-let U/C – Speculative 10 year average development completions Note: Forecast reflects CBRE’s estimate of earliest completions. 96
City development pipeline Q3 2017 m sq ft 6.0 5.0 4.0 3.0 2.0 1.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE 10 year average new and Completed Pipeline Pre-let Potential Speculative under-construction take-up U/C Pre-let U/C – Speculative 10 year average development completions Note: Forecast reflects CBRE’s estimate of earliest completions. 97
Property Yields and interest rate yield gap Retail and London Office Yields All Retail Central London Offices 10.0 8.0 NIY % 6.0 4.0 2.0 0.0 Source: IPD Yield Gap UK 10 Year Gilt Yield Property Yield vs 10 Year Gilt Yields IPD All Property Net Initial Yield 10 8 6 % 4 2 - (2) Q317 1994 1997 2000 2002 2005 2007 2010 2012 2015 Source: IPD/Bloomberg. 98
London office market rental outlook Prime London Office Rents £ psf 140 120 100 80 60 40 20 Actual Forecast 0 1990 1995 2000 2005 2010 2021 2016 West End City Source: CBRE (historic) and Average Agents' Consensus (including PMA Autumn 17) for forecasts. 99
Vacancy Central London West End & City Vacancy Rates 20 18 16 14 12 10 8 5.9% 6 4 3.7% 2 0 1985 1990 1995 2000 2005 2010 2015 Q3 2017 West End City West End 10 year average City 10 year average Source: CBRE (historic). 100
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