Intu Properties plc Investor presentation – Winter 2014
(1) Including Group share of joint ventures Page 2
Intu at a glance 9 of UK’s Over 21m sq ft top 20 of retail, catering and leisure space shopping centres £1.2bn Our centres attract 400m development pipeline customer visits a year 30m 2/3 96% unique customers of the UK’s population live within a 45 minute drive occupancy time of one of our centres Page 3
Intu - leading owner, developer and manager of prime UK shopping centres Centre Location Centre Location 1 Westfield London London - Shepherds Bush 23 intu Bromley Bromley 2 Bluewater Greenhithe 24 intu Eldon Square Newcastle 3 Westfield Stratford City London - Stratford Victoria Square Belfast 25 4 Meadowhall Sheffield intu Braehead Glasgow 26 5 intu Trafford Centre Manchester Victoria Quarter Leeds 27 6 St David's Cardiff Golden Square Warrington 28 7 intu Metrocentre Gateshead Silverburn Glasgow 29 8 intu Lakeside Thurrock White Rose Shopping Centre Leeds 30 9 Bullring Birmingham The Oracle Reading 31= 10 Arndale Centre Manchester Trinity Leeds Leeds 31= 11 The Mall at Cribbs Causeway Bristol Thistle Centre Stirling 31= 12= Brent Cross London Buchanan Galleries Glasgow 34 12= Cabot Place, One Canada Square London East Kilbride Shopping Centre Glasgow 35 Liverpool One Liverpool 14 15 Cabot Circus Bristol intu Merry Hill (2) 16 Brierley Hill 17 Highcross Leicester Leicester 43 intu Victoria Centre Nottingham intu Derby (2) 18 Derby 45 intu Chapelfield Norwich 19 intu Watford Watford 46 intu Potteries Stoke-on-Trent thecentre: mk (3) 20 Milton Keynes 59 intu Milton Keynes Milton Keynes 21 West Quay Southampton 69 intu Uxbridge Uxbridge 22 Festival Place Basingstoke 182 intu Broadmarsh Nottingham Source: PMA (1) Top shopping centres on basis of PMA Retail Score (June 2014). Intu shopping centres highlighted orange (2) Acquired on 1 May 2014 (3) Adjoined by intu Milton Keynes Page 4
Delivering change, delivering great experiences • Strong revaluation surplus for super-prime shopping centres • Successful integration of intu Merry Hill, intu Derby and Sprucefield acquisition • Improved financial flexibility • Letting progress as retailer demand strengthens for quality space • Gaining momentum with £1.2 billion development pipeline • Distinguishing Intu from competitors through brand and digital presence A long term business – 20 years of measured expansion 25,000 Shopping Centre Space, 20,000 '000 sq. ft. 15,000 10,000 5,000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Page 5
Strong revaluation surplus for super-prime shopping centres • Revaluation surplus £573 million (1) , 7.6% like-for-like Notable valuation movements: (IPD (2) capital growth + 3.5%) Market Surplus (deficit) (1) (1) value • Increasing NAV per share to 372p £m £m % • Total financial return (from pro forma NAV of 335p) 14 intu Trafford Centre 2,200 300 16 intu Lakeside 1,248 118 11 intu Metrocentre 922 33 4 per cent in six months Manchester Arndale 425 26 6 intu Milton Keynes 267 16 6 • Investment properties £8.8 billion (1) intu Eldon Square 265 11 5 intu Braehead 602 - - – May 2010 demerger £4.6 billion intu Potteries 162 (2) (1) intu Victoria Centre 299 (13) (4) Others 2,452 84 8,843 573 1) Including Group share of joint ventures 2) IPD monthly index, retail Page 6
Successful integration of intu Merry Hill, intu Derby and Sprucefield acquisition • Increasing intu ownership to 9 of top 20 UK centres • Initial indications positive and confirming investment case • Impact of rebranding and World Class Service training • Opportunities – rental levels – tenant repositioning/upsizing – active management/development potential Page 7
Improved financial flexibility Net debt to assets 44% 30 June 2014 (1) 31 December 2013 (1) Total properties £8,843m £7,624m Net external debt £(3,924)m £(3,698)m Net debt to assets 44.4% 48.5% Cash £200m £235m Undrawn committed corporate facilities £310m £90m Net assets attributable to shareholders £4,546m £3,519m Adjusted net assets per share 372p 346p 335p NAV pro forma basis Weighted average cost of gross debt 4.7% 4.8% Weighted average maturity of gross debt 7.7 years 8.0 years (1) Group including share of joint ventures Page 8
2014 debt funding activities • £110m intu Trafford bond issue at 4.6% cost • £40m raised on Parque Principado (Intu share of €95m) • £146m loan repaid on intu Uxbridge • Three new debt facilities totalling £424m to provide part-funding for the acquisition – Weighted average all-in cost of debt 2.5 per cent for first year – Margins step up after 12 months and thereafter at 6 month intervals – LTV of transaction was 48.9% – broadly in line with Group LTV – intu Merry Hill - £191m, initial LTV of 46.9%; maturity in 2016 with a one year extension option; secured against equity stake – intu Derby - £203m, initial LTV of 51.9%; maturity in 2016 – Sprucefield - £30m, initial LTV of 43.9%; maturity in 2016 Page 9
Underlying earnings Including Group share of joint ventures First half First half 2014 2013 £m £m Net rental income 189.2 181.0 Administration expenses (14.9) (13.9) Net finance cost (underlying) (100.3) (101.2) Dividend from US investment 3.0 3.3 Other (5.0) (1.1) Underlying earnings 72.0 68.1 Interest cover 1.76 1.63 (1) EPRA cost ratio 16.4% 16.3% (2) Earnings per share (pence) 6.4 6.8 (2) Weighted average shares in issue (million) 1,130 1,004 (2) Dividend per share (pence) 4.6 4.6 (1) The EPRA cost ratio presented excludes direct vacancy costs and is calculated in accordance with EPRA guidelines (2) Adjusted for rights issue bonus factor Page 10
Lettings progress as retailer demand strengthens for quality of space • 98 new long-term leases £15m +4% passing rent • Occupancy 96% Vacancy UK “big shopping centres” * 11% • Footfall +1% (Experian benchmark flat) • Retailer sales (est.) +1½% * PMA estimate – top 70 locations plus regional shopping centres. Page 11
Gaining momentum with £1.2 billion development pipeline • Projects on site in first half • Soon to commence – Barton Square, intu Trafford Centre – intu Watford, Charter Place extension • Other major extensions – Design and pre-letting • Foregoing some income ahead of redevelopment Page 12
intu Metrocentre Platinum Mall enhancing tenant mix, Qube 2 45,000 sq ft extra catering • Platinum Mall: - Mix: Aspirational lifestyle brands e.g. Kuoni, Tessuti, Phase 8, Circle 360 champagne bar - Works completed June 2014 including new ceilings, feature lighting, column treatments and quality finishes - Upper level rental tone increased • “Qube 2” food court extension: - Adjacent to successful cinema - 11 new catering outlets, 80% by rent agreed - Total expenditure £17m (Intu share £11m) - Construction starting this summer, to complete 2015 Page 13
intu Eldon Square Major refurbishment in progress, restaurant quarter now 2/3 pre-let by rent • Mall refreshment has much improved overall appearance and ambience prompting good retailer interest • Pre-letting underway of 23 new restaurants, to be known as Grey’s Quarter • Total expenditure £17m (Intu share £12m) • Works will commence in September 2014 for Autumn 2015 opening Page 14
intu Lakeside Creating more reasons to visit and stay longer • Food court construction completed - openings during summer - expenditure £9m, incremental rent over £1m - new names include Five Guys, Nandos, Thai Express and Patisserie Valerie • Over 600,000 sq ft leisure and retail extensions consented • 225,000 sq ft leisure extension - expenditure £80m, anticipated phased start from 2015 subject to pre-letting Page 15
intu Potteries Leisure extension fully pre-let, construction underway Page 16
intu Victoria Centre, Nottingham Implementing our plans • Major refurbishment of intu Victoria Centre and cluster of 12 new restaurants • Urban Outfitters and Superdry opened, interest from other retailers not currently represented in Nottingham • Strong demand for restaurant units at pre-letting stage Page 17
intu Bromley Queens Gardens restaurants and boutique cinema • 14,000 sq ft cluster of five restaurants • Expected construction from Winter 2014/2015 • Planning application approved for five screen boutique cinema and further restaurants Page 18
Nationwide opportunities Page 19
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