Investor and Analyst Tour 4 Kingdom Street, Paddington Central 21 June 2017 www.britishland.com @BritishLandPLC
Introduction Tim Roberts Head of Offices
Agenda 3.45pm Presentation • Our Campus approach – meeting customer needs – Tim Roberts • Delivering our Campus approach at Paddington Central – Tim Haddon / Tim Downes • Flexible workspace – Introducing Storey – Joff Sharpe • Q&A 4.30pm Tour of Paddington Central Drinks on the Rooftop, 4 Kingdom Street 5.15pm 3
Responding to evolving customer needs Employees are more discerning and Talent retention and flexibility are becoming increasingly important to occupiers demanding about the quality of the workplace Social Hub Talent Retention and Wellbeing Diverse Retail and F&B Brand Alignment Offering Collaboration Flexibility Ease of Accessibility Digital Connectivity Safety and Wellbeing Value for Money 4 Sources: BL occupier/end user surveys 2016; Stoddart Review 2016; JLL Workspace Reworked 2016
Our campuses provide a differentiated offer And respond to changing Campuses provide a unique platform customer needs Scale Occupiers • Range of accommodation • High quality buildings and environments attracting the best talent • Economies of scale to fund enhanced services • Flexible space on flexible terms • Foster collaboration between • High standard of digital infrastructure businesses Control of environment Employees, visitors and residents • Security and safety • Excellent transport connectivity • Active management of mix of uses • Broad retail, leisure and F&B offer • Activate space outside the buildings to • Vibrant environments enlivened by enliven events By d eliv ering these benefits, w e increa se d em a nd for our ca m p uses, d riv e incom e d iv ersity a nd d eliv er returns to our sha rehold ers 5
Paddington Central Tim Ha d d on Head of Cam pus Tim Dow nes Developm ent Director
Introducing Paddington Central 7
Introducing Paddington Central • 1 million sq ft with opportunity to add 0.5 million sq ft • Diverse occupier mix Insurance 4% Natural Resources Financial 9% 28% F&B, retail & leisure 12% Prof Services & TMT Corporate 26% 20% 8
Excellent transport connectivity Our investment at Paddington Central • £775 million investment £470m acquisition, July 2013 – £210m acquisition of 1 Sheldon Square, – April 15 £95m capital spend, primarily – development of 4 Kingdom Street • Rationale for investment Re-weighting to West End – Adding a third London campus – High quality, long term income – Development opportunities – Excellent transport links including – Crossrail Potentia l to a p p ly our exp ertise to grow rents a nd crea te v a lue 9
Vibrant environments enlivened by events Improving and enlivening the campus Campus experience index (out of 5) £ 10 m 4.5 invested to upgrade the campus 4.0 3.5 55,0 0 0 people attended 3.0 events in the last 12 months 2.5 70 % Physical environments Events Wellbeing & perceptions Food & drink Overall score Travel & accessibility Physical environments Events Travel & accessibility Wellbeing & Perceptions Food & drink Overall of occupiers and visitors thought that the area had changed for the better Paddington Central Benchmark 10
Broad retail, leisure and F&B offer Broadening the mix of uses • Retail and leisure currently provides 12% of rent, with plans to double that • Activating the canal-side; adding barges • Retail pop ups and street markets • Pergola outdoor dining – 850 covers 11
High quality buildings attracting the best talent 4 Kingdom Street High standard of digital infrastructure • New 147,000 sq ft office over nine floors • Balconies on each floor; roof terrace with basketball court • Rationalised core with bigger reception, and more flexible floor plates • BREEAM Excellent, WiredScore Platinum • £85m development cost with an NDV of £150m Completed on time and under budget – Office space 8 9% 5% >4 0 % >20 % under offer Ahead of pre- Ahead of best IRR since referendum net Paddington Central commitment effective ERVs rent on acquisition in 2013 12
13% Performance to date Annua lised tota l return since a cq uisition Apr 2015 1 Sheldon Apr 2017 4 Kingdom Jul 2013 Acquisition Square acquisition Street PC 2013 2014 2015 2016 2017 2018 - Evaluation and planning - Public realm improvements 437k sq ft of rent reviews - Letting 150,000 sq ft of - Development of 4 Kingdom vacant / grey space Street £80 25% 20% £75 Total Return 15% £70 £psf 10% £65 5% £60 0% £55 Acquisition to Mar 15 Apr 15 to Mar 17 Acquisition to Mar 17 Paddington Central top headline ERV Prime West End KF Office ERV (Re-Based) Paddington Central IPD West End Offices British Land 13
Gateway Building • New development opportunity on site of current management suite • 190 bedroom hotel totalling over 100,000 sq ft • Ground floor enlivened with high quality retail and F&B • Expect to submit planning in summer 2017 for £100m development • In advanced negotiations with a premium operator for pre-let Prem ium hotel cha nging p ercep tions a nd im p rov ing a rriv a l a t the ca m p us 14
5 Kingdom Street • Existing consent for 210,000 sq ft offices with plans to enhance by at least 30% • Opens up route through to Royal Oak and Warwick Avenue, completing campus • Targeting planning submission 2018 Com p leting the ca m p us a nd im p rov ing connections to m ore tra nsp ort op tions 15
The Box • Utilising redundant space on completion of Crossrail works • Potential to add leisure venue or other uses – e.g. conference, medical Op p ortunity to further d iv ersify the m ix of uses a t the ca m p us 16
Introducing Storey Joff Sha rp e Head of Operations, responsible for Storey
Flexible space on flexible terms Our first customer up and running… • Existing occupier at Paddington Central taking flexible space at Broadgate for their digital team • 25,000 sq ft at 2 Finsbury Avenue on two year term • Full management service and fit out • All-inclusive rate which reflects a premium for flexibility 18
Our brand launched… . 19
Space launching summer 2017… • 7,000 sq ft over 4 floors 2 Finsbury Avenue , Broadgate Appold Studios, Broadgate • Liverpool Street 2 minutes International House, Ealing Broadway • 20,000 sq ft • Ealing Broadway 6 minutes • 54,000 sq ft, including Kingfisher 25,000 sq ft • Liverpool Street 2 minutes …a further 8 0 ,0 0 0 sq ft of opportunities identified across our cam puses 20
Conclusions Tim Roberts Head of Offices
Key messages • Our approach is defined by what our customers want • Our unique campus proposition is well positioned to meet the evolving needs of our customers Good progress has been made at – Paddington Central with more development to come Flexible workspace broadens our offer to – both existing and new customers • Encouraging post-referendum occupational demand is an endorsement of our approach 22
Q&A
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