Investor Presentation HY 2020
Our Investment Case 3 4 1 2 Our d istinctiv e The sca le a nd A w ell-p ositioned Our op era tiona l business m od el & qua lity of our d ev elop m ent exp ertise & clea r stra tegy p ortfolio p ip eline custom er insight Increasing our focus 22.5m sq ft of Development pipeline Expertise in on mixed use places high quality assets aligned to strategy managing and leasing our assets based on our customer insight Growing London Underpinned by our Provides visibility campuses and resilient balance sheet on future earnings Residential and refining and financial strength Drives incremental Retail value for stakeholders 1
British Land at a glance 1FA, Broadgate £ 15.4 bn Assets under management £ 11.7 bn Of which we own £ 521 m Annualised rent 22.5 m sq ft Floor space 97 % Occupancy Canada Water Plym outh 2 As at September 2019
£ 11.7 bn A diverse, high quality portfolio (BL share) London Campuses (45%) Multi-let Retail (26%) 72 % London & South East Solus Retail (5%) Standalone offices (10%) Retail – London & SE (10%) Residential & Canada Water (4%) 3
Our unique London campuses £ 8 .6 bn Assets under management £ 6.4 bn Of which we own 78 % £ 20 5 m Annualised rent 6.6 m sq ft Floor space 97 % Occupancy 4 As at September 2019
Canada Water 53 acre m ixed use opportunity in Central London 5
Why mixed use? Occupiers Em ployees want space which is… want space which is… Attractive to skilled Flexible Affordable Well connected Located in vibrant Well connected Safe and promotes Sustainable and employees neighbourhoods wellbeing eco friendly Tech Close to Aligned to Supported by Has a range of workspace Close to retail, enabled complementary their brand excellent facilities including collaborative leisure and businesses and services and quiet dining options + Attractive, vibrant and safe public space World class, sustainable and smart buildings 6
We have created a distinctive advantage in mixed use • Mixed use campus development 1 Broadgate, 2-3 Finsbury Avenue, 5 Kingdom – Street near & medium term 1.3m sq ft committed developments – – Further opportunities Norton Folgate, Ealing, Kingston, Woolwich, Canada Water • Scale Control of groundscape eg. Eataly, Exchange Park – • Operational platform Expertise across development, planning, – marketing, data and tech, sustainability Combined asset management team with – dedicated retail and offices function • Natural partner for complex schemes Broadgate – SWFs, property specialists, Government 7
De-risked development pipeline focused on campuses Meadowhall Leisure 2-3 Finsbury 333,000 sq ft Avenue 563,000 sq ft Aldgate Place, Gateway 135 Bishopsgate 1 Triton Square Building 335,000 sq ft 366,000 sq ft Phase 2 Norton Folgate 105,000 sq ft Completion Q1 2020 Completion Q4 2020 146,000 sq ft 335,000 sq ft 5 Kingdom Street 429,000 sq ft 1 Finsbury Avenue 100 Liverpool Street Eden Walk, Kingston 287,000 sq ft 520,000 sq ft 1 Broadgate 533,000 sq ft Completion Q1 2020 PC’d Q1 2019 532,000 sq ft Recently Completed & Near term pipeline Medium term pipeline Medium term pipeline Committed Developments excl. Canada Water excl. Canada Water • ERV of £48m • ERV of £63m • All schemes consented • 87% pre-let or under offer 8
8 7% De-risked developments providing future income Pre-let or und er offer a cross com m itted schem es Pence per share £m ERV 4.6p annual EPS accretion once committed developments fully let 5.0 70 4.5 60 4.0 To let 3.5 50 3.0 40 2.5 30 2.0 Pre-let or under offer 1.5 20 1.0 10 0.5 0 0.0 Committed Near term FY20 FY21 FY22 FY23 9 Committed figures include 1 Finsbury Avenue which recently completed
Storey roll out Current Locations New & Forthcoming Locations 10 10
Building out Storey How British Land supports Storey’s operating platform • Operational Stats Landlord • c.30% premium to traditional Services Leasing and Asset Management lettings Fit out and Channel and Furnish pricing strategy • Stabilised portfolio 81% let or Development under offer Select and Marketing • 24 months average lease plan space & leasing length Finance and Legal Proposition & Operating Model Technology Technology installation • Good progress since 2017 launch • 297,000 sq ft operational Group Technology Account Customer management onboarding • Open on all 3 campuses Storey and Personalisation FM services • Further 91,700 sq ft identified HR and Other Support Services 11
Our Retail portfolio is well positioned to meet both consumer and retailer demands BL centres Average rent Potential to reach to sales ratio BL asset catchments c.50 % 9% of the population Occupancy Annual footfall of cost ratio 30 2m 14% Source: CACI Retail Footprint 2019, BL Insight team Note that population reach includes Broadgate 12
Retail sales focused on assets that do not meet our criteria The right characteristics to drive Large population in catchment, with Population Rental growth income from rents and growth potential trends potential commercialisation Quality of The right number of the right type of Potential to grow and/or Developm ent dem ographics demographic groups reconfigure the asset to meet potential future requirements Econom ic Above average income and health employment levels in the catchment Potential to create a true mixed- Mixed-use use community including retail, potential leisure, office and residential uses Quantum of retail space in the local Com petition area; strong competitive position relative to potential competitors Potential to become a last-mile Fulfilm ent fulfilment hub, considering Right size scheme – large enough potential potential to develop and quality of Critical Mass for draw, but small enough to drive local infrastructure demand:supply tension 13
Significant medium-term opportunities Ca na d a W a ter - Resolution to grant outline planning received September 2019 - £347m book value - £8m current rent roll Loca ted a t m ixed use a ssets: - 2-3 Finsbury Avenue, 5 Kingdom Street, 7.3 m sq ft Gateway Building, Ealing, Eden Walk - £260m book value Medium term pipeline - £6m current rent roll opportunities - c.£80m potential ERV - 3 out of 5 schemes already consented Sta nd a lone: - Meadowhall Leisure - Flexibility over progression options - Consented scheme 14
Building a London focused, increasingly mixed use business Indicative business split 5+ years March 2010 Current 10 % 33% 66% 55% 41% 30 -35% 5% 50 -55% • London focused: over 70% of group • Smaller, more focused Retail • Meaningful Residential exposure • Right balance of flexible and core workspace Retail Campus-focused Storey Residential Offices 15
Key messages from HY results 2 1 Continued op era tiona l resilience Good p rogress on stra tegy - 1.3m sq ft leasing activity - Resolution to grant planning at Canada Water - Portfolio 97% full - £236m retail sales - Developments 87% pre let or under offer 4 3 Pip eline of a ttra ctiv e op p ortunities Ma na ging ca p ita l w ell - 1m sq ft near term pipeline including - £125m buyback completed Norton Folgate and 1 Broadgate - Well positioned with debt low - 7.3m sq ft medium term pipeline, principally Canada Water 16
Outlook • Retail – Occupational market to remain challenging – Investment market will be tough, but growing evidence that buyers returning to the market • London – Optimistic that current momentum will continue; function of supply as well as quality and location of our space – Benefitting from our 7.3m sq ft medium term pipeline – Investment market would benefit from greater macro stability 10 0 Liverpool Street, Broadgate 17
Half year results 6 m onths ended Septem ber ‘19 18
Results Overview 16.1 p 8 56 p £ 11.7 bn Und erly ing ea rnings EPRA Net Asset Va lue Portfolio v a lua tion p er sha re p er sha re -4.3% v s Ma rch 19 -6.4% v s H1 19 -5.4% v s Ma rch 19 (Reta il -10 .7%, Offices +0 .4%) 30 .8 % 8 7 % 4.6 p Com m itted d ev elop m ents Loa n to v a lue Com m itted d ev elop m ents let or und er offer EPS a ccretion Incl: +120 bp s v a l’n d eclines, 120 ,0 0 0 sq ft lettings in +110 bp s d ev elop m ent sp end Prim a rily FY21 & FY22 p eriod 19
Underlying earnings per share (1.6) (0.5) 0.5 0.4 0.1 17.2 16.1 16.1 HY 2019 Net divestment Share Excl. impact of Retail like-for- Offices like-for- Financing HY 2020 and buybacks capital activity like income like income activities and developments other 20
Net rental income £m 1 1 Like for like Like for like (20) -3.2% +1.1% 2 (5) 1 (2) 267 243 HY 2019 Sales Acquisitions Retail like-for- Offices like-for- Developments HY 2020 like income like income 1 Like for like rental growth is stated excluding the impact of surrender premia 21
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