JPMC European Small/ Mid Cap Conference 12 September 2013 - PowerPoint PPT Presentation

JPMC European Small/ Mid – Cap Conference 12 September 2013

Strategic priorities Continued focus on income, asset management & developments: • Out of town retail • Retailer distribution Divestment of low yielding assets: • Wholly-owned residential investments • City offices Continue to leverage strong joint venture relationships Emphasis on growing income & underlying profits to cover the dividend 2

Highlights Rebalancing portfolio; building towards dividend cover Acquisitions of £124.0m 1 off average yields of 7.3% Disposals of £352.7m 1 off average yields of 4.4% New lettings at One Carter Lane to MFS and SEB  60,600 sq ft at average rents of £62.40 psf  WAULT 17 years (15 years to first break) New five year financing facilities with Helaba and RBS totalling £254m  Blended margin 2.4% (1) LondonMetric share 3

Occupational activity Investment portfolio £873.7m Development portfolio £124.7m   Average yoc 6 – 10%, 250bp margin Average yield 6.9% (March 2013 6.4%)   WAULT 11.3 years One Carter Lane on track to complete refurbishment March 2014  Occupancy 99.2%  Pre-let 58% of target income  Contracted rental income £52.1m  Income subject to fixed uplifts 24% 22 new leases agreed (426,500 sq ft)  Income expiring over next 5 years 3.7%  WAULT 17.1 (14.9 years to first break)  New rents 5.8% ahead of ERVs 4

Delivering the strategy Today At merger 5

Investment activity Acquisitions of £124.0m 1 (NIY 7.3%)  Boden DC, Leicester £5.2m (NIY 8.3%)  Norbert Dentressengle DC, Crick £17.9m (NIY 7.3%)  Argos DC, Bedford £51.7m (NIY 7.0%)  WH Smith DC, Birmingham £10.1m (NIY 7.9%)  Milton Keynes & Cardiff retail parks £25.8m (NIY 8.0%)  Martlesham Heath retail park £10.4m (NIY 6.5% rising to 7.4%) Disposals of £352.7m 1 (NIY 4.4%)  One Fleet Place £112.5m (NIY 5.1%)  Residential sales £101.8m, across 200 units  Distribution portfolio £138.4m (NIY 5.6%) (1) LondonMetric share 6

Investment Strategy Asset Short-cycle management development Income Retailer Retail led Bishop Auckland Leicester Coventry In solicitor’s Strong Distribution cashflow hands Primark, Thrapston Tesco, Harlow Opportunity London driven Unilever, Leatherhead Clerkenwell Quarter, London Carter Lane, London 7

Financing Five year Helaba financing facility for £114m  For five existing retailer distribution assets + future acquisitions Five year RBS financing facility for £140m  For majority of retail assets £180m existing Lloyds and RBS RCFs available to finance acquisitions Redeeming £96m debt facility on One Fleet Place and One Carter Lane  Carter Lane becomes mortgage-free Debt term to maturity increases from 3.0 years to 4.3 years Marginal cost of debt 4.1%; all-in cost of debt 4.0% 1 (1) Falls to 3.7% assuming facilities were fully drawn on current libor and swap rates 8

Dividend cover – post distribution sale (2) (1) (1) Based on 12 months of London & Stamford and 12 months of Metric Property 9 (2) Full year Metric Property and post merger contracted income from acquisitions

Appendix

Top 10 tenant exposure (1) (1) Gross rental income based on contracted rents for total portfolio excluding residential (2) Market capitalisations as at 10 September 2013 (3) Market capitalisation of parent Home Retail Group (4) Market capitalisation of parent Associated British Foods (5) Market capitalisation of parent Kingfisher (6) USD 11

Debt facilities (1) (2) (3) (4) (6) (1) Helaba Distribution term loan: Wellingborough, Crawley, Nottingham, Thrapston, Birmingham, Bedford, Crick (2) RBS Retail term loan 1: Christchurch, Leicester, Luton, Southampton, Milton Keynes, Tonbridge, Ipswich, Bishop Auckland, Mansfield, Loughborough, Milford Haven, Wick, Congleton, Scarne, King's Lynn, Bedford (Alban Retail Park & Midland Road), Sheffield, St Albans, Hove & Cannock (3) Wells Fargo Retail term loan: Launceston, Coventry & Newry (4) Distribution JV: Harlow 12 (5) MIPP JV: Ashford, Bristol (Longwell Green), Camborne, Haverhill, Inverness, Lichfield, Londonderry, Nottingham, Orpington, Swindon, Eastbourne

Income statement Pro-forma Enlarged group (1) Statutory format (2) FY to 31 March (£m) 2013 2012 2013 2012 Profit before tax & exceptional items 45.6 32.7 39.9 19.5 Net rental income 39.4 48.1 29.2 35.5 Share of JV net income 5.3 5.5 4.5 5.3 Management fees & other income 10.6 6.4 10.4 6.4 General corporate costs (15.6) (14.2) (11.0) (9.5) Net finance costs (13.7) (14.7) (11.8) (13.4) Underlying profit 25.9 31.0 21.3 24.3 Valuation movements (3) 19.7 1.7 18.6 (4.8) (1) 12 months of London & Stamford and 12 months of Metric Property (2) 12 months of London & Stamford and two months of Metric Property for 2013, London & Stamford only for 2012 (3) Includes revaluation, derivative movements and profit/(loss) on sales 13

Balance sheet At 31 March (£m) 2013 2012 Property portfolio (incl trading properties) 990.6 663.9 Joint ventures 120.9 161.6 Cash 37.6 136.9 Bank debt (464.5) (322.8) Other net assets (7.9) (8.7) Net assets 676.7 630.9 EPRA adjustments 10.6 12.7 EPRA net assets 687.3 643.6 EPRA NAV per share 109p 119p Exceptional items 38.9 1.8 Adjusted net assets 726.2 645.4 Adjusted NAV per share 116p 119p LTV 43% 34% 14

Movement in net assets (3) (2) (1) (1) Merger with Metric: £11.9m, internalisation of management contract £14.4m, impairment of Meadowhall mark to market £23.2m 15 (2) Metric merger: £190.3m, tender offer: -£100.7m (3) Add back exceptional items of £49.5 less EPRA adjustments of £10.6m