PADDINGTON CENTRAL 5 JULY 2013 www.britishland.com
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Highlights • Acquisition of major West-End, office-led estate • Strong Property Fundamentals – attractive mix of modern well-let buildings and development sites – significant upside from asset management – estate will benefit from improving transport infrastructure • 100 % in line with strategy – increases London weighting of business – shifts office business “further West” – exploits our scale and knowledge of large London estates adds to development pipeline – • Financially attractive – initial yield of 5.3% rises to 6.2% when fully let (excludes development) – development opportunities with double digit IRRs (unlevered) 3
Delivering Future Growth – Focus on London and the South East Paddington Aldgate Central Ealing Broadway Clarges Paddington Central Surrey Quays & Harmsworth Recent acquisitions Quays BL assets/concentration Eden Walk Continue to move West Transport inter-changes London residential Up and coming areas Estates and mixed use schemes Development 4
Paddington Location 1 3 2 1. Paddington Central 2. Paddington Station 3. Paddington Basin 5
Paddington Central – Estate Key: BL ownership Non BL ownership Multi-let offices Multi-let offices 268,000 sq ft 143,000 sq ft 200 residential units sold on long leases; Development sites retail at ground floor (355,000 sq ft) + Crossrail box below (80,000 sq ft) FOUR KINGDOM STREET New Hammersmith & FIVE City line station and KINGDOM STREET access to Crossrail ONE KINGDOM ONE STREET SHELDON SQUARE 88,000 sq ft retail 206 room 4-star Non BL ownership (16 units) around hotel (111,000 sq ft) Sheldon Square 6
Paddington Central – Existing Properties 3 SHELDON SQUARE SHELDON SQUARE RETAIL 2 KINGDOM STREET 3 KINGDOM STREET 7
Paddington Central – Key Occupiers • Top 8 tenants represent c.80% of the income Area Contracted Unexpired Occupier Building sq ft rent pa £m lease term Astra Zeneca 2 Kingdom Street 76,778 3.4 12 yrs Nokia 2 Kingdom Street 60,791 3.4 9 yrs Rio Tinto 2 Kingdom Street 26,177 1.5 13 yrs Statoil 2 Kingdom Street 26,483 1.5 14 yrs Accor 3 Kingdom Street 111,414 2.2 18 yrs Cerner 3 Sheldon Square 28,010 1.2 9 yrs Kingfisher 3 Sheldon Square 55,158 2.7 9 yrs Prudential 3 Sheldon Square 25,255 1.5 9 yrs Total Estate 610,000 21.9 10.7 yrs 8
Paddington Central – Crossrail • Paddington will be one of only three Crossrail stations in London’s West End and will provide direct access to City and Docklands • New access point to Crossrail will be opposite the entrance to Paddington Central, off Bishop’s Bridge Road • As part of these works, reconstruction of Hammersmith & City line station with new public square fronting canal (see image below). We have initial plans to improve pedestrian entrance to Paddington Central by linking it to the new square Approximate Crossrail journey times from Paddington to Key Central London stations Bond Street 2 minutes Tottenham Court Road 4 minutes Farringdon 7 minutes Liverpool Street 9 minutes Canary Wharf 16 minutes 9
Paddington Central – Development Sites 4 KINGDOM STREET “CROSSRAIL BOX” 5 KINGDOM STREET • 145,200 sq ft of offices (as • 210,000 sq ft of offices (as consented) • Situated below existing Crossrail deck consented) • 14 floors at ground level • 9 floors • 80,000 sq ft • Plan to redesign scheme and add • Proposed start: end 2015 additional floor space • 8 metre clear slab • Possession by 2018 • Proposed start: end 2014 • Potential for retail, leisure, storage or parking 10
Financial Impact • Investment of equity placing proceeds accretive to earnings in current financial year • Pro forma LTV at 43% (from 46% pre placing) Impact FY 14 Annualised Net rent £16m £21m Underlying profit 1 £9m £12m EPS 1 0.9p 1.2p Overall Placing EPS Accretion 0.4p 0.7p 1: Assumes 2% financing cost 11
Appendices
Asset Overview Investment Properties - £400m Contracted rent pa WALL Property Sq ft Occupants £m yrs 2 Kingdom St 268,000 AstraZeneca, Nokia, Statoil 10.9 11.2 1 3 Kingdom St 111,000 Novotel 2.2 18.0 3 Sheldon Sq 143,000 Kingfisher, Prudential, Cerner 7.3 7.8 Sheldon Sq Retail 88,000 Nuffield Health, Sainsbury 1.5 12.0 Total 610,000 21.9 10.7 Development Properties - £70m Estimated capex 2 Property Sq ft Likely start on site £m 4 Kingdom St 145,200 End 2015 71 5 Kingdom St 210,000+ End 2014 109 Crossrail Box 80,000 Reverts to BL by 2018 - Total 435,200+ 180 1 Rents are subject to annual RPI linked uplifts 2 Excludes notional interest 13
Equity Placing – Acquisition Spend • Pro forma LTV at 43% - compares to 46% pre-placing Acquisition spend 2014 Annualised EPS £m EPS Ealing Broadway shopping centre 143 0.8p 0.8p Surrey Quays JV buy-out 48 0.2p 0.2p Other acquisitions 75 0.1p 0.1p Impact as at 1 April 2013 266 1.1p 1.1p Acquisitions since year end 22 0.1p 0.1p Paddington Central 1 470 0.9p 1.2p Impact as at 4 July 2013 758 2.1p 2.4p 1: Assumes 2% financing cost 14
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