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Results Presentation Full Year ended 31 March 2015 - PowerPoint PPT Presentation

Results Presentation Full Year ended 31 March 2015 www.britishland.com @britishlandplc Results Overview Chris Grigg Chief Executive Highlights Another strong set of results Continued outperformance Exceptional leasing activity Ongoing


  1. Results Presentation Full Year ended 31 March 2015 www.britishland.com @britishlandplc

  2. Results Overview Chris Grigg Chief Executive

  3. Highlights Another strong set of results Continued outperformance Exceptional leasing activity Ongoing portfolio repositioning 3

  4. Macro trends driving our strategy Transforming impact Population growth of technology and urbanisation Importance of Globalisation infrastructure Sustainability 4

  5. Focused investment activity 1 Creating great Leveraging our placemaking skills to create Places People environments Prefer Exciting and lifestyle oriented real estate Growing in 2 Investing in existing assets London and Focusing on regeneration and growth areas the South East Investing around 3 Accessible and well-connected properties infrastructure Over £3bn of our assets are near Crossrail stations Internet resilient 4 Well located, locally preferred, multi-let assets retail Engaging environments with a broad F&B offering Omni-channel compatible Profitable 5 Mixed-use developments development Replenishing the medium term pipeline Understanding 6 Providing spaces and services which meet their needs our customers 5

  6. 2015 financial highlights 48 % 2-year total accounting return FY to 31 March 2015 Change NAV per Share 829p +20.5% Valuation £13.6bn +12.1% Total Property Return 18.4% Underlying Profit Before Tax £313m +5.4% Dividend per Share 27.7p +2.5% Total Accounting Return 24.5% 6

  7. Strong valuation performance 12 % Increase in valuation • Valuation well ahead in both sectors Contribution to valuation uplift – +7.5% in Retail; +18.8% Offices • Letting up of recently completed developments a key factor • Benefiting from increased weighting to London and the South East – Now 64% of portfolio (pro-forma) • Continue to outperform market – Capital returns 190bps ahead – Total returns 130bps ahead Yield Movement Development Asset Management 7

  8. Exceptional leasing performance 10 % Investment lettings/ • Strong leasing volumes renewals vs ERV • Letting space on attractive terms • Good quality and diverse mix of occupiers • Strengthening rental trend; strong growth in Offices, notable improvement in Retail FY to 31 March 2015 Retail Office Total Lettings / renewals (000 sq ft) 1,137 810 1,947 Lettings / renewals under offer (000 sq ft) 348 152 500 Investment lettings / renewals vs ERV 8.7% 10.8% 10.0% Occupancy 98.5% 98.1% 98.3% LFL occupancy +30bps +730bps +310bps ERV growth 2.5% 8.0% 4.6% 8

  9. Broadly balanced investment activity £2.4 bn Investment Activity Gross investment activity in 2015 Net Spend £m £343m £395m (£19m) £626m (£105m) 1,200 800 400 0 -400 -800 -1,200 2011 2012 2013 2014 2015 -1,600 Disposals Acquisitions & Development Net Spend 9

  10. Investing in line with strategy 3 1 Increasing investment Selling mature retail assets in London and South East £245m • Now 64% of total portfolio 64% • £245m sold in addition to superstore disposals • £210m acquisition of One Sheldon Square 4 • On site at 4 Kingdom Street Pre-selling residential apartments 2 Reducing investment in £370m • £370m of residential sales standalone superstores • Includes £259m at Clarges Mayfair 28 • 28 foodstores sold 5 7% • Now under 7% of portfolio Increasing medium term • c60% in London and South development pipeline 7m sq ft • 7m sq ft focused on London, including Canada Water 10

  11. Retail & Leisure highlights Improving rental growth Continued strength of operating metrics Ongoing evolution of the portfolio Strong uplift in valuation and total returns 11

  12. Improved Retail & Leisure 90 bps valuation performance Outperformance vs All Retail Total Returns FY valuation change % -1.5% 4.4% 7.5% 8 6 4 2 0 -2 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth

  13. Good demand from high quality occupiers 8.7 % Lettings and renewals by sector by rent Letting/renewals 16.6% ahead of ERV 43.3% 13.8% 1.1 m sq ft 5.1% 4.6% 3.9% 12.7% Fashion & Footwear Electrical & Mobile Phone General Retail Food & Leisure DIY Health & Beauty Other

  14. British Land operational metrics remain strong Retailer same store sales Average dwell time Average LFL spend + 4.5 % + 16 % annualised + 3.7 % Source: Springboard Source: BL consumer surveys Source: BL consumer surveys Footfall + 1.9 % +5% Occupancy remaining affluent high at 98.5 % ahead of market by shopper visits 290 bps Source: BL consumer surveys, CACI Source: Springboard and Experian Source: BL 14

  15. Continuing to outperform +290 bps footfall benchmarks Outperformance BL footfall performance vs Experian benchmark in 2015 Sep 09 = 100 110 105 100 95 90 UK Market (Experian Index) British Land 85 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 15

  16. Strengthening rental growth trend 2.5 % Rental growth British Land Retail rental growth vs IPD in 2014/15 % 3.0 2.5 2.0 1.5 1.0 0.5 0.0 H1 2013/14 H2 2013/14 H1 2014/15 H2 2014/15 FY 2013/14 FY 2014/15 -0.5 British Land IPD 16

  17. Investment driving performance – Meadowhall • £3m upgrade to premium retail offer • Last 6 month sales +6.0% for retailers in Park Lane – vs 3.6% across Meadowhall • £50m refurbishment planned to start in September 17

  18. Investment driving performance – Ealing Broadway Acquired in 2013 for £143m; 6.9% NIY • Bought in two adjoining ownerships • Phase 1 refurbishment completed • Re-positioning the occupiers • Submitted planning for wider refurbishment and PRS development • Delivering performance: – ERV +19% since acquisition – Sales +3.2% and accelerating 340,000 sq ft Growing and 19m annual Next to affluent area footfall Crossrail station Shopping centre 18

  19. Continuing to evolve our retail portfolio 28 superstores: £475m; 4.8% NIY £245m mature assets; 6.2% NIY £720m disposals Surrey Quays leisure park (£135m) £445m increasing share of existing assets; 5.3% NIY £749m acquisitions £169m invested in HUT portfolio 5.6% NIY Completed 305,000 sq ft Old Market, Hereford £95m Extensions to 4 retail schemes development/capex Refurbishment at Ealing Broadway Upgrade to premium offer at Meadowhall Improvements to landscaping and amenities 19

  20. Office & Residential highlights Valuations strongly ahead Exceptional leasing activity Campuses performing well and appealing to new occupiers Good progress on new developments Strong and broad based rental growth 20

  21. Strong Office & Residential performance 8.0 % • Outperformed IPD capital returns by 440 bps ERV growth in 2015 FY valuation change % 5.0% 14.5% 18.8% 20 16 12 8 4 0 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth 21

  22. Exceptional Office leasing in 10.8 % strong markets Lettings/renewals • 960,000 sq ft of lettings/renewals ahead of ERV completed/under offer • Terms well ahead of valuation: 21% 16% 10.8% ahead of ERV • Occupancy at 98.1% (+730 bps 10% like-for-like) • Diverse range of lettings 8% – 175,000 sq ft tech/flexible 38% 3% working 4% – 86,000 sq ft food and leisure Banks & Financial Services Food & Leisure TMT Insurance Government Other Business/Professional Services 22

  23. Leasing strategy success at Leadenhall £90 psf 45 44 43 42 41 40 Rental high 39 38 • 84% let/under offer up from 53% 37 36 a year ago 35 34 33 32 • Diverse mix of occupiers 31 30 29 • Beating records for City rents 28 27 4 times over 26 25 24 • Most recent letting at £90psf 23 22 21 to Affinity Shipping 20 19 18 • Valuation +37% in the year 17 16 15 14 Let prior to 2014/15 13 12 11 Let in 2014/15 10 9 8 Under offer 7 6 5 4 In negotiations 3 Reception and Restaurants 2 1

  24. Widening the appeal of Broadgate Attracting different occupiers 62,000 sq ft let to WeWork 11,000 sq ft let to Central Working £20 million redevelopment of Broadgate Circle completed 5 Broadgate completing shortly Planning granted at 100 Liverpool Street 24

  25. Making progress at Paddington Central First round of public realm improvements underway On site at 4 Kingdom Street for 147,000 sq ft office building Acquisition of One Sheldon Square for £210 million Grey space fully let including 51,000 sq ft to Microsoft Good prospects for rental growth with average rents of £52 psf 25

  26. Facebook at Regent’s Place – a strong endorsement of the campus Now Facebook’s largest European hub Taking an additional 66,000 sq ft Brings total space to over 150,000 sq ft Rents nearly doubled on a net effective basis Improving retail and A3 offer in line with broader occupier mix Nearly 350,000 sq ft of rent reviews to come in 2016 £2.5m p.a. rental uplift at current rental levels 26

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