FULL YEAR RESULTS PRESENTATION

Transcription

1 FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH

2 CHRIS GRIGG Chief Executive

3 Introduction Good set of results Profits: +5.1% NAV: +4.9% Q4 Valuation: +0.3% Total Returns: 8.3% 2

4 Our Vision VISION To Build the Best REIT in Europe DELIVERY Asset Level Outperformance High Return on Capital To Deliver Superior Returns Over Time 3

5 Five Key Priorities 1. Sustainable and growing income 2. Assets which protect and grow capital value 3. Creating incremental value 4. Controlling costs 5. Exploiting our scale and financial strength To Drive Superior Performance 4

6 Our Strategic Priorities Key Priorities Long-Term Decisions Short-Term Actions Guiding our Long-Term Decisions and Short-term Actions 5

7 Our Long-Term Decisions Sector Choice Retail and London Offices Scale Overall and in key sectors Efficient Capital Structure To drive returns Adding Value Not just about asset management Translating Priorities 6

8 Our Short-Term Actions Sharpen Focus on Income Accretive Acquisitions Capitalised on Development Decisions Lease extensions Improving ERVs Drake Circus Maidenhead Leading the market in pre-lets Successful Financings 2bn raised Increased Pace of Recycling 100m of sales Translating Priorities into Actions 7

9 Today s Agenda Results Overview Financial Review Retail Review Offices Review Conclusion Chris Grigg Chief Executive Lucinda Bell Finance Director Charlie Maudsley Head of Retail Tim Roberts Head of Offices Chris Grigg Chief Executive 8

10 Financial Highlights Announced 1.5% increase in the quarterly dividend to 6.6p Y/E 31 March FY 2011 FY 2012 Change Net Rental Income 518m 546m +5.4% Underlying PBT 256m 269m +5.1% Dividend per share 26.0p 26.1p - Valuation 10.3bn +2.6% NAV per share 567p 595p +4.9% Total Accounting Return 17.7% 9.5% n/a Good Progress in More Challenging Markets 9

11 Property Level Performance in 2011/12 Y/E 31 March BL IPD Performance vs IPD Rental Values (ERVs) +2.1% +0.5% +160 bps Capital Returns 3.0% 0.5% +250 bps Total Property Returns 8.3% 6.3% +200 bps Significant Outperformance at the Asset Level 10

12 Drivers of Property Level Performance Contribution to Valuation Uplift Sector and asset selection key to outperformance Retail and offices outperformed sector benchmarks Our actions drove capital value uplift Over 40% from asset management One third from development A quarter from yield compression Longer-Term Decisions and Recent Actions 11

13 Property Level Outperformance The Long-Term Record British Land Portfolio Returns Relative to IPD Bps bps +250bps +270bps +200bps +180bps +140bps 12 Months 3yr 5yr Capital Return Total Return Consistent Strong Outperformance at the Asset Level 12

14 Sharpened Focus on Income 882 million of acquisitions over last 2 years Adding 36 million of new rental income in the year Drake Circus Mayflower Maidenhead Virgin Active Growing Income Through Acquisition 13

15 Sharpened Focus on Income 1 million sq ft of retail lettings and renewals 6.9% ahead of ERV 1 million sq ft of office lettings/lease extensions in investment portfolio 3.3% ahead of ERV Total Lettings and renewals at 6% ahead of ERV 10.0m of new annual rent Securing Income Through Asset Management 14

16 Well-timed Developments The Leadenhall Building 10, Brock Street, NEQ 5 Broadgate Pre-lets Secure Annual Income of 34m: 20 Year Average Term 15

17 Incremental Value The Virgin Active Example Exploit our deal skills Quality leisure operation Strong asset backing Attractive income (NIY of 7.3%) Long leases (25 years) Early recycling 5 clubs sold to institutions 18% premium to purchase price Virgin Active Portfolio Purchased from Motivated Seller 16

18 Successful, Well-timed Financings 2bn of unsecured and secured refinancing Few property companies with comparable access to debt markets Taking advantage of our size and strength Refinancing and Reducing Cost of Debt 17

19 LUCINDA BELL Finance Director

20 Key Themes Strengthened the quality and longevity of our cash flows Raised 2bn of finance by leveraging our scale Increase in dividend Confidence in the Portfolio for the Future 19

21 Highlights FY to 31 March Change Net Rental Income 518m 546m +5.4% Underlying PBT 256m 269m +5.1% Underlying EPS 28.5p 29.7p +4.2% Dividend per share 26.0p 26.1p Net Asset Value per share 567p 595p +4.9% Total Accounting Return 17.7% 9.5% Growth in Both Income and Capital 20

22 Growth in Underlying Profit of 5.1% ( 13m) + 24m + 7m (8)m (8)m (2)m 256m Like for like net rental growth +1.5% Retail +0.8% Offices +2.5% 269m 2011 Net investment Like-for-like Developments Admin costs Other 2012 Investment and Asset Management Driving Growth in Profits 21

23 Income Statement Net rents increased by 28m Limited impact from tenant failures Occupiers in administration represent 0.6% of total rent Cost base continues to be competitive FY to 31 March 2011 m 2012 m Growth % Net Rental Income % Fees & Other Income Administrative Expenses (68) (76) Net Finance Costs (212) (218) Underlying PBT % Efficient and Competitive Operating Cost Ratio of 15% 22

24 Management Action Drives 2.6% Valuation Uplift FY to 31 March 2012 Valuation m Uplift % ERV growth 1 % EPRA Topped-up NIY 2 % UK Retail 6, Office Investments 2, Office Developments n/a n/a Other (inc. Europe) 729 (0.4) Total 10, Like for like (as calculated by IPD) excluding Europe 2 Including purchaser s costs rent contracted from expiry of rent fees and contracted uplifts not in lieu of growth NAV up 4.9% to 595p 23

25 2bn Financings Raised on Competitive Terms Exploiting the benefits of our scale Diverse range of lenders 850m of new debt for HUT Amount m Term yrs Unsecured bank Unsecured US Private Placement Sub Total (BL) 1,060 Secured bank (Funds) Secured insurer (Funds) Sub Total (JVs & Funds) 900 Total 1,960 6 Total (BL share) 1,412 6 Average Margin to British Land of 160bps 24

26 Key Financing Highlights Proportionally consolidated EPRA Net Debt 4,317m 4,690m Loan to Value (LTV) 44.7% 45.3% Interest Cover 2.2x 2.2x Average Interest Rate 4.9% 4.6% Average maturity of drawn debt 10.1 years 9.3 years Group Loan to Value (LTV) 24.3% 29.1% Interest Cover 3.0x 3.0x Average Interest Rate 4.7% 4.2% Sound Balance Sheet Metrics 25

27 Diversified Sources and Well Spread Debt Maturities Group Maturity m 1, Undrawn Facilities Private Placements Debentures & Loan Notes Drawn Facilities Year to 31 March Improved Average Maturity of our Total Resources 26

28 Good Liquidity Well spread, well phased debt portfolio Cash resources - 337m of cash and liquid investments Total facilities available in 2 years time are 1.7bn 480m of net development spend over next 3 years No immediate debt refinancing requirements Well Managed Refinancing Risk 27

29 Loan To Value LTV at 45.3% - within 40-50% target range Strength of financing structure Strong operational fundamentals 98% occupancy Long lease length 11.3 years 24% of leases fixed or RPI uplifts 96% of rent collected within 7 days Total letting risk significantly lower than IPD LTV Range Reflects Asset Quality and Balance Sheet Strength 28

30 Significant Rental Growth Potential Annualised Rent Valuation Basis 3 m Current annualised cash rent 534 Expiry of rent free periods 1 51 Fixed, minimum uplifts 1 17 Developments pre-let 40 Total contracted 642 Letting of developments 49 RPI uplifts 1,2 7 Uplift from rent reviews, expiries and vacancies 1 30 Total Over next 5 years 2 Illustrative impact based on growth in RPI of 2.5%pa 3 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group s external valuers), less any ground rents payable under head leases 194m of Prospective Rental Growth; 108m Contracted 29

31 Increase in Dividend Increase in Q4 dividend to 6.6p 26.1p for the full year Quarterly dividend to continue at this level for FY12/13 total of 26.4p Reflecting strength of contracted cash flows (including pre-lets) 1.5% Increase in Quarterly Dividend to 6.6p 30

32 Summary Strengthened the quality and longevity of our cash flows Raised 2bn of finance by leveraging our scale Confidence in future: quality of portfolio and our actions Confidence in the Portfolio for the Future 31

33 Charles Maudsley Head of Retail

34 Robust Retail Performance Outperformed the retail market ERV growth 180 bps ahead of market; outperforming each subsector 340 lettings/renewals 6.9% above ERV 6.1% BL UK Retail Total Return - outperformed IPD All Retail by 110 bps Against Challenging Market Backdrop 33

35 Key Messages A portfolio suitable for the modern retail environment Meeting consumer needs Attracting retailers Delivering for investors The right approach Quality team, asset management and driving total returns Defensively Positioned Today; Well Positioned to Outperform in Future 34

36 Drivers of Our Performance 9.5bn 1 UK Retail Assets Under Management 23% Strength and diversity of our retail portfolio 45% 12% Strong asset management initiatives 7% 13% Shopping centres Focus on creating the right retail environment 1 BL Share UK Retail 6.0bn Department Stores Performance Driven by Right Assets and Doing the Right Things 35

37 Retail Market Summary Difficult year for retailers, particularly in second half Rising number of retailer casualties Polarisation increasingly marked Retailer trading performance Occupational market Retail Landscape Continues to Change 36

38 Retail Occupational Market Retailers aggressively repositioning portfolios Exercising lease breaks in secondary locations Retail Lease Expiries % of income 16% 12% 8% British Land IPD All Retail IPD Secondary Retail 4% 0% Source: IPD Polarisation Accelerating 37

39 Retail Occupational Market ERV Growth Indexed March 2010 = British Land IPD All Retail IPD Secondary Retail 90 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Source: IPD British Land Benefiting from Polarisation 38

40 Investment Market Capital Returns % (1.3) (0.4) (1.2) (0.8) (5.0) H1 H2 FY British Land Retail IPD All Retail IPD Secondary Retail (6.3) Source: IPD Capital Values Reflecting Weaker Sentiment: Prime More Resilient 39

41 Our Performance Capital Returns Outperformed IPD capital returns by 120 bps: all sub-sectors outperformed Continued outperformance: over 3 years by 210 bps pa Capital Return H1% H2% FY% Retail Parks 1.0 (0.7) 0.2 Superstores 1.2 (0.1) 1.1 Shopping Centres 0.6 (0.5) 0.0 Department Stores BL UK Retail 0.9 (0.4) 0.4 IPD UK Retail 0.4 (1.2) (0.8) Reflects Strength and Diversity of Portfolio 40

42 Our Performance Rental Growth Outperformed IPD ERV growth by 180 bps: all sub-sectors positive ERV Growth H1% H2% FY% Retail Parks Superstores Shopping Centres Department Stores BL UK Retail IPD UK Retail (0.3) (0.1) (0.4) Significant Outperformance Providing the Right Space 41

43 Asset Management Initiatives UK occupancy robust at 98.3% Admin exposure only 0.9% 1 of retail rent 526 income initiatives across 3.8m sq ft Lettings / renewals 6.9% ahead of ERV H1 H2 FY Lettings/Renewals Sq ft 000s ,095 vs ERV % Rent Reviews Sq ft 000s 996 1,671 2,667 vs Previous Rent % As at 31 March Including recent Clinton Cards administration post year end 1.6% of retail rent Driving Rental Growth Outperformance 42

44 Leasing Activity 14% 22% 39% 8% Homeware 10% 6% 1% Grocery Electrical Attracting Broad Spread of Retail Demand 43

45 Leasing Activity Lettings/Renewals Sq ft 000 Annual Rent m Increase in rent m Vs ERV % Retail Parks Shopping Centres Developments n/a Other Total 1, Lettings/Renewals Ahead of ERV in all Subsectors 44

46 Leasing Activity Leveraging Relationships 109,000 sq ft (plus 63,000 sq ft of mezzanine) Top rent 55 psf 60,000 sq ft (including 30,000 sq ft of mezzanine) Rent 20 psf 29,000 sq ft (plus 24,500 sq ft of mezzanine) Top rent 40 psf 65,000 sq ft (plus 33,000 sq ft of mezzanine) Top rent 50 psf Continued Demand from Existing Retailers 45

47 Leasing Activity Retail Parks Swarovski at Glasgow Jack & Jones at Glasgow Whole Foods at Cheltenham Simply Be in Teesside Park Boots drive through in Northampton First ever UK Retail Park formats First Retail Park Swarovski in Glasgow Fort Attracting New Retailers to our Retail Parks 46

48 Evolving the Retailing Environment Obtained 62 planning consents covering 850,000 sq ft 142 capital projects underway Signed 39 food and beverage lettings Upgrade of Oasis food court at Meadowhall Under offer with 3 cinema pre-lets Investing in digital media including WiFi Future Proofing our Assets to Attract Retailers and Consumers 47

49 Retail Footfall Region BL FY % Experian FY % Performance vs Experian Midlands 0.8 (2.6) +340 bps North East (0.1) bps North West (0.8) (4.1) +330 bps Scotland 1.9 (1.7) +360 bps South East (0.3) (2.1) +180 bps South West 0.0 (0.6) +60 bps Wales (0.3) (0.6) +30 bps Yorkshire 0.8 (0.3) +110 bps All Regions 0.3 (2.0) +230 bps Retail Parks 0.7 Shopping Centres 0.1 Attracting the Consumer: Footfall Outperforming the Market 48

50 Resilient Operational Performance At 31 March 2012 British Land IPD UK Occupancy Rate 98.3% 95.7% Rents - Index Linked/fixed Uplifts 24.3% n/a Lease Length 12.1 years 11.5 years Income Expiring (Mar ) 7.5% 16.1% Rent Collection within 2 weeks of due date 97% n/a Occupiers in Administration 1 0.9% n/a Temporary Lettings 0.3% n/a 1 As at 31 March Including recent Clinton Cards administration post year end 1.6% of retail rent Retail Defensively Positioned in Today s Challenging Environment 49

51 UK Retail Market Development Pipeline Continued demand 440,000 sq ft under offer on our portfolio Little new stock in the pipeline UK Retail Development Completions m sq ft 12 8 Retail Parks Town Centre Source: PMA Shortage of the Right Space 50

52 Our Retail Development Pipeline 100,000 sq ft extension to Surrey Quays 302,000 sq ft development of Whiteley Shopping Centre, near Southampton Strong demand from high quality retailers 68% pre-let/under offer 1m sq ft of Potential New Space Across Portfolio Developing the Next Generation of Retail Space 51

53 Retail Outlook Market environment will remain challenging Key challenge over next 12/24 months is growing income Short-term variability in performance, reflecting sentiment Prime will be more resilient, but not immune to market sentiment Shortage of high quality space Confidence about our relative prospects given our portfolio and active asset management Defensively Positioned Today: Well Positioned to Outperform in Future 52

54 Tim Roberts Head of Offices

55 Key Messages Strong performance over year 7.8% capital return 12.1% total return Office Value by Subsector 1 Balancing City and West End Strategy and actions delivering outperformance: Focus on London 1.2bn development commitment 1m sq ft of lettings/re-gears securing 26m pa 1.1m sq ft of pre-lets securing 34m pa 57% 43% 1 Proforma for committed development Strategy Continues to Deliver Good Performance 54

56 Strong Office Performance Outperformed IPD at sector and subsector level, and on capital and total return basis Developments showed 24.9% capital return Continued ERV growth 3.7% Capital Return BL % IPD % Performance vs IPD City bps West End bps All Offices bps Outperformance Driven by London Focus and Our Actions 55

57 Office Performance Drivers Contribution to Valuation Uplift Full Year Good capital returns throughout the year H1 +5.6% H2 +2.1% H1 boosted by yield H2 no yield impact Over Two-Thirds of Valuation Uplift Driven by Our Actions 56

58 Strong and Secure Income Flow 2.1m sq ft of pre-lets/lettings and lease extensions in year, securing 60m pa of rent British Land accounts for one fifth of London take-up over last 2 years BL IPD Central London Occupancy rate 98.0% 89.9% Lease length 8.8 yrs 8.0 yrs Income expiring: Mar % 30.8% Capturing Occupier Demand for Best Quality Buildings 57

59 Revitalising Broadgate Nearly 50% of Estate recently developed, refurbished or under construction UBS retained as anchor occupier at 5 Broadgate Also 755k sq ft of lease extensions In addition re-geared and let c. 130,000 sq ft, totalling 3.2m pa Improved 3 year lease expiry from 15.3% to 4.6% of rent Occupancy high at 97% Reinforcing Broadgate as Premier Business Destination 58

60 Enhancing Broadgate Broadgate Circle Significant Asset Management Opportunities 59

61 Enhancing Broadgate 100 Liverpool Street Existing building 380,000 sq ft Lease break extended from 2013 to 2016 Capital value net of dilapidations, break penalty and income of c. 345 psf Crossrail station due to open in 2018 Significant Asset Management Opportunities 60

62 Transforming Regent s Place Estate will grow to 2.0m sq ft Development of NEQ (500,000 sq ft) completing in June 2013 Debenhams pre-let of 174,500 sq ft 25 year lease term Including further 30,000 sq ft at 56 psf 62,000 sq ft of lease extensions securing 3m pa Transformed into a Vibrant 2.0m sq ft Mixed Use Estate 61

63 Achieved Major Development Milestones Tendered 74 construction contracts totalling 500m Secured final planning consent on over 900,000 sq ft Entered 47 third party legal agreements Unconditional pre-lets for lease on 1.1m sq ft, ahead of investment case NEQ 500,000 sq ft 10 Portman Sq 159,000 sq ft Marble Arch Hse 86,000 sq ft 5 Broadgate 700,000 sq ft Leadenhall 610,000 sq ft 199 Bishopsgate 142,000 sq ft 39 Victoria St 92,000 sq ft Developments Showed Capital Return of 24.9% 62

64 Attractive Development Pre-lets Sq ft m pa (BL Share) psf Term yrs Rent Free mths 700, , , Total 1,065, Secured 1.1m sq ft Pre-lets - 50% of Committed Programme 63

65 Profitable Development Programme On Track Valuers expected 192m profit to come: 167m already recognised Over 40m still provided within cost as a contingency Sq ft 000s End Value m Income m % Pre-let % costs placed Development Yield % City 1, West End Total 2,289 1, Further Profits to Come 64

66 Residential Increased investment in London residential Over 600m owned or under management 330m BL development portfolio (end value) 300m standing investment portfolio managed on behalf of a Fund Develop and sell approach for our 330m development portfolio 140m in the context of mixed-use developments 190m in residential-led schemes Exploiting London s Growing Status 65

67 Market Outlook London Development Pipeline City and West End Development Completions m sq ft Committed Pre-let Completed Average Grade A Take up Source: Drivers Jonas Deloitte Expected Completions Below Historical Average, Leaving Limited Choice 66

68 Market Outlook Occupational Demand London Active Demand m sq ft City Active Demand West End Active Demand Active demand picked up 18.7m sq ft of lease breaks or expiries between 2013 and 2015 West End requirements driven by TMT sector 2 0 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Source: Jones Lang LaSalle Market Demand Underpinned by Structural Factors 67

69 Market Outlook Positive Rental Outlook Agents Consensus Rental Growth Forecast Rental Index 2011 = City West End + 4.1% pa + 3.7% pa Source: Average Agents Consensus Imbalance Between Demand and Supply 68

70 Confident About Our Future Prospects High quality portfolio with growth opportunities Profitable development programme well on track Focus on London, well balanced between City and West End Positive About Outlook for London Offices 69

71 CHRIS GRIGG Chief Executive

72 Outlook Building the Best REIT in Europe 71

73 Summary Strong results Driven by decisions Driven by actions Management team Defensively positioned today with growth tomorrow Building the Best REIT in Europe 72

74 APPENDICES

75 Reconciliation of Underlying Profit Before Tax Year Ended 2011 m 2012 m IFRS Profit before tax Net valuation movement (includes disposals) (591) (215) Deferred and current taxation of joint ventures & funds 6 - Amortisation of intangible assets 10 - Capital financing costs 1 2 Non-recurring items - 3 Underlying profit before tax EPRA adjustments 4 (6) EPRA earnings before tax

76 Gross Rental Income 1 Sectoral Analysis (Accounting Basis) m 12 months to 31 March 2012 Annualised as at 31 March 2012 Group JVs & Funds Total Group JVs & Funds Total Retail parks Superstores Shopping centres Department stores UK Retail Europe All Retail City West End Provincial All Offices Other Total Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives 75

77 Growth in Rental Income FY Reported Net Rental Income m Annualised Gross Rental Income m 31 March Like-for-like 7 5 Acquisitions Disposals (7) (6) Development (6) (4) Other (2) 1 31 March

78 Operating Costs Metric Our measure of efficiency: Controlling costs a strategic priority Metric introduced 2011 Net operating costs: 14.9% of Gross Rental Income No BL staff costs/overheads capitalised It remains a key competitive advantage FY to 31 March 2011 m 2012 m Property Outgoings Administrative Expenses; Property related Corporate expenses 30 Income generated from property management (18) (17) Net Operating Costs As % of Gross Rental Income Group JVs & Funds

79 EPRA Balance Sheet (Proportional Consolidation) m Group JVs & Funds March 2012 March 2011 Total properties 5,414 4,923 10,337 9,572 Net debt (2,229) (2,461) (4,690) (4,317) Other net liabilities (113) (153) (266) (154) EPRA Net Assets 3,072 2,309 5,381 5,101 EPRA Diluted NAV per share 595p 567p Loan to Value inc. share of JVs & Funds 45.3% 44.7% Loan to Value Group 29.1% 24.3% 78

80 Reconciliation of EPRA NAV & NNNAV As at 31 March 2011 m 2011 Pence 2012 m 2012 Pence Balance sheet (IFRS) net assets 4, , Deferred tax arising on revaluation movements Mark to market on effective cash flow hedges and related debt adjustments Adjust to fully diluted on exercise of share options EPRA NAV 5, , Deferred tax arising on revaluation movements (37) (4) (31) (3) Mark to market of debt and derivatives 53 6 (202) (23) EPRA NNNAV 5, ,

81 Growth in EPRA Net Asset Value +23p +1p +29p +1p (26)p 567p 595p 2011 Office Revaluation Retail/Other Revaluation Underlying Profit Dividends Other

82 Net Debt As at 31 March 2012 Group m JVs & Funds m Gross debt 2,621 2,601 5,222 Market value of derivatives Cash & liquid investments (337) (146) (483) EPRA adjustments 1 (74) (115) (189) Net debt (EPRA basis) 2,229 2,461 4,690 Average interest rate 4.2% 4.6% Interest cover 2 3.0x 2.2x Total m 1 Excludes mark to market on effective cash flow hedges and related debt adjustments 2 Underlying profit before interest and tax (UPBIT)/net interest 81

83 Diverse Funding Profile 5bn 4bn 3bn 0.8bn 1.8bn Other JV & Funds debt Securitisations Debentures & loan notes 2bn 1bn 0bn 1.0bn 1.0bn 0.5bn 0.5bn 1.1bn 1.1bn Group (LTV: 29.1%) Prop. Consol. (LTV: 45.3%) US Private Placements Unsecured debt 82

84 Debt Maturity Joint Ventures and Funds BL Share m 1 1,200 1, JVs - securitisations JVs - bank debt Funds - bank debt Year to 31 March 1 Pro forma for financings completed since year end 83

85 Movement in Cash Flow FY to 31 March 2012 Group m JVs & Funds m Total m Net cash from operations Investment acquisitions (382) - (382) Other purchases (22) 11 (11) Disposals Development and other capital expenditure (106) (101) (207) Investment in and loans to JVs & Funds (110) Dividend paid (212) - (212) Other / non cash movements (34) Net (increase) / decrease in net debt (589) 121 (468) 84

86 Major Assets As at 31 March 2012 (excluding developments) BL Share % Sq ft 000 Rent m pa 1 Occupancy rate % 2 Lease length yrs 3 1 Broadgate, EC2 50 4, Regents Place, NW , Meadowhall Shopping Centre 50 1, Ropemaker Place, EC Teesside Shopping Park Drake Circus Shopping Centre Debenhams, Oxford Street York House, W Glasgow Fort Shopping Centre St Stephens Shopping Centre Tesco Superstores 50 2, Sainsbury s Superstores 50 2, annualised contracted rent including 100% of Joint Ventures & Funds 2 includes accommodation under offer or subject to asset management 3 to first break 85

87 Top 20 Customers At 31 st March 2012 % of total rent % of total rent Tesco 7.2 Sainsbury s 6.2 Debenhams 4.3 UBS AG 3.6 Home Retail Group 3.0 HM Government 2.3 Kingfisher (B&Q) 2.2 Virgin Active 2.1 Next 2.0 Arcadia Group 1.9 Spirit Group 1.7 Bank of Tokyo-Mitsubishi UFJ 1.6 Macquarie Group 1.5 DSG International 1.4 Herbert Smith 1.4 Asda Group (inc. Asda Living) 1.3 Alliance Boots 1.3 RBS 1.2 Hutchison 3G 1.1 Marks and Spencer

88 Portfolio Valuation by Sector Group JVs & Funds Total Change% 2 At at 31 March 2012 m m 1 m H1 H2 FY Retail parks 1, , (0.7) 0.2 Superstores 142 1,223 1, (0.1) 1.1 Shopping centres 474 1,038 1, (0.6) 0.0 Department stores UK Retail 2,946 3,100 6, (0.5) 0.4 Europe Retail (2.0) (4.4) (5.7) All Retail 3 2,946 3,372 6, (0.6) 0.1 City 526 1,538 2, West End 1,402-1, Provincial (1.9) All Offices 4 2,017 1,545 3, Other Total 5,414 4,923 10, group s share of properties in Joint Ventures & Funds 2 valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales 3 including committed and prospective developments of 87 million, down 8.0% for the 12 months 4 including committed and prospective developments of 614 million, up 17.8% for the 12 months 87

89 Portfolio Net Yields 1 At 31 st March 2012 (excluding developments) EPRA initial yield % EPRA topped-up initial yield % 1 Overall topped-up initial yield% 2 Reversionary yield % Equivalent yield % Retail parks Superstores Shopping centres Department stores UK Retail Europe Retail All Retail City West End Provincial All Offices Other Total Including rent contracted from expiry of rent free periods and fixed uplifts not in lieu of growth 2 Including fixed/minimum uplifts (excluded from EPRA definition) 88

90 Lease Length and Occupancy At 31 st March 2012 (excluding developments) Average lease length (yrs) Occupancy rate (%) To expiry To break Occupancy Occupancy (overall) 1 Retail parks Superstores Shopping centres Department stores UK Retail Europe Retail All Retail City West End Provincial All Offices Other Total Including accommodation under offer subject to asset management 89

91 Annualised Rent & Estimated Rental Value (ERV) At 31 st March 2012 (excluding Developments) Annualised rents (valuation basis) m 1 ERV m Average rent ( psf) Group JVs & Funds Total Total Contracted ERV Retail parks Superstores Shopping centres Department stores UK Retail Europe Retail All Retail City West End Provincial All Offices Other Total gross rents on a cash basis plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group s external valuers), less any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift 2 based on office space only 90

92 Significant Rental Growth Potential Current annualised cash rent Accounting Gross Rent m Annualised Rent Valuation Basis 3 1 Over next 5 years 2 Illustrative impact based on growth in RPI of 2.5%pa 3 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group s external valuers), less any ground rents payable under head leases 4 Including notional purchaser s costs, and annualised property outgoings (as per EPRA definition) m EPRA Net Yield % Expiry of rent free periods Fixed and minimum uplifts Developments pre-let Total contracted Letting of developments RPI uplifts 1,2 7 7 Uplift from rent reviews, expiries and vacancies Total

93 Contracted Rental Increases (Cash Flow Basis) Year to 31 March ( m pa) Excluding developments Expiry of rent free periods Fixed uplifts (EPRA basis) Fixed & minimum uplifts in lieu of rental growth Total

94 Rent Subject to Open Market Rent Review 12 months to 31 March ( m) Retail parks Superstores Shopping centres Department stores UK Retail Europe Retail All Retail City West End Provincial All Offices Other Total Potential uplift at current ERV

95 Rent Subject to Lease Break or Expiry At 31 March ( m) Retail parks Superstores Shopping centres Department stores UK Retail Europe Retail All Retail City West End Provincial All Offices Other Total % of contracted rent 2.5% 3.0% 2.1% 3.4% 7.6% 7.6% 18.6% Potential uplift at current ERV (1)

96 Rent Resetting to Market Year to 31 March ( m pa) Income expiring existing portfolio Speculative developments City Speculative developments West End Speculative developments Retail Total

97 Rent Resetting to Market Total ERV Resetting to Market (Next 3 Years) 30% 25% 20% 15% 10% 5% 0% 7% 9% British Land 27% IPD (exc. development) Vacant & Income Expiring Developments (Speculative) 96

98 Committed Developments At 31 March 2012 BL Share Sq ft PC Calendar Current Value Cost to complete Notional interest ERV Pre-let Resi End Value % '000 Year m m m 1,2 m 3 m m 4 5 Broadgate Q The Leadenhall Building Q NEQ, Regents Place Q Bishopsgate Q Portman Square Q Marble Arch House Q Victoria Street Q Total Offices 2, Puerto Venecia, Zaragoza 50 1,360 Q Whiteley Village, Fareham Q Glasgow Fort (Cinema) Q Total Retail 1, Total Residential Total Committed 4, Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 from 1 April 2012 to practical completion (PC) 2 based on a notional cost of finance of 6% 3 estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 4 parts of residential development expected to be sold, no rent allocated of which 108 million completed or exchanged 5 191,000 sq ft pre-let to Aon signed with an option to take a further 85,000 sq ft 6 includes 126,000 sq ft of residential 7 includes 25,000 sq ft of off-site residential and retail (95-99 Baker Street) sale completed 8 includes 10,000 sq ft of residential 97

99 Prospective Developments At 31 March 2012 BL Share % Sq ft ' Eldon Street Pre-submission Colmore Row Detailed planning consent 100 Liverpool Street Planning pending New Century Park 50 1,000 Outline Total Offices 1,714 Fort Kinnaird, Edinburgh Planning pending Glasgow Fort, Glasgow Detailed planning consent Kingston Centre, Milton Keynes Detailed planning consent Broughton Park, Chester Planning pending Surrey Quays, London Detailed planning consent Power Court, Luton Planning pending Superstore Extensions Board Commitment to Fund Deepdale Retail Park, Preston Detailed planning consent Meadowhall Surrounding Land Planning submitted Total Retail 960 Total Prospective 2,674 98

100 Estimated Future Development Spend for Offices and Retail PC Prelet ERV Cost to complete m (excluding notional interest) Six mths As at 31 March 2012 Calendar Year m Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar Bishopsgate, EC2 Q Portman Square, W1 Q NEQ, Regent s Place, NW1 Q Victoria Street, SW1 Q Marble Arch House, W1 Q The Leadenhall Building, EC3 Q Broadgate, EC2 Q Total Offices Puerto Venecia, Zaragoza Q Glasgow Fort (Leisure) Q Whiteley Shopping Centre Q Total Retail Total Committed

101 Illustrative Unrealised Office Development Profits Unrealised profit illustration 1 Average Valuation Yield ( m) +75bps +50bps +25bps 5.4% (25bps) (50bps) (75bps) (10%) (24) (5%) Estimated Rental Value % % % Estimated remaining valuation surpluses on committed office developments, based on external valuers March 2012 assumptions (sensitised for movements in yields and headline rents) excluding valuation surplus of 167m realised to date 2 Headline (excluding tenant incentives) 100

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