Investor / Analyst visit to Braehead, June 2013 Corporate strategy overview. David Fischel, Chief Executive

Transcription

1 Investor / Analyst visit to Braehead, June 2013 Corporate strategy overview David Fischel, Chief Executive

2 Agenda Thursday 27 June 2013 Intu strategy & operations 15:45-16:15 Arrival at Braehead Meet Peter Beagley, Regional Centre Director 16:15 Corporate strategy overview David Fischel, CEO Update on Operational Strategy Mike Butterworth, COO 16:45 Customer experience and connectivity Trevor Pereira, Commercial Director, Roger Binks, Customer Experience Director Karen Harris, Intu Digital Managing Director 17:30 Questions 17:50 Braehead leisure - Xscape 18:30 Depart for Blythswood Square Hotel 19:30 Pre-dinner drinks The Rally Bar Friday 28 June 2013 Asset management & investment 08:30 Depart hotel 09:00 Coach tour of Braehead regeneration area Peter Beagley, Regional Centre Director 09:30 Developments Martin Ellis, Construction Director 10:00 Asset management Julian Wilkinson, Asset Management Director 10:30 Tour of Braehead Group 1: Julian Wilkinson, Asset Management Director Group 2: Trevor Pereira, Commercial Director Group 3: David Parker, Asset Manager 12:00 Lunch 12:45 Depart 20:00 Dinner The Monte Carlo room Page 2

3 Welcoming remarks David Fischel

4 Braehead Power Station s Page 4

5 Taking derelict land Page 5

6 and creating a destination Page 6

7 2007 Page 7

8 2012 Page 8

9 Retail context Population of Scotland 5.2m Scotland retail spend b, forecast b (source: CACI) (9% of UK total) Average spend per head in Scotland in 2013 is 2,672, above the UK average of 2,604 Glasgow attracting significant investment 2014 Commonwealth Games (c 525m), Europe s largest hospital campus ( 1b), airport expansion ( 290m) Intu Braehead is Scotland s best-ranked shopping centre (CACI) Intu Braehead catchment 2.4m (45 minute drive time) Intu Braehead attracts 74% of shoppers from its primary and secondary catchments Relatively affluent catchment Secure Families represent 16% of intu Braehead shoppers (9% Scotland average) Page 9

10 Corporate Strategy Overview

11 Focus, scale and quality Page 11

12 Providing great retail and leisure experiences Page 12

13 Enhancing our dynamic retail and leisure destinations Page 13

14 Digital reshaping retail 82% of UK consumers say social networks save them time in making a retail purchase There are 81.6m mobile handsets in the UK of them There are 21m mobile internet uses a month 39% want to use mobiles to receive personalised promotions 83% of users research online prior to in-store visit 42% of users use a mobile phone to locate products in-store 74% of users would be happy to receive retailer messaging whilst in store 68% of smartphone users use them in-store 44% of shoppers always check online before buying in-store Consumers believe social media and online sources should be a fully integrated part of the store SOURCES: Cisco 2012; econsultancy 2012; Deloitte 2012: Ofcom 2012 Page 14

15 Key statistics 2012 Page 15

16 Key statistics 2012 Average dwell time 106 minutes in town centres 77 minutes out of town centres 137 minutes Aggregate spend c 5 billion Average spend per visit 16 in town centres 11 out of town centres 25 Page 16

17 New nationwide brand Page 17

18 Bond issue significantly extends debt maturity profile Weighted average maturity c 8 years (was 6 years) 1, Annual repayments ( 'm) December 2012 as reported Pro forma, adjusted for 2013 refinancing Page 18

19 Key Messages Benefits of scale Growth opportunities digital physical Leading change Capital structure Prospects for returns Page 19

20 Update on operational strategy Mike Butterworth, Chief Operating Officer

21 Operational strategy Delivering growth Page 2

22 Operational strategy Customer experience Asset management Development Page 3

23 Asset management Tenant mix Encouraging commitment fewer temps Protect rental values Creative change Page 4

24 Developments Page 5

25 Developments Sidgate, intu Eldon Square CAD drawing Platinum mall, intu Metrocentre CAD drawing Page 6

26 Developments SEA LIFE, intu Trafford The Avenue, intu Potteries CAD drawing Page 7

27 Developments Food Court, intu Lakeside CAD drawing Intu Victoria Centre CAD drawing Page 8

28 Developments Intu Bromley CAD drawing Charter Place, intu Watford CAD drawing Page 9

29 Drawing customers from further, for longer and more often Asset Emerging New Retailer Demand Range & Choice Property Segments Marketing Footfall Dwell Time Customer Experience World Class Service Experiences Memorable Moments Page 10

30 Customer Experience & Connectivity Trevor Pereira Commercial Director Roger Binks Customer Experience Director Karen Harris - Managing Director, IntuDigital

31 Why that helps retailers & Intu Asset Emerging New Retailer Demand Range & Choice Property Segments Marketing Footfall Dwell Time Customer Experience World Class Service Experiences Memorable Moments Page 2

32 Customer insight Demographics & Stated Behaviour Observed Behaviour Missions Missions Missions Missions Drivers of Behaviour & engagement Page 3

33 From demographics to ethnographic Amy & Joanne Girls Day Out Page 4

34 Shopper missions Deborah Mum in School Hours Rachel & Jason Family Weekend Shop Carol & Len Free Timers Sue and Gabrielle Mum and daughter Liam After Work Ben & Sophie Entertainment, Dining & Cinema Page 5

35 Developing our customer proposition Customer Experience Page 6

36 World Class Service Page 7

37 Creative events Page 8

38 Memorable moments Page 9

39 Physical interactions Page 10

40 Community matters Page 11

41 Digitally connected Page 12

42 A seamless multi channel experience for all our customers The fibre optic & WiFi network is the catalyst for innovation In-centre footfall & dwell time analytics Click & Collect Building operational systems Location based services Business WiFi offering 4G rollout Page 13

43 Big data an example Location Based offers Wifi Registration Intu App Browsing Data Footfall Behaviour Page 14

44 Why that helps retailers & Intu Asset Emerging New Retailer Demand Range & Choice Property Segments Self fuelling dynamo Marketing Footfall Dwell Time Customer Experience World Class Service Experiences Memorable Moments Page 15

45 Creating the best experience

46 What is world class customer experience? A Great Experience Listens to the consumer Is intuitive and unique Clearly expresses benefits Adds Value Is built with scalability in mind PEOPLE TALK ABOUT GREAT EXPERIENCES GREAT EXPERIENCES ARE GROWN Is worth talking about Is Shared Page 17

47 Process of managing the experience Marketing Construction & Development Property Experiences HR Finance Customer Experience Asset Management Centre Teams Corporate Functions Customer Experience is NOW everyone s responsibility, for delivery and origination. Operations ICT Page 18

48 How do we create it? Insight Business focus & performance Raw ideas Generating innovative solutions [Concepts] Prove the concept Develop the product [prepare for full launch] Full roll out Generate solutions Winning support for investment Implementation Page 19

49 Customer experience roadmap In play Initiatives that are in live tests or rolled out. 2 in test 8 rolled out Under evaluation / in progress Initiatives that are being scoped or evaluated to be considered or prepared for a live test. 17 being scoped 3 ready for testing Waiting room Raw ideas that have been filtered, but not started raw ideas 10 filtered Page 20

50 Elite fashion Page 21

51 Elite fashion

52 Customer experience roadmap In play Initiatives that are in live tests or rolled out. 2 in test 8 rolled out Under evaluation / in progress Initiatives that are being scoped or evaluated to be considered or prepared for a live test. Customer Lounges Waiting room Raw ideas that have been filtered, but not started. 50+ raw ideas 10 filtered Page 23

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58 What is world class customer experience A Great Experience Listens to the consumer Is intuitive and unique Clearly expresses benefits Adds Value Is built with scalability in mind PEOPLE TALK ABOUT GREAT EXPERIENCES GREAT EXPERIENCES ARE GROWN Is worth talking about Is Shared Page 29

59 The UK s First Multi Channel Shopping Centre

60 The pitch to retailers Shopping has radically changed Pace of change has quickened Innovate and embrace it Enhance our visitor s shopping experience Fluid world of virtual & physical shopping Page 31

61 Customers want it all Shop favourite retailers & brands online One basket One checkout Pick up & return at their shopping centre Shoppable magazine content Page 32

62 The UK s first multi channel shopping centre New sales platform for retailers Click & collect at the heart of our centres Content led with magazine and film style editorial Beginning of our digitally connected world intu.co.uk Page 33

63 One consumer domain intu.co.uk Page 34

64 Why we re doing this Demographic to technographic: Shopping is multichannel Consumer proposition: What our customers want Footfall: Click & Collect will drive footfall back to centres Rents: Convert pure play retailers to multichannel Revenue: Generate new income Media: New media platform to anchor multichannel advertising deals Page 35

65 Timing Live public BETA 80 retailers signed up Retailers include both tenants & pure plays Phase 1 Click & Collect across all centres Consumer launch from September Page 36

66 Developments Martin Ellis, Construction Director

67 intu Braehead planning application Page 2

68 intu Braehead planning application Planning red line boundary around existing Page 3

69 intu Braehead planning application Proposed building plots Page 4

70 intu Braehead planning application Block plans Page 5

71 intu Braehead planning application Shopping centre retail plans Existing Retail New Retail Page 6

72 intu Braehead planning application Plans in context Page 7

73 intu Braehead planning application Fitting into a masterplan Page 8

74 intu Braehead planning application Building sections Page 9

75 intu Braehead planning application Public realm Page 10

76 intu Braehead planning application Transport interchange Page 11

77 intu Braehead planning application Department store and public square Page 12

78 Page 13

79 Construction and development work 1 billion pipeline of organic developments over 10 years, including major extensions at intu Lakeside, intu Braehead and intu Victoria Centre, is focused on projects which position each of our centres as broader destinations, providing top retailers and iconic brands along with a mix of leisure Page 14

80 Indicative timeline Page 15

81 intu Watford Page 16

82 intu Victoria Centre Page 17

83 Asset management Julian Wilkinson, Asset Management Director

84 Strategy

85 Driving growth through active management Letting strategy Improving tenant mix Sustainability with key retailers + + Achieving ERV on review / renewal Goal The right space at the right rent Outcome Tenant re-investment and commitment to the Centre Consistent growth in rental income Page 3

86 Strategy intu Braehead 2011 reappraisal Key tenant mix opportunities Scope to expand catering offer Low outlay, high impact environment improvements Pockets of temporary lettings Expiry profile 2014 Page 4

87 Improving tenant mix Attracting catalyst brands to enhance appeal to consumers and other retailers

88 Super regional centres major destinations 158 acres land Barton Square John Lewis M&S intu Trafford Centre Selfridges Bus station Debenhams Petrol Frankie & Benny s The Orient The Great Hall Coach House Premier Inn M60 Page 6

89 Improving tenant mix example intu Trafford Centre Over 100 new brands since Selected retailers joining the Centre No Page 7

90 Improving tenant mix intu Braehead tenant mix evolution from opening in 1999 Lydia Brown providing moving image Page 8

91 Improving tenant mix - recent initiatives Enhancing the environment to attract new retailers Upper level double height signage zones Escalator removal to improve linkages and sight lines Mall de-cluttering Page 9

92 Improving tenant mix Extending the catering offer Improvement of food court environment Development of distinct offers for ground and first floor Ground floor 2011 casual dining offer - 3 new restaurants and a 4 th coming soon Champagne Bar added Other kiosks to be remodelled and converted to restaurants in 2014 Costa relocation First floor Consolidation of fast food offers Tenant mix improvements e.g. Fuel Juice Bars Additional initiatives to generate space - new fascias and relocations from ground floor Page 10

93 Sustainability with key retailers Meeting needs of existing retailers up / down sizing, flagship configurations

94 Sustainability with key retailers - examples intu Trafford Centre intu Braehead FROM TO FROM TO Next 25,000 sq ft 42,000 sq ft Next 23,000 sq ft 34,000 sq ft M&S 83,000 sq ft 99,000 sq ft JD Sports 9,000 sq ft 11,000 sq ft Ernest Jones 2,000 sq ft 5,000 sq ft Topshop 11,000 sq ft 11,000sq ft Superdrug 8,000 sq ft 5,000 sq ft WH Smith 18,000 sq ft 8,000 sq ft Page 12

95 Sustainability with key retailers intu Braehead - repositioning anchor / MSU units Next 34,000 sq ft. Opening 1 August 2013 JD Sports 10,000 sq ft. Opening Oct/Nov 13 Topshop/Topman. Full refit summer 2013 Page 13

96 Achieving ERV Establishing rental tone for upcoming lease expiry cycle

97 Achieving ERV intu Trafford Centre intu Braehead intu Trafford Centre 400 Zone A (Prime) intu Braehead 250 Scottish Zone A ( 335 English equivalent) Page 15

98 Achieving ERV Lease renewal strategy Strategy Early engagement with retailers Secure MSU mix, rental tone and shop fit, e.g. Next Secure large standard units e.g. JD Sports & Topshop/Topman Establish appropriate mix of food, leisure and retail Secure further investment from retailers e.g. Thorntons Successfully applied at intu Trafford Centre 63 expiries 2013, passing rent 15m, ERV 18m Two thirds completed / under offer, in aggregate 2% ahead of ERV intu Braehead lease expiries expiries of original 15 year leases passing rent 12.6m, representing 40% of rent roll ERV 14.7m intu Braehead total reversion from expiries and reviews - 6.9m (21% of current contracted rent) Page 16

99 Long term growth in rental income and capital value intu Braehead intu Trafford Centre 406m Market value 582m 1,230m Market value 1,800m CAGR +3.0% CAGR +4.9% CAGR +3.3% CAGR +4.8% Long term rental growth Long term rental growth Page 17

100 Achieving ERV example intu Trafford Centre Increase in zone A tone 2008 to 2012 first floor Key Page 18

101 Achieving ERV intu Braehead Zone A tone 2013 evidence for 2014 lease expiry cycle Page 19

102 Achieving ERV intu Braehead Reversion to ERV * +21% *Uplift from current contracted rent to ERV of occupied units based on 31 December 2012 valuation data. Page 20

103 Asset management - key messages Strong tenant mix Strengthening range of brands Food, retail, leisure Complementary adjacent uses Moved up 3 places to # 22 in PMA tenant mix rankings 2008 to 2012 Improving operational metrics 2012 retailer sales up 4%, footfall down 1% Sound financial base Sustainable rental levels Reduced temporary lettings Retailer buy-in - 8 million capital investment committed ytd 2013 Scope for future rental & capital growth 250 Scottish ZA ( 335 English equivalent) evidenced for 2014 expiry cycle Page 21