Full Year Results Presentation

Full Year Results

Presentation

Full Year ended 31 March 2016

@BritishLandPLC www.britishland.com #BLFY2016 $BLND

Results Overview

Chris Grigg

4

Results highlights

•

Another strong set of results

•

Underlying profits up 16% to £363m

•

NAV up 11% to 919p

•

Good performances across

the business

•

Rising rental growth and strong lettings

Well positioned for the future

•

Resilience built into the company

•

Optionality in our development pipeline

6

A resilient business

•

Quality of income

–

Long leases – 9 years to first break

–

High occupancy (99%)

–

Modern buildings

•

Over £1.4bn of Retail assets recycled

•

Strength of financing

–

Gearing at 32%

–

Long average debt maturity – over 8 years

–

Weighted average interest rate at 3.3%

Optionality embedded into our development pipeline

•

180,000 sq ft of offices

–

4 Kingdom Street

–

Clarges Mayfair

•

Glasgow Fort extension

•

100 Liverpool Street

•

1 Finsbury Avenue

•

Plymouth Leisure

•

1 Triton Square

•

Blossom Street

•

Meadowhall Leisure

•

2–3 Finsbury Avenue

•

Eden Walk, Kingston

•

Canada Water

Committed

Near term

Medium term

2017

2016

8

Aligning our strategy to long term trends

Key long term trends

Implications for British Land

Globalisation

Continued strength

of London

Transforming impact

of technology

Rise of omnichannel

Population growth

and urbanisation

Sharpened focus

on end user

Importance of

infrastructure

Blurring of work

and leisure

Placemaking lies at the heart of our business

Offices

Retail

Lifestyle orientated mixed use offices

Multi-let lifestyle centres

Regional

Attracting visitors from a wide

catchment for a planned trip

Local

Fitting into the daily life of

local communities

Campuses

Large, office-led mixed use

lifestyle campuses

Campus-lite

Smaller clusters

10

Our purpose and strategy is aligned around

Places People Prefer

Strategic focus

Customer Orientation

Right Places

Capital Efficiency

Expert People

Placemaking

We Connect

We Design

We Enhance

We Enliven

Values

Places People Prefer

How Britain shops today

90%

of shopping spend touches

the physical store

Source: IPF/Conlumino

<20 mins

average customer drive time

to BL assets

Source: Kantar Source: British Land surveys

Convenience ranked

#1

importance for a shopping trip

70%

more click and collect than

national average

39%

of food eaten out

of home in the UK

28%

of BL visitors

use F&B/leisure

12

A well positioned multi-let portfolio

BL regional centres BL local centres BL asset catchments

Average rent

to sales ratio

10

%

Annual footfall of

330

m

90

%

of our car parking

spaces are free

Potential to reach

60%

Our data shows both regional and local can succeed

Off-peak

Meadowhall Glasgow Fort

Ealing

Broadway

Doncaster

Wheatley

Regional

Regional

Local

Local

Size (‘000 sq ft)

1,500

510

470

232

Drive time (mins)

24

16

10

12

Frequency

of visit

33 pa

50 pa

70 pa

52 pa

Dwell time (mins)

118

78

69

55

Annualised spend

£3,358

£2,751

£3,056

£2,798

14

32%

18%

16%

13%

9%

3%

9%

Attracting a more diverse occupier base

Lettings and renewals by sector by rent

Retailers taking space in

non-traditional locations

Letting/renewals

ahead of ERV

8.0

%

Fashion & Footwear

General Retail Food & Leisure

Health & Beauty Electrical & Mobile Phone

DIY Other

Our Retail operational metrics remain strong

+3.0%

+2.4%

Foot

fa

ll

Ret

ail

er

in

-store sal

es

Regional

+2.9%

+3.2%

Total multi-let

portfolio

Local

+2.2%

+3.2%

Ahead of market by

440 bps

Ahead of market by

200 bps

3.4%

3.5%

3.3%

Ahead of market by

200 bps

ERV

gr

ow

th

16

Local: Providing convenience and quality at

Old Market, Hereford

Footfall

+11.5%

Rent to sales

8%

ERV

+4.9%

Regional: Expanding and improving Glasgow Fort

Footfall

+6.7%

Leisure/F&B

13%

ERV

+4.7%

18

Investment driving performance at Meadowhall

•

On site with a

£60m

refurbishment

•

Attracting new occupiers

•

Substantial leisure

extension planned

New additions

Delivering growth across our London campuses

Our 3 campuses as

a % of office assets

>

70

%

Paddington Central

Broadgate

Regent’s Place

20

Regent’s Place: A model for our

campus approach

•

A more diverse occupier base

•

Significant rental growth

–

25% ERV growth over last

three years

–

Rent reviews 30% above

previous passing rent

•

Further growth from development

ERV growth in FY2016

13.3

%

Professional and Corporate Other

33%

3%

17%

19%

3%

12%

13%

Transforming Broadgate into a London destination

•

Buildings for a wide range of occupiers

•

Increasing and diversifying retail offer

22

100 Liverpool Street

•

Major development opportunity

•

Significant retail and leisure

Significant potential at Paddington Central

•

Progressing public realm improvements

and campus completion

•

Due to top out at 4 Kingdom Street

this month

•

New co-working space opening at

2 Kingdom Street

24

A focus on campuses driving Office performance

•

Our actions contributed

45% of the valuation uplift

–

ERV growth a key driver

•

Lettings/renewals 6% ahead of ERV

–

Setting new rental highs

at Leadenhall

•

Offices portfolio c10% reversionary

•

Rent reviews a more

important element

•

Overall, leasing activity

added over £13m of rent

ERV growth FY2016

Canada Water

•

Roger Madelin appointed

Financial Review

Lucinda Bell

Highlights

FY to 31 March

2015

2016

Change

%

Underlying Profit (£m)

313

363

16.0

Underlying Earnings per Share (p)

30.6

34.1

11.4

Dividend per Share (p)

27.7

28.4

2.5

Valuation Performance

12.1%

6.7%

EPRA Net Asset Value per Share (p)

829

919

10.9

LTV

35%

32%

28

Underlying profit up £50 million

£m

313

18

15

27

₍₄₎

(6)

FY 2015 Developments Like for like rental growth Financing activities Investment activity Administrative expenses FY 2016

363

Net rental income

585

23

15

40

(43)

FY 2015 Developments Like for like rental growth Acquisitions Disposals FY 2016

620

£m

30

Financing Costs

£m

(201)

27

(11)

₁₀

(5)

FY 2015 Financing activity Acquisitions Disposals Completion of developments

FY 2016

(180)

Income statement

FY to 31 March

2015

2016

Change

%

Net Rental Income (£m)

585

620

35

6.0

Fees & Other Income

_(£m)

₁₇

₁₇

_-

_-

Administrative Expenses

_(£m)

₍₈₈₎

₍₉₄₎

₍₆₎

_6.8

Net Finance Costs (£m)

(201)

(180)

21

(10.4)

Underlying Profit (£m)

313

363

50

16.0

Underlying Earnings per Share (p)

30.6

34.1

3.5

11.4

Dividend per Share (p)

27.7

28.4

0.7

2.5

1 _{Fees & other income and administrative expenses have been restated to reflect the change in presentation of the results of Broadgate Estates, a wholly owned subsidiary of the}

32

Valuation performance

FY to March 2016

Valuation

£bn

Uplift

£m

Uplift

%

Yield

Compression

bps

ERV

Growth

%

NEY

%

Weighting

%

Retail & Leisure

7.3

184

2.4

13

2.4

5.0

49

Offices & Residential

7.0

761

11.8

21

9.6

4.4

49

Canada Water

0.3

5

1.7

13

0.5

3.2

2

Total

14.6

950

6.7

17

5.3

4.7

100

- Of which Standing

Investments

13.9

857

6.4

- Of which

Development

0.7

93

9.4

Valuation growth drivers – Retail & Leisure

FY to March 2016 Valuation

£bn

Uplift

£m

Uplift

%

Yield Compression

bps

ERV Growth

%

H1

H2

FY

H1

H2

FY

H1

H2

FY

Regional

2.8

86

2.8

0.2

3.0

11

4

15

1.7

1.8

3.5

Local

2.4

61

1.5

1.1

2.6

7

2

9

1.0

2.2

3.3

Multi-let

5.2

147

2.2

0.6

2.8

9

3

12

1.4

2.0

3.4

Dept St + Leisure

1.0

59

3.4

2.5

6.0

19

17

37

0.2

0.2

0.4

Superstores

0.8

(20) (1.7) (0.5) (2.1)

(5)

1

(6) (0.9) (0.3) (1.3)

Solus/Other

0.3

(2) (0.1) (0.4) (0.5)

1

1

2

0.1

0.0

0.1

34

Valuation growth drivers – Offices & Residential

FY to March 2016 Valuation

£bn

Uplift

£m

Uplift

%

Yield Compression

bps

ERV Growth

%

H1

H2

FY

H1

H2

FY

H1

H2

FY

West End

3.9

458

8.1

4.6

12.8

24

3

28

4.1

5.6

9.9

City

2.9

288

8.5

2.4

11.1

16

(4)

12

4.8

4.3

9.3

Offices

6.8

746

8.3

3.7

12.1

20

-

21

4.4

5.0

9.6

Residential

0.2

15

6.7 (0.3)

5.7

Offices &

Residential

7.0

761

8.2

3.5

11.8

Growth in diluted EPRA net asset value

829p

68p

17p

34p

(26p)

(3p)

Mar 15 Offices & Residential

Retail & Leisure Underlying Profit Dividends Finance transaction costs Mar 16 Stamp duty change 13p

919p

36

Strength of debt metrics

Proportionally Consolidated

31 Mar 2015

31 Mar 2016

Loan to Value (LTV)

35%

32%

Loan to Value pro-forma for 2012 bond conversion

32%

29%

Weighted Average Interest Rate

3.8%

3.3%

Interest Cover

2.6x

3.0x

Average Maturity of Drawn Debt (years)

8.7

8.1

Group

31 Mar 2015

31 Mar 2016

Loan to Value (LTV)

28%

25%

Available undrawn facilities

£1.2bn

£1.2bn

Weighted Average Interest Rate

3.3%

2.6%

Offices to Let Residential to Sell Pre sold/ pre let 100 Liverpool Street 1 Finsbury Avenue & 1 Triton Square 5 Kingdom Street & Blossom Street Retail Residential

0

200

400

600

800

1,000

1,200

1,400

1,600

Development programme

•

Current speculative commitment

£0.5bn, 100% of costs fixed

•

Speculative development

commitment is 4%, limit of 10%

•

Expecting to commit to

100 Liverpool Street in early 2017

•

Optionality across the

development pipeline

•

Further medium term opportunities

at Canada Water, Eden Walk

and Meadowhall

Committed

Near-Term Pipeline

38

Future income growth

Annualised Gross Rents Cash Flow Basis

£m

Accounting Basis £m

Current Passing Rent 610

641

Contracted Uplifts 77

Total Contracted Rent 687

Developments – Under Construction 16 14

RPI linked leases 7 7

Reversion 47 39

Potential Rent in 5 Years excl Near Term Developments 757 701

Near Term Developments - 100 Liverpool Street 10 7

Near Term Developments - 1 Triton Square 15 9

Near Term Developments - 1 Finsbury Avenue 3 1

Near Term Developments - Other 41 36

Potential Rent in 5 Years incl Near Term Developments 826 754

Increase 35% 18%

Valuation rent, includes assumptions on outstanding rent review settlements

RPI-linked leases assumed at 2.6% per annum and uplift at rent review based on ERVs determined by the Group’s valuers Excludes owner occupier space

Outlook

Chris Grigg

40

Outlook

•

British Land is well positioned

•

Operationally and financially resilient

•

Significant development pipeline with optionality

42

Gross investment

activity in 2016

Broadly balanced investment activity

Investment Activity

Disposals Acquisitions & Capital Investment Net Spend

£52m £648m (£267m) Net Spend £m 2013 2014 2015 2016 £21m

£1,257m

Note: 2015 restated to exclude post period end acquisition of 1 Sheldon Square, which is now included in 2016.

£484m

Investment Activity

From 1 April 2015

Retail

£m

Offices

£m

Residential

£m

Total

£m

Development Spend

17

140

30

187

Capital Spend

99

19

2

120

Purchases

100

232

–

332

Sales

(420)

(139)

(59)

(618)

Net Investment

(204)

252

(27)

21

Gross Investment

636

530

91

1,257

44

Acquisitions

From 1 April 2015

Area

Price

(Gross)

£m

Price

(BL Share)

£m

Annual

Passing

Rent

£m

Completed

1 Sheldon Square

Offices

London

210

210

10

Hercules Unit Trust unit purchase

Retail

Various

95

95

5

19–33 Liverpool Street

Offices

London

22

22

1

Chester, Broughton development land

Retail North West

5

3

–

Teesside Leisure Park

Retail

North East

2

2

–

Total

334

332

16

1 _{Units purchased over the course of the period. £95m represents purchased GAV} 2 _{BL share of net rent topped up for rent frees}

45

Disposals

From 1 April 2015 Area Price (Gross) £m Price (BL Share) £m Annual Passing Rent £m1 Completed

Parkgate Shopping Park, Rotherham Retail Yorkshire 170 120 6

39 Victoria Street Offices London 139 139 5

Birstall Shopping Park, Leeds Retail Yorkshire 107 31 2

PREF – France & Portugal Retail Europe 67 43 4

Hatters Way, Luton & Hylton Riverside, Sunderland Retail Various 45 34 2

560 London Road, Camberley Retail South 38 38 2

Debenhams, Oxford Retail South 23 23 1

The Hempel Collection Residential London 20 20 –

Superstore disposals Retail Various 154 122 6

B&M, Daventry Retail Midlands 9 9 1

Bedford Street Residential London 4 4 –

Aldgate Place Residential London 1 1 –

Exchanged

Aldgate Place Residential London 32 16 –

The Hempel Collection Residential London 18 18 –

Total 827 618 29

1

46

Strong operational performance

Outperformance

in 2016

BL footfall performance vs Experian benchmark

+440

bps

UK Market (Experian Index) British Land

80 85 90 95 100 105 110 115

Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16

Continued ERV growth in Retail

Rental growth on

multi-let assets

Portfolio rental growth vs IPD

3.4

%

Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16

48

BL property outperformance vs IPD – 5 years

100

400

200

120

280

140

Retail Offices Total

5 years ended 31 March 2016

Outperformance bps pa

BL property outperformance vs IPD – 3 years

50

270

130

60

150

60

Retail Offices Total

Outperformance bps pa

3 years ended 31 March 2016

50

Gross rental income

Accounting Basis £m 12 months to 31 March 2016 Annualised as at 31 March 2016 Group JVs & Funds3 _{Total Group JVs & Funds}3 _Total

Regional 55 89 144 52 83 135

Local 100 26 126 97 26 123

Multi-let 155 115 270 149 109 258

Department Stores & Leisure 57 – 57 56 – 56 Superstores 11 36 47 9 35 44 Solus & Other 21 – 21 18 – 18

Retail & Leisure 244 151 395 232 144 376

West End 125 – 125 125 – 125

City 5 114 119 5 119 124

Offices 130 114 244 130 119 249

Residential4 3 – 3 3 – 3

Offices & Residential 133 114 247 133 119 252

Canada Water 8 – 8 8 – 8

Total 385 265 650 373 263 636

Table shows UK total

1 _{Excluding developments under construction and assets held for development.} 2

Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives

3 _{Group’s share of properties in joint ventures and funds including HUT at share} 4 _{Stand-alone residential}

Operating costs metric

FY to 31March (£m) 2015 2016

Property operating expenses 33 34

Administrative expenses 88 94

Net fees and other income (17) (17)

Ground rent costs (3) (3)

EPRA Costs (including direct vacancy costs) 101 108

Gross rental income 618 654

Ground rent costs (3) (3)

Gross Rental Income (EPRA basis) 615 651

EPRA Cost Ratio (including direct vacancy costs) 16.4% 16.6%

Table shows figures on a proportionately consolidated basis which includes the Group's share of joint ventures and funds and excludes non-controlling interests in the Group's subsidiaries.

52

Administrative Expenses

FY to 31

March (£m)

2015

2016

Personnel Costs

49

50

Share Scheme Costs

13

10

Other Administrative Expenses

23

33

Total – British Land

₈₅

₉₃

Broadgate Estates

3

5

Total – Group

88

98

Capitalised Costs

–

(4)

Total Administrative Expenses

88

94

FY17 income statement guidance

–

Rental Income

–

Virtually fully let portfolio with contracted gross rent of £636m as at 31 March 2016.

–

Like-for-like growth, given portfolio nearly full, will be driven by rental growth and

full year impact of FY16 leasing.

–

Property outgoings likely to be similar to FY16 as a percentage of gross rents.

–

Administrative costs and fee income

–

Expected to be broadly in line with FY16 levels.

–

Financing

–

Weighted average interest rate now 3.3% on gross debt of £5.1bn.

–

Capitalised interest expected to be at a similar level to FY16.

–

2012 Convertible Bond

–

As in FY16, underlying EPS will be diluted for the 2012 convertible bond.

–

For earnings calculations, the interest payable on the 2012 convertible bond of £6m

will need to be added back and the number of shares increased by 58 million

.

–

Dividend

–

3% increase in 2017.

–

Other

54

Reconciliation of underlying profit before tax

FY to 31 March (£m)

2015

2016

IFRS Profit before tax attributable to shareholders of the Company

1,734

1,312

Net valuation movement

(1,473)

(861)

Profit on disposal of investment and trading properties

(32)

(63)

Deferred and current taxation of joint ventures & funds

(2)

1

Capital financing costs / (income)

47

(31)

Add non-controlling interests

39

5

Underlying Profit

313

363

Dilution adjustments

6

6

EPRA balance sheet (proportional consolidation)

£m

31 March 15

Group

JVs &

Funds

31 March 16

Total properties

13,677

9,787

4,861

14,648

Adjusted net debt

(4,918)

(3,357)

(1,408)

(4,765)

Other net liabilities

(124)

(101)

(108)

(209)

EPRA Net Assets (undiluted)

8,635

6,329

3,345

9,674

Dilution impact of 2012 convertible bond

400

400

–

400

EPRA Net Assets (diluted)

9,035

6,729

3,345

10,074

Loan to Value (LTV)

35%

25%

32%

Average interest rate

3.8%

2.6%

3.3%

Interest cover

2.6x

3.4x

3.0x

Average maturity of drawn debt (years)

8.7

7.2

8.1

56

Reconciliation of EPRA NAV & NNNAV

31 March 15

31 March 16

£m

pence

£m

pence

Balance Sheet (IFRS) Net Assets

8,565

840

9,619

935

Deferred tax arising on revaluation movements

13

5

Mark to market on effective cash flow hedges and

related debt adjustments

257

198

Adjust to fully diluted on exercise of share options

37

36

Adjust to dilute for 2012 convertible bond

400

400

Surplus on trading properties

96

93

Less non-controlling interests

(333)

(277)

EPRA NAV

9,035

829

10,074

919

Deferred tax arising on revaluation movements

(13)

(24)

Mark to market of debt and derivatives

(663)

(410)

At 31 March 2016 Group £m JVs & Funds £m Less non-controlling interest £m £m

Gross Debt (principal value) 3,552 1,665 (128) 5,089

IFRS adjustments:

Issue costs and premia (18) (4) 1 (21)

Fair value hedges 197 – – 197

Other Items 30 – – 30

IFRS gross debt 3,761 1,661 (127) 5,295

Market value of derivatives (30) 45 (3) 12

Cash (114) (239) 9 (344)

IFRS net debt 3,617 1,467 (121) 4,963

Adjustments:

Remove market value of derivatives (12)

Remove fair value hedges (159)

Other adjustments (27)

Adjusted net debt 4,765

58

Adjusted net debt – proportionally consolidated (£bn)

4.9 4.8 0.3 0.3 (0.6) (0.1) Mar 15 Net Debt

Acquisitions Development & Capex

Disposals Operating Cashflow after cash dividends

Mar 16 Net Debt

LTV

35%

LTV

32%

Debt maturity – group (£m)

Debenture & loan notes (Secured) Bank Term Loan (Secured) US Private Placements (Unsecured)

Convertible Bond (Unsecured) Bank RCF Drawn (Unsecured) Bank RCF Undrawn (Unsecured)

Year to March 0 200 400 600 800 1,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

1 _{2022 pro-forma for 1 year extension of bank syndicated RCF, agreed post year end}

60

Debt maturity – joint ventures and funds

1

_(£m)

1 _{At British Land share (including share of HUT)}

JVs – Securitisations Funds – Bank drawn Funds – Bank undrawn JVs – Bank drawn

0 200 400 600 800 1,000 2017 2018 2019 2020 2021 2022 - 2026 2027-2036 Year to March

Debt Financing – Diverse profile

Debentures & loan notes (Secured) Bank RCFs Drawn (Unsecured) US Private Placements (Unsecured)

Bank Term Loan (Secured) JVs Securitisations

JV & Funds Term Loans (Secured)2

1 _{Proportionally Consolidated}

2 _{HUT’s debt shown at our share (£0.4 billion) within JV & Funds}

Diverse Debt Profile

_{(31 March 2016)}

•

Over £1bn of debt financing activity

since 31 March 2015

•

WAIR reduced by 50 bps to 3.3% from

3.8%

•

£350m 0% convertible bonds due 2020

(issued June 2015)

-

Flexible settlement options

-

Competitive terms

-

Further diversifying sources of finance

•

£110m tender on 6.75% 2020 debentures

•

Reduced pricing and extended various

bank loans and facilities

Convertible Bonds (Unsecured)

£0.6bn £0.8bn £0.3bn £0.8bn £0.6bn £1.5bn £0.5bn

62

Number of shares

Number of shares (m)

31 Mar 15

31 Mar 16

IFRS Basic

Weighted Average

1,016

1,025

Underlying and IFRS Diluted

Weighted Average

1,022

1,089

EPRA Diluted

Weighted Average

1,080

1,089

Period End

1,090

1,096

Major property holdings

At 31 March 2016

(excl. developments under construction)

BL Share

%

Sq ft

000’s

Rent

£m pa

Occupancy

Rate %

Lease

Length yrs

1

Broadgate

50 4,724 226 99.3 7.8

2

Regent's Place

100 1,590 79 98.7 7.4

3

Paddington Central

100

806 33 99.8 7.8

4

Meadowhall Shopping Centre

50 1,500 80 98.3 6.9

5

Sainsbury's Superstores

50 2,526 56 100.0 14.0

6

The Leadenhall Building

50 603 37 97.8 11.6

7

Debenhams, Oxford Street

100 363 11 100.0 23.0

8

Teesside Shopping Park

100 569 15 99.1 5.7

9

Glasgow Fort Shopping Park

100 510 14 94.2 6.5

10 Drake's Circus Shopping Centre

100 570 16 98.4 5.2

1 _{Annualised EPRA contracted rent including 100% of Joint Ventures & Funds}

2 _{Includes accommodation under offer or subject to asset management at 31 March 2016} 3 _{Weighted average to first break}

64

Top 20 occupiers & occupier split by industry

As at 31 March 2016 % of Contracted Rent

UBS AG1 5.7% Tesco plc 5.6% Debenhams 5.3% J Sainsbury plc 4.6% Kingfisher (B&Q) 2.6% HM Government 2.2% Next plc 2.1% Virgin Active 1.8% Facebook 1.7% Spirit Group 1.6% Alliance Boots 1.5% Wesfarmers 1.4% Visa Inc 1.4% Dixons Carphone 1.4%

Marks & Spencer plc 1.4%

Arcadia Group 1.3%

Dentsu Aegis 1.3%

Herbert Smith 1.2%

RBS 1.1%

TJX Cos Inc (TK Maxx) 1.0%

General Retail 18%

Fashion & Beauty

15%

Banks & Financial services2 _16% Supermarket 12% Professional & Corporate 8% Food/Leisure 9% DIY 6% TMT 7%

Occupier Split by Industry (%)

Other 8%

1 _{Rent contracted on both 5 Broadgate and 1-3 Finsbury Avenue/100 Liverpool Street lease}

whilst UBS move. 3.0% pro-forma for run off of UBS rent at 1-3 Finsbury Avenue/ 100 Liverpool Street.

Portfolio valuation by sector

At 31 March 2016 Group JVs & Funds1 Total1 Change %2

£m £m £m H1 H2 FY

Regional 1,052 1,792 2,844 2.8 0.2 3.0

Local 1,893 485 2,378 1.5 1.1 2.6

Multi-let 2,945 2,277 5,222 2.2 0.6 2.8

Department Stores & Leisure 1,004 1 1,005 3.4 2.5 6.0

Superstores 153 628 781 (1.7) (0.5) (2.1)

Solus & Other 333 – 333 (0.1) (0.4) (0.5)

Retail & Leisure3 4,435 2,906 7,341 1.8 0.7 2.4

West End 3,904 – 3,904 8.1 4.6 12.8

City 104 2,782 2,886 8.5 2.4 11.1

Offices 4,008 2,782 6,790 8.3 3.7 12.1

Residential4 173 61 234 6.7 (0.3) 5.7

Offices & Residential3 4,181 2,843 7,024 8.2 3.5 11.8

Canada Water 283 – 283 2.6 (0.9) 1.7

Total 8,899 5,749 14,648 4.7 2.0 6.7

Standing Investments 8,204 5,673 13,877 4.5 1.9 6.4

Developments 695 76 771 6.9 3.1 9.4

1 _{Group’s share of properties in joint ventures and funds including HUT at ownership share}

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 developments

66

Retail Portfolio Valuation

–

Previous Classification basis

At 31 March 2016 Valuation

Change %

ERV Growth %

NEY Yield

Compression

£m

H1

H2

FY

H1

H2

FY

H1

H2

FY

Shopping parks

3,346

1.1

0.3

1.3

0.9

1.9

2.8

5

2

7

Shopping centres

2,205

3.8

0.9

4.7

2.0

1.9

3.9

14

5

18

Superstores

781

(1.6)

(0.5)

(2.1)

(0.9)

(0.3)

(1.3)

(5)

1

(6)

Department stores

606

2.9

3.0

6.0

–

0.3

0.3

12

13

25

Leisure

403

4.2

1.8

6.1

0.3

0.3

0.6

22

23

54

Retail & Leisure

7,341

1.8

0.7

2.4

0.9

1.5

2.4

8

5

13

1 Group’s share of properties in joint ventures and funds including HUT at share

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 _{As calculated by IPD}

4 _{Solus/Other assets under current Retail segmentation previously included in Shopping Parks} 5 _{Including committed developments}

Portfolio weighting

Department Stores & Leisure 7.1 6.9 1,005 6.7

Superstores 6.7 5.3 781 5.2

Solus & Other 2.8 2.3 333 2.2

Retail & Leisure 53.6 50.2 7,341 49.0

West End 23.9 26.6 3,904 28.0

City 18.8 19.7 2,886 19.3

Offices 42.7 46.3 6,790 47.3

Residential2 1.9 1.6 234 1.8

Offices & Residential 44.6 47.9 7,024 49.1

Canada Water 1.8 1.9 283 1.9

Total 100.0 100.0 14,648 100.0

1 _{Pro forma for developments under construction at estimated end value (as determined by the Group’s external valuers) and post period end transactions} 2 _{Stand-alone residential}

68

Portfolio net yields

1,2

At 31 March 2016 EPRA net initial yield % EPRA topped up net initial yield %3 Overall topped up net initial yield %4 Net equivalent yield % Net reversionary yield % Regional 4.3 4.4 4.5 4.8 4.8 Local 4.8 5.1 5.2 5.2 5.2 Multi-let 4.5 4.7 4.8 5.0 5.0

Department Stores & Leisure 4.7 4.8 6.4 5.1 4.0 Superstores 5.3 5.3 5.3 5.2 5.2 Solus & Other 5.6 5.6 5.6 5.1 4.7

Retail & Leisure 4.7 4.8 5.1 5.0 4.9

West End 3.5 3.9 4.0 4.4 4.6 City 3.2 4.4 4.5 4.4 5.3

Offices 3.4 4.2 4.2 4.4 4.9

Canada Water 2.8 2.8 2.8 3.2 3.4

Total 4.1 4.5 4.7 4.7 4.9

1 _{Including notional purchaser's costs}

2 _{Excluding developments under construction, assets held for development and residential assets} 3 _{Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth} 4 _{Including fixed/minimum uplifts (excluded from EPRA definition)}

Portfolio net yields

1,2 –

Previous Classification basis

At 31 March 2016

EPRA net

initial

yield %

EPRA topped

up net initial

yield %

Overall topped

up net initial

yield %

Net

equivalent

yield %

Net

reversionary

yield %

Shopping parks

4.7 4.9 4.9

5.1 5.0

Shopping centres

4.5 4.6 4.7 4.9 4.9

Superstores

5.3 5.3

5.3

5.2 5.2

Department stores

3.9 3.9 5.6 4.2 3.5

Leisure

6.1 6.1 7.6 6.4 4.8

Retail & Leisure

4.7 4.8 5.1 5.0 4.9

1 _{Including notional purchaser's costs}

2 _{Excluding developments under construction, assets held for development and residential assets} 3 _{Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth} 4 _{Including fixed/minimum uplifts (excluded from EPRA definition)}

70

Portfolio yield & ERV movements

1

At 31 March 2016 NEY3 ERV Growth %2 NEY Yield Compression3 bps

% H1 H2 FY H1 H2 FY

Regional 4.8 1.7 1.8 3.5 11 4 15 Local 5.2 1.0 2.2 3.3 7 2 9

Multi-let 5.0 1.4 2.0 3.4 9 3 12

Department Stores & Leisure 5.1 0.2 0.2 0.4 19 17 37

Superstores 5.2 (0.9) (0.3) (1.3) (5) 1 (6)

Solus & Other 5.1 0.1 0.0 0.1 1 1 2

Retail & Leisure 5.0 0.9 1.5 2.4 8 5 13

West End 4.4 4.1 5.6 9.9 24 3 28

City4 4.4 4.8 4.3 9.3 16 (4) 12

Offices 4.4 4.4 5.0 9.6 20 (0) 21

Canada Water 3.2 0.2 0.2 0.5 11 1 13

Total 4.7 2.3 3.0 5.3 13 3 17

1 _{Excluding developments under construction, assets held for development and residential assets} 2 _{As calculated by IPD}

3 _{Including notional purchaser’s costs}

Lease length and occupancy

1

At 31 March 2016 Average Lease Length (yrs) Occupancy Rate (%)

To Expiry To Break Occupancy Occupancy (underlying)2

Regional 7.9 6.9 95.8 97.8 Local 8.7 7.5 98.9 99.6

Multi-let 8.3 7.2 97.3 98.6

Department Stores & Leisure 19.7 19.6 100.0 100.0 Superstores 14.2 13.8 100.0 100.0 Solus & Other 10.5 10.5 100.0 100.0

Retail & Leisure 10.6 9.8 98.0 99.0

West End 9.5 7.5 97.8 98.1 City 10.2 8.3 98.4 99.1

Offices 9.8 7.9 98.1 98.6

Canada Water 7.5 7.4 98.4 99.1

Total 10.2 9.0 98.0 98.8

1 _{Excluding developments under construction, assets held for development and residential assets} 2 _{Including accommodation under offer or subject to asset management}

72

Annualised rent & estimated rental value (ERV)

1

At 31 March 2016 Annualised Rents (Valuation Basis) £m2 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted3 ERV

Regional 54 84 138 155 32.8 35.9 Local 97 27 124 134 24.2 24.7

Multi-let 151 111 262 289 28.0 29.7

Department Stores & Leisure 51 – 51 44 15.3 13.1 Superstores 9 35 44 43 21.4 20.8 Solus & Other 18 – 18 16 18.8 16.0

Retail & Leisure 229 146 375 392 24.0 24.3

West End 125 – 125 165 51.5 60.6 City 5 94 99 162 50.0 60.3

Offices 130 94 224 327 51.0 60.4

Residential4 3 – 3 4

Offices & Residential 133 94 227 331

Canada Water 8 – 8 9 18.7 21.6

Total 370 240 610 732 30.1 32.6

1 _{Excluding developments under construction and assets held for development}

2 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, excludes contracted rent subject to rent free and future uplift

3 _{Annualised rent, plus rent subject to rent free} 4 _{Stand-alone residential}

Rent subject to open market rent review

1

At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m

Regional 15 12 17 10 18 44 72

Local 11 24 21 12 11 56 79

Multi-let 26 36 38 22 29 100 151

Department Stores & Leisure – – – – – – –

Superstores 5 4 8 12 14 17 43

Solus & Other – 1 – – – 1 1

Retail & Leisure 31 41 46 34 43 118 195

West End 6 20 20 15 2 46 63

City 1 4 13 14 16 18 48

Offices 7 24 33 29 18 64 111

Canada Water – – – – – – –

Total 38 65 79 63 61 182 306

Potential uplift at current ERV 1 2 4 2 1 7 10

Table with previous classification provided on Company website

74

Rent subject to lease break or expiry

1

At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m

Regional 13 12 9 13 9 34 56 Local 9 6 8 11 9 23 43

Multi-let 22 18 17 24 18 57 99

Department Stores & Leisure – 1 – – – 1 1 Superstores – – – – – – – Solus & Other 1 – – – 6 1 7

Retail & Leisure 23 19 17 24 24 59 107

West End 10 8 10 4 19 28 51 City 17 3 17 14 8 37 59 Offices2 27 11 27 18 27 65 110 Canada Water 1 – 1 – 1 2 3 Total 51 30 45 42 52 126 220 % of contracted rent 7.3% 4.4% 6.5% 6.1% 7.6% 18.2% 31.9%

Potential uplift at current ERV 3 4 3 11 4 1 18 23

1 _{Excluding developments under construction, assets held for development and residential assets} 2 _{Based on office space only}

ERV resetting to market

At 31 March 2016

2017

2018

2019

2020

2021 2017–19 2017–21

For period to 31 March

£m

£m

£m

£m

£m

£m

£m

ERV expiring – existing portfolio

₃₈

₃₃

₅₆

₄₆

₅₄

₁₂₇

₂₂₇

Developments – Under Construction

6

10

–

–

–

16

16

Total Rent Resetting to Market

excluding Near Term Developments

44

43

56

46

54

143

243

Near term developments – Expiries

(28)

–

–

–

–

(28)

(28)

Near term developments – Completions

2

2

20

68

–

24

92

Total Rent Resetting to Market

including Near Term Developments

46

45

76

114

54

167

335

ERV of current vacancies

14

14

Vacant & Income Expiring

181

349

1 _{Rent is based on ERV, reflecting current valuation, expires to first break}

2 _{Including space under offer of £4m and space subject to asset management of £1m} 3 _{Including £2m of vacant space at recently completed developments}

76

Contracted rental increases (cash flow basis)

At 31 March 2016

2017

2018

2019

2020

2021 2017–19 2017–21

For period to 31 March

£m

£m

£m

£m

£m

£m

£m

Expiry of rent free periods

49

10

3

–

–

62

62

Fixed uplifts (EPRA basis)

–

1

1

–

–

2

2

Fixed & minimum uplifts in lieu

of rental growth

5

1

2

1

1

8

10

77

Multi-let assets

Regional – Breadth and depth of Retail and

Leisure, attracting visitors from a wide catchment

Local – Convenience and accessibility, with retail, social and civic space fitting into

the daily life of local communities

Bath Southgate Shopping Centre Basildon Mayflower Shopping Park Londonderry Lisnagelvin Shopping Centre

Chester Broughton Shopping Park * Bath Weston Lock Shopping Park Mansfield St. Peter’s Shopping Park

Edinburgh Fort Kinnaird Shopping Park * Barrow-In-Furness Cornerhouse Shopping Park Milton Keynes Kingston Centre Shopping Park

Glasgow Fort Shopping Park * Barrow-In-Furness Hindpool Shopping Park Newmarket Studlands Shopping Park

Kingston-upon-Hull, St. Stephens Shopping Centre Bradford Forster Shopping Park Newport Harlech Shopping Park

Kingston Eden Walk Shopping Centre Bury Woodfields Shopping Park Oldham Elk Mill Shopping Park

Nottingham Giltbrook Shopping Park Cheltenham Gallagher Shopping Park * Orpington Nugent Shopping Park

Peterborough Serpentine Green Shopping Centre Colchester Tollgate Shopping Park Oxford Botley Road Shopping Park

Plymouth Drake Circus Shopping Centre Dartford Prospect Place Shopping Park * Preston Deepdale Shopping Park *

Sheffield Meadowhall Shopping Centre Denton Crown Point Shopping Park Stafford Queens Shopping Park *

Speke New Mersey Shopping Park * Doncaster Wheatley Shopping Park Swindon Orbital Shopping Park

Stockton on Tees Shopping Park Dumfries Cuckoo Bridge Shopping Park Wakefield Westgate Shopping Park

Ealing Broadway Shopping Centre Walsall Crown Wharf Shopping Park *

Fareham Whiteley Shopping Centre Woking Lion Shopping Park

Hereford Old Market Shopping Centre York Clifton Moor Shopping Park

Inverness Shopping Park * Leeds Westside Shopping Park Leicester Beaumont Shopping Centre Lincoln Valentine Shopping Park * Llandudno Mostyn Champneys Shopping Park *

78

Superstores

_{Stand-alone Superstores}1 _{In Multi-let assets}2 _{Total Exposure}1,2,3

Store Size ‘000 SQ FT Number of stores Valuation (BL share) £m Capital Value psf WALL to FB yrs Number of stores Valuation (BL share) £m Capital Value psf WALL to FB yrs Number of stores Valuation (BL share) £m Capital Value psf WALL to FB yrs >100 8 177 351 12.4 5 357 538 13.0 13 534 457 12.8 75–100 13 270 467 17.9 2 55 415 12.8 15 325 457 17.0 50–75 16 256 404 12.6 1 12 196 11.1 17 268 385 12.3 25–50 8 52 226 8.3 3 32 457 14.6 11 84 281 10.4 0–25 2 8 177 9.1 17 80 436 11.1 19 88 387 10.9 March 2016 47 763 383 13.9 28 536 482 12.7 75 1,299 419 13.5 March 2015 57 924 395 14.5 29 529 491 13.9 86 1,453 426 14.4

Geographical Spread Gross Rent (BL Share) Lease Structure

London & South 57% Tesco £37m RPI and Fixed 8%

Rest of UK 43% Sainsburys £30m OMRR 92%

Other £5m

1 _{Excludes £8m non-foodstore occupiers in superstore led assets, and £10m Sainsburys Newquay, sold post period end} 2 _{Excludes non food-format stores e.g. Asda Living}

Under Construction/completed in period developments

ERV Let & Under Offer Resi End Value Resi Sales Exchanged & Completed % '000 £m £m1 £m2 £m £m £m

5 Broadgate Offices 50 710 Completed 469 8 19.2 19.2 – –

Yalding House Offices 100 29 Completed 37 1 1.9 – – –

Whiteley Leisure, Fareham Retail 50 57 Completed 12 1 0.6 0.6 – –

Glasgow Fort, M&S & Retail

Terrace Retail 75 112 Completed 35 3 2.0 1.7 – –

Total Completed in Period 908 553 13 23.7 21.5 – –

4 Kingdom Street Offices 100 147 Q2 2017 81 64 9.5 – – –

Clarges Mayfair Mixed Use 100 192 Q4 2017 404 107 6.2 – 456 259

Glasgow Fort (MSCP &

Additional retail/leisure units) Retail 75 12 Q3 2016 2 5 0.4 0.2 – –

The Hempel Phase 1 Residential 100 25 Q2 2016 26 2 – – 50 36

The Hempel Phase 2 Residential 100 32 Q3 2016 48 12 – – 72 8

Aldgate Place, Phase 1 Residential 50 221 Q2 2016 44 14 – – 79 55

Total Under Construction 629 605 204 16.1 0.2 657 358

Retail Capital Expenditure3 107

Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%)

1 _{From 1 April 2016}

2 _{Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)} 3 _{Capex committed and underway within our investment portfolio relating to leasing and asset management}

80

Near term and medium term developments

At 31 March 2016 Sector BL Share % Sq ft '000 Start On Site Total Cost1 £m Status

Near term Pipeline

100 Liverpool Street Offices 50 520 2017 279 Consented

1 Triton Square 2 Offices 100 217 2017 370 Pre-submission

1 Finsbury Avenue Offices 50 303 2017 150 Consented

5 Kingdom Street 3 Offices 100 240 2017 228 Consented

Blossom Street, Shoreditch Mixed Use 100 340 2017 256 Consented

Plymouth Leisure Retail 100 102 2016 41 Consented

New Mersey Shopping Park, Speke – Leisure Retail 66 66 2016 20 Consented

Crawley Homewares Park Retail 100 52 2016 26 Consented

Aldgate Place, Phase 2 Residential 50 145 2016 59 Consented

54 The Broadway, Ealing Residential 100 34 2016 21 Consented

Total Near Term 2,019 1,450

Retail Capital Expenditure 4 90

Medium term Pipeline

2–3 Finsbury Avenue Offices 50 550 Submitted

Eden Walk Shopping Centre, Kingston Mixed Use 50 562 Submitted

Canada Water Masterplan 5 _{Mixed Use 100 5,500 Pre-submission}

Forster Retail Park, Bradford, Phase 3 Retail 100 63 Consented

Meadowhall Leisure Retail 50 330 Pre-submission

Glasgow Fort – Retail Extension Retail 75 60 Consented

Putney High Street Residential 100 110 Consented

Total Medium Term 7,175

80

1 _{Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation rate} 2 _{Existing net areas, scheme in early design stages}

3 _{210,000 sq ft of which is consented}

4 _{Forecast capital commitments within our investment portfolio over the next 2 years relating to leasing & asset enhancement} 5 _{Assumed net area based on gross area of up to 7m sq ft}