British Land Chief Executive Chris Grigg on Q1 2015/16: We’ve had a good start to the year

LONDON, 2015-7-20 — /EPR Retail News/ — Chris Grigg, Chief Executive said: “We’ve had a good start to the year, making real progress against the priorities set out at our results in May in what are strong occupational and investment markets. In Retail, our operational metrics remain strong and we continue to recycle capital by selling selected mature assets and investing into our existing portfolio. In Offices, we’re pleased with the deals we’ve done at The Leadenhall Building and in the supply constrained City market we’re positive about our prospects on the remaining space. We handed over 5 Broadgate to UBS in June, progressed our development pipeline and continued to invest in our campuses through public realm enhancements and refurbishments. We’ve taken advantage of favourable market conditions to raise £350 million of convertible bonds at a zero coupon, continuing our strong track record in accessing funding on competitive terms from a range of sources.”

Strong occupational demand with lettings well ahead of ERV

  • 129,000 sq ft of Retail lettings/renewals; investment lettings/renewals 9.4% ahead of March 2015 ERV
  • Retail footfall +0.9%, continuing to outperform (+240bps vs market); retailer same store sales +3.3%
  • 132,000 sq ft of Office lettings/renewals; investment lettings/renewals 1.6% ahead of March 2015 ERV; a further 60,000 sq ft under offer 12.5% ahead of ERV
  • The Leadenhall Building now c.90% let/under-offer (from 84% at full year) with 107,000 sq ft of completed deals in the period and a further 52,000 sq ft under offer

Successfully delivering developments and enhancing existing assets

  • Achieved practical completion at 5 Broadgate in June and handed over to UBS to start fit out
  • Progressing Broadgate vision; planning submitted at 1 Finsbury Avenue for 300,000 sq ft of office and retail space having recently received planning permission on 517,000 sq ft at 100 Liverpool Street
  • On-site with refurbishment of 72,000 sq ft of office space at 338 Euston Road, substantially pre-let to Facebook
  • Opening of 110,000 sq ft of leisure extensions at Broughton, Chester and Fort Kinnaird, Edinburgh as well as 112,000 sq ft M&S anchored extension at Glasgow Fort; driving strong increases in footfall

Disciplined recycling of assets

  • £210 million acquisition of One Sheldon Square, increasing ownership at Paddington Central
  • 39 Victoria Street in the market and seeing strong investor demand (94,700 sq ft of recently refurbished and fully let office space)
  • Ongoing retail disposals including sale of Birstall Shopping Park, Leeds; c.£200 million under offer/on the market
  • Residential sales exchanged in the quarter total £12 million (BL share), with a further £27 million (BL share) reserved or under offer; units under offer 6.5% ahead of March 2015 valuation

Financial position remains strong

  • Raised £350 million of convertible bonds due 2020, at a zero coupon with flexible settlement options
  • Proportionally consolidated LTV at 36.5% based on March 2015 valuations (LTV of 33.7% pro-forma for 2012 convertible bond)
  • Weighted average interest rate reduced by 20bps to 3.6% (proportionally consolidated)
  • First quarter dividend confirmed at 7.091 pence, 2.5% ahead of prior year

Note 1 – Dividend
The first interim dividend payment for the quarter ended 30 June 2015 will be 7.09 pence per share, a 2.5% increase on the comparable period last year. The first interim dividend will be paid on 6 November 2015 to shareholders on the register at close of business on 2 October 2015. The current issued share capital (excluding Treasury shares) is 1,020,718,319 ordinary shares of 25p each. An announcement on the split between PID and non-PID income along with the availability of any scrip dividend alternative will be made no later than 4 business days before the ex-dividend date of 1 October 2015.

For Information Contact:
Investor Relations
Sally Jones, British Land 020 7467 2942
Media
Pip Wood, British Land 020 7467 2838
Gordon Simpson, Finsbury 020 7251 3801
Guy Lamming, Finsbury

Forward-Looking Statements
This release contains certain “forward-looking” statements reflecting, among other things, current views on our markets, activities and prospects.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond British Land’s ability to control or predict (such as changing political, economic or market circumstances).  Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements.  Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared.  Except to the extent required by law, British Land does not undertake to update or revise forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Notes to Editors:

About British Land
We are one of Europe’s largest publicly listed real estate companies. We own, manage, develop and finance a portfolio of high quality commercial property, focused on retail locations around the UK and London offices. We have total assets in the UK, owned or managed of £18.9 billion (of which British Land share is £13.6 billion), as valued at 31 March 2015. Our properties are home to over 1,200 different organisations ranging from international brands to local start-ups. Our objective is to deliver long-term and sustainable total returns to our shareholders and we do this by focusing on Places People Prefer. People have a choice where they work, shop and live and we aim to create outstanding places which make a positive difference to people’s everyday lives. Our customer orientation enables us to develop a deep understanding of the people who use our places. We employ a lean team of experts, who have the skills to translate this understanding into creating the right places, and we have an efficient capital structure which is able to effectively finance these places.

UK Retail assets account for 55% of our portfolio. As the UK’s largest listed owner and manager of retail space, our portfolio is well matched to the different ways people shop today. We are focused on being the destination of choice for retailers and their customers by being the best provider of spaces and services. Comprising around 22 million sq ft of retail space across shopping parks, superstores, shopping centres, department stores and leisure assets, the retail portfolio is modern, flexible and adaptable to a wide range of formats.

Our Office and Residential portfolio, which accounts for 45% of our portfolio is focused on London.  We have an attractive mix of high quality buildings in well managed environments and a pipeline of development projects which will add significantly to our portfolio. Increasingly, our Offices are in mixed-use environments which include retail and residential elements. Our 6.7 million sq ft of high quality office space includes Regent’s Place and Paddington Central in the West End and Broadgate, the premier city office campus (50% share).

Our size and substance demands a responsible approach to business. We believe leadership on issues such as sustainability helps drive our performance and is core to the delivery of our overall objective of driving shareholder value and creating Places People Prefer.

Further details can be found on the British Land website at www.britishland.com