REG - British Land Co PLC British Land Jersey - Final Results - Part 2 <Origin Href="QuoteRef">BLND.L</Origin> - Part 1

British LandAnnouncement

17/05/2017 07:06

RNS Number : 3501F
British Land Co PLC
17 May 2017
THE BRITISH LAND COMPANY PLC
Consolidated income statement
For the year ended 31 march 2017

Note

2017

2016

Underlying1
m
Capital
and other
m
Total
m

Underlying1
m
Capital
and other
m
Total
m
Revenue
3

556
33
589

569
21
590
Costs
3

(122)
(26)
(148)

(128)
(11)
(139)

3

434
7
441

441
10
451
Joint ventures and funds (see also below)
8

132
(80)
52

135
262
397
Administrative expenses


(84)
-
(84)

(93)
-
(93)
Valuation movement
4

-
(144)
(144)

-
616
616
(Loss) profit on disposal of investment properties and investments


-
(5)
(5)

-
35
35
Net financing costs









- financing income
5

2
42
44

5
65
70
- financing charges
5

(80)
(29)
(109) 

(111)
(34)
(145)



(78)
13
(65)

(106)
31
(75)
Profit on ordinary activities before taxation


404
(209)
195

377
954
1,331
Taxation
6


1
1


33
33
Profit for the year after taxation




196



1,364
Attributable to non-controlling interests


14
(11)
3

14
5
19
Attributable to shareholders of the Company


390
(197)
193

363
982
1,345
Earnings per share:









- basic
2



18.8p



131.2p
- diluted2
2



14.7p



119.7p
All results derive from continuing operations.

Note

2017

2016

Underlying1
m
Capital 
and other
m
Total
m

Underlying1
m
Capital
and other
m
Total
m
Results of joint ventures and funds accounted for using the equity method









Underlying Profit


132
-
132

135
-
135
Valuation movement
4

-
(93)
(93)

-
245
245
Capital financing costs


-
(6)
(6)

-
-
-
Profit on disposal of investment properties, trading properties and investments


-
18
18

-
18
18
Taxation


-
1
1

-
(1)
(1)

8

132
(80)
52

135
262
397
1 See definition in glossary.
2 Prior year diluted EPS has been restated. See note 1.
Consolidated statement OF COMPREHENSIVE INCOME
For the year ended 31 march 2017

2017
m
2016
m
Profit for the year after taxation
196
1,364
Other comprehensive (loss) income:


Items that will not be reclassified subsequently to profit or loss:


Net actuarial loss on pension schemes
(12)
(1)
Valuation movements on owner-occupied properties
-
19

(12)
18
Items that may be reclassified subsequently to profit or loss:


(Losses) gains on cash flow hedges


- Group
(21)
(24)
- Joint ventures and funds
1
(3)

(20)
(27)
Transferred to the income statement (cash flow hedges)


- Foreign currency derivatives
-
2
- Interest rate derivatives
16
10

16
12
Exchange differences on translation of foreign operations


- Hedging and translation
-
(3)
- Other
-
3

-
-



Deferred tax on items of other comprehensive income
-
(15)



Other comprehensive loss for the year 
(16)
(12)
Total comprehensive income for the year
180
1,352
Attributable to non-controlling interests
3
19
Attributable to shareholders of the Company
177
1,333
Consolidated BALANCE SHEET
AS AT 31 march 2017

Note

2017
m
2016
m
ASSETS




Non-current assets




Investment and development properties
7

9,073
9,643
Owner-occupied properties
7

94
95



9,167
9,738
Other non-current assets




Investments in joint ventures and funds
8

2,766
3,353
Other investments
9

154
142
Deferred tax assets
13

4
3
Interest rate and currency derivative assets
14

217
167



12,308
13,403
Current assets




Joint venture held for sale
8

540
-
Trading properties
7

334
325
Debtors
10

171
33
Cash and short term deposits
14

114
114



1,159
472
Total assets


13,467
13,875
LIABILITIES




Current liabilities




Short term borrowings and overdrafts
14

(464)
(74)
Creditors
11

(458)
(218)
Corporation tax


(30)
(18)



(952)
(310)
Non-current liabilities




Debentures and loans
14

(2,817)
(3,687)
Other non-current liabilities
12

(78)
(122)
Interest rate and currency derivative liabilities
14

(144)
(137)



(3,039)
(3,946)
Total liabilities


(3,991)
(4,256)
Net assets


9,476
9,619
EQUITY




Share capital


260
260
Share premium


1,298
1,295
Merger reserve


213
213
Other reserves


(97)
(93)
Retained earnings


7,547
7,667
Equity attributable to shareholders of the Company


9,221
9,342
Non-controlling interests


255
277
Total equity


9,476
9,619
EPRA NAV per share*
2

915p
919p
* As defined in glossary.
Consolidated statement OF CASH FLOWS
For the year ended 31 march 2017

Note

2017
m
2016
m
Rental income received from tenants


464
435
Fees and other income received


64
58
Operating expenses paid to suppliers and employees


(149)
(152)
Cash generated from operations


379
341





Interest paid


(92)
(124)
Interest received


8
11
Corporation taxation repayments received


9
8
Distributions and other receivables from joint ventures and funds
8

59
58
Net cash inflow from operating activities


363
294





Cash flows from investing activities




Development and other capital expenditure


(225)
(256)
Purchase of investment properties


(87)
(243)
Sale of investment and trading properties


761
564
Payments received in respect of future trading property sales


8
40
Purchase of investments


(19)
-
Indirect taxes paid in respect of investing activities


(1)
-
Investment in and loans to joint ventures and funds


(50)
(241)
Capital distributions and loan repayments from joint ventures and funds


83
366
Net cash inflow from investing activities


470
230





Cash flows from financing activities




Issue of ordinary shares


3
5
Purchase of own shares


(8)
-
Dividends paid
15

(295)
(235)
Dividends paid to non-controlling interests


(14)
(16)
Acquisition of units in Hercules Unit Trust


(11)
(61)
Closeout of interest rate derivatives


(13)
15
Cash collateral transactions


-
(24)
Decrease in bank and other borrowings


(526)
(919)
Drawdowns on bank and other borrowings


31
373
Drawdown of zero coupon 2015 convertible bond


-
344
Net cash outflow from financing activities


(833)
(518)





Net increase in cash and cash equivalents


-
6
Cash and cash equivalents at 1 April


114
108
Cash and cash equivalents at 31 March


114
114





Cash and cash equivalents consists of:




Cash and short term deposits
14

114
114
Consolidated statement OF CHANGES IN EQUITY
For the year ended 31 march 2017

Share
capital
m
Share
premium
m
Hedging
and
translation
reserve1
m
Re-
valuation
reserve
m
Merger
reserve
m
Retained
earnings
m
Total 
m
Non-controlling
interests
m
Total 
equity 
m
Balance at 1 April 2016
260 
1,295 
(107)
14
213 
7,667 
9,342
277 
9,619 
Profit for the year after taxation
-
-
-
-
-
193 
193
3
196 
Losses on cash flow hedges
-
-
(21)
-
-
-
(21)
-
(21)
Exchange and hedging movements in joint ventures
and funds
-
-
-
1
-
-
1
-
1
Reclassification of gains on cash flow hedges









Foreign currency derivatives
-
-
-
-
-
-
-
-
-
Interest rate derivatives
-
-
16
-
-
-
16
-
16
Net actuarial loss on pension schemes
-
-
-
-
-
(12)
(12)
-
(12)
Other comprehensive (loss) income
-
-
(5)
1 
- 
(12)
(16)
- 
(16)
Total comprehensive income for the year
-
- 
(5)
1 
- 
181
177
3 
180
Share issues
- 
3 
- 
- 
- 
-
3
- 
3
Fair value of share and share option awards
-
-
-
-
-
2
2
- 
2
Purchase of own shares
-
-
-
-
-
(8)
(8)
-
(8)
Purchase of units from non-controlling interests
- 
- 
- 
- 
- 
-
-
(11)
(11)
Gain on purchase of units from non-controlling interests
- 
- 
- 
- 
- 
1
1
-
1
Dividends payable in year (28.8p per share)
- 
- 
- 
- 
- 
(296)
(296)
-
(296)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(14)
(14)
Balance at 31 March 2017
260
1,298 
(112)
15
213 
7,547 
9,221
255 
9,476 










Balance at 1 April 2015
258
1,280
(76)
(6)
213
6,563
8,232
333
8,565
Profit for the year after taxation
-
-
-
-
-
1,345
1,345
19
1,364
Losses on cash flow hedges
-
-
(24)
-
-
-
(24)
-
(24)
Revaluation of owner-occupied property
-
-
-
19
-
-
19
-
19
Exchange and hedging movements in joint ventures
and funds
-
-
-
(3)
-
-
(3)
-
(3)
Reclassification of (losses) gains on cash flow hedges









Foreign currency derivatives
-
-
2
-
-
-
2
-
2
Interest rate derivatives
-
-
10
-
-
-
10
-
10
Exchange differences on translation of foreign operations
-
-
(3)
3
-
-
-
-
-
Net actuarial loss on pension schemes
-
-
-
-
-
(1)
(1)
-
(1)
Deferred tax on items of other comprehensive income
-
-
(16)
1
-
-
(15)
-
(15)
Other comprehensive (loss) income
-
-
(31)
20
-
(1)
(12)
-
(12)
Total comprehensive income for the year
-
-
(31)
20
-
1,344
1,333
19
1,352
Share issues
2
15
-
-
-
(12)
5
-
5
Fair value of share and share option awards
-
-
-
-
-
8
8
-
8
Purchase of units from non-controlling interests
-
-
-
-
-
-
-
(59)
(59)
-
-
-
-
-
(1)
(1)
-
(1)
Dividends payable in year (28.0p per share)
-
-
-
-
-
(287)
(287)
-
(287)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(16)
(16)
Adjustment for scrip dividend element
-
-
-
-
-
52
52
-
52
Balance at 31 March 2016
260
1,295
(107)
14
213
7,667
9,342
277
9,619
1 The balance at the beginning of the current year includes 9m in relation to translation and (116m) in relation to hedging (2015/16: 10m and (86m)).
Notes to the accounts
1 Basis of preparation, significant accounting policies and accounting judgements
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2017 or 2016, but is derived from those accounts. Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006 or equivalent preceding legislation. 
The financial statements for the year ended 31 March 2017 have been prepared on a historical cost basis, except for the revaluation of properties, investments held for trading and derivatives. The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and therefore comply with Article 4 of the EU IAS Regulation.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in June 2017.
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period. None of these are expected to have a material impact on the consolidated financial statements of the Group. 
Certain standards which could be expected to have an impact on the consolidated financial statements are discussed in further detail below. 
IFRS 9 - Financial Instruments (effective year ending 31 March 2019). The new standard addresses the classification, measurement and recognition of financial assets and financial liabilities. It simplifies the existing categories of financial instruments, introduces an expected credit loss model and redefines the criteria required for hedge effectiveness. On adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group. There will however be limited changes to presentation and disclosure.
IFRS 15 - Revenue from contracts with customers (effective year ending 31 March 2019). The new standard combines a number of previous standards, setting out a five step model for the recognition of revenue and establishing principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The new standard does not apply to gross rental income, but does apply to service charge income, management and performance fees and trading property disposals. The impact of the new standard on these items of revenue is not expected to have a material impact on the consolidated financial statements of the Group. 
IFRS 16 - Leases (effective year ending 31 March 2020). For lessees, it will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases will be removed. The accounting for lessors will however not significantly change. As a result on adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group.
The Group conducted an impact assessment of the above new standards in the year, and concluded that whilst adoption of these new standards based on the Group's current activities would lead to some limited changes to presentation and disclosure, they are not expected to have a material impact on the consolidated financial statements. 
Restatement
The IFRS diluted earnings per share for the year ended 31 March 2016 has been restated to reflect the full dilutive impact of the 1.5% 2012 convertible bond. This restatement reduces the diluted earnings per share measure from 124.1 pence to 119.7 pence shown on the Consolidated Income Statement and within the associated notes. This is the only financial measure within these financial statements impacted by this restatement.
Accounting judgements and estimates
In applying the Group's accounting policies, the Directors are requiredto make judgements and estimates that affect the financial statements.
Significant areas of estimation are:
Valuation of properties and investments held for trading: The Groupuses external professional valuers to determine the relevant amounts. The primary source of evidence for property valuations should be recent, comparable market transactions on an arms-length basis. However, the valuation of the Group's property portfolio and investments held for trading are inherently subjective, as they are made on the basis of assumptions made by the valuers which may not prove to be accurate.
Other less significant areas of estimation include the valuation of fixed rate debt and interest rate derivatives, the determination of share-based payment expense, and the actuarial assumptions used in calculating the Group's retirement benefit obligations.
The key areas of accounting judgement are:
REIT status: British Land is a Real Estate Investment Trust (REIT)
and does not pay tax on its property income or gains on property sales, provided that at least 90% of the Group's property income is distributed as a dividend to shareholders, which becomes taxable in their hands. In addition, the Group has to meet certain conditions such as ensuring the property rental business represents more than 75% of total profits and assets. Any potential or proposed changes to the REIT legislation are monitored and discussed with HMRC. It is Management's intention that the Group will continue as a REIT for the foreseeable future.
Accounting for joint ventures and funds: In accordance with IFRS 10 'Consolidated financial statements', IFRS 11 'Joint arrangements', and IFRS 12 'Disclosures of interests in other entities' an assessment is required to determine the degree of control or influence the Group exercises and the form of any control to ensure that the financial statement treatment is appropriate.
Interest in the Group's joint ventures is commonly driven by the terms of the partnership agreements which ensure that control is shared between the partners. These are accounted for under the equity method, whereby the consolidated balance sheet incorporates the Group's share of the net assets of its joint ventures and associates. The consolidated income statement incorporates the Group's share of joint venture and associate profits after tax.
Accounting for transactions: Property transactions are complex in nature and can be material to the financial statements. Assessment is required to determine the most appropriate accounting treatment of assets acquired and of potential contractual arrangements in the legal documents for both acquisitions and disposals. Management consider each transaction separately and, when considered appropriate, seek independent accounting advice.
Held for sale asset: On 1 March 2017 the Group exchanged conditional contracts on an agreement to sell its interest in Leadenhall Holding Co (Jersey) Limited, a joint venture with Oxford Properties. The net investment in the joint venture has been reclassified as a held for sale asset within current assets on the Group balance sheet, and the carrying amount is disclosed separately from the investment in joint ventures and funds within note 8.
Prior to exchange, held for sale criteria were not deemed to be met since the transaction relates to an illiquid asset and is subject to significant uncertainty prior to agreement of terms. However, upon exchange the sale is deemed highly probable as detailed terms have been agreed upon by relevant parties. At this point management expect the carrying amount of the Group's investment in the venture to be recovered principally through a sale transaction rather than continuing operations.
2 Performance measures
Earnings per share
The Group measures financial performance with reference to underlying earnings per share, the European Public Real Estate Association (EPRA) earnings per share and IFRS earnings per share. The relevant earnings and weighted average number of shares (including dilution adjustments) for each performance measure are shown below, and a reconciliation between these is shown within the supplementary disclosures (Table B).
EPRA earnings per share is calculated using EPRA earnings, which is the IFRS profit after taxation attributable to shareholders of the Company excluding investment and development property revaluations, gains/losses on investing and trading property disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. In the current year, diluted EPRA earnings per share did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS diluted earnings per share includes the dilutive impact as IAS 33 ignores this hurdle to conversion. In the prior year, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.
Underlying earnings per share is calculated using Underlying Profit adjusted for underlying taxation (see note 6). Underlying Profit is the pre-tax EPRA earnings measure, with additional Company adjustments. No Company adjustments were made in either the current or prior year.
Earnings per share 
2017

2016
Relevant
earnings
m
Relevant
number
of shares
million
Earnings
per share pence

Relevant
earnings
m
Relevant
number
of shares
million
Earnings
per share
pence
Underlying







Underlying basic
390
1,029
37.9

365
1,025
35.6
Underlying diluted
390
1,033
37.8

371
1,089
34.1
EPRA







EPRA basic
390
1,029
37.9

365
1,025
35.6
EPRA diluted
390
1,033
37.8

371
1,089
34.1
IFRS







Basic
193
1,029
18.8

1,345
1,025
131.2
Diluted1
160
1,091
14.7

1,303
1,089
119.7
1 Prior year diluted EPS has been restated. See note 1.
Net asset value
The Group measures financial position with reference to EPRA net asset value (NAV) per share and EPRA triple net asset value (NNNAV) per share. The net asset value and number of shares for each performance measure is shown below. A reconciliation between IFRS net assets and EPRA net assets, and the relevant number of shares for each performance measure, is shown within the supplementary disclosures (Table B). EPRA net assets is a proportionally consolidated measure that is based on IFRS net assets excluding the mark-to-market on effective cash flow hedges and related debt adjustments, the mark-to-market on the convertible bonds as well as deferred taxation on property and derivative valuations. They include the valuation surplus on trading properties and are adjusted for the dilutive impact of share options.
As at 31 March 2017, EPRA NAV and EPRA NNNAV did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS net assets includes the dilutive impact following the treatment of IFRS earnings per share. In the prior year period, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.
Net asset value per share
2017

2016
Relevant
net assets
m
Relevant
number
of shares
million
Net asset
value per
share
pence

Relevant
net assets
m
Relevant
number
of shares
million
Net asset
value per
share
pence
EPRA







EPRA NAV
9,498
1,038
915

10,074
1,096
919
EPRA NNNAV
8,938
1,038
861

9,640
1,096
880
IFRS







Basic
9,476
1,029
921

9,619
1,029
935
Diluted
9,876
1,096
901

10,019
1,096
914
Total accounting return
The Group also measures financial performance with reference to total accounting return. This is calculated as the increase in EPRA net asset value per share and dividend paid in the year as a percentage of the EPRA net asset value per share at the start of the year.

2017

2016
Decrease in NAV per share
pence
Dividend per share paid
pence
Total
accounting
return

Increase in NAV per share
pence
Dividend per
share paid
pence
Total
accounting
return
Total accounting return
(4)
28.78
2.7%

90
28.02
14.2%
3 Revenue and costs

2017

2016

Underlying
m
Capital
and other
m
Total
m

Underlying
m
Capital
and other
m
Total
m
Rent receivable
449
-
449

437
-
437
Spreading of tenant incentives and guaranteed rent increases
(9)
-
(9)

12
-
12
Surrender premia
2
-
2

2
-
2
Gross rental income
442
-
442

451
-
451
Trading property sales proceeds
-
33
33

-
21
21
Service charge income
62
-
62

72
-
72
Management and performance fees (from joint ventures and funds)
9
-
9

8
-
8
Other fees and commissions
43
-
43

38
-
38
Revenue
556
33
589

569
21
590








Trading property cost of sales
-
(26)
(26)

-
(11)
(11)
Service charge expenses
(62)
-
(62)

(72)
-
(72)
Property operating expenses
(25)
-
(25)

(26)
-
(26)
Other fees and commissions expenses
(35)
-
(35)

(30)
-
(30)
Costs
(122)
(26)
(148)

(128)
(11)
(139)

434
7
441

441
10
451
The cash element of net rental income recognised during the year ended 31 March 2017 from properties which were not subject to a security interest was 276m (2015/16: 229m). Property operating expenses relating to investment properties that did not generate any rental income were 2m (2015/16: 1m). Contingent rents of 2m (2015/16: 3m) were recognised in the year.
4 Valuation movements on property

2017
m
2016
m
Consolidated income statement


Revaluation of properties
(144)
616
Revaluation of properties held by joint ventures and funds accounted for using the equity method
(93)
245

(237)
861
Consolidated statement of comprehensive income


Revaluation of owner-occupied properties
-
19

(237)
880


5 Net financing costs

2017
m
2016
m
Underlying





Financing charges


Bank loans, overdrafts and derivatives
(3)
(30)
Other loans
(83)
(88)
Obligations under head leases
(2)
(2)

(88)
(120)
Development interest capitalised
8
9

(80)
(111)
Financing income


Deposits, securities and liquid investments
2
3
Loans to joint ventures
-
2

2
5
Net financing charges - underlying
(78)
(106)



Capital and other





Financing charges


Valuation movements on translation of foreign currency debt
-
2
Hedging reserve recycling
-
(2)
Valuation movements on fair value derivatives
51
54
Valuation movements on fair value debt
(48)
(53)
Recycling of fair value movement on close-out of derivatives
(10)
(6)
Capital financing costs1
(15)
(29)
Fair value movement on non-hedge accounted derivatives
(7)
-

(29)
(34)
Financing income


Fair value movement on convertible bonds
42
64
Fair value movement on non-hedge accounted derivatives
-
1

42
65
Net financing income - capital
13
31






Net financing costs


Total financing income
44
70
Total financing charges
(109)
(145)
Net financing costs
(65)
(75)
1 Primarily debenture bonds redemption and tender offer and purchase costs.
Interest payable on unsecured bank loans and related interest rate derivatives was 13m (2015/16: 19m). Interest on development expenditure is capitalised at the Group's weighted average interest rate of 2.4% (2015/16: 2.6%). The weighted average interest rate on a proportionately consolidated basis at 31 March 2017 was 3.1% (2015/16: 3.3%).
6 Taxation

2017
m
2016
m
Taxation income (expense) 


Current taxation:


UK corporation taxation: 20% (2015/16: 20%)
(3)
(15)
Adjustments in respect of prior years
4
17
Total current taxation income 
1
2
Deferred taxation on revaluations and derivatives
-
31
Group total taxation
1
33
Attributable to joint ventures and funds
1
(1)
Total taxation income 
2
32



Taxation reconciliation


Profit on ordinary activities before taxation
195
1,331
Less: profit attributable to joint ventures and funds1
(52)
(397)
Group profit on ordinary activities before taxation
143
934
Taxation on profit on ordinary activities at UK corporation taxation rate of 20% (2015/16: 20%)
(29)
(187)
Effects of:


REIT exempt income and gains
28
161
Taxation losses
(2)
11
Deferred taxation on revaluations and derivatives
-
31
Adjustments in respect of prior years
4
17
Group total taxation income 
1
33
1 A current taxation expense of nil (2015/16: charge of 1m) and a deferred taxation credit of 1m (2015/16: expense of nil) arose on profits attributable to joint ventures and funds. The low tax charges reflects the Group's REIT status.
Taxation expense attributable to Underlying Profit for the year ended 31 March 2017 was a nil (2015/16: 2m). Corporation taxation payable at
31 March 2017 was 30m (2015/16: 18m) as shown on the balance sheet.
7 Property
Property reconciliation for the year ended 31 March 2017

Investment

Retail
Level 3
m
Offices & residential
Level 3
m
Canada
Water
Level 3
m
Developments
Level 3
m
Investment
and
development properties
Level 3
m
Trading properties
m
Owner-
occupied
Level 3
m
Total
m
Carrying value at 1 April 2016
5,617
3,436
256
334
9,643
325
95
10,063
Additions








- property purchases
80
-
8
-
88
-
-
88
- development expenditure
12
4
10
55
81
56
-
137
- capitalised interest and staff costs
-
-
2
3
5
5
-
10
- capital expenditure on asset
management initiatives
82
9
1
-
92
-
-
92

174
13
21
58
266
61
-
327
Depreciation
-
-
-
-
-
-
(1)
(1)
Disposals
(624)
(39)
-
(7)
(670)
(26)
-
(696)
Reclassifications
-
271
27
(271)
27
(27)
-
-
Revaluations included in income statement
(105)
(57)
(18)
36
(144)
-
-
(144)
Movement in tenant incentives and contracted rent uplift balances
(41)
(8)
-
-
(49)
1
-
(48)
Carrying value at 31 March 2017
5,021
3,616
286
150
9,073
334
94
9,501
Head lease liabilities (note 12)







(64)
Valuation surplus on trading properties






83
Group property portfolio valuation at 31 March 2017






9,520
Non-controlling interests







(310)
Group property portfolio valuation at 31 March 2017 attributable to shareholders

9,210
Property valuation
The different valuation method levels are defined below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
These levels are specified in accordance with IFRS 13 'Fair Value Measurement'. Property valuations are inherently subjective as they are made on the basis of assumptions made by the valuer which may not prove to be accurate. For these reasons, and consistent with EPRA's guidance, we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. The inputs to the valuations are defined as 'unobservable' by IFRS 13 and these are analysed in a table on the following page. There were no transfers between levels in the period.
The Group's total property portfolio was valued by external valuers on the basis of fair value, in accordance with the RICS Valuation - Professional Standards 2014, ninth edition, published by The Royal Institution of Chartered Surveyors.
The information provided to the valuers, and the assumptions and valuations models used by the valuers are reviewed by the property portfolio team, the Head of Offices, the Head of Retail and the Chief Financial Officer. The valuers meet with the external auditors and also present directly to the Audit Committee at the interim and year end review of results.
Investment properties, excluding properties held for development, are valued by adopting the 'investment method' of valuation. This approach involves applying capitalisation yields to current and future rental streams net of income voids arising from vacancies or rent-free periods and associated running costs. These capitalisation yields and future rental values are based on comparable property and leasing transactions in the market using the valuers' professional judgement and market observation. Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and structural conditions.
In the case of ongoing developments, the approach applied is the 'residual method' of valuation, which is the investment method of valuation as described above, with a deduction for all costs necessary to complete the development, including a notional finance cost, together with a further allowance for remaining risk. Properties held for development are generally valued by adopting the higher of the residual method of valuation, allowing for all associated risks, or the investment method of valuation for the existing asset.
Copies of the valuation certificates of Knight Frank LLP, CBRE and Jones Lang LaSalle can be found at www.britishland.com/reports
A breakdown of valuations split between the Group and its share of joint ventures and funds is shown below:

2017

2016
Group
m
Joint
ventures
and funds
m
Total
m

Group
m
Joint
ventures
and funds
m
Total
m
Knight Frank LLP
7,031
2,883
9,914

7,529
3,576
11,105
CBRE
2,489
1,380
3,869

2,582
1,361
3,943
Jones Lang LaSalle
-
538
538

-
-
-
Total property portfolio valuation
9,520
4,801
14,321

10,111
4,937
15,048
Non-controlling interests
(310)
(71)
(381)

(324)
(76)
(400)
Total property portfolio valuation
attributable to shareholders
9,210
4,730
13,940

9,787
4,861
14,648
Information about fair value measurements using unobservable inputs (Level 3) for the year ended 31 March 2017
Investment
Fair value at
31 March 2017
m
Valuation
technique
ERV per sq ft

Equivalent Yield

Costs to complete per sq ft
Min
Max
Average

Min
%
Max
%
Average
%

Min
Max
Average
Retail
4,987
Investment methodology
2
77
22

4
11
5

-
48
6
Offices1,2
3,695
Investment methodology
7
117
54

4
7
5

-
150
20
Canada Water
271
Investment methodology
15
25
22

2
5
3

-
18
10
Developments2
150
Residual methodology
18
72
54

2
6
4

-
616
508
Total
9,103












Trading properties
at fair value
417












Group property portfolio valuation
9,520












1 Includes owner-occupied.
2 Includes Residential with an average capital value per sq ft of 981 including developments at end value and mixed use.
All other factors being equal:
- a higher equivalent yield or discount rate would lead to a decrease in the valuation of an asset;
- an increase in the current or estimated future rental stream would have the effect of increasing the capital value; and
- an increase in the costs to complete would lead to a decrease in the valuation of an asset.
However, there are interrelationships between the unobservable inputs which are partially determined by market conditions, which would impact on these changes. There were no transfers between valuation levels in the period.
8 Joint ventures and funds
Summary movement for the year of the investments in joint ventures and funds

Joint ventures
m
Funds
m
Total
m

Equity
m
Loans
m
Total
m
At 1 April 2016
3,109
244
3,353

2,833
520
3,353
Additions
59
3
62

13
49
62
Disposals
(30)
-
(30)

-
(30)
(30)
Share of profit on ordinary activities after taxation
44
8
52

52
-
52
Distributions and dividends:







Capital
(73)
-
(73)

(73)
-
(73)
Revenue
(45)
(14)
(59)

(59)
-
(59)
Hedging and exchange movements
1
-
1

1
-
1
Reclassification of venture as held for sale asset (see page 8)
(540)
-
(540)

(355)
(185)
(540)
At 31 March 2017
2,525
241
2,766

2,412
354
2,766 
Additional investments in joint ventures and funds covenant information
At 31 March 2017 the investments in joint ventures included within the total investments in joint ventures and funds and joint venture held for sale was 3,299m (2015/16: 3,348m), being the 2,766m total investment shown above, plus the 540m joint venture held for sale, less the net investment of 7m (2015/16: 5m) in PREF, a property fund in Continental Europe.
The summarised income statements and balance sheets below and on the following page show 100% of the results, assets and liabilities of joint ventures and funds. Where necessary these have been restated to the Group's accounting policies.
Joint ventures' and funds' summary financial statements for the year ended 31 March 2017

Broadgate
REIT
Ltd1
MSC Property
Intermediate
Holdings Ltd
BL Sainsbury
Superstores
Ltd
Tesco Joint
Ventures2
The SouthGate Limited Partnership
USS
Joint
Ventures3
Leadenhall
Holding Co
(Jersey) Ltd4
Hercules Unit Trust
joint ventures
and sub-funds5
Other
joint ventures
and funds6
Total
2017
Total
Group share
2017
Partners
Euro Bluebell LLP
(GIC)
Norges Bank Investment
Management
J Sainsbury plc
Tesco PLC
Aviva
Investors
Universities Superannuation Scheme Group
PLC
Oxford
Properties




Property sector
City Offices
Broadgate
Shopping Centres
Meadowhall
Superstores
Superstores
Shopping
Centres
Shopping
Centres
City Offices
Leadenhall
Retail
Parks



Group share
50%
50%
50%
50%
50%
50%
50%
Various















Summarised income statements
m
m
m
m
m
m
m
m
m
m
m
Revenue7
245
99
49
19
17
14
43
35
1
522
260
Costs
(52)
(23)
-
-
(5)
(5)
(10)
(4)
(1)
(100)
(50)

193
76
49
19
12
9
33
31
-
422
210
Administrative expenses
-
-
-
(2)
(1)
-
-
-
(1)
(4)
(2)
Net interest payable
(82)
(35)
(21)
(9)
(1)
-
-
(4)
-
(152)
(76)
Underlying profit
111
41
28
8
10
9
33
27
(1)
266
132
Net valuation movement
(185)
(1)
(46)
(29)
(6)
(7)
107
(16)
-
(183)
(93)
Capital financing costs
-
-
(12)
-
-
-
-
-
-
(12)
(6)
Profit on disposal of investment properties and investments
-
-
3
(3)
-
-
-
-
34
34
18
(Loss) profit on ordinary activities before taxation
(74)
40
(27)
(24)
4
2
140
11
33
105
51
Taxation
-
-
-
2
-
-
-
-
-
2
1
(Loss) profit on ordinary activities after taxation
(74)
40
(27)
(22)
4
2
140
11
33
107
52
Other comprehensive income
1
-
-
1
-
-
-
-
-
2
1
Total comprehensive income
(73)
40
(27)
(21)
4
2
140
11
33
109
53
British Land share of total comprehensive (expense) income
(37)
20
(15)
(10)
2
1
70
5
17
53

British Land share of distributions payable
32
17
55
4
1
-
5
14
4
132













Summarised balance sheets
m
m
m
m
m
m
m
m
m
m
m
Investment and trading properties
4,478
1,842
769
325
264
247
-
603
1
8,529
4,265
Current assets
2
5
-
-
1
1

3
52
64
32
Cash and deposits
290
37
17
2
8
7
-
10
28
399
200
Gross assets
4,770
1,884
786
327
273
255
-
616
81
8,992
4,497
Current liabilities
(88)
(41)
(22)
(2)
(4)
(6)
-
(10)
(19)
(192)
(96)
Bank and securitised debt
(1,794)
(668)
(367)
(185)
-
-
-
(139)
-
(3,153)
(1,577)
Loans from joint venture partners
(357)
(317)
-
-
-
(22)
-
-
(12)
(708)
(354)
Other non-current liabilities
(56)
(23)
-
(4)
(28)
-
-
(4)
-
(115)
(58)
Gross liabilities
(2,295)
(1,049)
(389)
(191)
(32)
(28)
-
(153)
(31)
(4,168)
(2,085)
Net assets
2,475
835
397
136
241
227
-
463
50
4,824
2,412
British Land share of net assets less shareholder loans
1,237
417
199
68
121
114
-
231
25
2,412

1 Included within the Broadgate REIT net valuation movement is a 20m payment received in December 2016 from UBS A.G. in relation to the development and occupation of 5 Broadgate, and subsequent vacation of 100 Liverpool Street, including 8-10 Broadgate.
2 Tesco joint ventures include BLT Holdings (2010) Limited as at 31 March 2017.
3 USS joint ventures include the Eden Walk Shopping Centre Unit Trust and the Fareham Property Partnership.
4 The Leadenhall column shows the equity accounted profit and loss for the period. Due to the transaction which exchanged in March 2017, the net investment in this venture was reclassified as a held for sale asset.
5 Hercules Unit Trust joint ventures and sub-funds includes 50% of the results of Deepdale Co-Ownership Trust, Gibraltar Limited Partnership and Valentine Co-Ownership Trust and 41.25% of Birstall Co-Ownership Trust. The balance sheet shows 50% of the assets of these joint ventures and sub-funds.
6 Included in the column headed 'Other joint ventures and funds' are contributions from the following: BL Goodman Limited Partnership, The Aldgate Place Limited Partnership, Bluebutton Property Management UK Limited, City of London Office Unit Trust and Pillar Retail Europark Fund (PREF). The Group's ownership share of PREF is 65%, however as the Group is not able to exercise control over significant decisions of the fund, the Group equity accounts for its interest in PREF.
7 Revenue includes gross rental income at 100% share of 437m (2015/16: 451m).

The borrowings of joint ventures and funds and their subsidiaries are non-recourse to the Group. All joint ventures are incorporated in the United Kingdom, with
the exception of Broadgate REIT Limited, the Eden Walk Shopping Centre Unit Trust and Leadenhall Holding Co (Jersey) Limited which are incorporated in Jersey.
Of the funds, the Hercules Unit Trust (HUT) joint ventures and sub-funds are incorporated in Jersey and PREF in Luxembourg.

These financial statements include the results and financial position of the Group's interest in the Fareham Property Partnership, the Aldgate Place Limited Partnership, the BL Goodman Limited Partnership, the Auchinlea Partnership and the Gibraltar Limited Partnership. Accordingly, advantage has been taken of the exemptions provided by Regulation 7 of the Partnership (Accounts) Regulations 2008, not to attach the partnership accounts to these financial statements.
Joint venture held for sale
On 1 March 2017 the Group exchanged conditional contracts on an agreement to sell its interest in Leadenhall Holding Co (Jersey) Limited, a joint venture with Oxford Properties. The transaction is expected to complete in the first half of the next financial year, and therefore the net investment in the joint venture has been recognised as a held-for-sale asset from the date of exchange. The net investment as at 31 March 2017 is summarised below.
Joint venture held for sale - summarised balance sheet for the year ended 31 March

Leadenhall Holding Co (Jersey) Limited
2017
m
2016
m
Investment property
1,075
-
Current assets
17
-
Current liabilities
(13)
-
Loans from joint venture partners
(371)
-
Net assets
708
-
British Land share of net assets less shareholder loans
355
-
Operating cash flows of joint ventures and funds (Group share)

2017
m
2016
m
Rental income received from tenants
207
208
Fees and other income received
-
1
Operating expenses paid to suppliers and employees
(20)
(18)
Cash generated from operations
187
191
Interest paid
(84)
(86)
Interest received
1
1
UK corporation tax paid
(2)
(3)
Foreign tax paid
-
(1)
Cash inflow from operating activities
102
102
Cash inflow from operating activities deployed as:


Surplus cash retained within joint ventures and funds
43
44
Revenue distributions per consolidated statement of cash flows
59
58
Revenue distributions split between controlling and non-controlling interests


Attributable to non-controlling interests
4
4
Attributable to shareholders of the Company
55
54


9 Other investments

2017

2016
Investment
held for
trading
m
Loans, receivables
and other
m
Total
m

Investment
held for
trading
m
Loans,
receivables
and other
m
Total
m
At 1 April
101
41
142

99
280
379
Additions
-
25
25

-
35
35
Disposals
-
(2)
(2)

-
(272)
(272)
Revaluation
(8)
-
(8)

2
-
2
Depreciation
-
(3)
(3)

-
(2)
(2)
At 31 March
93
61
154

101
41
142
The investment held for trading comprises interests as a trust beneficiary. The trust's assets comprise freehold reversions in a pool of commercial properties, comprising Sainsbury's superstores. The interest was categorised as Level 3 in the fair value hierarchy, is subject to the same inputs as those disclosed in note 7, and its fair value was determined by the Directors, supported by an external valuation.
10 Debtors

2017
m
2016
m
Trade and other debtors
22
24
Deposits received relating to held for sale asset1
144
-
Prepayments and accrued income
5
9

171
33
1 Relates to deposit received on held for sale joint venture transaction (see note 8) recognised as a financial asset, the realisation of which is conditional and not guaranteed as at the balance sheet date.
Trade and other debtors are shown after deducting a provision for bad and doubtful debts of 14m (2015/16: 16m). The charge to the income statement in relation to bad and doubtful debts was 1m (2015/16: 1m).
The Directors consider that the carrying amount of trade and other debtors is approximate to their fair value. There is no concentration of credit
risk with respect to trade debtors as the Group has a large number of customers who are paying their rent in advance.
As at 31 March, trade and other debtors outside their payment terms yet not provided for are as follows:

Total
m
Within
credit terms
m
Outside credit terms but not impaired
0-1
month
m
1-2
months
m
More than
2 months
m
2017
22
7
9
4
2
2016
24
12
11
1
-
11 Creditors

2017
m
2016
m
Trade creditors
127
39
Deposits received relating to held for sale asset1
144
-
Other taxation and social security
32
34
Accruals
83
72
Deferred income
72
73

458
218
1 Relates to deposit received on held for sale joint venture transaction (see note 8) recognised as a financial lability, the realisation of which is conditional and not guaranteed as at the balance sheet date.
Trade creditors are interest-free and have settlement dates within one year. The Directors consider that the carrying amount of trade and other creditors is approximate to their fair value.
12 Other non-current liabilities

2017
m
2016
m
Other creditors
1
70
Head leases1
64
46
Net pension liabilities
13
6

78
122
1 Includes nil in relation to head lease liabilities on trading properties held at cost (2015/16: 9m).
13 Deferred tax
The movement on deferred tax is as shown below:
Deferred tax assets year ended 31 March 2017

1 April
2016
m
Credited to income 
m
Credited (debited) to equity 
m 
Transferred to corporation tax 
m 
31 March
2017 
m 
Interest rate and currency derivative revaluations
5
(1)
-
-
4
Other timing differences
6
1
-
-
7

11
-
-
-
11
Deferred tax liabilities year ended 31 March 2017

m
m
m
m
m
Property and investment revaluations
(7)
-
-
-
(7)
Interest rate and currency derivative revaluations
-
-
-
-
-
Other timing differences
(1)
-
-
1
-

(8)
-
-
1
(7)






Net deferred tax assets
3
-
-
1
4
Deferred tax assets year ended 31 March 2016

1 April
2015
m
Credited to income
m
Credited (debited) to equity
m
Transferred to joint ventures
m
31 March
2016
m
Interest rate and currency derivative revaluations
-
-
5
-
5
Other timing differences
-
6
-
-
6

-
6
5
-
11
Deferred tax liabilities year ended 31 March 2016

m
m
m
m
m
Property and investment revaluations
(5)
-
(2)
-
(7)
Interest rate and currency derivative revaluations
(4)
25
(21)
-
-
Other timing differences
(3)
-
-
2
(1)

(12)
25
(23)
2
(8)






Net deferred tax (liability) assets
(12)
31
(18)
2
3
The following corporation tax rates have been substantively enacted; 19% effective from 1 April 2017 reducing to 17% effective from 1 April 2020. The deferred tax assets and liabilities have been calculated at the tax rate effective in the period that the tax is expected to crystallise.
The Group has recognised a deferred tax asset calculated at 17% (2015/2016: 18%) of 5m (2015/2016: 6m) in respect of capital losses from previous years available for offset against future capital profit. Further unrecognised deferred tax assets in respect of capital losses of 129m (2015/2016: 60m) exist at 31 March 2017.
The Group has recognised deferred tax assets on derivative revaluations to the extent that future matching taxable profits are expected to arise.
At 31 March 2017, the Group had an unrecognised deferred tax asset calculated at 17% (2015/2016: 18%) of 50m (2015/2016: 51m) in respect
of UK revenue tax losses from previous years.
Under the REIT regime, development properties which are sold within three years of completion do not benefit from tax exemption. At 31 March 2017, the value of such properties is 176m (2015/2016: 967m) and if these properties were to be sold and no tax exemption was available, the tax arising would be 13m (2015/16: 56m).
14 Net debt

Footnote
2017
m
2016
m
Secured on the assets of the Group



9.125% First Mortgage Debenture Stock 2020
1.1
34
34
5.264% First Mortgage Debenture Bonds 2035

377
371
5.0055% First Mortgage Amortising Debentures 2035

99
100
5.357% First Mortgage Debenture Bonds 2028

348
349
6.75% First Mortgage Debenture Stock 2020

-
62
Bank loans
1.2, 1.3
475
733
Loan notes

2
2


1,335
1,651
Unsecured



5.50% Senior Notes 2027

102
101
3.895% Senior US Dollar Notes 2018
2
32
28
4.635% Senior US Dollar Notes 2021
2
181
165
4.766% Senior US Dollar Notes 2023
2
113
105
5.003% Senior US Dollar Notes 2026
2
73
69
3.81% Senior Notes 2026

114
113
3.97% Senior Notes 2026

117
116
1.5% Convertible Bond 2017

406
445
0% Convertible Bond 2020

331
334
Bank loans and overdrafts

477
634


1,946
2,110
Gross debt
3
3,281
3,761
Interest rate and currency derivative liabilities

144
137
Interest rate and currency derivative assets

(217)
(167)
Cash and short term deposits
4,5
(114)
(114)
Total net debt

3,094
3,617
Net debt attributable to non-controlling interests

(103)
(104)
Net debt attributable to shareholders of the Company

2,991
3,513
1 These are non-recourse borrowings with no recourse for repayment to other companies or assets in the Group:

2017
m
2016
m
1.1 BLD Property Holdings Ltd
34
34
1.2 Hercules Unit Trust
475
443
1.3 TBL Properties Limited and subsidiaries
-
290

509
767
2 Principal and interest on these borrowing were fully hedged into Sterling at a floating rate at the time of issue.
3 The principal amount of gross debt at 31 March 2017 was 3,069m (2015/16: 3,552m). Included in this is the principal amount of secured borrowings and other borrowings of non-recourse companies of 1,238m of which the borrowings of the partly-owned subsidiary, Hercules Unit Trust, not beneficially owned by the Group is 112m.
4 Included within cash and short term deposits is the cash and short term deposits of Hercules Unit Trust, of which 9m is the proportion not beneficially owned by the Group.
5 Cash and deposits not subject to a security interest amount to 99m (2015/16: 93m).
Maturity analysis of net debt

2017
m
2016
m
Repayable: within one year and on demand
464
74
Between: one and two years
31
504
 two and five years
1,283
1,491
 five and ten years
783
807
 ten and fifteen years
332
500
 fifteen and twenty years
388
385
 twenty and twenty five years
-
-

2,817
3,687
Gross debt
3,281
3,761
Interest rate and currency derivatives
(73)
(30)
Cash and short term deposits
(114)
(114)
Net debt
3,094
3,617
1.5% Convertible bond 2012 (maturity 2017)
On 10 September 2012, British Land (Jersey) Limited (the 2012 Issuer), a wholly-owned subsidiary of the Group, issued 400 million 1.5% guaranteed convertible bonds due 2017 (the 2012 bonds) at par. The 2012 Issuer is fully guaranteed by the Company in respect of the 2012 bonds.
Subject to their terms, the 2012 bonds are convertible into preference shares of the 2012 Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. Bondholders may exercise their conversion right at any time up to (but excluding) the 20th dealing day before 10 September 2017 (the maturity date).
The initial exchange price was 693.07 pence per ordinary share. The exchange price is adjusted based on certain events.
From 25 September 2015, the Company has the option to redeem the 2012 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2012 bonds have been converted, redeemed, or purchased and cancelled. The 2012 bonds will be redeemed at par on 10 September 2017 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled. No redemption of the bonds occurred in the year.
0% Convertible bond 2015 (maturity 2020)
On 9 June 2015, British Land (White) 2015 Limited (the 2015 Issuer), a wholly owned subsidiary of the Group, issued 350 million zero coupon guaranteed convertible bonds due 2020 (the 2015 bonds) at par. The 2015 Issuer is fully guaranteed by the Company in respect of the 2015 bonds.
Subject to their terms, the 2015 bonds are convertible into preference shares of the 2015 Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. From 20 July 2015 up to and including 29 June 2018, a bondholder may exercise its conversion right if the share price has traded at a level exceeding 130% of the exchange price for a specified period. Thereafter, and up to but excluding the 7th dealing day before 9 June 2020 (the maturity date), a bondholder may convert at any time.
The initial exchange price was 1103.32 pence per ordinary share. The exchange price is adjusted based on certain events (such as the Company paying dividends in any quarter above 3.418 pence per ordinary share). As at 31 March 2017 the exchange price was 1063.79 pence per ordinary share.
From 30 June 2018, the Company has the option to redeem the 2015 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2015 bonds have been converted, redeemed, or purchased and cancelled. The 2015 bonds will be redeemed at par on 9 June 2020 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled.
Fair value and book value of net debt

2017

2016
Fair value
m
Book value
m
Difference
m

Fair value
m
Book value
m
Difference
m
Debentures and unsecured bonds
1,682
1,590
92

1,637
1,613
24
Convertible bonds
737
737
-

779
779
-
Bank debt and other floating rate debt
963
954
9

1,384
1,369
15
Gross debt
3,382
3,281
101

3,800
3,761
39
Interest rate and currency derivative liabilities
144
144
-

137
137
-
Interest rate and currency derivative assets
(217)
(217)
-

(167)
(167)
-
Cash and short term deposits
(114)
(114)
-

(114)
(114)
-
Net debt
3,195
3,094
101

3,656
3,617
39
Net debt attributable to non-controlling interests
(105)
(103)
(2)

(106)
(104)
(2)
Net debt attributable to shareholders of the Company
3,090
2,991
99

3,550
3,513
37
The fair values of debentures, unsecured bonds and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and other floating rate debt has been valued assuming it could be renegotiated at contracted margins. The derivatives have been valued by calculating the present value of expected future cash flows, using appropriate market discount rates, by an independent treasury advisor.
Short term debtors and creditors and other investments have been excluded from the disclosures on the basis that the fair value is equivalent to the book value. The fair value hierarchy level (as defined in note 7) of debt held at amortised cost whose fair value is disclosed is level 2.
Group loan to value (LTV)

2017
m
2016
m
Group loan to value (LTV)
22.6%
25.2%



Principal amount of gross debt
3,069
3,552
Less debt attributable to non-controlling interests
(112)
(109)
Less cash and short term deposits (balance sheet)
(114)
(114)
Plus cash attributable to non-controlling interests
9
8
Total net debt for LTV calculation
2,852
3,337
Group property portfolio valuation (note 7)
9,520 
10,111
Investments in joint ventures and funds (note 8)
2,766 
3,353
Joint venture held for sale (note 8)
540
-
Other investments (note 9)
154 
142
Less property and investments attributable to non-controlling interests
(364)
(384)
Total assets for LTV calculation
12,616
13,222
Proportionally consolidated loan to value (LTV)

2017
m
2016
m
Proportionally consolidated loan to value (LTV)
29.9%
32.1%



Principal amount of gross debt
4,649
5,217
Less debt attributable to non-controlling interests
(128)
(128)
Less cash and short term deposits
(323)
(353)
Plus cash attributable to non-controlling interests
9
9
Total net debt for proportional LTV calculation
4,207
4,745
Group property portfolio valuation (note 7)
9,520
10,111
Share of property of joint ventures and funds (note 7)
4,801
4,937
Other investments (note 9)
154
142
Less other investments attributable to joint ventures and funds
(3)
(4)
Less property attributable to non-controlling interests
(381)
(400)
Total assets for proportional LTV calculation
14,091
14,786
British Land Unsecured Financial Covenants
The two financial covenants applicable to the Group unsecured debt including convertible bonds are shown below:

2017
m
2016
m
Net Borrowings not to exceed 175% of Adjusted Capital and Reserves
29%
34%



Principal amount of gross debt
3,069 
3,552
Less the relevant proportion of borrowings of the partly-owned subsidiary/non-controlling interests
(112)
(109)
Less cash and deposits (balance sheet)
(114)
(114)
Plus the relevant proportion of cash and deposits of the partly-owned subsidiary/non-controlling interests
9 
8
Net Borrowings
2,852 
3,337
Share capital and reserves (balance sheet)
9,476 
9,619
EPRA deferred tax adjustment (EPRA Table A)
3
5
Trading property surpluses (EPRA Table A)
83 
93
Exceptional refinancing charges (see below)
274 
287
Fair value adjustments of financial instruments (EPRA Table A)
155 
198
Less reserves attributable to non-controlling interests (balance sheet)
(255)
(277)
Adjusted Capital and Reserves
9,736 
9,925
In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of 274m (2015/16: 287m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.

2017
m
2016
m
Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets
26%
29%



Principal amount of gross debt
3,069 
3,552
Less cash and deposits not subject to a security interest (being 99m less the relevant proportion of cash and deposits of the partly owned subsidiary/non-controlling interests of 3m)
(96)
(88)
Less principal amount of secured and non-recourse borrowings
(1,238)
(1,563)
Net Unsecured Borrowings
1,735 
1,901
Group property portfolio valuation (note 7)
9,520
10,111
Investments in joint ventures and funds (note 8)
2,766
3,353
Joint venture held for sale (note 8)
540
-
Other investments (note 9)
154
142
Less investments in joint ventures and joint venture held for sale (note 8)
(3,299)
(3,348)
Less encumbered assets
(3,040)
(3,803)
Unencumbered Assets
6,641
6,455
Reconciliation of movement in Group net debt for the year ended 31 March 2017

2016
Cash flows
Transfers3
Foreign exchange
Fair value
Arrangement
costs
amortisation
2017
Short term borrowings
74
(74)
464
-
-
-
464
Long term borrowings
3,687
(423)
(464)
49
(36)
4
2,817
Derivatives1
(30)
1
-
(48)
4
-
(73)
Total liabilities from financing activities
3,731
(496)
-
1
(32)
4
3,208
Cash and cash equivalents
(114)
-
-
-
-
-
(114)
Net debt
3,617
(496)
-
1
(32)
4
3,094
Reconciliation of movement in Group net debt for the year ended 31 March 2016

2015
Cash flows
Transfers3
Foreign exchange
Fair value
Arrangement
costs
amortisation
2016
Short term borrowings
102
(104)
74
2
-
-
74
Long term borrowings
3,847
(98)
(74)
14
(9)
7
3,687
Derivatives2
(13)
22
-
(13)
(26)
-
(30)
Total liabilities from financing activities
3,936
(180)
-
3
(35)
7
3,731
Cash and cash equivalents
(108)
(6)
-
-
-
-
(114)
Net debt
3,828
(186)
-
3
(35)
7
3,617
1 Cash flows on derivatives include 14m of net receipts on derivative interest.
2 Cash flows on derivatives include 7m of net receipts on derivative interest.
3 Transfers comprises debt maturing from long term to short term borrowings.
Fair value hierarchy
The table below provides an analysis of financial instruments carried at fair value, by the valuation method. The fair value hierarchy levels are defined in note 7.

2017

2016
Level 1
m
Level 2
m
Level 3
m
Total
m

Level 1
m
Level 2
m
Level 3
m
Total
m
Interest rate and currency derivative assets
-
(217)
-
(217)

-
(167)
-
(167)
Other investments - available for sale
(14)
-
-
(14)

-
-
-
-
Other investments - held for trading
-
-
(93)
(93)

-
-
(101)
(101)
Assets
(14)
(217)
(93)
(324)

-
(167)
(101)
(268)
Interest rate and currency derivative liabilities
-
144
-
144

-
137
-
137
Convertible bonds
737
-
-
737

779
-
-
779
Liabilities
737
144
-
881

779
137
-
916
Total
723
(73)
(93)
557

779
(30)
(101)
648
Categories of financial instruments

2017
m
2016
m
Financial assets


Fair value through income statement


Other investments - held for trading
93
101



Derivatives in designated hedge accounting relationships
215
164
Derivatives not in designated hedge accounting relationships
2
3



Loans and receivables


Debtors
166
24
Cash and short term deposits
114
114
Other investments - loans and receivables
61
41

651
447
Financial liabilities


Fair value through income statement


Convertible bonds
(737)
(779)



Derivatives in designated hedge accounting relationships
(143)
(137)
Derivatives not in designated accounting relationships
(1)
-
Amortised cost


Gross debt
(2,544)
(2,982)
Head leases payable
(64)
(46)



Creditors
(373)
(133)

(3,862)
(4,077)
Total
(3,211)
(3,630)
Gains and losses on financial instruments, as classed above, are disclosed in note 5 (net financing costs), note 10 (debtors), note 4 (valuation movements on property), the consolidated income statement and the consolidated statement of comprehensive income. The Directors consider that the carrying amounts of other investments and head leases payable are approximate to their fair value, and that the carrying amounts are recoverable.
Maturity of committed undrawn borrowing facilities

2017
m
2016
m
Maturity date: over five years
125
-
 between four and five years
1,110
1,113
 between three and four years
58
95
Total facilities available for more than three years
1,293
1,208



Between two and three years
149
85
Between one and two years
-
-
Within one year
2
60
Total
1,444
1,353
The above facilities are comprised of British Land undrawn facilities of 1,322m, plus undrawn facilities of Hercules Unit Trust totalling 122m.
15 Dividend
The fourth quarter interim dividend of 7.30 pence per share, totalling 75m (2015/16: 7.09 pence per share, totalling 73m) was approved by the Board on 16 May 2017 and is payable on 4 August 2017 to shareholders on the register at the close of business on 30 June 2017.
The Board will announce the availability of the Scrip Dividend Alternative, if available, via the Regulatory News Service and on its website (www.britishland.com/dividends), no later than four business days before the ex-dividend date of 30 June 2017. The Board expects to announce the split between Property Income Distributions (PID) and non-PID income at that time. Any Scrip Dividend Alternative will not be enhanced. PID dividends are paid, as required by REIT legislation, after deduction of withholding tax at the basic rate (currently 20%), where appropriate. Certain classes of shareholders may be able to elect to receive dividends gross. Please refer to our website www.britishland.com/dividends for details.
Payment date
Dividend
Pence per share
2017
m
2016
m
Current year dividends



05.08.2017
2017 4th interim
7.30


06.05.2017
2017 3rd interim
7.30


12.02.2017
2017 2nd interim
7.30
75

06.11.2016
2017 1st interim
7.30
75



29.20


Prior year dividends




05.08.2016
2016 4th interim
7.091
73

06.05.2016
2016 3rd interim
7.09
73

12.02.2016
2016 2nd interim
7.09

73
06.11.2015
2016 1st interim
7.09

72


28.36







07.08.2015
2015 4th interim
6.922

71
06.05.2015
2015 3rd interim
6.92

71
Dividends in consolidated statement
of changes in equity

296
287
Dividends settled in shares

-
(52)
Dividends settled in cash

296
235
Timing difference relating to payment
of withholding tax

(1)
-
Dividends in cash flow statement

295
235
1 Dividend split half PID, half non-PID.
2 Scrip alternative treated as non-PID for this dividend.
16 Share capital and reserves

2017
2016
Number of ordinary shares in issue at 1 April
1,040,562,323
1,031,788,286
Share issues
472,735
8,774,037
At 31 March
1, 041,035,058
1,040,562,323
Of the issued 25p ordinary shares, 7,783 shares were held in the ESOP trust (2015/16: 627), 11,266,245 shares were held as treasury shares (2015/16: 11,266,245) and 1,029,761,030 shares were in free issue (2015/16: 1,029,295,541). No treasury shares were acquired by the ESOP trust during the year.
All issued shares are fully paid.
Hedging and translation reserve
The hedging and translation reserve comprises the effective portion of the cumulative net change in the fair value of cash flow and foreign currency hedging instruments, as well as all foreign exchange differences arising from the translation of the financial statements of foreign operations. The foreign exchange differences also include the translation of the liabilities that hedge the Company's net investment in a foreign subsidiary.
Revaluation reserve
The revaluation reserve relates to owner-occupied properties and investments in joint ventures and funds.
Merger reserve
This comprises the premium on the share placing in March 2013. No share premium is recorded in the Company's financial statements, through the operation of the merger relief provisions of the Companies Act 2006.
17 Segment information
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its three principal sectors are Offices, Retail and Canada Water. The Office sector includes residential, as this is often incorporated into Office schemes. The Offices sector also includes the British Land share of the Leadenhall joint venture (see note 8). The Retail sector includes leisure, as this is often incorporated into Retail schemes.
The relevant gross rental income, net rental income, operating result and property assets, being the measures of segment revenue, segment result and segment assets used by the management of the business, are set out below. Management reviews the performance of the business principally on a proportionally consolidated basis, which includes the Group's share of joint ventures and funds on a line-by-line basis and excludes non-controlling interests in the Group's subsidiaries. The chief operating decision maker for the purpose of segment information is the Executive Committee.
Gross rental income is derived from the rental of buildings and the sale of trading properties. Operating result is the net of net rental income, fee income and administrative expenses. No customer exceeded 10% of the Group's revenues in either year.
Segment result

Offices

Retail

Canada Water

Other/unallocated

Total
2017
m
2016
m

2017
m
2016
m

2017
m
2016
m

2017
m
2016
m

2017
m
2016
m
Gross rental income














British Land Group
139
133

279
291

9
8

-
-

427
432
Share of joint ventures and funds
116
114

100
104

-
-

-
4

216
222
Total
255
247

379
395

9
8

-
4

643
654















Net rental income














British Land Group
131
124

265
277

8
7

(1)
-

403
408
Share of joint ventures and funds
112
110

95
99

-
-

-
3

207
212
Total
243
234

360
376

8
7

(1)
3

610
620















Operating result














British Land Group
127
112

255
260

5
7

(50)
(46)

337
333
Share of joint ventures and funds
109
109

96
102

-
-

(1)
(1)

204
210
Total
236
221

351
362

5
7

(51)
(47)

541
543















Reconciliation to Underlying Profit
2017
m
2016
m
Operating result
541
543
Net financing costs
(151)
(180)
Underlying Profit
390
363
Reconciliation to profit on ordinary activities before taxation


Underlying Profit
390
363
Capital and other
(209)
954
Underlying Profit attributable to non-controlling interests
14
14
Total profit on ordinary activities before taxation
195
1,331
Of the total revenues above, nil (2015/16: 4m) was derived from outside the UK.
Segment assets

Offices

Retail

Canada Water

Other/unallocated

Total
2017
m
2016
m

2017
m
2016
m

2017
m
2016
m

2017
m
2016
m

2017
m
2016
m
Property assets














British Land Group
4,223
4,181

4,716
5,323

271
283

-
-

9,210
9,787
Share of joint ventures and funds
2,792
2,843

1,938
2,018

-
-

-
-

4,730
4,861
Total
7,015
7,024

6,654
7,341

271
283

-
-

13,940
14,648
Reconciliation to net assets
British Land Group
2017
m
2016
m
Property assets
13,940
14,648
Other non-current assets
156
138
Non-current assets
14,096
14,786



Other net current liabilities
(364)
(257)
Adjusted net debt
(4,223)
(4,765)
Other non-current liabilities
(11)
(90)
EPRA net assets (undiluted)
9,498
9,674
Convertible dilution
-
400
EPRA net assets (diluted)
9,498
10,074
Non-controlling interests
255
277
EPRA adjustments
(277)
(732)
Net assets
9,476
9,619
SUPPLEMENTARY DISCLOSURES
UNAUDITED
Table A:Summary income statement and balance sheet
Summary income statement based on proportional consolidation for the year ended 31 March 2017
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with its share of the results of joint ventures and funds included on a line-by-line basis and excluding non-controlling interests.

Year ended 31 March 2017

Year ended 31 March 2016

Group
m
Joint
ventures
and funds
m
Less
non-controlling interests
m
Proportionally consolidated
m

Group
m
Joint ventures
and funds
m
Less
non-controlling interests
m
Proportionally consolidated
m
Gross rental income
442
220
(19)
643

451
231
(28)
654
Property operating expenses
(25)
(10)
2
(33)

(26)
(9)
1
(34)
Net rental income
417
210
(17)
610

425
222
(27)
620










Administrative expenses
(84)
(2)
-
(86)

(93)
(5)
4
(94)
Net fees and other income
17
-
-
17

16
-
1
17
Ungeared Income Return
350
208
(17)
541

348
217
(22)
543










Net financing costs
(78)
(76)
3
(151)

(106)
(82)
8
(180)
Underlying Profit
272
132
(14)
390

242
135
(14)
363
Underlying taxation
-
-
-
-

2
-
-
2
Underlying Profit after taxation
272
132
(14)
390

244
135
(14)
365
Valuation movement



(237)




861
Other capital and taxation (net)1



(433)




48
Capital and other



(670)




909
Total return



(280)




1,274
1 Includes other comprehensive income, movement in dilution of share options and the movement in items excluded for EPRA NAV.
Summary balance sheet based on proportional consolidation as at 31 March 2017
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the composition of the EPRA net assets of the Group, with its share of the net assets of the joint venture and fund assets and liabilities included on a line-by-line basis, and excluding non-controlling interests, and assuming full dilution.

Group
m
Share of joint ventures
& funds
m
Less non-controlling interests
m
Share
options
m
Deferred
tax
m
Mark-to-market on effective cash flow hedges and related debt adjustments
m
Head
leases
m
Valuation surplus on trading properties
m
EPRA Net assets 
31 March 2017
m
EPRA Net assets
31 March
2016
m
Retail properties
5,066
2,021
(381)
-
-
-
(52)
-
6,654
7,341
Office properties
4,155
2,792
-
-
-
-
(15)
83
7,015
7,024
Canada Water properties
280
-
-
-
-
-
(9)
-
271
283
Other properties
-
-
-
-
-
-
-
-
-
-
Total properties
9,501
4,813
(381)
-
-
-
(76)
83
13,940
14,648
Investments in joint ventures and funds
2,766
(2,766)
-
-
-
-
-
-
-
-
Joint venture held for sale
540
(540)
-
-
-
-
-
-
-
-
Other investments
154
(3)
-
-
-
-
-
-
151
138
Other net (liabilities) assets
(391)
(101)
7
36
3
-
76
-
(370)
(347)
Net debt
(3,094)
(1,403)
119
-
-
155
-
-
(4,223)
(4,765)
Dilution due to convertible bond
-
-
-
-
-
-
-
-
-
400
Net assets
9,476
-
(255)
36
3
155
-
83
9,498
10,074
EPRA NAV per share (note 2)








915p
919p
EPRA Net Assets Movement

Year ended
31 March 2017

Year ended
31 March 2016
m
Pence per share

m
Pence per share
Opening EPRA NAV
10,074
919

9,035
829
Income return
390
36

365
34
Capital return
(670)
(13)

909
77
Dividend paid
(296)
(27)

(235)
(21)
Closing EPRA NAV
9,498
915

10,074
919
Table B:EPRA Performance measures
EPRA Performance measures summary table

2017

2016
m
Pence per share

m
Pence per share
EPRA Earnings
- basic
390
37.9

365
35.6

- diluted
390
37.8

371
34.1
EPRA Net Initial Yield

4.3%


4.1%
EPRA 'topped-up' Net Initial Yield

4.5%


4.5%
EPRA Vacancy Rate

4.8%


2.0%

2017

2016
Net assets
Net asset
value per share pence

Net assets
Net asset
value per share pence
EPRA NAV
9,498
915

10,074
919
EPRA NNNAV
8,938
861

9,640
880
Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share

2017
m
2016
m
Profit attributable to the shareholders of the Company
193
1,345
Exclude:


Group - current taxation
(1)
(2)
Group - deferred taxation
-
(31)
Joint ventures and funds - current taxation
-
1
Joint ventures and funds - deferred taxation
(1) 
-
Group - valuation movement
144
(616)
Group - loss (profit) on disposal of investment properties and investments
5
(35)
Group - profit on disposal of trading properties
(7)
(10)
Joint ventures and funds - net valuation movement (including result on disposals)
75
(263)
Joint ventures and funds - capital financing costs
6
-
Changes in fair value of financial instruments and associated close-out costs
(13)
(31)
Non-controlling interests in respect of the above
(11)
5
Underlying Profit
390
363
Group - underlying current taxation
-
2
EPRA earnings - basic
390
365
Dilutive effect of 2012 convertible bond
-
6
EPRA earnings - diluted
390
371



Profit attributable to the shareholders of the Company
193
1,345
Dilutive effect of 2012 convertible bond1
(33)
(42)
IFRS earnings - diluted1
160
1,303
1 The 2016 comparative figures for the dilutive effect of the 2012 convertible bond and IFRS diluted earnings have been restated - see Note 1.

2017
Number
million
2016
Number
million
Weighted average number of shares
1,040
1,036
Adjustment for Treasury shares
(11)
(11)
IFRS/EPRA Weighted average number of shares (basic)
1,029
1,025
Dilutive effect of share options
1
2
Dilutive effect of ESOP shares
3
4
Dilutive effect of 2012 convertible bond
58
58
IFRS Weighted average number of shares (diluted)
1,091
1,089
Dilutive effect of 2012 convertible bond
(58)
-
EPRA Weighted average number of shares (diluted)
1,033
1,089
Net assets per share

2017

2016
m
Pence
per share

m
Pence
per share
Balance sheet net assets
9,476


9,619

Deferred tax arising on revaluation movements
3


5

Mark-to-market on effective cash flow hedges and related debt adjustments
155


198

Dilution effect of share options
36


36

Surplus on trading properties
83


93

Convertible bond adjustment
-


400

Less non-controlling interests
(255)


(277)

EPRA NAV
9,498
915

10,074
919
Deferred tax arising on revaluation movements
(19)


(24)

Mark-to-market on effective cash flow hedges and related debt adjustments
(155)


(153)

Mark-to-market on debt
(386)


(257)

EPRA NNNAV
8,938
861

9,640
880
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of the debt and derivatives and to include the deferred taxation on revaluations and derivatives.

2017
Number
million
2016
Number
million
Number of shares at year end
1,040
1,040
Adjustment for treasury shares
(11)
(11)
IFRS/EPRA number of shares (basic)
1,029
1,029
Dilutive effect of share options
3
2
Dilutive effect of ESOP shares
6
7
Dilutive effect of 2012 convertible bond
58
58
IFRS number of shares (diluted)
1,096
1,096
Dilutive effect of 2012 convertible bond
(58)
-
EPRA number of shares (diluted)
1,038
1,096
EPRA Net Initial Yield and 'topped-up' Net Initial Yield

2017
m
2016
m
Investment property - wholly-owned
9,210 
9,787
Investment property - share of joint ventures and funds
4,730 
4,861
Less developments, residential and land
(798)
(894)
Completed property portfolio
13,142 
13,754
Allowance for estimated purchasers' costs
897 
985
Gross up completed property portfolio valuation (A)
14,039
14,739
Annualised cash passing rental income
607 
607
Property outgoings
(9)
(8)
Annualised net rents (B)
598
599
Rent expiration of rent-free periods and fixed uplifts1
30
63
'Topped-up' net annualised rent (C)
628
662
EPRA Net Initial Yield (B/A)
4.3%
4.1%
EPRA 'topped-up' Net Initial Yield (C/A)
4.5%
4.5%
Including fixed/minimum uplifts received in lieu of rental growth
11
24
Total 'topped-up' net rents (D)
639
686
Overall 'topped-up' Net Initial Yield (D/A)
4.6%
4.7%
'Topped-up' net annualised rent
628
662
ERV vacant space
34 
14
Reversions
38
42
Total ERV (E)
700 
718
Net Reversionary Yield (E/A)
5.0%
4.9%
1 The weighted average period over which rent-free periods expire is 1 year (2015/16: 1 year).
The above is stated for the UK portfolio only.
EPRA Net Initial Yield (NIY) basis of calculation
EPRA NIY is calculated as the annualised net rent (on a cash flow basis), divided by the gross value of the completed property portfolio. The valuation of our completed property portfolio is determined by our external valuers as at 31 March 2017, plus an allowance for estimated purchaser's costs. Estimated purchaser's costs are determined by the relevant stamp duty liability, plus an estimate by our valuers of agent and legal fees on notional acquisition. The net rent deduction allowed for property outgoings is based on our valuers' assumptions on future recurring non-recoverable revenue expenditure.
In calculating the EPRA 'topped-up' NIY, the annualised net rent is increased by the total contracted rent from expiry of rent-free periods and future contracted rental uplifts where defined as not in lieu of growth. Overall 'topped-up' NIY is calculated by adding any other contracted future uplift to the 'topped-up' net annualised rent.
The net reversionary yield is calculated by dividing the total estimated rental value (ERV) for the completed property portfolio, as determined by our external valuers, by the gross completed property portfolio valuation.
The EPRA vacancy rate is calculated as the ERV of the unrented, lettable space as a proportion of the total rental value of the completed property portfolio.
EPRA Vacancy Rate

2017
m
2016
m
Annualised potential rental value of vacant premises
34 
14
Annualised potential rental value for the completed property portfolio
710
728
EPRA Vacancy Rate
4.8%
2.0%
The above is stated for the UK portfolio only. A discussion of significant factors affecting vacancy rates is included within the Strategic Report within the British Land Annual Report and Accounts.
EPRA Cost Ratios

2017
m
2016
m
Property operating expenses
23
25
Administrative expenses
84
90
Share of joint ventures and funds expenses
12
13
Less:
Performance and management fees (from joint ventures and funds)
(9)
(9)

Net other fees and commissions
(8)
(8)

Ground rent costs
(2)
(3)
EPRA Costs (including direct vacancy costs) (A)
100
108
Direct vacancy costs
(12)
(11)
EPRA Costs (excluding direct vacancy costs) (B)
88
97
Gross Rental Income less ground rent costs
412
429
Share of joint ventures and funds (GRI less ground rent costs)
229
222
Total Gross Rental Income less ground rent costs (C)
641
651



EPRA Cost Ratio (including direct vacancy costs) (A/C)
15.6%
16.6%
EPRA Cost Ratio (excluding direct vacancy costs) (B/C)
13.7%
14.9%



Overhead and operating expenses capitalised (including share of joint ventures and funds)
5
4
In the current year, employee costs in relation to staff time on development projects have been capitalised into the base cost of relevant development assets. 
Table C:Gross rental income

2017
m
2016
m
Rent receivable
633
615
Spreading of tenant incentives and guaranteed rent increases
8
36
Surrender premia
2
3
Gross rental income
643
654
The current and prior year information is presented on a proportionally consolidated basis, excluding non-controlling interests.
Table D:Property related capital expenditure

2017

2016

Group
Joint
ventures
and funds
Total

Group
Joint
ventures
and funds
Total
Acquisitions
88
-
88

238
-
238
Development
131
14
145

104
58
162
Like-for-like portfolio
67
47
114

99
6
105
Other
20
2
22

25
15
40
Total property related capex
306
63
369

466
79
545
The above is presented on a proportionally consolidated basis, excluding non-controlling interests and business combinations. The 'Other' category contains amounts owing to tenant incentives of 10m (2015/16: 27m), capitalised staff costs of 5m (2015/16: 4m) and capitalised interest of 7m (2015/16: 9m).

This information is provided by RNS
The company news service from the London Stock Exchange
  END
FR UNOWRBNAVAAR