REG - British Land Co PLC - Half-year Report- Part 3 <Origin Href="QuoteRef">BLND.L</Origin> - Part 2
16/11/2016 07:07
- Part 2: For the preceding part double click ID:nRSP2797Pa
0.7
Virgin Active 2.0 JD Sports 0.7
Facebook 1.7 Reed Smith 0.7
Wesfarmers (Homebase/Bunnings) 1.6 H&M 0.7
Spirit Group 1.6 Mothercare 0.7
M&S Plc 1.5 Mayer Brown 0.7
Alliance Boots 1.5 Lewis Trust (River Island) 0.6
Visa Inc 1.4 ICAP Plc 0.6
Dixons Carphone 1.4 Lend Lease 0.6
Dentsu Aegis 1.4 TGI Fridays 0.6
Arcadia Group 1.3 Pets at Home 0.6
Herbert Smith 1.2 Steinhoff 0.5
RBS 1.1 MS Amlin Plc 0.5
TJX Cos Inc (TK Maxx) 1.0 Credit Agricole 0.5
Gazprom 1.0 Henderson 0.5
New Look 0.9
1 Rent contracted on both 5 Broadgate and run off of 1-3 Finsbury Avenue and 100 Liverpool Street. 3.0% pro-forma for run off of UBS rent at 1-3 Finsbury Avenue/100 Liverpool Street.
Recently Completed and Committed Developments
At 30 September 2016 Sector BL Share Sq ft PC Calendar Year Current Value Cost to complete ERV Let & Under Offer Resi Sales Exchanged & not completed
% '000 £m1 £m2 £m3 £m £m4
Aldgate Place, Phase 1 Residential 50 221 Completed 7 9 - n/a -
Clarges Mayfair - Offices Offices 100 51 Completed 120 9 5.5 2.0 n/a
Glasgow Fort Leisure Quarter Retail 75 12 Completed 8 - 0.4 0.3 n/a
Total Completed in Period 284 135 18 5.9 2.3 -
4 Kingdom Street Offices 100 147 Q2 2017 111 39 9.4 - n/a
Clarges Mayfair - Retail and Residential Residential 100 114 Q4 2017 322 74 0.8 - 259
The Hempel Phase 1 Residential 100 25 Q4 2016 16 1 n/a n/a 13
The Hempel Phase 2 Residential 100 32 Q4 2016 55 6 n/a n/a 14
100 Liverpool Street Offices 50 520 Q4 2019 115 157 18.5 - -
Total Under Construction and Committed 838 619 277 28.7 - 286
Retail Capex5 117
Data includes Group's share of properties in Joint Ventures and Funds (except area which is shown at 100%)
1 Excludes completed sales of £93m
2 From 1 October 2016. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
3 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)
4 At agreed sales price
5 Capex committed and underway within our investment portfolio relating to leasing and asset management
Near term Pipeline
At 30 September 2016 Sector BL Share Sq ft Start On Site Total Cost 1 Status
'000 £m
1 Finsbury Avenue Offices 50 281 2017 102 Consented
Speke (Leisure) Retail 67 66 2017 18 Consented
Plymouth (Leisure) Retail 100 102 2018 35 Consented
Total Near term 449 155
Retail Capex2 100
1 Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
2 Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement
Medium term Pipeline
At 30 September 2016 Sector BL Share Sq ft Status
'000
2-3 Finsbury Avenue Offices 50 560 Resolution to grant
135 Bishopsgate Offices 50 340 Pre-submission
Blossom Street Offices 100 340 Consented
1 Triton Square Offices 100 338 Submitted
5 Kingdom Street Offices 100 240 Consented
Gateway Building Offices 100 104 Pre-submission
Aldgate Phase 2 Residential 50 145 Consented
Canada Water Phase 11 Mixed Use 100 5,500 Pre-submission
Bradford (Retail & Leisure) Retail 100 43 Consented
Meadowhall Leisure Retail 50 330 Submitted
Eden Walk Retail and Residential Mixed Use 50 562 Resolution to grant
Total Medium Term 8,502
1 Assumed net area based on gross area of up to 7m sq ft
Residential development programme
At 30 September 2016 Sq Ft No. Market Units PC Date/ BL Share Current Value1 Cost To come2 Sales Exchanged & not Completed1,3
Status
'000 % £m £m £m
Clarges Mayfair4 103 34 Q4 2017 100 308 72 259
Mixed Use 103 34 308 72 259
The Hempel Phase 1 25 15 Q4 2016 100 16 1 13
The Hempel Phase 2 32 19 Q4 2016 100 55 6 14
Aldgate Place Phase 1 221 154 Completed 50 7 9 -
Resi-led 278 188 78 16 27
Total Committed Residential 381 222 386 88 286
Data includes Group's share of properties in Joint Ventures and Funds (except area which is shown at 100%)
1 Excludes completed sales of £93m
2 From 1 October 2016. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
3 At agreed sales price
4 Includes 9,500 sq ft of affordable housing (11 units)
GLOSSARY
Adjusted net debt is the Group net debt and the Group's share of joint venture
and funds' net debt excludes the mark-to-market on effective cash flow hedges
and related debt adjustments and non-controlling interests. A reconciliation
between Group net debt and adjusted net debt is included in table A within the
supplementary disclosures.
Annualised rent is the gross property rent receivable on a cash basis as at
the reporting date. Additionally, it includes the external valuers' estimate
of additional rent in respect of unsettled rent review, turnover rent and
sundry income such as that from car parks and commercialisation, less any
ground rents payable under head leases.
Assets under management is the full value of all assets owned and managed by
British Land and includes 100% of the value of all joint ventures and funds.
BREEAM (Building Research Establishment Environmental Assessment Method)
assesses the sustainability of buildings against a range of social and
environmental criteria.
Capital return is calculated as the change in capital value of the UK
portfolio, less any capex incurred, expressed as a percentage of capital
employed (start value plus capex) over the period, as calculated by IPD.
Capital returns are calculated monthly and indexed to provide a return over
the relevant period.
Capped rents are rents subject to a maximum level of uplift at the specified
rent reviews as agreed at the time of letting.
Collar rents are rents subject to a minimum level of uplift at the specified
rent reviews as agreed at the time of letting.
Contracted rent is the annualised rent adjusting for the inclusion of rent
subject to rent free periods.
Developer's profit is the profit on cost estimated by the valuers that a
developer would expect. The developer's profit is typically calculated by the
valuers to be a percentage of the estimated total development costs, including
land and notional finance costs.
Development uplift is the total increase in the value (after taking account of
capex and capitalised interest) of properties held for development during the
period. It also includes any developer's profit recognised by valuers in the
period.
Development cost is the total cost of construction of a project to completion,
excluding site values and finance costs (finance costs are assumed by the
valuers at a notional rate of 5% per annum).
EPRA is the European Public Real Estate Association, the industry body for
European REITs.
EPRA cost ratio (including direct vacancy costs) is the ratio of net overheads
and operating expenses against gross rental income (with both amounts
excluding ground rents payable). Net overheads and operating expenses relate
to all administrative and operating expenses including the share of joint
ventures' overheads and operating expenses, net of any service fees, recharges
or other income specifically intended to cover overhead and property
expenses.
EPRA cost ratio (excluding direct vacancy costs) is the ratio calculated
above, but with direct vacancy costs removed from net overheads and operating
expenses balance.
EPRA earnings 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. These items are presented in the capital and other column of
the income statement. A reconciliation between profit attributable to
shareholders of the Company and EPRA earnings is included in table B within
the supplementary disclosures.
EPRA NAV per share is EPRA NAV divided by the diluted number of shares at the
period end.
EPRA net asset value (EPRA NAV) is a proportionally consolidated measure,
representing the 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. It includes the valuation surplus on trading properties and is
adjusted for the dilutive impact of share options. A reconciliation between
IFRS net assets and EPRA NAV is included in table B within the Supplementary
Disclosures.
EPRA net initial yield is the annualised rents generated by the portfolio,
after the deduction of an estimate of annual recurring irrecoverable property
outgoings, expressed as a percentage of the portfolio valuation
(adding notional purchaser's costs), excluding development and residential
properties.
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of debt and
derivatives and to include deferred taxation on revaluations.
EPRA topped-up net initial yield is the current annualised rent, net of costs,
topped-up for contracted uplifts, where these are not in lieu of rental
growth, expressed as a percentage of capital value, after adding notional
purchaser's costs (adding notional purchaser's costs), excluding development
and residential properties.
EPRA vacancy rate is the estimated market rental value (ERV) of vacant space
divided by ERV of the whole portfolio, excluding developments and residential
property.
Estimated rental value (ERV) is the external valuers' opinion as to the open
market rent which, on the date of valuation, could reasonably be expected to
be obtained on a new letting or rent review of a property.
ERV growth is the change in ERV over a period on the standing investment
properties expressed as a percentage of the ERV at the start of the period.
ERV growth is calculated monthly and compounded for the period subject to
measurement, as calculated by IPD.
Fair value movement is accounting adjustment to change the book value of an
asset or liability to its market value.
Footfall is the annualised number of visitors entering our assets.
Footfall growth movement in footfall against the same period in the prior
year, on properties owned throughout both comparable periods, aggregated at
British Land's ownership share for each asset..
Gross investment activity as measured by our share of acquisitions, sales and
investment in committed development.
Gross rental income is the gross accounting rent receivable (quoted either for
the period or on an annualised basis) prepared under IFRS which requires that
rental income from fixed / minimum guaranteed rent reviews and tenant
incentives is spread on a straight-line basis over the entire lease to first
break. This can result in income being recognised ahead of cash flow.
Group is The British Land Company PLC and its subsidiaries and excludes its
share of joint ventures and funds (where not treated as a subsidiary) on a
line-by-line basis (i.e. not proportionally consolidated).
Headline rent is the contracted gross rent receivable which becomes payable
after all the tenant incentives in the letting have expired.
IFRS are the International Financial Reporting Standards as adopted by the
European Union.
Income return is calculated as net income expressed as a percentage of capital
employed over the period, as calculated by IPD. Income returns are calculated
monthly and indexed to provide a return over the relevant period.
Interest cover is the number of times net financing costs is covered by
underlying profit before net interest payable and taxation.
IPD is Investment Property Databank Ltd which produces an independent
benchmark of property returns and British Land UK portfolio returns.
Lettings and lease renewals are compared both to the previous passing rent as
at the start of the financial year and the ERV immediately prior to letting.
Both comparisons are made on a net effective basis.
Letting performance against ERV comparison of achieved letting terms on long
term lettings and renewals against valuation assumptions on like-for-like
space, calculated on a net effective basis, aggregated at 100% share.
Leverage see loan to value (LTV).
Like-for-like rental income growth is the growth in net rental income on
properties owned throughout the current and previous periods under review.
This growth rate includes revenue recognition and lease incentive adjustments
but excludes properties held for development in either period and lease
accounting adjustments related to guaranteed rent reviews.
Loan to value (LTV) is the ratio of principal value of gross debt less cash,
short term deposits and liquid investments to the aggregate value of
properties and investments.
Managed portfolio consists of multi-let properties where we have control of
facilities and utilities management.
Mark-to-market is the difference between the book value of an asset or
liability and its
market value.
Managed portfolio consists of multi-let properties where we have control of
facilities and utilities management.
Multi-channel retailing is the use of a variety of channels in a customer's
shopping experience, including research, before a purchase. Such channels
include: retail stores, online stores, mobile stores, mobile app stores,
telephone sales and any other method of transacting with a customer.
Transacting includes browsing, buying, returning as well as pre- and post-sale
service.
Net development value is the estimated end value of a development project as
determined by the external valuers for when the building is completed and
fully let (taking into account tenant incentives and notional purchaser's
costs). It is based on the valuers view on ERVs, yields, letting voids and
tenant incentives.
Net effective rent is the contracted gross rent receivable taking into account
any rent-free period or other tenant incentives. The incentives are treated as
a cost-to-rent and spread over the lease to the earliest termination date.
Net equivalent yield 'NEY' is the weighted average income return (after adding
notional purchaser's costs) a property will produce based upon the timing of
the income received. In accordance with usual practice, the equivalent yields
(as determined by the external valuers) assume rent is received annually in
arrears.
Net initial yield 'NIY' is the current annualised rent, net of costs,
expressed as a percentage of capital value, after adding notional purchaser's
costs.
Net rental income is the rental income receivable in the period after payment
of direct property outgoings which typically comprise ground rents payable
under head leases, void costs, net service charge expenses and other direct
irrecoverable property expenses. Net rental income is quoted on an accounting
basis.
Net rental income will differ from annualised net cash rents and passing rent
due to the effects of income from rent reviews, net property outgoings and
accounting adjustments for fixed and minimum contracted rent reviews and lease
incentives.
Net reversionary yield is the anticipated yield to which the initial yield
will rise (or fall) once the rent reaches the estimated rental value.
Occupancy rate is the estimated rental value of let units as a percentage of
the total estimated rental value of the portfolio, excluding development and
residential properties. It includes accommodation under offer, subject to
asset management (where they have been taken back for refurbishment and are
not available to let as at the balance sheet date) or occupied by the Group.
Omni-channel retailing is the evolution of multi-channel retailing, but is
concentrated more on a seamless approach to the consumer experience through
all available shopping channels i.e. mobile internet devices, computers,
bricks and mortar, television, radio, direct mail, catalogue, etc.
Over rented is the term used to describe when the contracted rent is above the
estimated rental value (ERV).
Overall 'topped-up' net initial yield is the EPRA Net 'topped-up' Initial
Yield, adding all contracted uplifts to the annualised rents.
Passing rent is the gross rent, less any ground rent payable under head
leases.
Property income distributions (PIDs) are profits distributed to shareholders
which are subject to tax in the hands of the shareholders as property income.
PIDs are normally paid net of withholding tax currently at 20% which the REIT
pays to the tax authorities on behalf of the shareholder. Certain types of
shareholder (i.e. pension funds) are tax exempt and receive PIDs without
withholding tax. REITs also pay out normal dividends, called non-PIDs, which
are taxed in the same way as dividends received from non REIT companies; these
are not subject to withholding tax and for UK individual shareholders qualify
for the tax free dividend allowance.
Portfolio valuation is reported by the Group's external valuers. In accordance
with usual practice, they report valuations net, after the deduction of the
notional purchaser's costs, including stamp duty land tax, agent and legal
fees.
Proportionally consolidated measures include the Group's share of joint
ventures and funds and exclude non-controlling interests in the Group's
subsidiaries.
Rack rented is the term used to describe when the contracted rent is in line
with the estimated rental value (ERV), implying a nil reversion.
Rent-free period see Tenant (or lease) incentives.
REITs are property companies that allow people and organisations to invest in
commercial property and receive benefits as if they directly owned the
properties themselves. The rental income, after costs is passed directly to
shareholders in the form of dividends. In the UK REITs are required to
distribute at least 90% of their tax exempt property income to shareholders as
dividends. As a result, over time, a significant proportion of the total
return for shareholders is likely to come from dividends. The effect is that
taxation is moved from the corporate level to the investor level as investors
are liable for tax as if they owned the property directly. British Land became
a REIT in January 2007
Rent reviews take place at intervals agreed in the lease (typically every five
years) and their purpose is usually to adjust the rent to the current market
level at the review date. For upwards-only rent reviews, the rent will either
remain at the same level or increase (if market rents have increased) at the
review date.
Rents with fixed and minimum uplifts are either where rents are subject to
contracted uplifts at a level agreed at the time of letting; or where the rent
is subject to an agreed minimum level of uplift at the specified rent review.
Retailer sales growth movement in retailer sales against the same period in
the prior year, on occupiers providing sales data throughout both comparable
periods, aggregated at British Land's ownership share for each asset.
Retail planning consents are separated between A1, A2 and A3 - as set out in
The Town and Country Planning (Use Classes) Order. Within the A1 category,
Open A1 permission allows for the majority of types of retail including
fashion to be accommodated, while Restricted A1 permission places limits on
the types of retail that can operate (for example, a restriction that only
bulky goods operators are allowed to trade at that site).
Class Description Use for all/any of the following purposes
A1 Shops Shops, retail warehouses, hairdressers, undertakers, travel and ticket agencies, post offices, pet shops, sandwich bars, showrooms, domestic hire shops dry cleaners, funeral directors and internet cafes.
A2 Financial and professional services Financial services such as banks and building societies, professional services (other than health and medical services) and including estate and employment agencies. It does not include betting offices or pay day loan shops - these are now classed as "sui generis" uses.
A3 Restaurants and cafes For the sale of food and drink for consumption on the premises - restaurants, snack bars and cafes.
D2 Assembly and leisure Cinemas, music and concert halls, bingo and dance halls (but not night clubs), swimming baths, skating rinks, gymnasiums or areas for indoor or outdoor sports and recreations.
Reversion is the increase in rent estimated by the external valuers, where the
passing rent is below the estimated rental value. The increases to rent arise
on rent reviews and letting of vacant space or re letting of expiries.
Scrip dividend For certain periods, British Land offers its shareholders the
opportunity to receive dividends in the form of shares instead of cash. This
is known as a Scrip dividend.
Standing investments are assets which are directly held and not in the course
of, or held for development.
Tenant (or lease) incentives are incentives offered to occupiers to enter into
a lease. Typically this will be an initial rent-free period, or a cash
contribution to fit-out. Under accounting rules the value of lease incentives
is amortised through the income statement on a straight-line basis to the
earliest lease termination date.
TMT stands for technology, media and telecommunications.
The residual site value of a development is calculated as the estimated net
development value, less development profit, all development construction
costs, finance costs (assumed at a notional rate) of a project to completion
and notional site acquisition costs. The residual is determined to be the
current site value.
Topping out is a traditional construction ceremony to mark the occasion when
the structure of the building reaches the highest point.
Total property return is calculated as the change in capital value, less any
capex incurred, plus net income, expressed as a percentage of capital employed
over the period, as calculated by IPD. Total property returns are calculated
monthly and indexed to provide a return over the relevant period.
Total accounting return is the growth in EPRA NAV per share for the period
plus dividends paid expressed as a percentage of EPRA NAV per share at the
beginning of the period.
Total shareholder return is the growth in value of a shareholding over a
specified period, assuming dividends are reinvested to purchase additional
units of stock.
Total tax contribution is a more comprehensive view of tax contributions than
the accountancy-defined tax figure quoted in most financial statements. It
comprises taxes and levies paid directly, as well as taxes collected from
others which we administered.
Turnover rents is where all or a portion of the rent is linked to the sales or
turnover of the occupier.
Under rented is the term used to describe when the contracted rent is below
the estimated rental value (ERV), implying a positive reversion.
Underlying earnings per share (EPS) consists of underlying profit after tax
divided by the diluted weighted average number of shares in issue during the
period.
Underlying profit is the pre-tax EPRA earnings measure with additional Company
adjustments.
No Company adjustments were made in either the current or prior period.
Valuation uplift is the increase in the portfolio valuation and sales receipts
of properties sold during the period, net of capex, capitalised interest and
development team costs, and transaction costs incurred, expressed as a
percentage of the portfolio valuation at the start of the period plus net
capex, capitalised interest and development team costs, and transaction
costs.
Virtual freehold represents a long leasehold tenure for a period of up to 999
years. A 'peppercorn', or nominal, rent is paid annually.
Weighted average debt maturity Each tranche of Group debt is multiplied by the
remaining period to its maturity and the sum of the results is divided by
total Group debt in issue at the period end.
Weighted average interest rate is the Group loan interest and net derivative
costs per annum at the period end, divided by total Group debt in issue at the
period end.
Weighted average unexpired lease term is the average lease term remaining to
first break, or expiry, across the portfolio weighted by contracted rental
income (including rent-frees). The calculation excludes residential leases and
properties allocated as developments.
Yield on cost is the estimated annual rent of the completed development
divided by the total cost of development including site value and notional
finance costs to the point of assumed rent commencement, expressed as a
percentage return.
Yield shift is a movement (usually expressed in bps) in the yield of a
property asset, or like-for-like portfolio, over a given period. Yield
compression is a commonly used term for a reduction in yields. Yield expansion
refers to an increase in yields.
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on British Land
See all newsREG - BlackRock Group British Land Co PLC - Form 8.3 - British Land Company plc
AnnouncementREG - Glazer Capital, LLC British Land Co PLC - Form 8.3 - British Land Company plc, The
AnnouncementREG - Barclays PLC British Land Co PLC - Form 8.3 BRITISH LAND COMPANY PLC, THE
AnnouncementREG - Castlebar Capital British Land Co PLC - Form 8.3 BRITISH LAND CO PLC
AnnouncementREG - Trium Capital LLP British Land Co PLC - Form 8.3 - THE BRITISH LAND COMPANY PLC
Announcement