REG - British Land Co PLC - Half Yearly Report - Part 2 <Origin Href="QuoteRef">BLND.L</Origin> - Part 1

British LandAnnouncement

17/11/2015 07:02

RNS Number : 9197F
British Land Co PLC
17 November 2015
Consolidated income Statement
For the six months ended 30 September 2015



Six months ended
30 September 2015
Unaudited

Six months ended
30 September 2014
Unaudited2

Note

Underlying pre-tax1

m
Capital
and other
m
Total
m

Underlying pre-tax1

m
Capital
and other
m
Total
m
Revenue
3

276
15
291

239
38
277
Costs
3

(54)
(7)
(61)

(47)
(37)
(84)

3

222
8
230

192
1
193
Joint ventures and funds
(see also below)
8

63
219
282

64
340
404
Administrative expenses


(47)
-
(47)

(39)
-
(39)
Net valuation movement
4

-
397
397

-
511
511
Profit on disposal of investment properties and investments


-
26
26

-
7
7
Financing costs









- financing income
5

3
-
3

4
25
29
- financing charges
5

(62)
(6)
(68)

(58)
(4)
(62)



(59)
(6)
(65)

(54)
21
(33)
Profit on ordinary activities
before taxation


179
644
823

163
880
1,043
Taxation
6


7
7


(2)
(2)
Profit for the year after taxation 




830



1,041
Attributable to non-
controlling interests


8
6
14

8
35
43
Attributable to shareholders
of the Company


171
645
816

155
843
998
Earnings per share:









- basic
2



79.8p



98.5p
- diluted
2



75.4p



97.9p
All results derive from continuing operations.



Six months ended
30 September 2015
Unaudited

Six months ended
30 September 2014
Unaudited2

Note

Underlying pre-tax1

m
Capital
and other
m
Total
m

Underlying pre-tax1

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









Underlying profit before taxation


63
-
63

64
-
64
Net valuation movement


-
217
217

-
338
338
Profit on disposal of investment properties, trading properties and investments


-
2
2

-
4
4
Financing break costs on
property disposals


-
-
-

-
(1)
(1)
Taxation


-
-
-

-
(1)
(1)


8

63
219
282

64
340
404
1See note 2. 
2The prior period comparatives have been re-presented to reflect the presentation adopted in the current period.
Consolidated Statement of Comprehensive Income
For the six months ended 30 September

Six months ended 30 September 2015
Unaudited
m
Six months ended 30 September 2014
Unaudited
m
Profit for the year after taxation
830
1,041
Other comprehensive income:


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


Net actuarial (loss) gain on pension scheme
(1)
1
Valuation movements on owner-occupied property
12
8

11
9
Items that may be reclassified subsequently to profit or loss:


Gains (losses) on cash flow hedges


- Group
8
(23)
- Joint ventures and funds
4
6

12
(17)
Transferred to the income statement (cash flow hedges)


- Foreign currency derivatives
2
(3)
- Interest rate derivatives
4
5

6
2
Exchange differences on translation of foreign operations


- Hedging and translation
1
2
- Other
-
(1)

1
1



Deferred tax on items of other comprehensive income
(5)
-



Other comprehensive profit (loss) for the year
25
(5)
Total comprehensive income for the year 
855
1,036
Attributable to non-controlling interests
14
43
Attributable to shareholders of the Company
841
993
Consolidated balance sheet
AT 30 september 2015

Note

30 September 2015
Unaudited
m
31 March
2015
Audited
m
ASSETS




Non-current assets




Investment and development properties
7

9,446 
9,120
Owner-occupied property
7

94 
60



9,540 
9,180
Other non-current assets




Investments in joint ventures and funds
8

3,281
2,901
Other investments
9

143 
379
Interest rate and currency derivative assets
10

112
139



13,076
12,599
Current assets




Trading properties
7

302 
274
Debtors


70
20
Cash and short-term deposits
10

188
108



560
402
Total assets


13,636
13,001
LIABILITIES




Current liabilities




Short-term borrowings and overdrafts
10

(174)
(102)
Creditors


(229)
(261)
Corporation tax


(7)
(9)



(410)
(372)
Non-current liabilities




Debentures and loans
10

(3,754)
(3,847)
Other non-current liabilities


(95)
(79)
Deferred tax liabilities


(12)
(12)
Interest rate and currency derivative liabilities
10

(112)
(126)



(3,973)
(4,064)
Total liabilities


(4,383)
(4,436)
Net assets


9,253
8,565
EQUITY




Share capital


259
258
Share premium


1,293
1,280
Merger reserve


213 
213
Other reserves


(57)
(82)
Retained earnings


7,261
6,563
Equity attributable to shareholders of the Company


8,969
8,232
Non-controlling interests


284
333
Total equity


9,253
8,565
EPRA NAV per share1
2

891p
829p
1As defined in note 2.
Consolidated statement of cash flows
For the six months ended 30 September 2015

Note

Six months ended 30 September 2015
Unaudited
m
Six months ended 30 September 2014
Unaudited
m
Rental income received from tenants


216
194
Fees and other income received


10
9
Operating expenses paid to suppliers and employees


(65)
(60)
Cash generated from operations


161
143





Net interest paid


(58)
(52)
UK corporation tax paid


(1)
-
Distributions and other receivables from joint ventures and funds
8

30
40
Net cash inflow from operating activities


132
131





Cash flows from investing activities




Development and other capital expenditure


(132)
(73)
Purchase of investment properties


(240)
-
Sale of investment and trading properties


390
137
Payments received in respect of trading properties


16
24
Acquisition of units in Hercules Unit Trust


(55)
(27)
Investment in and loans to joint ventures and funds


(208)
(96)
Capital distributions and loan repayments from joint ventures and funds


323
101
Indirect taxes (paid) recovered in respect of investing activities


(1)
3
Net cash inflow from investing activities


93
69





Cash flows from financing activities




Issue of ordinary shares


2
5
Dividends paid
11

(116)
(95)
Dividends paid by subsidiaries


(9)
(11)
Closeout of interest rate derivatives


13
(2)
Movement in other financial liabilities


(22)
(2)
Decrease in bank and other borrowings


(369)
(313)
Drawdowns on bank and other borrowings


11
168
Drawdown of zero coupon convertible bond


345
-
Net cash outflow from financing activities


(145)
(250)





Net increase (decrease) in cash and cash equivalents


80
(50)
Cash and cash equivalents at 1 April


108
142
Cash and cash equivalents at 30 September


188
92





Cash and cash equivalents consists of:




Cash and short-term deposits


188
92
consolidated statement Of changes in equity
For the six months ended 30 September 2015
Six month movements in equity

Share capital
m
Share premium
m
Hedging and translation reserve
m
Revaluation
reserve
m
Merger reserve
m
Retained earnings
m
Total
m
Non-controlling interests
m
Total
equity
m
Balance at 1 April 2015
258 
1,280 
(76)
(6)
213 
6,563 
8,232 
333 
8,565 
Total comprehensive income for the period
-
-
11 
14 
- 
816
841
14 
855
Share issues
1 
13 
- 
- 
- 
(10) 
4 
-
4 
Purchase of units from non-controlling interests
- 
- 
- 
- 
- 
(1)
(1)
(54) 
(55)
Fair value of share and share option awards
- 
- 
- 
- 
- 
6
6
- 
6
Dividends payable in period (13.84p per share)
- 
- 
- 
- 
- 
(141) 
(141) 
- 
(141)
Dividends payable by subsidiaries
- 
- 
- 
- 
- 
-
- 
(9) 
(9) 
Adjustment for scrip dividend element
- 
- 
- 
- 
- 
28
28
-
28
Balance at 30 September 2015
259
1,293
(65)
8
213 
7,261
8,969
284
9,253










Balance at 1 April 2014
255
1,257
(32)
(38)
213
5,091
6,746
371
7,117
Total comprehensive income for the period
-
-
(19)
13
-
999
993
43
1,036
Share issues
2
15
-
-
-
(12)
5
-
5
Purchase of units from non-controlling interests
-
-
-
-
-
-
-
(35)
(35)
Fair value of share and share option awards
-
-
-
-
-
4
4
-
4
Dividends payable in period (13.50p per share)
-
-
-
-
-
(136)
(136)
-
(136)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(11)
(11)
Adjustment for scrip dividend element
-
-
-
-
-
44
44
-
44
Balance at 30 September 2014
257
1,272
(51)
(25)
213
5,990
7,656
368
8,024
Prior year movements in equity

Share capital
m
Share premium
m
Hedging and translation reserve
m
Revaluation
reserve
m
Merger reserve
m
Retained earnings
m
Total
m
Non-controlling interests
m
Total
equity
m
Balance at 1 April 2014
255
1,257
(32)
(38)
213
5,091
6,746
371
7,117
Total comprehensive income for the year
-
-
(44)
32
-
1,698
1,686
53
1,739
Share issues
3
23
-
-
-
(10)
16
-
16
Non-controlling interests on acquisition
of subsidiary
-
-
-
-
-
-
-
31
31
Purchase of units from non-controlling interests
-
-
-
-
-
2
2
(103)
(101)
Fair value of share and share option awards
-
-
-
-
-
10
10
-
10
Dividends payable in year (27.30p per share)
-
-
-
-
-
(277)
(277)
-
(277)
Dividends payable by subsidiaries
-
-
-
-
-
-
-
(19)
(19)
Adjustment for scrip dividend element
-
-
-
-
-
49
49
-
49
Balance at 31 March 2015
258
1,280
(76)
(6)
213
6,563
8,232
333
8,565










NOTES TO THE ACCOUNTS
For the six months ended 30 September 2015
1 Basis of preparation
The financial information for the period ended 30 September 2015 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the
year ended 31 March 2015 has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3)
of the Companies Act 2006.
The financial information included in this announcement has been prepared on a going concern basis using accounting policies consistent with International Financial Reporting Standards (IFRS)
as adopted by the European Union and in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
The current period financial information presented in this document has been reviewed, not audited.
The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2015, which have been prepared in accordance with IFRS as adopted by the European Union.
In the current financial year the Group has adopted the Annual Improvements to IFRSs 2010-2012 cycle, the Annual Improvements to IFRSs 2011-2013 cycle and the amendments to IAS 19 Employee Benefits. Otherwise the same accounting policies, accounting judgements, estimates and methods of computation are followed in the half year report as applied in the Group's latest annual audited financial statements. The adoption of these standards had no impact on the financial position, results or financial disclosures of the Group.
Standards and interpretations issued but not effective for the current accounting period were:
IAS 16 (amended) - Property, plant and equipment
IAS 38 (amended) - Intangible assets
IAS 27 (amended) - Separate financial statements
IFRS 10 (amended) - Consolidated financial statements
IFRS 11 (amended) - Joint arrangements
IFRS 14 - Regulatory deferral accounts
Annual Improvements to IFRSs 2012-2014 cycle
IAS 1 (amended) - Presentation of Financial Statements
IFRS 15 - Revenue from contracts with customers; and
IFRS 9 - Financial Instruments
The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods except as follows:
IFRS 9 will impact both the measurement and disclosures of financial instruments and is effective for the Group's year ending
31 March 2019. The Group has not yet completed its evaluation of the effect of the adoption.

IFRS 15 does not apply to gross rental income, but does apply to service charge income, other fees and trading property disposals and is effective for the Group's year ending 31 March 2019. The Group does not expect adoption of IFRS 15 to have a material
impact on the measurement of revenue recognition, but additional disclosures will be required with regards to the above sources
of income.
The Group's business activities, financial position, cash flows, liquidity position and financing structure are discussed above. As discussed on in the financial review, the Directors believe that the Group is well placed to manage its business risks satisfactorily and consider it appropriate to adopt the going concern basis of accounting in preparing the interim financial statements. The Group's business is not seasonal.
The interim financial information was approved by the Board on 16 November 2015.
2Performance 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 for each performance measure are shown below, and a reconciliation between these is shown within the supplementary disclosures (Table B).
EPRA earnings is the profit after tax excluding investment and development property revaluations and gains or losses on disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. EPRA earnings (diluted) also takes into account dilution due to the 2012 convertible bond.
Underlying earnings is the EPRA earnings measure, with additional company adjustments. For the six months ended 30 September 2015 there were no company adjustments, however for the six months ended 30 September 2014, the 2012 convertible bond was not treated as dilutive for underlying earnings.

Six months ended
30 September 2015

Six months ended
30 September 2014
Earnings per share
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
171
1,022
16.7

155
1,013
15.3
Underlying diluted
174
1,086
16.0

155
1,019
15.3








EPRA







EPRA basic
171
1,022
16.7

155
1,013
15.3
EPRA diluted
174
1,086
16.0

158
1,077
14.7








IFRS







Basic
816
1,022
79.8

998
1,013
98.5
Diluted
819
1,086
75.4

998
1,019
97.9
EPRA 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 are shown below. A reconciliation between IFRS net assets and EPRA net assets, and the relevant number of shares for each performance, is shown within the supplementary disclosures (Table B).
The EPRA NAV per share excludes the mark-to-market on effective cash flow hedges and related debt adjustments, mark-to-market on the convertible bonds, deferred taxation on revaluations, and includes the surplus on trading properties and is calculated on a fully diluted basis. The EPRA NAV per share calculation takes into account dilution for the 2012 convertible bond.


30 September 2015


31 March 2015
Net asset value per share
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
9,755
1,095
891

9,035
1,090
829
EPRA NNNAV
9,220
1,095
842

8,359
1,090
767








IFRS







Basic
9,253
1,026
902

8,565
1,020
840
Diluted
9,253
1,095
845

8,565
1,032
830
Total accounting return
The Group also measures financial performance with reference to total accounting return. This is calculated as the increase in EPRA NAV per share and dividend paid in the period as a percentage of the EPRA NAV per share at the start of the period.


Six months ended
30 September 2015

Six months ended
30 September 2014


Increase 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
62
13.84
9.1%

81
13.50
13.7%
3Revenue and costs


Six months ended
30 September 2015

Six months ended
30 September 2014

Underlying
m
Capital & other
m

Underlying
m
Capital & other
m
Rent receivable
218
- 

181
-
Spreading of tenant incentives and guaranteed rent increases
10
- 

14
-
Surrender premia
2
- 

3
-
Gross rental income
230
- 

198
-
Trading property sales proceeds
- 
15

-
38
Service charge income
41
- 

34
-
Management and performance fees (from joint ventures and funds)
3
- 

5
-
Other fees and commissions
2
- 

2
-
Revenue
276
15

239
38






Trading property cost of sales
- 
(7)

-
(37)
Service charge expenses
(41)
- 

(34)
-
Property operating expenses
(13)
- 

(13)
-
Costs
(54)
(7)

(47)
(37)

222
8

192
1
4Net valuation movements on property

Six months ended 30 September 2015
m
Six months ended 30 September 2014
m
Consolidated income statement


Revaluation of properties
397
511
Net valuation movements of joint ventures and funds accounted
for using the equity method
217
338

614
849
Consolidated statement of comprehensive income


Revaluation of owner-occupied properties
12
8

626
857
5Net financing costs

Six months ended
30 September 2015
m
Six months ended
30 September 2014
m
Interest payable on:


Bank loans and overdrafts
20
20
Other loans
46
43
Obligations under finance leases
1
-

67
63
Development interest capitalised
(5)
(5)

62
58
Interest receivable on:


Deposits, securities and liquid investments
(1)
(1)
Loans to joint ventures
(2)
(3)

(3)
(4)
Net financing costs - underlying
59
54
Net financing costs - capital
6
(21)
Net financing costs
65
33



Total financing income
(3)
(29)
Total financing charges
68
62
Net financing costs
65
33
Interest on development expenditure is capitalised at the Group's weighted average interest rate of 3.1% (Six months ended 30 September 2014: 3.6%). The weighted average interest rate on a proportionately consolidated basis at 30 September 2015 was 3.6% (Six months ended 30 September 2014: 4.1%).
6Taxation

Six months ended 30 September 2015
m
Six months ended 30 September 2014
m
Current tax - UK corporation taxation
(30 September 2015: 20%; 30 September 2014: 21%):
2
(2)
Total current taxation income (expense)
2
(2)
Deferred taxation on revaluations
5 
-
Group total taxation
7
(2)
Attributable to joint ventures and funds
-
(1)
Total taxation
7
(3)
Taxation expense attributable to underlying profits for the six months ended 30 September 2015 was nil (Six months ended 30 September 2014: nil).
The deferred taxation charge for the six months ended 30 September 2015 has been calculated using the substantively enacted UK corporation taxation rate at the reporting date of 20% (effective from 1 April 2015).
7Property
Property reconciliation

Six months ended 30 September 2015

Year ended 31 March 2015

Investment and development properties
Level 3 
Trading properties 
Owner-occupied
Level 3 
Total 

Investment and development properties
Level 3
Trading properties
Owner-occupied
Level 3
Total
Carrying value at the start of the
period/year
9,120
274
60
9,454

7,272
271
47
7.590
Additions










- property purchases
238
-
-
238

147
-
-
147
- acquisition of subsidiaries
-
-
-
-

1,000
-
-
1,000
- development expenditure
20
34
-
54

68
46
-
114
- capitalised interest and staff costs
1
3
-
4

-
8
-
8
-
capital expenditure on asset management initiatives
50
-
-
50

42
-
-
42

309
37
-
346

1,257
54
-
1,311
Depreciation
-
-
-
-

-
-
(1)
(1)
Disposals
(378)
(7)
-
(385)

(333)
(45)
-
(378)
Reclassifications
(20)
(2)
22
-

2
(6)
4
-
Revaluations included in income statement
397
-
-
397

884
-
-
884
Revaluation included in SOCIE
-
-
12
12

-
-
10
10
Movement in tenant incentives and contracted rent uplift balances
18
-
-
18

38
-
-
38
Carrying value at the end of the
period/year
9,446
302
94
9,842

9,120
274
60
9,454










Plus: surplus on trading properties



91




96
Less: head lease liabilities


(41)




(41)
Total Group property portfolio valuation
at the end of the period



9,892




9,509
Non-controlling interests



(323)




(441)
Total Group property portfolio valuation
at the end of the period attributable
to shareholders 



9,569




9,068
The Group's total property portfolio was valued by independent 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 model 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 on a half yearly basis.
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. There were no transfers between levels in the period. Inputs to the valuation, including equivalent yields, rental values and costs to complete, are 'unobservable' as defined by IFRS 13.
Additional property covenant information
Properties valued at 1,900m (31 March 2015: 1,845m) were subject to a security interest and other properties of non-recourse companies amounted to 1,863m (31 March 2015: 1,999m), totalling 3,763m (31 March 2015: 3,844m).
8Joint ventures and funds
Summary movement for the period of the investments in joint ventures and funds

Joint ventures
m
Funds
m
Total 
m
Equity
m
Loans
m
Total 
m
At 1 April 2015
2,586
315
2,901
2,598
303
2,901
Additions
204
-
204
4
200
204
Disposals
(2)
(1)
(3)
-
(3)
(3)
Share of profit after taxation
268
14
282
282
-
282
Distributions and dividends:






Capital
-
(47)
(47)
(47)
-
(47)
Revenue
(54)
(7)
(61)
(61)
-
(61)
Hedging and exchange movements
5
-
5
5
-
5
At 30 September 2015
3,007
274
3,281
2,781
500
3,281
Additional investments in joint ventures and funds covenant information
At 30 September 2015 the investments in joint ventures included within the total investments in joint ventures and funds was 3,245m (31 March 2015: 2,869m), being the 3,281m total investment shown above, less the net investment of 36m in PREF, a fund owning a portfolio of retail property in Europe.
Summary income statement for the period of the investments in joint ventures and funds




Six months ended
30 September 2015

Six months ended
30 September 20141

m
100%
m
BL Share

m
100%
m
BL Share






Revenue
266
133 

293
147
Costs
(56)
(28)

(52)
(26)

210 
105 

241
121






Administrative expenses
(2)
(1)

(5)
(2)
Net financing costs
(81) 
(41)

(116)
(55)
Underlying profit before taxation
127 
63 

120
64






Net valuation and disposal movements
435 
219 

679
342
Non-recurring items
- 
-

(2)
(1)
Profit on ordinary activities before taxation
562 
282

797
405






Taxation
(1) 
- 

(1)
(1)






Profit on ordinary activities after taxation
561 
282 

796
404






Profit distributions split between controlling and non-controlling interests





Attributable to non-controlling interests

2 

15
Attributable to shareholders of the Company

280 


389
1The prior period comparatives have been re-presented to reflect the presentation adopted in the current period.
Operating cash flows of joint ventures and funds (Group share)

Six months ended 30 September 2015
m
Six months ended 30 September 2014
m








Rental income received from tenants
102 
122
Fees and other income received
1 
-
Operating expenses paid to suppliers and employees
(9)
(11)
Cash generated from operations
94 
111



Interest paid
(44)
(65)
Interest received
- 
2
UK corporation tax paid
(3)
(4)
Cash inflow from operating activities
47 
44
Cash inflow from operating activities deployed as:


Surplus cash retained within joint ventures and funds
17 
4
Revenue distributions per consolidated statement of cash flows
30
40



Revenue distributions split between controlling and non-controlling interests


Attributable to non-controlling interests
2 
4
Attributable to shareholders of the Company
28 
36
9Other investments

30 September
2015
m
31 March
2015
m
Investment held for trading
102
99
Loans, receivables and other
41
280
Other investments
143
379
The investment held for trading comprises interests as a trust beneficiary. The trusts' assets comprise freehold reversions in a pool of commercial properties, comprising Sainsbury's superstores. The investment has been categorised as Level 3 in the fair value hierarchy (see note 7). Fair value of the interest has been determined by the Directors, supported by an external valuation from CBRE. The superstore asset valuations are subject to the same inputs as disclosed in note 7.
Included within the loans, receivables and other balance as at 30 September 2015 is nil (31 March 2015: 243m) in relation to a loan to the Broadgate joint venture, which is carried at amortised cost, and was fully repaid in the period.
10Net debt
10.1 Fair value and book value of net debt

30 September 2015

31 March 2015

Fair value
m 
Book value
m 

Fair value
m
Book value
m
Debentures and unsecured bonds
1,825
1,773

1,925
1,785
Convertible bonds
839
839

493
493
Bank debt and other floating rate debt
1,334
1,316

1,691
1,671
Gross debt
3,998
3,928

4,109
3,949
Interest rate and currency derivative liabilities
112
112

126
126
Interest rate and currency derivative assets
(112)
(112)

(139)
(139)

3,998
3,928

4,096
3,936
Cash and short-term deposits
(188)
(188)

(108)
(108)
Net debt
3,810
3,740

3,988
3,828
Net debt attributable to non-controlling interests
(98)
(96)

(192)
(190)
Net debt attributable to shareholders of the Company
3,712
3,644

3,796
3,638
The fair values of debt, debentures and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and loan notes have been valued assuming they 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 have been excluded from the disclosures on the basis that their fair value is equivalent to the book value.
10.2 Loan to value

30 September 2015
m
31 March
2015
m
Principal value of gross debt
3,710
3,717
Less the relevant portion of the borrowings of the partly owned subsidiary (non-controlling interests)
(127)
(200)
Less cash and short-term deposits (balance sheet)
(188)
(108)
Plus the relevant portion of the cash and deposits of the partly owned subsidiary (non-controlling interests)
31
10
Total Group net debt for LTV calculation
3,426
3,419
Total Group property portfolio valuation (note 7)
9,892
9,509
Investments in joint ventures and funds (note 8)
3,281 
2,901
Other investments (note 9)
143 
379
Less property and investments attributable to non-controlling interests
(360)
(528)
Total Group property for LTV calculation
12,956
12,261
Group LTV
26%
28%
10.3 British Land Unsecured Financial Covenants
The two financial covenants applicable to the Group unsecured debt including the convertible bonds are shown below:

30 September 2015
m
31 March
2015
m
Net Borrowings not to exceed 175% of Adjusted Capital and Reserves
36%
38%



Net Borrowings


Principal amount of gross debt
3,710
3,717
Less the relevant proportion of borrowings of the partly-owned subsidiary (non-controlling interests)
(127)
(200)
Less cash and deposits (balance sheet)
(188)
(108)
Plus the relevant proportion of cash and deposits of the partly-owned subsidiary (non-controlling interests)
31 
10
Net Borrowings
3,426
3,419



Adjusted Capital and Reserves


Share capital and reserves (balance sheet)
9,253
8,565
EPRA deferred tax adjustment (EPRA Table A)
12
13
Trading property surpluses (EPRA Table A)
97
96
Exceptional refinancing charges (see below)
294 
300
Fair value adjustments of financial instruments (EPRA Table A)
234
257
Less reserves attributable to non-controlling interests (balance sheet)
(284)
(333)
Adjusted Capital and Reserves
9,606
8,898
In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of 294m
(31 March 2015: 300m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.

30 September 2015
m
31 March
2015
m
Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets
29%
28%





Net Unsecured Borrowings


Principal amount of gross debt
3,710
3,717
Less cash and deposits not subject to a security interest (being 168m less the relevant proportion of cash and deposits of the partly owned subsidiary of 28m)
(140)
(77)
Less principal amount of secured and non-recourse borrowings
(1,756)
(1,906)
Net Unsecured Borrowings

1,814
1,734




Unencumbered Assets



Properties (note 7)

9,892
9,509
Investments in joint ventures and funds (note 8)

3,281 
2,901
Other investments (note 9)

143 
379
Less investments in joint ventures (note 8)

(3,245)
(2,869)
Less encumbered assets (note 7)

(3,763)
(3,844)
Unencumbered Assets

6,308
6,076
10.4 2012 Convertible bond
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 can exercise their 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.
10.5 2015 Convertible bond 
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 year above 14.18 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. 
10.6 Fair value hierarchy
The table below analyses financial instruments carried at fair value, by the valuation method. The different levels are defined as follows:
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).

30 September 2015

31 March 2015

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
-
(112)
-
(112)

-
(139)
-
(139)
Investment held for trading
-
-
(102)
(102)

-
-
(99)
(99)
Assets
-
(112)
(102)
(214)

-
(139)
(99)
(238)
Interest rate and currency derivative liabilities
-
112
-
112

-
126
-
126
Convertible bonds
839
-
-
839

493
-
-
493
Liabilities
839
112
-
951

493
126
-
619
Total
839
-
(102)
737

493
(13)
(99)
381
There have been no transfers between levels in the period. A 3m valuation gain in relation to the investment held for trading has been recorded in the six months ended 30 September 2015. Further disclosures in relation to the valuation of the investment held for trading are included within Note 9.
11Dividend
The 2016 second quarter dividend of 7.09 pence per share, totalling 73m, is payable on 12 February 2016 to shareholders on the register at close of business on 8 January 2016.
The Board will announce the availability of the Scrip Dividend Alternative via the Regulatory News Service and on its website (www.britishland.com), no later than 4 business days before the ex-dividend date of 7 January 2016. The Board expects to announce the split between PID and non-PID income at that time. A 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) for details.
The 2015 first quarter dividend of 7.09 pence per share, totalling 73m, was paid on 6 November 2015. 30% of shareholders opted for the Scrip Dividend Alternative. Both the cash dividend and Scrip Dividend Alternative were treated as PIDs. The total cash paid by the Group was 53m, being 43m paid to shareholders, 8m of withholding tax on the cash dividend and 2m of withholding tax on the Scrip Dividend Alternative.
The Consolidated Statement of Changes in Equity shows total dividends in the six months to 30 September 2015 of 141m, 70m being the third quarter 2015 PID dividend of 6.92 pence per share paid on 6 May 2015, and the fourth quarter 2015 PID dividend of 6.92 pence per share, paid on 7August 2015, totalling 71m. A scrip alternative was offered in lieu of cash for the fourth quarter dividend, which was non-PID.
12Segment Information
Operating segments
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium-term. Its two principal sectors are currently Offices and Retail. The Office sector includes residential, as this is often incorporated into Office schemes, and Retail includes leisure, for a similar rationale.
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 whch 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. Operating result is the net of net rental income, fee income and administration expenses. No customer exceeded 10% of the Group's revenues in either year.
Segment result

Six months ended 30 September

Offices & residential

Retail & leisure

Other / unallocated

Total
2015
m
2014
m

2015
m
2014
m

2015
m
2014
m

2015
m
2014
m
Gross rental income











British Land Group
66
59

153
129

-
-

219
188
Share of joint ventures and funds
54
43

51
73

2
5

107
121
Total
120
102

204
202

2
5

326
309












Net rental income











British Land Group
61
55

145
122

-
-

206
177
Share of joint ventures and funds
52
41

49
70

2
4

103
115
Total
113
96

194
192

2
4

309
292












Operating result











British Land Group
51
50

136
115

(26)
(27)

161
138
Share of joint ventures and funds
54
43

50
71

2
6

106
120
Total
105
93

186
186

(24)
(21)

267
258

Six months ended 30 September 2015
m 
Six months ended 30 September 2014
m
Reconciliation to underlying profit before taxation


Operating result
267 
258
Net financing costs
(96)
(103)
Underlying profit before taxation
171
155



Reconciliation to profit before taxation


Underlying profit before taxation
171
155
Capital and other
644
880
Underlying profit attributable to non-controlling interests
8
8
Total profit on ordinary activities before taxation
823
1,043
Of the total gross rental income above, 2m (Six months ended 30 September 2014: 5m) was derived from outside the UK.
Segment assets

Offices & residential

Retail & leisure

Other / unallocated

Total

30 September 2015
m
31 March 2015
m

30 September 2015
m
31 March 2015
m

30 September 2015
m
31 March 2015
m

30 September 2015
m
31 March 2015
m

Property assets











British Land Group
3,986
3,550

5,583
5,518

-
-

9,569
9,068
Share of joint ventures and funds
2,755
2,530

2,060
2,039

43
40

4,858 
4,609
Total
6,741
6,080

7,643
7,557

43
40

14,427 
13,677
Reconciliation to net assets

30 September 2015 
m
31 March
2015
m

British Land Group
Property assets
14,427 
13,677
Other non-current assets
141 
256
Non-current assets
14,568 
13,933

Other net current liabilities
(216)
(307)
Adjusted net debt
(4,908)
(4,918)
Other non-current liabilities
(89)
(73)
EPRA net assets (undiluted)
9,355
8,635
Dilution for 2012 convertible bond
400
400
EPRA net assets (diluted)
9,755 
9,035
Non-controlling interests
284
333
EPRA adjustments
(786)
(803)
Net assets
9,253
8,565
13Contingent liabilities
The Group, joint ventures and funds have contingent liabilities in respect of legal claims, guarantees and warranties arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities.
14Related party transactions
There have been no material changes in the related party transactions described in the last annual report.
15Share capital
At 30 September 2015, of the issued 25p ordinary shares, 1m were held in the ESOP Trust (31 March 2015: 1m), 11m were held as Treasury shares (31 March 2015: 11m) and 1,025m shares were in free issue (31 March 2015: 1,020m; 30 September 2014: 1,018m). All shares are fully paid.

m
Ordinary shares
of 25p each
Issued, called and fully paid


At 1 April 2015
258
1,031,788,286
Issues
1
5,443,183
At 30 September 2015
259
1,037,231,469
Supplementary Disclosures
Table A: Summary income statement and balance sheet
Summary income statement based on proportional consolidation for the six months ended 30 September 2015
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. The underlying profit before taxation and underlying profit after taxation are the same as presented in the consolidated income statement.

Six months ended 30 September 2015

Six months ended 30 September 2014

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
230
110
(14)
326

198
125
(14)
309
Property operating expenses
(13)
(5)
1
(17)

(13)
(4)
-
(17)










Net rental income
217
105
(13)
309

185
121
(14)
292
Administrative expenses
(47)
(1)
1
(47)

(39)
(2)
-
(41)
Fees and other income
5
-
-
5

7
-
-
7










Ungeared Income Return
175
104
(12)
267

153
119
(14)
258
Net interest
(59)
(41)
4
(96)

(54)
(55)
6
(103)
Underlying profit before taxation
116
63
(8)
171

99
64
(8)
155
Underlying taxation



-




-
Underlying profit after taxation
116
63
(8)
171

99
64
(8)
155
Underlying earnings per share - diluted basis



16.0p




15.3p
Valuation movement and profit on disposal



642




826
Other capital and taxation (net)*



3




17
Capital and other



645




843
Total return



816




998
See note 2 for the basis of calculation of underlying EPS.
* 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 30 September 2015
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 ventures' and funds' 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 interest
m
Share
options
m
Deferred
tax
m
Mark-to-market on effective cash flow hedges and related debt adjustments
m
Head
leases
m
Convertible bond adjustment
m
Valuation surplus on trading properties
m
EPRA
Net assets 30 September 2015
m
EPRA
Net assets 31
March
2015
m
Retail properties
5,933
2,143
(400)
-
-
-
(33)
-
-
7,643
7,557
Office properties
3,909
2,749
-
-
-
-
(14)
-
97
6,741
6,080
Other properties
-
43
-
-
-
-
-
-
-
43
40
Total properties
9,842
4,935
(400)
-
-
-
(47)
-
97
14,427
13,677
Investments in joint ventures and funds
3,281
(3,281)
-
-
-
-
-
-
-
-
-
Other investments
143
(2)
-
-
-
-
-
-
-
141
256
Other net (liabilities) assets
(273)
(137)
3
43
12
-
47
-
-
(305)
(380)
Net debt
(3,740)
(1,515)
113
-
-
234
-
-
-
(4,908)
(4,918)
Dilution due to 2012 convertible bond
-
-
-
-
-
-
-
400
-
400
400
Net assets
9,253
-
(284)
43
12
234
-
400
97
9,755
9,035
EPRA NAV
per share (note 2)









891p
829p
EPRA Net Assets Movement

30 September 2015

31 March 2015

m
Pence per share

m
Pence per share
Opening EPRA NAV
9,035
829

7,027
688
Income return
171
16

313
31
Capital return
662
59

1,523
145
Dividend paid
(113)
(13)

(228)
(27)
Dilution due to 2012 convertible bond
-
-

400
(8)
Closing EPRA NAV
9,755
891

9,035
829
Table B: EPRA Performance measures
EPRA Performance measures summary table


Six months ended
30 September 2015

Six months ended
30 September 2014


m
Pence
per share

m
Pence
per share

EPRA Earnings
- basic
171
16.7

155
15.3


- diluted
174
16.0

158
14.7

EPRA Net Initial Yield

4.1%


4.4%

EPRA 'topped-up' Net Initial Yield

4.6%


5.0%

EPRA Vacancy Rate

2.6%


4.3%


30 September 2015

31 March 2015


m
Pence
per share

m
Pence
per share

EPRA NAV
9,755
891

9,035
829

EPRA NNNAV
9,220
842

8,359
767
Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share

Six months ended 30 September 2015
m
Six months ended 30 September 2014
m
Profit attributable to the shareholders of the Company
816
998
Exclude:


Group - taxation
(7)
2
Joint ventures and funds - taxation
-
1
Group - net valuation movement
(397)
(511)
Group - profit on disposal of investment properties and investments
(26)
(7)
Group - profit on disposal of trading properties
(8)
(1)
Joint ventures and funds - net valuation movement (including result on disposals)
(219)
(342)
Net financing costs - capital
6
(21)
Financing break costs on property disposals
-
1
Non-controlling interests in respect of the above
6
35
EPRA and underlying earnings (basic)
171
155
Dilutive effect of 2012 converitble bond
3
-
Underlying earnings (diluted)
174
155
Dilutive effect of 2012 convertible bond
-
3
EPRA earnings (diluted)
174
158



Profit attributable to the shareholders of the Company
816
998
Dilutive effect of 2012 convertible bond
3
-
IFRS earnings (diluted)
819
998

Six months ended 30 September
2015
Number
million
Six months ended 30 September
2014
Number
million
Weighted average number of shares
1,033
1,024
Adjustment for Treasury shares
(11)
(11)
IFRS and EPRA weighted average number of shares (basic)
1,022
1,013
Dilutive effect of share options
2
2
Dilutive effect of ESOP shares
4
4
Dilutive effect of 2012 convertible bond
58
-
IFRS weighted average number of shares (diluted)
1,086
1,019
Dilutive effect of 2012 convertible bond
-
58
EPRA weighted average number of shares (diluted)
1,086
1,077
Net assets per share

30 September 2015

31 March 2015

m
Pence
per share

m
Pence
per share
Balance sheet net assets
9,253


8,565

Deferred tax arising on revaluation movements
12


13

Mark-to-market on effective cash flow hedges and related debt adjustments
234


257

Dilution effect of share options
43


37

Surplus on trading properties
97


96

Convertible bond adjustment
400


400

Less non-controlling interests
(284)


(333)

EPRA NAV
9,755
891

9,035
829
Deferred tax arising on revaluation movements
(12)


(13)

Mark-to-market on effective cash flow hedges and related debt adjustments
(234)


(257)

Mark-to-market on debt
(289)


(406)

EPRA NNNAV
9,220
842

8,359
767
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.

30 September
2015
Number
million
31 March
2015
Number
million
Number of shares at period / year end
1,037
1,031
Adjustment for treasury shares
(11)
(11)
Number of shares (basic)
1,026
1,020
Dilutive effect of share options
4 
4
Dilutive effect of ESOP shares
7 
8
Dilutive effect of 2012 convertible bond
58 
-
IFRS number of shares (diluted)
1,095
1,032
Dilutive effect of 2012 convertible bond
-
58
EPRA number of shares (diluted)
1,095
1,090
EPRA Net Initial Yield and 'topped-up' Net Initial Yield


30 September 2015
m
30 September 2014
m

Investment property - wholly-owned
9,569
7,708

Investment property - share of joint ventures and funds
4,815 
5,093

Less developments, residential and land
(805)
(1,009)

Completed property portfolio
13,579
11,792

Allowance for estimated purchasers' costs
846 
720

Gross up completed property portfolio valuation
14,425
12,512

Annualised cash passing rental income
594 
564

Property outgoings
(8)
(8)

Annualised net rents
586 
556

Rent expiration of rent-free periods and fixed uplifts1
76 
68

'Topped-up' net annualised rent
662
624

EPRA Net Initial Yield
4.1%
4.4%

EPRA 'topped-up' Net Initial Yield
4.6%
5.0%

Including fixed/minimum uplifts received in lieu of rental growth
25 
27

Total 'topped-up' net rents
687 
651

Overall 'topped-up' Net Initial Yield
4.8%
5.2%

'Topped-up' net annualised rent
662 
624

ERV vacant space
18 
28

Reversions
25 
2

Total ERV
705
654

Net Reversionary Yield
4.9%
5.2%
1 The weighted average period over which rent-free periods expire is 1 year (30 September 2014: 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 30 September 2015, 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

30 September 
2015
m
30 September
2014
m
Annualised potential rental value of vacant premises
18 
28
Annualised potential rental value for the completed property portfolio
708 
657
EPRA Vacancy Rate
2.6%
4.3%
The above is stated for the UK portfolio only.


EPRA Cost Ratios

Six months ended
Six months ended

30 September 2015
m
30 September 2014
m
Property outgoings
12
13
Administrative expenses
46
39
Share of joint ventures and funds expenses
6
6
Less:
Performance & management fees (from joint ventures & funds)
(3)
(5)

Other fees and commission
(2)
(2)

Ground rent costs
(1)
(2)
EPRA Costs (including direct vacancy costs) (A)
58
49
Direct vacancy costs
(5)
(7)
EPRA Costs (excluding direct vacancy costs) (B)
53
42



Gross Rental Income less ground rent costs
218
170
Share of joint ventures and funds (GRI less ground rent costs)
107
137
Total Gross Rental Income (C)
325
307



EPRA Cost Ratio (including direct vacancy costs) (A/C)
17.8%
16.0%
EPRA Cost Ratio (excluding direct vacancy costs) (B/C)
16.3%
13.7%



Overhead and operating expenses capitalised (including share of joint ventures and funds)
2
-



In the current period, employee costs in relation to staff time on development projects are capitalised into the base cost of relevant developments assets.
Table C: Gross rental income
Calculation of gross rental income

Six months ended 30 September
2015
m
Six months ended 30 September
2014
m
Rent receivable
304
292
Spreading of tenant incentives and guaranteed rent increases
20
14
Surrender premia
2
3
Gross rental income
326
309
The current and prior period information is presented on a proportionally consolidated basis, excluding non-controlling interests.
Table D: Property related capital expenditure

Six months ended 30 September 2015

Year ended 31 March 2015

Group
m
Joint ventures and funds
m
Total 
m

Group
m
Joint ventures and funds
m
Total
m
Acquisitions
238
-
238

147
-
147
Development
49
11
60

64
83
147
Like-for-like portfolio
47
4
51

67
23
90
Other
16
4
20

25
8
33
Total property related capex
350
19
369

303
114
417
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 14m (Year ended 31 March 2015: 18m), capitalised fees of 2m (Year ended 31 March 2015: nil) and capitalised interest of 4m (Year ended 31 March 2015: 15m).
SUPPLEMENTARY TABLES
(Data includes Group's share of Joint Ventures and Funds)
Portfolio Valuation
At 30 September 2015
Group
JVs &
Funds1
Total
Change

m
m
m
%
m
Shopping parks
2,213 
1,102 
3,315 
 1.1 
36 
Shopping centres
1,157 
1,125 
2,282 
 3.9 
86 
Superstores
221 
685 
906 
(1.6)
(15)
Department stores
609 
1 
610 
 2.9 
17 
Leisure
527 
3 
530 
 2.8 
15 
Retail & Leisure3
4,727 
2,916 
7,643 
 1.8 
139 
Of which Multi-let
 3,119 
 2,236 
 5,355 
2.2 
121 






West End
3,669 
- 
3,669 
 8.1 
285 
City
104 
2,709 
2,813 
 8.5 
221 
Provincial
3 
- 
3 
 2.6 
- 
Offices
3,776 
2,709 
6,485 
 8.3 
506 
Residential4
210 
46 
256 
 6.5 
17 
Offices & Residential3
3,986 
2,755 
6,741 
 8.2 
523 
Total
8,713 
5,671 
14,384 
 4.7 
662 
Standing Investments
8,050 
5,618 
13,668 
 4.5 
602 
Developments
663 
53 
716 
 8.5 
60 
Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of 14.4bn at year end, +4.7% valuation movement.
1 Group's share of properties in joint ventures and funds including HUT at ownership share


2 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date,
including developments (classified by end use), purchases and sales
 Including committed developments
4 Stand-alone residential
Portfolio Yield & ERV Movements1,2





At 30 September 2015
EPRA net initial yield %
EPRA topped up net initial yield %3
Overall topped up net initial yield %4
Net equivalent yield %
Net equivalent yield compression5
Net reversionary yield %
ERV Growth %5 6








Shopping parks
4.7 
5.0 
5.1 
5.1 
5
5.1 
0.9 
Shopping centres
4.5 
4.7 
4.8 
4.9 
14
5.0 
1.9 
Superstores
5.3 
5.3 
5.3 
5.2 
(5) 
5.2 
(0.9)
Department stores
4.0 
4.0 
5.9 
4.4 
12
3.7 
0.0 
Leisure
4.9 
4.9 
6.1 
5.3 
22
4.0 
0.3 
Retail & Leisure
4.7 
4.9 
5.1 
5.0 
8
4.9 
0.9 
Of which Multi-let
4.5 
4.8 
4.8 
4.9 
9
5.0 
1.4 








West End
3.3 
4.0 
4.0 
4.4 
24
4.6 
4.1 
City
3.2 
4.5 
4.5 
4.4 
16
5.2 
5.1 
Offices
3.3 
4.2 
4.3 
4.4 
20
4.9 
4.5 
Total
4.1 
4.6 
4.8 
4.7 
13
4.9 
2.3 
Table shows UK total, excluding assets held in Europe.




1 Including notional purchaser's costs





2 Excluding developments under construction and assets held for development

3 Including rent contracted from expiry of rent-free periods and contracted uplifts not in lieu of growth

4 Including fixed/minimum uplifts (excluded from EPRA definition)




5 6 months to 30 September 2015






6 As calculated by IPD






Total Property Return (as calculated by IPD, excluding Europe)
6 mths to 30 September 2015
Retail
Offices
Total
%
British Land
IPD
British Land
IPD
British Land
IPD
Capital Return
1.8 
1.9 
8.3 
7.2 
4.7 
4.4 
- ERV Growth
0.9 
0.8 
4.5 
4.4 
2.3 
2.2 
- Yield Compression1
8 bps
11 bps
20 bps
12 bps
13 bps
15 bps
Income Return
2.6 
2.5 
1.6 
2.0 
2.1 
2.4 
Total Property Return
4.4 
4.4 
10.0 
9.3 
6.9 
6.8 
1 Net equivalent yield movement
Portfolio Weighting
At 30 September
2014
2015
2015
2015


(current)
(current)
(pro-forma1)

%
%
m
%





Shopping parks
23.4 
23.0 
3,315
22.4 
Shopping centres
15.5 
15.9 
2,282
15.4 
Superstores
10.1 
6.3 
906
5.7 
Department stores
4.7 
4.2 
610
4.1 
Leisure
2.8 
3.7 
530
3.6 
Retail & Leisure
56.5 
53.1 
7,643
51.2 
Of which Multi-let
36.0 
37.2 
5,355
36.0 





West End
23.1 
25.5 
3,669
27.2 
City
17.8 
19.6 
2,813
19.0 
Provincial
0.7 
- 
3
- 
Offices
41.6 
45.1 
6,485
46.2 
Residential2
1.9 
1.8 
256
2.6 
Offices & Residential
43.5 
46.9 
6,741
48.8 
Total
100.0 
100.0 
14,384
100.0 
Table shows UK total, excluding assets held in Europe.
1 Pro forma for developments under construction at estimated end value (as determined by the Group's external valuers) and post
period end transactions 
2 Stand-alone residential

Annualised Rent & Estimated Rental Value (ERV)1
At 30 September 2015
Annualised rent
(valuation basis) m2
ERV m
Average rent psf
Group
JVs & Funds
Total
Total
Contracted3,4
ERV3







Shopping parks
115
54
169
181
25.5
25.9
Shopping centres
64
52
116
128
29.5
31.4
Superstores
12
38
50
49
21.6
21.2
Department stores
25
- 
25
24
15.1
14.0
Leisure
27
- 
27
23
14.4
11.9
Retail & Leisure
243
144
387
405
23.7
23.8
Of which Multi-let
 158 
 108 
266
293
27.6 
28.8 







West End
113
- 
113
155
50.9
57.0
City
4
90
94
155
50.5
57.7
Offices
117
90
207
310
50.6
57.2
Residential5
4
- 
4
3


Offices & Residential
121
90
211
313









Total
364
234
598
718
29.2
31.2
Table shows UK total, excluding assets held in Europe.
1 Excluding developments under construction and assets held for development
2 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group's external valuers), less
any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift
3 Office average rent & ERV psf is based on office space only
4 Annualised rent, plus rent subject to rent free


5 Stand-alone residential























Gross Rental Income1
Accounting Basis m
6 mths to 30 September 2015
Annualised as at 30 September 2015

Group
JVs & Funds2
Total
Group
JVs & Funds2
Total







Shopping parks
59
31
90
114
55
169
Shopping centres
34
27
61
63
51
114
Superstores
6
19
25
12
38
50
Department stores
14
- 
14
29
- 
29
Leisure
16
- 
16
31
- 
31
Retail & Leisure
129
77
206
249
144
393
Of which Multi-let
83 
57 
140 
158
107 
265 







West End
60
- 
60
117
- 
117
City
2
54
56
4
113
117
Offices
62
54
116
121
113
234
Residential3
3
- 
3
3
- 
3
Offices & Residential
65
54
119
124
113
237







Total
194
131
325
373
257
630
Table shows UK total, and includes completed developments. 
1 Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental
uplifts and lease incentives
2 Group's share of properties in joint ventures and funds including HUT at share

3 Stand-alone residential
Lease Length & Occupancy1
At 30 September 2015
Average lease length yrs
Occupancy rate %

To expiry
To break
Occupancy
Occupancy (underlying)2





Shopping parks
8.7 
7.7 
97.3 
98.1 
Shopping centres
8.7 
7.7 
96.9 
98.2 
Superstores
14.3 
14.0 
100.0 
100.0 
Department stores
21.0 
20.9 
100.0 
100.0 
Leisure
18.3 
18.3 
100.0 
100.0 
Retail & Leisure
10.9 
10.1 
97.8 
98.6 
Of which Multi-let
8.6 
7.5 
97.0 
98.1 





West End
10.0 
8.2 
96.1 
98.5 
City
10.6 
8.8 
97.7 
97.7 
Provincial
16.5 
6.5 
100.0 
100.0 
Offices
10.3 
8.5 
96.9 
98.1 





Total
10.6 
9.4 
97.4 
98.4 
Table shows UK total, excluding assets held in Europe.
1 Excluding developments under construction and assets held for development
2 Including accommodation under offer or subject to asset management





Rent Subject to Lease Break or Expiry1
At 30 September 2015
2016
2017
2018
2019
2020
2016-18
2016-20
For period to 31 March
m
m
m
m
m
m
m








Shopping parks
8 
6 
10 
12 
15 
24 
51 
Shopping centres
7 
9 
9 
6 
10 
25 
41 
Superstores
- 
- 
- 
- 
- 
- 
- 
Department stores
- 
- 
1 
- 
- 
1 
1 
Leisure
- 
- 
- 
- 
- 
- 
- 
Retail & Leisure
15 
15 
20 
18 
25 
50 
93 
Of which Multi-let
 14 
 15 
 19 
 17 
25 
48 
 90 








West End
1 
8 
9 
10 
4 
18 
32 
City
- 
19 
- 
17 
13 
19 
49 
Offices2
1 
27 
9 
27 
17 
37 
81 
Total
16 
42 
29 
45 
42 
87 
174 
% of contracted rent
2.4%
6.1%
4.1%
6.6%
6.2%
12.6%
25.4%
Potential uplift at current ERV3
1 
9 
1 
7 
3 
11 
21 
Table shows UK total, excluding assets held in Europe.
1 Excluding developments under construction 
2 Based on office space only
3 As determined by the Group's valuers 
Rent Subject to Open Market Rent Review1
At 30 September 2015
2016
2017
2018
2019
2020
2016-18
2016-20
For period to 31 March
m
m
m
m
m
m
m








Shopping parks
 12 
 14 
 22 
 24 
 16 
48 
88 
Shopping centres
 4 
 12 
 15 
 14 
 8 
31 
53 
Superstores
 7 
 5 
 4 
 9 
 15 
16 
40 
Department stores
 - 
 - 
 - 
 - 
 - 
- 
- 
Leisure
 - 
 - 
 2 
 - 
 - 
2 
2 
Retail & Leisure
23 
31 
43 
47 
39 
97 
183 
Of which Multi-let
11 
26 
38 
38 
23 
75 
136 








West End
3 
8 
19 
20 
14 
30 
64 
City
11 
1 
6 
14 
14 
18 
46 
Offices
14 
9 
25 
34 
28 
48 
110 
Total
37 
40 
68 
81 
67 
145 
293 
Potential uplift at current ERV
1 
- 
1 
3 
1 
2 
6 
Table shows UK total, excluding assets held in Europe.
1 Excluding developments under construction and assets held for development
Major Property Holdings
At 30 September 2015
BL Share
Sq ft
Rent
Occupancy
Lease
(excl. developments under construction)
%
'000
m pa1
rate %2
length yrs3
Broadgate, London EC2
50 
4,721 
225 
99.3 
8.3 
Regent's Place, London NW1
100 
1,590 
73 
98.8 
8.2 
Meadowhall Shopping Centre, Sheffield
50 
1,393 
82 
97.2 
7.2 
Paddington Central
100 
808 
33 
99.8 
8.2 
Sainsbury's Superstores4
50 
2,526 
59 
100.0 
14.2 
The Leadenhall Building5
50 
602 
35 
86.7 
12.0 
Debenhams, Oxford Street
100 
363 
11 
100.0 
23.5 
Tesco Superstores4
65 
1,243 
27 
100.0 
14.3 
Teeside Shopping Park, Stockton-on-Tees
100 
478 
15 
95.7 
6.5 
Drake Circus Shopping Centre, Plymouth
100 
412 
16 
99.6 
5.9 
1 Annualised EPRA contracted rent including 100% of Joint Ventures & Funds
2 Includes accommodation under offer or subject to asset management at 30 September 2015
3 Weighted average to first break 
4 Comprises stand-alone assets/properties 
5 90.8% occupancy rate Including post period end activity
Top 40 Occupiers by Total Contracted Rent
At 30 September 2015
% of total rent


% of total rent
Tesco plc
6.1 

New Look
0.9 
UBS AG1
5.7 

Gazprom
0.9 
Debenhams
5.4 

Vodafone plc
0.9 
J Sainsbury plc
4.8 

Sports Direct
0.9 
Kingfisher (B&Q)
2.6 

Aon Plc
0.8 
Home Retail Group
2.4 

Asda Group
0.8 
Next plc
2.3 

JPMorgan
0.7 
HM Government
2.2 

Reed Smith
0.7 
Virgin Active
1.8 

Children's World Ltd (Mothercare)
0.7 
Spirit Group
1.6 

H&M Hennes & Mauritz AB
0.7 
Alliance Boots
1.5 

Deutsche Bank AG
0.7 
Dixons Carphone
1.4 

JD Sports
0.7 
Visa Inc
1.4 

Mayer Brown
0.7 
Marks & Spencer plc
1.4 

ICAP Plc
0.6 
Arcadia Group
1.3 

Steinhoff
0.6 
Aegis Group
1.3 

Lewis Trust (River Island)
0.6 
Herbert Smith
1.2 

MondaysTopCo (TGI Fridays)
0.6 
Royal Bank of Scotland
1.1 

Pets at Home
0.5 
TJX Cos Inc (TK Maxx)
0.9 

Credit Agricole
0.5 
Facebook
0.9 

BridgeStreet
0.5 
1 Temporary increase due to 5 Broadgate lease commencement and 1-3 Finsbury Avenue/100 Liverpool Street lease run off





Acquisitions and Disposals
From 1 April 2015


Price (Gross)
Price (BL Share)
Annual Passing Rent
Acquisitions 
Area
m
m
m2
Completed 





1 Sheldon Square
Offices
London
210
210
10
Hercules Unit Trust unit purchase1
Retail
Various
95
95
5
19-33 Liverpool Street
Offices
London
22
22
1
Teesside Leisure Park
Retail
North East
2
2
-
Total


329
329
16
1 Units purchased over the course of the period. 95m represents purchased GAV


2 BL share of net rent topped up for rent frees





From 1 April 2015

Price (Gross)
Price (BL Share)
Annual Passing Rent
Disposals
Area
m
m
m1
Completed 





Parkgate Shopping Park, Rotherham
Retail
Yorkshire
170
120
6
39 Victoria Street
Offices
London
139
139
5
Birstall Shopping Park, Leeds
Retail
Yorkshire
107
31
2
Hatters Way, Luton & Hylton Riverside, Sunderland
Retail
Various
44
33
2
The Hempel Collection
Residential
London
16
16
-
Superstore disposals
Retail
Various
14
14
1
Bedford Street
Residential
London
4
4
-
Exchanged 





Tesco, Bursledon
Retail
South
60
60
3
Aldgate Place
Residential
London
16
8
-
The Hempel Collection
Residential
London
6
6
-
Total


576
431
19
1 BL share of net rent topped up for rent frees



Recently Completed & Committed Developments
At 30 September 2015
Sector
BL Share
Sq ft
PC Calendar Year
Current Value
Cost to complete
ERV
Let & Under Offer
Resi End Value

%
'000

m
m1
m2
m
m3










5 Broadgate
Offices
50
710
Completed
453
16
19.2
19.2
- 
Whiteley Leisure, Fareham
Retail
50
58
Completed
12
1
0.6
0.6
- 
Glasgow Fort, M&S & Retail Terrace
Retail
75
112
Completed
33
3
1.9
1.7
- 
Total Completed in Period
880

498
20
21.7
21.5
- 










Yalding House
Offices
100
29
Q4 2015
32
3
1.7
- 
- 
4 Kingdom Street
Offices
100
147
Q2 2017
57
76
8.9
- 
- 
Clarges Mayfair
Mixed Use
100
192
Q3 2017
360
138
6.0
- 
463
Glasgow Fort (MSCP & Additional retail / leisure units)
Retail
75
12
Q3 2016
1
7
0.4
- 
- 
The Hempel Phase 1
Residential
100
25
Q1 2016
32
1
- 
- 
51
The Hempel Phase 2 4
Residential
100
32
Q2 2016
48
13
- 
- 
74
Aldgate Place, Phase 1 5
Residential
50
221
Q2 2016
30
27
- 
- 
81
Total Under Construction
658

560
265
17.0
- 
669
Retail Capex6





 80 



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

1 From 1 October 2015








2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)

3 Residential development of which 332m completed or exchanged and a further 10m under offer

4 Now excludes 17 Craven Hill Gardens - sold separately




5 End value excludes sale of hotel site, receipts of 6m (BL Share). Sale now completed

6 Capex committed and underway within our investment portfolio relating to leasing & asset enhancement











Near-Term Pipeline
At 30 September 2015
Sector
BL Share
Sq ft
Start On Site
Total Cost1
Status
'000
m
5 Kingdom Street 2
Offices
100
240
2016
209
Consented
100 Liverpool Street 3
Offices
50
509
2017
260
Consented
1 Finsbury Avenue
Offices
50
303
2017
150
Consented5
1 Triton Square
Offices
100
217
2017
340
Pre-submission
Blossom Street, Shoreditch
Mixed Use
100
347
2016
242
Submitted
Plymouth Leisure
Retail
100
102
2016
39
Consented
New Mersey Shopping Park, Speke - Leisure
Retail
65
66
2016
17
Consented
Forster Retail Park, Bradford, Phase 3
Retail
100
63
2016
18
Pre-submission
Aldgate Place, Phase 2
Residential
50
145
2016
58
Consented
54 The Broadway, Ealing
Residential
100
34
2016
18
Consented
Total Near-Term


2,026

1,351

Retail Capex4




 110 

1 Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation
rate
2 210,000 sq ft of which is consented






3 Planning granted for 517,000 sq ft, but currently considering options to enhance design and mix

4 Forecast capital commitments within our investment portfolio over the next 2 years relating to leasing & asset enhancement
5 Resolution to grant planning consent






Medium-Term Pipeline
At 30 September 2015
Sector
BL Share
Sq ft
Status


'000

Eden Walk Shopping Centre, Kingston
Mixed Use
50
562
Submitted
Canada Water Masterplan 1
Mixed Use
100
5,500
Pre-submission
2 - 3 Finsbury Avenue 2
Offices
50
189
Pre-submission
Meadowhall Leisure
Retail
50
330
Pre-submission
Putney High Street
Mixed Use
100
110
Consented
Total Medium-Term


6,691

1 Assumed net area based on gross area of up to 7m sq ft



2 Existing net areas, scheme in early design stages








Residential development programme
At 30 September 2015
Sq Ft
No. Market Units
PC Date/
Status
BL Share
Current Value1
Cost To complete2
End Value
Sales Exchanged3
'000


%
m
m
m
m
Clarges Mayfair4
103
34
Q3 2017
100
265
 107 
 463 
259
Mixed use
103
34


265
 107 
 463 
259
The Hempel Phase 1
25
15
Q1 2016
100
32
 1 
 51 
26
The Hempel Phase 2
32
19
Q2 2016
100
48
 13 
 74 
- 
Aldgate Place Phase 1
221
154
Q2 2016
50
30
 27 
 81 
47
Residential-led
278
188


110
 41 
 206 
73
Aldgate Place Phase 2
145

Consented
50




54 The Broadway, Ealing
34

Submitted
100




Near Term prospective
179







Total Committed Residential
381
222


375
 148 
 669 
332
Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%)
1 Excluding completed sales
2 From 1 October 2015. Cost to complete excludes notional interest as interest is capitalised individually on each development
atour capitalisation rate
3 Of which 16m completed at The Hempel Phase 1. Excludes completed sale of hotel site at Aldgate Place for 6m (BL Share)
4 Includes 9,500 sq ft of affordable housing (11 units)
Superstores

Stand-alone Superstores1
In Shopping Centres & Shopping Parks2
Total Exposure1,2,3
Store Size
'000 sq ft
No of Stores
Valuation (BL share)
m
Capital Value
psf
WALL to FB
No of Stores
Valuation (BL share)
m
Capital Value
psf
WALL to FB
No of Stores
Valuation (BL share)
m
Capital Value
psf
WALL
to FB
>100
 8 
 179 
 345 
12.9 
 5 
 367 
 552 
 13.5 
 13 
 546 
 461 
 13.3 
75-100
 14 
 286 
 457 
18.2 
 1 
 41 
 483 
 12.4 
 15 
 327 
 460 
 17.5 
50-75
 17 
 294 
 440 
12.7 
 1 
 13 
 198 
 11.6 
 18 
 307 
 419 
 12.7 
25-50
 9 
 63 
 239 
 8.9 
 3 
 31 
 433 
 15.0 
 12 
 94 
 280 
 10.8 
0-25
 4 
 13 
 190 
10.7 
 17 
 78 
 418 
 11.4 
 21 
 91 
 356 
 11.3 
Sept 2015
 52 
 835 
 389 
14.2 
 27 
 530 
 494 
 13.1 
 79 
 1,365 
 424 
 13.8 
March 2015
 57 
 924 
 395 
14.5 
 29 
 529 
 491 
 13.9 
 86 
 1,453 
 426 
 14.4 













Geographical Spread

Annualised Gross Rent (BL Share)
Lease Structure

London & South

58%
Tesco


37m
RPI and Fixed

7%
Rest of UK

42%
Sainsbury's


32m
OMRR

93%



Other


6m




1 Excludes 12m non-foodstore occupiers in superstore led assets, and Tesco Bursledon, sold post period end
2 Excludes non food-format stores e.g. Asda Living







3 Excludes 102m of investments held for trading comprising freehold reversions in a pool of Sainsbury's Superstores


This information is provided by RNS
The company news service from the London Stock Exchange
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IR DXBDBLXBBGUL