REG - Land Sec. Group PLC - Preliminary Results to 31 March 2016 <Origin Href="QuoteRef">LAND.L</Origin> - Part 3
17/05/2016 07:05
- Part 3: For the preceding part double click ID:nRSQ4006Yb
non-owned element being adjusted as a non-controlling
interest or redemption liability as appropriate. Our joint operations are presented on a proportionate basis in all
financial measures. Measures described as being prepared on a proportionate basis are non-GAAP measures and therefore not
presented in accordance with IFRSs.
Revenue profit is the Group's measure of underlying pre-tax profit, which is used by senior management to assess the
Group's income performance. It excludes all items of a capital nature, such as valuation movements and profits and losses
on the disposal of investment properties, as well as one-off items. A full definition of revenue profit is given in the
glossary. The components of revenue profit are presented on a proportionate basis in note 2. Revenue profit is a non-GAAP
measure.
2. Segmental information
The Group's operations are organised into two operating segments, being the Retail Portfolio and the London Portfolio. The
London Portfolio includes all our London offices and central London shops and the Retail Portfolio includes all our
shopping centres and shops (excluding central London shops), hotels and leisure assets and retail park properties. All of
the Group's operations are in the UK.
Management has determined the Group's operating segments based on the information reviewed by senior management to make
strategic decisions. During the year, the chief operating decision maker was the Executive Committee (ExecCom), which
comprised the Executive Directors, the managing directors of the Retail and London portfolios, the Group General Counsel
and Company Secretary, the Group HR Director and the Corporate Affairs and Sustainability Director. The information
presented to ExecCom includes reports from all functions of the business as well as strategy, financial planning,
succession planning, organisational development and Group-wide policies.
The Group's primary measure of underlying profit before tax is revenue profit. However, segment profit is the lowest level
to which the profit arising from the on-going operations of the Group is analysed between the two segments. The Group
manages its financing structure, with the exception of joint ventures, on a pooled basis and, as such, debt facilities and
interest charges (other than those relating to joint ventures) are not specific to a particular segment. Unallocated income
and expenses (Group services) are items incurred centrally which are neither directly attributable nor can be reasonably
allocated to individual segments.
Year ended 31 March 2016
Retail Portfolio London Portfolio Total
Revenue profit Group£m Joint ventures£m Total£m Group£m Joint ventures£m Total£m Group(1)£m Joint ventures£m Total£m
Rental income 332.3 31.0 363.3 268.5 18.5 287.0 600.8 49.5 650.3
Finance lease interest 1.3 - 1.3 8.9 - 8.9 10.2 - 10.2
Gross rental income (before rents payable) 333.6 31.0 364.6 277.4 18.5 295.9 611.0 49.5 660.5
Rents payable(2) (7.8) (1.1) (8.9) (2.9) - (2.9) (10.7) (1.1) (11.8)
Gross rental income (after rents payable) 325.8 29.9 355.7 274.5 18.5 293.0 600.3 48.4 648.7
Service charge income 50.7 5.0 55.7 42.8 3.5 46.3 93.5 8.5 102.0
Service charge expense (52.9) (5.5) (58.4) (43.0) (4.3) (47.3) (95.9) (9.8) (105.7)
Net service charge expense (2.2) (0.5) (2.7) (0.2) (0.8) (1.0) (2.4) (1.3) (3.7)
Other property related income 19.9 0.6 20.5 16.3 1.1 17.4 36.2 1.7 37.9
Direct property expenditure (40.0) (5.0) (45.0) (32.0) (2.2) (34.2) (72.0) (7.2) (79.2)
Net rental income 303.5 25.0 328.5 258.6 16.6 275.2 562.1 41.6 603.7
Indirect property expenditure (24.2) (1.0) (25.2) (17.0) (0.9) (17.9) (41.2) (1.9) (43.1)
Depreciation and amortisation (0.3) - (0.3) (0.9) - (0.9) (1.2) - (1.2)
Segment profit before interest 279.0 24.0 303.0 240.7 15.7 256.4 519.7 39.7 559.4
Joint venture net interest expense - (3.6) (3.6) - (16.5) (16.5) - (20.1) (20.1)
Segment profit/(loss) 279.0 20.4 299.4 240.7 (0.8) 239.9 519.7 19.6 539.3
Group services - other income 3.7 - 3.7
- expense (37.7) - (37.7)
Interest income 35.1 - 35.1
Interest expense (178.3) - (178.3)
Revenue profit 342.5 19.6 362.1
1. Group income figures shown in this column are included in note 3 and agree to the revenue figure included in the
revenue profit column in the income statement.
2. Included within rents payable is finance lease interest payable of £0.6m and £0.4m for the Retail and London
portfolios, respectively.
Reconciliation of revenue profit to profit before tax Total
Group£m Joint ventures£m Total£m
Revenue profit 342.5 19.6 362.1
Capital and other items
Valuation and profits on disposals
Net surplus on revaluation of investment properties 736.0 171.4 907.4
Movement in impairment of trading properties(3) 11.5 4.4 15.9
Impairment of long-term development contracts (0.1) 0.1 -
Profit on disposal of trading properties 40.7 - 40.7
Profit on disposal of investment properties 75.1 3.6 78.7
Net interest expense
Fair value movement on foreign exchange swaps 23.4 - 23.4
Foreign exchange movement on borrowings (23.4) - (23.4)
Fair value movement on interest-rate swaps (10.7) - (10.7)
Fair value movement on long-term liabilities 0.5 - 0.5
Amortisation of bond exchange de-recognition adjustment (23.4) - (23.4)
Exceptional items
Head office relocation (5.6) - (5.6)
Premium payable on redemption of medium term notes (26.2) - (26.2)
Impairment of unamortised finance costs (0.9) - (0.9)
Other
Revaluation of redemption liabilities (4.6) - (4.6)
Impairment of goodwill (0.9) - (0.9)
Amortisation of intangible asset (1.5) - (1.5)
Adjustment for non-wholly owned subsidiaries(4) 4.8 0.1 4.9
Joint venture taxation - (0.8) (0.8)
Profit before tax 1,137.2 198.4 1,335.6
3. The movement in impairment of trading properties of £15.9m relates entirely to the London Portfolio.
4. All items in the segment note are presented on a proportionate basis (see note 1). This adjustment represents the
non-owned element of the Group's subsidiaries which is excluded from the numbers presented in the tables above. Included
within the £4.9m adjustment above is revenue of £3.2m, net surplus on revaluation of investment properties of £2.4m, joint
venture profits in non-wholly owned subsidiaries of £0.1m, less costs of £0.8m.
Year ended 31 March 2015
Retail Portfolio London Portfolio Total
Revenue profit Group£m Joint ventures£m Total£m Group£m Joint ventures£m Total£m Group(1)£m Joint ventures£m Total£m
Rental income 327.8 49.1 376.9 244.9 21.5 266.4 572.7 70.6 643.3
Finance lease interest 1.4 0.1 1.5 8.9 - 8.9 10.3 0.1 10.4
Gross rental income (before rents payable) 329.2 49.2 378.4 253.8 21.5 275.3 583.0 70.7 653.7
Rents payable(2) (9.1) (1.6) (10.7) (2.2) - (2.2) (11.3) (1.6) (12.9)
Gross rental income (after rents payable) 320.1 47.6 367.7 251.6 21.5 273.1 571.7 69.1 640.8
Service charge income 49.6 7.1 56.7 40.1 2.6 42.7 89.7 9.7 99.4
Service charge expense (51.6) (7.9) (59.5) (39.0) (3.1) (42.1) (90.6) (11.0) (101.6)
Net service charge expense (2.0) (0.8) (2.8) 1.1 (0.5) 0.6 (0.9) (1.3) (2.2)
Other property related income 18.5 1.1 19.6 15.9 0.7 16.6 34.4 1.8 36.2
Direct property expenditure (37.4) (7.5) (44.9) (27.3) (3.1) (30.4) (64.7) (10.6) (75.3)
Net rental income 299.2 40.4 339.6 241.3 18.6 259.9 540.5 59.0 599.5
Indirect property expenditure (27.6) (1.8) (29.4) (19.9) (0.9) (20.8) (47.5) (2.7) (50.2)
Depreciation (0.3) - (0.3) (0.8) - (0.8) (1.1) - (1.1)
Segment profit before interest 271.3 38.6 309.9 220.6 17.7 238.3 491.9 56.3 548.2
Joint venture net interest expense - (6.8) (6.8) - (17.5) (17.5) - (24.3) (24.3)
Segment profit 271.3 31.8 303.1 220.6 0.2 220.8 491.9 32.0 523.9
Group services - other income 4.1 - 4.1
- expense (43.5) - (43.5)
Interest income 29.4 - 29.4
Interest expense (184.8) - (184.8)
Revenue profit 297.1 32.0 329.1
1. Group income figures shown in this column are included in note 3 and agree to the revenue figure included in the
revenue profit column in the income statement.
2. Included within rents payable is finance lease interest payable of £1.2m and £0.4m for the Retail and London
portfolios, respectively.
Reconciliation of revenue profit to profit before tax Total
Group£m Joint ventures£m Total£m
Revenue profit 297.1 32.0 329.1
Capital and other items
Valuation and profits on disposals
Net surplus on revaluation of investment properties 1,767.8 269.1 2,036.9
Movement in impairment of trading properties(3) 1.9 (0.3) 1.6
Profit on disposal of trading properties 29.8 1.7 31.5
Profit on disposal of investment properties 107.1 25.6 132.7
Profit on disposal of investments in joint ventures 3.3 - 3.3
Net interest expense
Fair value movement on foreign exchange swaps (5.1) - (5.1)
Foreign exchange movement on borrowings 4.9 - 4.9
Fair value movement on interest-rate swaps (34.0) (0.8) (34.8)
Fair value movement on long-term liabilities (4.4) - (4.4)
Amortisation of bond exchange de-recognition adjustment (21.5) - (21.5)
Impairment of unamortised finance costs (4.5) (1.6) (6.1)
Exceptional items
Impairment of long-term development contracts (11.3) - (11.3)
Net gain on business combination 2.2 - 2.2
Business combination costs (8.8) - (8.8)
Impairment of goodwill (29.7) - (29.7)
Other
Revaluation of redemption liabilities (8.5) - (8.5)
Amortisation of intangible asset (1.1) - (1.1)
Adjustment for non-wholly owned subsidiaries(4) 5.5 0.1 5.6
Profit before tax 2,090.7 325.8 2,416.5
3. The movement in impairment of trading properties of £1.6m relates entirely to the London Portfolio.
4. All items in the segment note are presented on a proportionate basis (see note 1). This adjustment represents the
non-owned element of the Group's subsidiaries which is excluded from the numbers presented in the tables above. Included
within the £5.6m adjustment above is revenue of £3.7m, a net surplus on revaluation of investment properties of £2.8m,
joint venture profits in non-wholly owned subsidiaries of £0.1m, less costs of £1.0m.
3. Revenue
All revenue is classified within the 'Revenue profit' column of the income statement, with the exception of proceeds on the
sale of trading properties and income arising on long-term development contracts, which are presented in the 'Capital and
other items' column. Also included in the 'Capital and other items' column is the non-owned element of the Group's
subsidiaries which is excluded from revenue profit.
Group
Year ended Year ended 31 March 2015
31 March 2016
Revenue Capital and other items Total Revenue Capital and other items Total
profit profit
£m £m £m £m £m £m
Rental income (excluding adjustment for lease incentives) 572.3 2.5 574.8 557.9 2.9 560.8
Adjustment for lease incentives 28.5 0.1 28.6 14.8 0.1 14.9
Rental income 600.8 2.6 603.4 572.7 3.0 575.7
Service charge income 93.5 0.6 94.1 89.7 0.7 90.4
Other property related income 36.2 - 36.2 34.4 - 34.4
Trading property sales proceeds - 194.9 194.9 - 55.5 55.5
Finance lease interest 10.2 - 10.2 10.3 - 10.3
Other income 3.7 - 3.7 4.1 - 4.1
744.4 198.1 942.5 711.2 59.2 770.4
4. Costs
All costs are classified within the 'Revenue profit' column of the income statement, with the exception of the cost of sale
of trading properties, costs arising on long-term development contracts, amortisation of intangible assets, business
combination costs and head office relocation costs which are presented in the 'Capital and other items' column. Also
included in the 'Capital and other items' column is the non-owned element of the Group's subsidiaries which is excluded
from revenue profit.
Year ended Year ended 31 March 2015
31 March 2016
Revenue Capital and other items Total Revenue Capital and other items Total
profit profit
£m £m £m £m £m £m
Rents payable 10.7 - 10.7 11.3 - 11.3
Service charge expense(1) 95.9 0.5 96.4 90.6 0.6 91.2
Direct property expenditure(1) 72.0 0.3 72.3 64.7 0.4 65.1
Indirect property expenditure(1) 80.1 - 80.1 92.1 - 92.1
Impairment of long-term development contracts - 0.1 0.1 - 11.3 11.3
Trading property disposals - 154.2 154.2 - 25.7 25.7
Movement in impairment of trading properties - (11.5) (11.5) - (1.9) (1.9)
Amortisation of intangible asset - 1.5 1.5 - 1.1 1.1
Business combination costs - - - - 8.8 8.8
Head office relocation - 5.6 5.6 - - -
258.7 150.7 409.4 258.7 46.0 304.7
1. The table above includes Group employee costs for the period of £64.3m (2015: £67.4m), which has been split into
£7.3m (2015: £7.2m) within service charge expense, £0.3m (2015: £0.4m) within direct property expenditure and £56.7m (2015:
£59.8m) within indirect property expenditure, of which £19.1m relates to Group services (2015: £23.4m).
5. Interest Year ended Year ended
31 March 2016 31 March 2015
Revenueprofit Capital and other items Total Revenue profit Capital and other items Total
£m £m £m £m £m £m
Interest income
Short-term deposits - - - 0.1 - 0.1
Interest received on loan investments 0.3 - 0.3 2.3 - 2.3
Other interest receivable 1.1 - 1.1 0.6 - 0.6
Net interest receivable from joint ventures 33.5 - 33.5 26.2 - 26.2
Net pension interest 0.2 - 0.2 0.2 - 0.2
Total interest income 35.1 - 35.1 29.4 - 29.4
Interest expense
Bond and debenture debt (168.9) - (168.9) (169.8) - (169.8)
Bank and other short term borrowings (19.9) - (19.9) (29.4) - (29.4)
Fair value movement on foreign exchange swaps - 23.4 23.4 - (5.1) (5.1)
Foreign exchange movement on borrowings - (23.4) (23.4) - 4.9 4.9
Fair value movement on interest-rate swaps - (10.7) (10.7) - (34.0) (34.0)
Fair value movement on long-term liabilities - 0.5 0.5 - (4.4) (4.4)
Amortisation of bond exchange de-recognition adjustment - (23.4) (23.4) - (21.5) (21.5)
Premium payable on redemption of medium-term notes - (26.2) (26.2) - - -
Impairment of unamortised finance costs - (0.9) (0.9) - (4.5) (4.5)
Other interest payable (1.0) - (1.0) (0.6) - (0.6)
(189.8) (60.7) (250.5) (199.8) (64.6) (264.4)
Interest capitalised in relation to properties under development 11.5 - 11.5 15.0 - 15.0
Total interest expense (178.3) (60.7) (239.0) (184.8) (64.6) (249.4)
Net interest expense (143.2) (60.7) (203.9) (155.4) (64.6) (220.0)
Joint venture net interest expense (20.1) (24.3)
Net interest expense included in revenue profit (163.3) (179.7)
Finance lease interest payable of £1.0m (2015: £1.6m) is included within rents payable as detailed in note 2.
6. Net assets per share Group
2016 2015
£m £m
Net assets attributable to the owners of the parent 11,698.9 10,606.3
Fair value of interest-rate swaps - Group 31.9 37.7
- Joint ventures 2.2 2.1
Deferred tax liability arising on business combination 4.9 5.8
Goodwill on deferred tax liability (4.9) (5.8)
EPRA adjusted net assets 11,733.0 10,646.1
Reverse bond exchange de-recognition adjustment (368.3) (391.7)
Adjusted net assets attributable to the owners of the parent 11,364.7 10,254.4
Reinstate bond exchange de-recognition adjustment 368.3 391.7
Fair value of interest-rate swaps - Group (31.9) (37.7)
- Joint ventures (2.2) (2.1)
Deferred tax liability arising on business combination (4.9) (5.8)
Excess of fair value of debt over book value (note 14) (1,000.8) (1,161.3)
EPRA triple net assets 10,693.2 9,439.2
2016 2015
million million
Number of ordinary shares in issue 801.2 801.0
Number of treasury shares (10.5) (10.5)
Number of own shares (1.2) (1.0)
Number of ordinary shares - basic net assets per share 789.5 789.5
Dilutive effect of share options 2.9 3.7
Number of ordinary shares - diluted net assets per share 792.4 793.2
2016 2015
pence pence
Net assets per share 1,482 1,343
Diluted net assets per share 1,476 1,337
Adjusted net assets per share 1,439 1,299
Adjusted diluted net assets per share 1,434 1,293
EPRA measure - adjusted diluted net assets per share 1,481 1,342
- diluted triple net assets per share 1,349 1,190
Adjusted net assets per share excludes the fair value of interest-rate swaps used for hedging purposes and the bond
exchange de-recognition adjustment as management consider this better represents the expected future cash flows of the
Group. EPRA measures have been included to assist comparison between European property companies. We believe our measure of
adjusted net assets attributable to the owners of the parent is more indicative of underlying business performance.
7. Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
The Group has also chosen to disclose adjusted earnings per share in order to provide an indication of the Group's
underlying business performance. Adjusted earnings and adjusted earnings per share are calculated on a proportionate basis
and exclude capital and one-off items. We believe our measure of adjusted diluted earnings per share is more appropriate
than the EPRA measure in the context of our business.
Group
2016 2015
£m £m
Profit for the financial year attributable to the owners of the parent 1,338.0 2,416.8
Net surplus on revaluation of investment properties (907.4) (2,036.9)
Movement in impairment of trading properties (15.9) (1.6)
Profit on disposal of trading properties (40.7) (31.5)
Profit on disposal of investment properties (78.7) (132.7)
Profit on disposal of investments in joint ventures - (3.3)
Fair value movement on foreign exchange swaps (23.4) 5.1
Foreign exchange movement on borrowings 23.4 (4.9)
Fair value movement on interest-rate swaps 10.7 34.8
Fair value movement on long-term liabilities (0.5) 4.4
Premium payable on redemption of medium term notes 26.2 -
Impairment of unamortised finance costs 0.9 6.1
Net gain on business combination - (2.2)
Business combination costs - 8.8
Impairment of goodwill 0.9 29.7
Revaluation of redemption liabilities 4.6 8.5
Amortisation of intangible asset 1.5 1.1
Adjustment for non-wholly owned subsidiaries(1) (4.9) (5.6)
Joint venture taxation 0.8 -
Group taxation (2.4) (0.3)
EPRA adjusted earnings attributable to the owners of the parent 333.1 296.3
Head office relocation 5.6 -
Impairment of long-term development contracts(2) - 11.3
Amortisation of bond exchange de-recognition 23.4 21.5
Adjusted earnings attributable to the owners of the parent 362.1 329.1
1. This adjustment represents the non-owned element of the Group's subsidiaries which is excluded from adjusted
earnings.
2. The impairment of long-term development contracts has been removed from our adjusted earnings due to the long-term,
capital nature of these programmes.
2016 2015
million million
Weighted average number of ordinary shares 801.1 800.9
Weighted average number of treasury shares (10.5) (10.5)
Weighted average number of own shares (0.9) (0.8)
Weighted average number of ordinary shares - basic earnings per share 789.7 789.6
Dilutive effect of share options 3.0 3.5
Weighted average number of ordinary shares - diluted earnings per share 792.7 793.1
2016 2015
pence pence
Basic earnings per share 169.4 306.1
Diluted earnings per share 168.8 304.7
Adjusted earnings per share 45.9 41.7
Adjusted diluted earnings per share 45.7 41.5
EPRA adjusted earnings per share 42.2 37.5
EPRA adjusted diluted earnings per share 42.0 37.4
8. Dividends
Pence per share Group and Company
2016 2015
Ordinary dividends paid Payment date PID Non-PID Total £m £m
For the year ended 31 March 2014:
Third interim 11 April 2014 7.6 - 7.6 59.8
Final 22 July 2014 7.9 - 7.9 62.4
For the year ended 31 March 2015:
First interim 10 October 2014 7.9 - 7.9 62.4
Second interim 8 January 2015 6.0 1.9 7.9 62.4
Third interim 10 April 2015 7.9 - 7.9 62.4
Final 24 July 2015 8.15 - 8.15 64.4
For the year ended 31 March 2016:
First interim 9 October 2015 8.15 - 8.15 64.4
Second interim 7 January 2016 - 8.15 8.15 64.4
Gross dividends 255.6 247.0
Dividends settled in shares - (17.2)
Historic unclaimed dividends refunded (0.2) -
Dividends in statement of changes in equity 255.4 229.8
Timing difference on payment of withholding tax 6.6 (0.4)
Dividends in the statement of cash flows 262.0 229.4
A third quarterly interim dividend of 8.15p per ordinary share, or £64.4m in total (2015: 7.9p or £62.4m in total), was
paid on 8 April 2016 as a Property Income Distribution (PID). The Board has recommended a final dividend for the year ended
31 March 2016 of 10.55p per ordinary share (2015: 8.15p) to be paid as a PID. This final dividend will result in a further
estimated distribution of £83.3m (2015: £64.4m). Subject to shareholders' approval at the Annual General Meeting, the final
dividend will be paid on 28 July 2016 to shareholders registered at the close of business on 24 June 2016. The total
dividend paid and recommended in respect of the year ended 31 March 2016 is therefore 35.0p per ordinary share (2015:
31.85p).
A Dividend Reinvestment Plan (DRIP) has been available in respect of all dividends paid during the year and will be
available in respect of the final dividend declared.
9. Net cash generated from operations
Group Company
2016 2015 2016 2015
Reconciliation of operating profit/(loss) to net cash generated from operations: £m £m £m £m
Operating profit/(loss) 1,346.6 2,346.7 (22.0) (22.0)
Adjustments for:
Net surplus on revaluation of investment properties (738.4) (1,770.6) - -
Movement in impairment of trading properties (11.5) (1.9) - -
Impairment of long-term development contracts 0.1 11.3 - -
Profit on disposal of trading properties (40.7) (29.8) - -
Profit on disposal of investment properties (75.1) (107.1) - -
Profit on disposal of investments in joint ventures - (3.3) - -
Depreciation 0.8 2.1 - -
Amortisation of intangible assets 3.2 1.1 - -
Share-based payment charge 7.9 6.0 - -
Defined benefit pension scheme charge 0.8 1.1 - -
493.7 455.6 (22.0) (22.0)
Changes in working capital:
Increase in long-term development contracts - (0.6) - -
(Increase)/decrease in receivables (33.1) 5.6 - -
Increase in payables and provisions (9.6) (13.1) (22.0) (22.0)
Net cash generated from operations 451.0 447.5 - -
10. Investment properties
Group
2016 2015
£m £m
Net book value at the beginning of the year 12,158.0 9,847.7
Acquisitions 156.9 108.9
Acquired in business combination - 910.8
Capital expenditure: Investment portfolio 91.2 72.5
Developments 103.6 203.7
Capitalised interest 9.2 11.4
Disposals (880.7) (470.6)
Net movement in finance leases (18.9) (13.6)
Transfer to non-current assets held for sale - (283.4)
Valuation surplus 738.4 1,770.6
Net book value at 31 March 12,357.7 12,158.0
The market value of the Group's investment properties, as determined by the Group's external valuers, differs from the net
book value presented in the balance sheet due to the Group presenting lease incentives, tenant finance leases and head
leases separately. The following table reconciles the net book value of the investment properties to the market value.
31 March 2016 31 March 2015
Group Joint ventures(1) Adjustment for proportionate share(2) Combined Portfolio Group Joint Adjustment for proportionate share(2) Combined Portfolio
(excl. joint ventures) (excl. joint ventures) ventures(1)
£m £m £m £m £m £m £m £m
Net book value 12,357.7 1,629.9 (33.6) 13,954.0 12,158.0 1,403.0 (31.8) 13,529.2
Plus: tenant lease incentives 267.5 42.8 (0.3) 310.0 251.0 26.5 (0.2) 277.3
Less: head leases capitalised (13.5) - - (13.5) (16.5) - 0.2 (16.3)
Plus: properties treated as finance leases 220.5 - (0.5) 220.0 242.4 - (1.2) 241.2
Market value 12,832.2 1,672.7 (34.4) 14,470.5 12,634.9 1,429.5 (33.0) 14,031.4
1. Refer to note 11 for a breakdown of this amount by entity.
2. This represents the interest in X-Leisure which we do not own, but which is consolidated in the Group numbers.
The net book value of leasehold properties where head leases have been capitalised is £967.9m (2015: £911.8m).
Investment properties include capitalised interest of £201.1m (2015: £198.2m). The average rate of interest capitalisation
for the year is 5.0% (2015: 5.0%). The historical cost of investment properties is £6,611.6m (2015: £7,185.4m).
11. Joint arrangements
The Group's joint arrangements are described below:
Joint ventures Percentage owned & Business Year end date(1) Joint venture partner
voting rights segment
Held at 31 March 2016
20 Fenchurch Street Limited Partnership 50.0% London Portfolio 31 March Canary Wharf Group plc
Nova, Victoria(2) 50.0% London Portfolio 31 March Canada Pension Plan Investment Board
Metro Shopping Fund Limited Partnership 50.0% Retail Portfolio 31 March Delancey Real Estate Partners Limited
St. David's Limited Partnership 50.0% Retail Portfolio 31 December Intu Properties plc
Westgate Oxford Alliance Limited Partnership 50.0% Retail Portfolio 31 March The Crown Estate Commissioners
The Oriana Limited Partnership(3) 50.0% London Portfolio 31 March Frogmore Real Estate Partners Limited Partnership
Harvest(4) (5) 50.0% Retail Portfolio 31 March J Sainsbury plc
The Ebbsfleet Limited Partnership(5) 50.0% London Portfolio 31 March Ebbsfleet Property Limited
Millshaw Property Co. Limited(5) (6) 50.0% Retail Portfolio 31 March Evans Property Group Limited
Countryside Land Securities (Springhead) Limited(5) 50.0% London Portfolio 30 September Countryside Properties PLC
West India Quay Unit Trust(5) (7) 50.0% Retail Portfolio 31 December Schroder Exempt Property Unit Trust
Joint operation Ownership interest Business Joint operation partners
segment
Bluewater, Kent 30.0% Retail Portfolio M&G Real Estate and GICLend Lease Retail PartnershipHermes and Aberdeen Asset Management
The following joint arrangements were sold or transferred to investments in subsidiaries in the year ended 31 March 2015:
Joint ventures
Buchanan Partnership 50.0% Retail Portfolio The Henderson UK Shopping Centre Fund
Bristol Alliance Limited Partnership 50.0% Retail Portfolio Hammerson plc
The Martineau Galleries Limited Partnership(5) 33.3% Retail Portfolio Hammerson plcPearl Group Limited
Joint operations
Princesshay, Exeter 50.0% Retail Portfolio The Crown Estate Commissioners
Thomas More Square, E1 50.0% London Portfolio The Cadillac Fairview Corporation Limited
1. The year end date shown is the accounting reference date of the joint venture. In all cases the Group's accounting is
performed using financial information for the Group's own reporting period and reporting date.
2. Nova, Victoria includes the Victoria Circle Limited Partnership, Nova Residential Limited Partnership and Victoria
Circle Developer Limited.
3. On 6 August 2015, The Oriana Limited Partnership disposed of its interest in 6-17 Tottenham Court Road, W1 to a
subsidiary of the Group.
4. On 31 March 2016, The Harvest Limited Partnership was dissolved after disposing of its interests in Lincoln and
Thanet earlier in the year. Harvest now comprises Harvest Two Limited Partnership and Harvest Development Management
Limited.
5. Included within Other in subsequent tables.
6. On 22 July 2015, Millshaw Property Co. Limited disposed of the Millshaw Park Industrial Estate, Leeds, its only
property interest.
7. West India Quay Unit Trust is held in the X-Leisure Unit Trust (X-Leisure) in which the Group holds a 95% share.
All of the Group's joint arrangements have their principal place of business in the United Kingdom. All of the Group's
joint arrangements own and operate investment property with the exception of The Ebbsfleet Limited Partnership and
Countryside Land Securities (Springhead) Limited, which hold development land as trading properties, and Millshaw Property
Co. Limited which disposed of its only property interest during the year. The Westgate Oxford Alliance Limited Partnership,
Nova, Victoria and The Oriana Limited Partnership are also engaged in the development of investment and trading properties.
The activities of all the Group's joint arrangements are therefore strategically important to the business activities of
the Group.
All joint ventures are registered in England and Wales with the exception of the Metro Shopping Fund Limited Partnership
and West India Quay Unit Trust which are registered in Jersey.
Year ended 31 March 2016
Joint ventures 20 Fenchurch Street Limited Partnership Nova, Victoria Metro Shopping Fund Limited Partnership St. David's Limited Partnership Westgate Oxford Alliance Partnership The Oriana Limited Partnership Individually material JVs at Other Total
LS's share
Income statement 100% 100% 100% 100% 100% 100% 50% LS share LS share
£m £m £m £m £m £m £m £m £m
Revenue(1) 44.8 - 18.8 44.6 3.4 1.4 56.5 3.2 59.7
Gross rental income (after rents payable) 36.0 - 15.2 36.6 2.6 1.0 45.7 2.7 48.4
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