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3.7 (3) 4.6
1. IPD Quarterly Universe
2. IPD Retail Warehouses Quarterly Universe
3. Includes leisure, hotel portfolio and other
Table 21: Cost analysis
Year ended 31 March 2017 Year ended 31 March 2016
£m Total £m Cost ratio %(1) Total £m Cost ratio %(1)
Gross rental income (before rents payable) 648
Gross rental income (after rents payable) 637 Direct Managed operations 8 1.2 8 1.2
Net service charge expense (5) property Tenant default 2 0.3 9 1.4
Net direct property expenditure (32) costs Void related costs 13 2.0 15 2.3
Net rental income 600 £37m Other direct property costs 12 1.9 12 1.8
Indirect costs (39)
Segment profit before finance expense 561 Indirect Development expenditure 16 2.5 20 3.0
Net unallocated expenses (40) expenses
Net finance expense - Group (118) £79m Asset management,
Net finance expense - joint ventures (21) administration and
Revenue profit 382 compliance 65 10.0 59 9.0
Total £116m Total (incl. direct vacancy costs) 116 17.9 123 18.7
Total cost ratio(1) 17.9% Head office relocation (1) 6
EPRA costs (incl. direct vacancy costs) 115 18.1 129 19.9
Less: Direct vacancy costs (12) (15)
EPRA (excl. direct vacancy costs) 103 16.2 114 17.5
1. Percentages represent costs divided by gross rental income including finance leases, before rents payable. This is
with the exception of EPRA measures which represent costs divided by gross rental income including finance leases, after
rents payable.
Table 22: Combined Portfolio analysis
Like-for-like segmental analysis
Market value(1) Valuation Rental income(3) Annualised rental income(4) Annualised netrent(5) Net estimated rental value(6)
movement(2)
31 March 2017 31 March 2016 Surplus/ (deficit) Surplus/ (deficit) 31 March 2017 31March 2016 31 March 2017 31 March 2017 31 March 2016 31 March 2017 31 March 2016
£m £m £m % £m £m £m £m £m £m £m
Retail Portfolio
Shopping centres and shops 3,663 3,677 (47) (1.3%) 194 195 184 179 180 195 190
Retail parks 855 886 (37) (4.2%) 52 52 52 51 50 51 51
Leisure and hotels 1,361 1,323 30 2.3% 82 84 81 79 78 82 81
Other 20 20 - (2.0%) 2 2 1 2 2 2 2
Total Retail Portfolio 5,899 5,906 (54) (0.9%) 330 333 318 311 310 330 324
London Portfolio
West End 2,020 2,084 (87) (4.3%) 89 88 91 89 84 98 96
City 797 797 (25) (3.1%) 29 28 29 32 32 40 37
Mid-town 1,013 1,053 (50) (5.1%) 40 39 40 43 42 49 49
Inner London 323 320 (13) (7.8%) 14 13 14 15 9 17 17
Total London offices 4,153 4,254 (175) (4.4%) 172 168 174 179 167 204 199
Central London shops 1,267 1,181 82 6.9% 45 44 34 34 45 58 55
Other 41 45 (4) (7.8%) 2 2 1 1 1 1 1
Total London Portfolio 5,461 5,480 (97) (1.8%) 219 214 209 214 213 263 255
Like-for-like portfolio (10) 11,360 11,386 (151) (1.4%) 549 547 527 525 523 593 579
Proposed developments (3) 6 4 (3) (33.2%) - - - - - - -
Development programme (11) 1,138 1,013 14 1.3% 21 8 25 1 - 60 63
Completed developments (3) 1,841 1,771 (7) (0.4%) 63 47 70 40 16 86 85
Acquisitions (12) 94 90 - 0.4% 4 2 4 4 4 4 3
Sales (13) - 207 - - 11 56 - - 13 - 12
Combined Portfolio 14,439 14,471 (147) (1.0%) 648 660 626 570 556 743 742
Properties treated as finance leases (10) (10)
Combined Portfolio 14,439 14,471 (147) (1.0%) 638 650
Total portfolio analysis
Market value(1) Valuation Rental income(3) Annualised rental income(4) Annualised netrent(5) Net estimated rental value(6)
movement(2)
31 March 2017 31 March 2016 Surplus/ (deficit) Surplus/ (deficit) 31 March 2017 31 March 2016 31 March 2017 31 March 2017 31 March 2016 31 March 2017 31 March 2016
£m £m £m % £m £m £m £m £m £m £m
Retail Portfolio
Shopping centres and shops 3,860 3,790 (37) (0.9%) 195 196 185 179 180 210 205
Retail parks 861 890 (40) (4.5%) 52 68 52 51 50 51 51
Leisure and hotels 1,384 1,542 30 2.2% 94 98 82 80 91 83 93
Other 20 20 - (1.9%) 2 2 1 2 2 2 2
Total Retail Portfolio 6,125 6,242 (47) (0.8%) 343 364 320 312 323 346 351
London Portfolio
West End 3,247 3,262 (103) (3.2%) 123 109 127 107 97 156 156
City 1,853 1,814 (14) (0.8%) 66 65 67 53 36 88 83
Mid-town 1,336 1,325 (48) (3.7%) 48 41 55 42 41 67 67
Inner London 323 320 (13) (7.8%) 14 28 14 15 9 17 17
Total London offices 6,759 6,721 (178) (2.8%) 251 243 263 217 183 328 323
Central London shops 1,514 1,462 82 5.7% 52 51 42 40 49 68 67
Other 41 46 (4) (7.9%) 2 2 1 1 1 1 1
Total London Portfolio 8,314 8,229 (100) (1.3%) 305 296 306 258 233 397 391
Combined Portfolio 14,439 14,471 (147) (1.0%) 648 660 626 570 556 743 742
Properties treated as finance leases (10) (10)
Combined Portfolio 14,439 14,471 (147) (1.0%) 638 650
Represented by:
Investment portfolio 12,628 12,800 (187) (1.5%) 585 600 571 523 527 650 650
Share of joint ventures 1,811 1,671 40 2.3% 53 50 55 47 29 93 92
Combined Portfolio 14,439 14,471 (147) (1.0%) 638 650 626 570 556 743 742
Like-for-like segmental analysis
Gross estimated Net initial yield(8) Equivalent yield(9) Voids (by ERV)(3)
rental value(7)
31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016
£m £m % % % % % %
Retail Portfolio
Shopping centres and shops 203 197 4.3% 4.4% 4.8% 4.7% 3.9% 2.9%
Retail parks 52 52 5.5% 5.1% 5.6% 5.4% - -
Leisure and hotels 82 81 5.2% 5.3% 5.4% 5.5% 0.7% 0.5%
Other 2 2 3.8% 6.3% 8.3% 8.2% 33.3% 21.7%
Total Retail Portfolio 339 332 4.7% 4.7% 5.0% 5.0% 2.8% 2.0%
London Portfolio
West End 98 96 4.0% 3.8% 4.6% 4.5% 7.6% 4.7%
City 41 38 3.8% 3.7% 4.8% 4.5% - -
Mid-town 50 51 4.0% 3.8% 4.5% 4.4% - 0.4%
Inner London 17 17 4.2% 2.6% 5.0% 4.9% - -
Total London offices 206 202 4.0% 3.7% 4.7% 4.5% 3.6% 2.3%
Central London shops 58 56 2.5% 3.5% 4.1% 4.0% 18.6% 4.9%
Other 1 1 0.9% 1.0% 1.3% 1.5% 33.3% 16.7%
Total London Portfolio 265 259 3.6% 3.6% 4.5% 4.4% 7.0% 2.9%
Like-for-like portfolio (10) 604 591 4.2% 4.2% 4.8% 4.7% 4.6% 2.4%
Proposed developments (3) - - - - n/a n/a n/a n/a
Development programme (11) 61 64 0.1% - 4.2% 4.0% n/a n/a
Completed developments (3) 87 85 2.0% 0.8% 4.2% 4.1% n/a n/a
Acquisitions (12) 4 3 3.7% 3.6% 3.8% n/a n/a n/a
Sales (13) - 12 - 5.5% n/a n/a n/a n/a
Combined Portfolio 756 755 3.6% 3.5% 4.7% n/a n/a n/a
Total portfolio analysis Notes:
Gross estimated 1. The market value figures are determined by the Group's external valuer.2. The valuation movement is stated after adjusting for the effect of SIC15 under IFRS.3. Refer to glossary for definition.4. Annualised rental income is annual 'rental income'
rental value(7) Net initial yield(8) 31 March 2017 31 March 2016 31 March 2017 31 March 2016 £m £m % % Retail Portfolio Shopping centres and shops 219 213 4.1% 4.2% Retail parks 52 52 5.4% 5.1% Leisure and hotels 83 93 5.2% 5.3% Other 2 2 3.8% 6.3% Total Retail Portfolio 356 360 4.5% 4.6% London Portfolio West End 156 156 3.0% 2.8% City 89 84 2.7% 1.7% Mid-town 68 69 3.0% 3.0% Inner London 17 17 4.2% 2.6% Total London offices 330 326 3.0% 2.5% Central London shops 69 68 2.4% 3.1% Other 1 1 0.9% 1.1% Total London Portfolio 400 395 2.9% 2.6% Combined Portfolio 756 755 3.6% 3.5% Represented by: Investment portfolio 661 661 3.7% 3.7% Share of joint ventures 95 94 2.4% 1.7% Combined Portfolio 756 755 3.6% 3.5% (as defined in the glossary) at the balance sheet date, except that car park and commercialisation income are included on a net basis (after deduction for operational outgoings). Annualised rental income includes temporary lettings.5. Annualised net rent
is annual cash rent, after the deduction of ground rents, as at the balance sheet date. It is calculated with the same methodology as annualised rental income but is stated net of ground rent and before SIC15 adjustments.6. Net estimated rental value is
gross estimated rental value, as defined in the glossary, after deducting expected ground rents.7. Gross estimated rental value (ERV) - refer to glossary for definition. The figure for proposed developments relates to the existing buildings and not the
schemes proposed.8. Net initial yield - refer to glossary for definition. This calculation includes all properties including those sites with no income.9. Equivalent yield - refer to glossary for definition. Proposed developments are excluded from the
calculation of equivalent yield on the Combined Portfolio.10. The like-for-like portfolio - refer to glossary for definition. Capital expenditure on refurbishments, acquisitions of head leases and similar capital expenditure has been allocated to the like
-for-like portfolio in preparing this table.11. The development programme - refer to glossary for definition. Net initial yield figures are only calculated for properties in the development programme that have reached practical completion.12. Includes all
properties acquired since 1 April 2015.13. Includes all properties sold since 1 April 2015.
Gross estimated
rental value(7)
Net initial yield(8)
31 March 2017
31 March 2016
31 March 2017
31 March 2016
£m
£m
%
%
Retail Portfolio
Shopping centres and shops
219
213
4.1%
4.2%
Retail parks
52
52
5.4%
5.1%
Leisure and hotels
83
93
5.2%
5.3%
Other
2
2
3.8%
6.3%
Total Retail Portfolio
356
360
4.5%
4.6%
London Portfolio
West End
156
156
3.0%
2.8%
City
89
84
2.7%
1.7%
Mid-town
68
69
3.0%
3.0%
Inner London
17
17
4.2%
2.6%
Total London offices
330
326
3.0%
2.5%
Central London shops
69
68
2.4%
3.1%
Other
1
1
0.9%
1.1%
Total London Portfolio
400
395
2.9%
2.6%
Combined Portfolio
756
755
3.6%
3.5%
Represented by:
Investment portfolio
661
661
3.7%
3.7%
Share of joint ventures
95
94
2.4%
1.7%
Combined Portfolio
756
755
3.6%
3.5%
1. The market value figures are determined by the Group's external valuer.2. The valuation movement is stated after
adjusting for the effect of SIC15 under IFRS.3. Refer to glossary for definition.4. Annualised rental income is annual
'rental income' (as defined in the glossary) at the balance sheet date, except that car park and commercialisation income
are included on a net basis (after deduction for operational outgoings). Annualised rental income includes temporary
lettings.5. Annualised net rent is annual cash rent, after the deduction of ground rents, as at the balance sheet date.
It is calculated with the same methodology as annualised rental income but is stated net of ground rent and before SIC15
adjustments.6. Net estimated rental value is gross estimated rental value, as defined in the glossary, after deducting
expected ground rents.7. Gross estimated rental value (ERV) - refer to glossary for definition. The figure for proposed
developments relates to the existing buildings and not the schemes proposed.8. Net initial yield - refer to glossary for
definition. This calculation includes all properties including those sites with no income.9. Equivalent yield - refer to
glossary for definition. Proposed developments are excluded from the calculation of equivalent yield on the Combined
Portfolio.10. The like-for-like portfolio - refer to glossary for definition. Capital expenditure on refurbishments,
acquisitions of head leases and similar capital expenditure has been allocated to the like-for-like portfolio in preparing
this table.11. The development programme - refer to glossary for definition. Net initial yield figures are only calculated
for properties in the development programme that have reached practical completion.12. Includes all properties acquired
since 1 April 2015.13. Includes all properties sold since 1 April 2015.
Table 23: Lease lengths
Weighted average unexpired lease term at 31 March 2017
Like-for-like portfolio Like-for-like portfolio, completed developments and acquisitions
Mean(1) Mean(1)
Years Years
Retail Portfolio
Shopping centres and shops 6.5 6.5
Retail parks 7.6 7.6
Leisure and hotels 12.4 12.5
Other 1.9 1.9
Total Retail Portfolio 8.2 8.2
London Portfolio
West End 8.0 8.0
City 6.1 10.9
Mid-town 9.5 12.2
Inner London 15.8 15.8
Total London offices 8.6 10.3
Central London shops 6.8 7.2
Other 6.7 6.7
Total London Portfolio 8.3 9.9
Combined Portfolio 8.2 9.1
1. Mean is the rent weighted average of the unexpired lease term across all leases (excluding short-term leases). Term
is defined as the earlier of tenant break or expiry.
Table 24: Development pipeline financial summary
Cumulative movements on the development programme to 31 March 2017 Total scheme details(1)
Market value at start of scheme Capital expenditure incurred to date Capitalised interest to date Valuation surplus/(deficit) Disposals, SIC15 rent Market value at 31 March 2017 Estimated total capital expenditure(3) Estimated total capitalised interest Estimated total development cost(4) Net Income/ ERV(5) Valuation (deficit)/surplus for the year ended 31 March 2017(2)
to date(2) and other adjustments
£m £m £m £m £m £m £m £m £m £m £m
Developments let and transferred or sold
Shopping centres and shops - - - - - - - - - - -
Retail parks - - - - - - - - - - -
London Portfolio 137 283 16 405 4 845 277 15 416 40 (9)
137 283 16 405 4 845 277 15 416 40 (9)
Developments after practical completion, approved or in progress
Shopping centres and shops 30 115 8 32 (2) 183 171 10 211 14 10
Retail parks - - - - - - - - - - -
London Portfolio 212 385 44 401 (87) 955 272 44 528 46 4
242 500 52 433 (89) 1,138 443 54 739 60 14
Movement on proposed developments for the year ended 31 March 2017
Proposed developments
Shopping centres and shops - - - - - - - - - - -
Retail parks 4 2 - (3) 3 6 44 1 51 3 (3)
London Portfolio - - - - - - - - - - -
4 2 - (3) 3 6 44 1 51 3 (3)
1. Total scheme details exclude properties sold in the year.
2. Includes profit realised on the disposal of investment properties and any surplus or deficit on investment properties
transferred to trading.
3. For proposed development properties the estimated total capital expenditure represents the outstanding costs required
to complete the scheme as at 31 March 2017.
4. Includes the property at its market value at the start of the financial year in which the property was added to the
development programme together with estimated capitalised interest. For proposed development properties, the market value
of the property at 31 March 2017 is included in the estimated total cost. Estimated costs for proposed schemes could still
be subject to material change prior to final approval.
5. Net headline annual rent on let units plus net ERV at 31 March 2017 on unlet units.
Table 25: Reconciliation of segmental information note to statutory reporting
The table below reconciles the Group's income statement to the segmental information note (note 2 to the financial
statements). The Group's income statement is prepared using the equity accounting method for joint ventures and includes
100% of the results of the Group's non-wholly owned subsidiaries. In contrast, the segmental information note is prepared
on a proportionately consolidated basis and excludes the non-wholly owned share of the Group's subsidiaries. This is
consistent with the financial information reviewed by management.
Year ended 31 March 2017
Group income statement£m Jointventures(1)£m Proportionate share of Total£m Revenue Capital and other items£m
earnings(2)£m profit£m
Rental income 587 53 (2) 638 638 -
Finance lease interest 10 - - 10 10 -
Gross rental income (before rents payable) 597 53 (2) 648 648 -
Rents payable (10) (1) - (11) (11) -
Gross rental income (after rents payable) 587 52 (2) 637 637 -
Service charge income 94 9 (2) 101 101 -
Service charge expense (96) (11) 1 (106) (106) -
Net service charge expense (2) (2) (1) (5) (5) -
Other property related income 32 2 - 34 34 -
Direct property expenditure (58) (8) - (66) (66) -
Net rental income 559 44 (3) 600 600 -
Indirect property expenditure (79) (2) - (81) (81) -
Other income 2 - - 2 2 -
482 42 (3) 521 521 -
Profit on disposal of investment properties 19 1 - 20 - 20
Loss on disposal of investment in joint venture (2) - - (2) - (2)
Profit on disposal of other investment 13 - - 13 - 13
Net (deficit)/surplus on revaluation of investment properties (186) 40 (1) (147) - (147)
Movement in impairment of trading properties 12 - - 12 - 12
Profit on disposal of trading properties 29 7 - 36 - 36
Head office relocation 1 - - 1 - 1
Other (3) - 4 1 - 1
Operating profit 365 90 - 455 521 (66)
Finance income 37 - - 37 37 -
Finance expense (359) (21) - (380) (176) (204)
Share of post-tax profit from joint ventures 69 (69) - - - -
Profit before tax 112 - - 112 382 (270)
Taxation 1 - - 1 - 1
Profit attributable to owners of the parent 113 - - 113 382 (269)
1. Reallocation of the share of post-tax profit from joint ventures reported in the Group income statement to the
individual line items reported in the segmental information note.
2. Removal of the non-wholly owned share of results of the Group's subsidiaries. The non-wholly owned subsidiaries are
consolidated at 100% in the Group's income statement, but only the Group's share is included in revenue profit reported in
the segmental information note.
Year ended 31 March 2016
Group income statement£m Jointventures(1)£m Proportionate share of Total£m Revenue Capital and other items£m
earnings(2)£m profit£m
Rental income 603 50 (3) 650 650 -
Finance lease interest 10 - - 10 10 -
Gross rental income (before rents payable) 613 50 (3) 660 660 -
Rents payable (11) (1) - (12) (12) -
Gross rental income (after rents payable) 602 49 (3) 648 648 -
Service charge income 94 8 - 102 102 -
Service charge expense (96) (9) - (105) (105) -
Net service charge expense (2) (1) - (3) (3) -
Other property related income 36 2 - 38 38 -
Direct property expenditure (72) (7) - (79) (79) -
Net rental income 564 43 (3) 604 604 -
Indirect property expenditure (80) (2) - (82) (82) -
Other income 4 - - 4 4 -
488 41 (3) 526 526 -
Profit on disposal of investment properties 75 4 - 79 - 79
Net surplus on revaluation of investment properties 739 171 (3) 907 - 907
Movement in impairment of trading properties 11 5 - 16 - 16
Profit on disposal of trading properties 41 - - 41 - 41
Head office relocation (6) - - (6) - (6)
Other (2) (1) 6 3 - 3
Operating profit 1,346 220 - 1,566 526 1,040
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