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www.britishland.com
PADDINGTON CENTRAL 5 JULY 2013
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Highlights
• Acquisition of major West-End, office-led estate
• Strong Property Fundamentals – attractive mix of modern well-let buildings and development sites – significant upside from asset management – estate will benefit from improving transport infrastructure
• 100 % in line with strategy – increases London weighting of business – shifts office business “further West” – exploits our scale and knowledge of large London estates – adds to development pipeline
• Financially attractive – initial yield of 5.3% rises to 6.2% when fully let (excludes development) – development opportunities with double digit IRRs (unlevered)
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Delivering Future Growth – Focus on London and the South East
Continue to move West Transport inter-changes London residential
Up and coming areas Estates and mixed use schemes Development
Ealing Broadway
Clarges
Eden Walk
Surrey Quays & Harmsworth
Quays
Aldgate
Recent acquisitions
BL assets/concentration
Paddington Central
Paddington Central
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Paddington Location
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1
2
3
1. Paddington Central 2. Paddington Station 3. Paddington Basin
Paddington Central – Estate
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Key:
200 residential units sold on long leases;
retail at ground floor
88,000 sq ft retail (16 units) around Sheldon Square
Development sites (355,000 sq ft) + Crossrail box below (80,000 sq ft)
Multi-let offices 268,000 sq ft
Multi-let offices 143,000 sq ft
206 room 4-star hotel (111,000 sq ft)
BL ownership
New Hammersmith & City line station and access to Crossrail
Non BL ownership
FIVE KINGDOM STREET
FOUR KINGDOM STREET
ONE KINGDOM STREET
ONE SHELDON SQUARE
Non BL ownership
SHELDON SQUARE RETAIL
3 KINGDOM STREET
Paddington Central – Existing Properties
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3 SHELDON SQUARE
2 KINGDOM STREET
Paddington Central – Key Occupiers
• Top 8 tenants represent c.80% of the income
Occupier Building Area sq ft
Contracted rent pa £m
Unexpired lease term
Astra Zeneca 2 Kingdom Street 76,778 3.4 12 yrs
Nokia 2 Kingdom Street 60,791 3.4 9 yrs
Rio Tinto 2 Kingdom Street 26,177 1.5 13 yrs
Statoil 2 Kingdom Street 26,483 1.5 14 yrs
Accor 3 Kingdom Street 111,414 2.2 18 yrs
Cerner 3 Sheldon Square 28,010 1.2 9 yrs
Kingfisher 3 Sheldon Square 55,158 2.7 9 yrs
Prudential 3 Sheldon Square 25,255 1.5 9 yrs
Total Estate 610,000 21.9 10.7 yrs
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Paddington Central – Crossrail
• Paddington will be one of only three Crossrail stations in London’s West End and will provide direct access to City and Docklands
• New access point to Crossrail will be opposite the entrance to Paddington Central, off Bishop’s Bridge Road
• As part of these works, reconstruction of Hammersmith & City line station with new public square fronting canal (see image below). We have initial plans to improve pedestrian entrance to Paddington Central by linking it to the new square
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Approximate Crossrail journey times from Paddington to Key Central London stations
Bond Street 2 minutes
Tottenham Court Road 4 minutes
Farringdon 7 minutes
Liverpool Street 9 minutes
Canary Wharf 16 minutes
Paddington Central – Development Sites
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• 145,200 sq ft of offices (as consented)
• 9 floors • Proposed start: end 2015
• 210,000 sq ft of offices (as consented) • 14 floors • Plan to redesign scheme and add
additional floor space • Proposed start: end 2014
• Situated below existing Crossrail deck at ground level
• 80,000 sq ft • 8 metre clear slab • Possession by 2018 • Potential for retail, leisure, storage or parking
4 KINGDOM STREET “CROSSRAIL BOX” 5 KINGDOM STREET
Financial Impact
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Impact FY 14 Annualised
Net rent £16m £21m Underlying profit1 £9m £12m EPS1 0.9p 1.2p
Overall Placing EPS Accretion 0.4p 0.7p
• Investment of equity placing proceeds accretive to earnings in current financial year
• Pro forma LTV at 43% (from 46% pre placing)
1: Assumes 2% financing cost
Appendices
Asset Overview
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Property Sq ft Occupants
Contracted rent pa
£m WALL
yrs
2 Kingdom St 268,000 AstraZeneca, Nokia, Statoil 10.9 11.2
3 Kingdom St 111,000 Novotel1 2.2 18.0
3 Sheldon Sq 143,000 Kingfisher, Prudential, Cerner 7.3 7.8
Sheldon Sq Retail 88,000 Nuffield Health, Sainsbury 1.5 12.0
Total 610,000 21.9 10.7
Property Sq ft Likely start on site
Estimated capex2
£m
4 Kingdom St 145,200 End 2015 71
5 Kingdom St 210,000+ End 2014 109
Crossrail Box 80,000 Reverts to BL by 2018 -
Total 435,200+ 180
Investment Properties - £400m
Development Properties - £70m
1 Rents are subject to annual RPI linked uplifts 2 Excludes notional interest
• Pro forma LTV at 43% - compares to 46% pre-placing
Equity Placing – Acquisition Spend
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Acquisition spend
£m 2014
EPS Annualised
EPS
Ealing Broadway shopping centre 143 0.8p 0.8p
Surrey Quays JV buy-out 48 0.2p 0.2p
Other acquisitions 75 0.1p 0.1p
Impact as at 1 April 2013 266 1.1p 1.1p
Acquisitions since year end 22 0.1p 0.1p
Paddington Central1 470 0.9p 1.2p
Impact as at 4 July 2013 758 2.1p 2.4p
1: Assumes 2% financing cost
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