1 / 34

Presentation to UKSA 19 January 2005

Francis Salway Group Chief Executive. Presentation to UKSA 19 January 2005. …with scope for opportunism. Focused business model. Property outsourcing. Urban community development. Retail. London offices. Market leading positions. Three core businesses. Retail £4.8bn assets

amory
Télécharger la présentation

Presentation to UKSA 19 January 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Francis Salway Group Chief Executive Presentation to UKSA 19 January 2005

  2. …with scope for opportunism Focused business model Property outsourcing Urban community development Retail London offices

  3. Market leading positions Three core businesses Retail£4.8bn assets £257m net income London offices£3.3bn assets £200m net income Property outsourcing£1.9bn operating properties £196m operating profit(1) (1) Six months to 30 September 2004 annualised, excluding profit on sales of properties

  4. Aiming to deliver enhanced financial returns Strategic focus on value creation

  5. Effective recycling of capital Active management of balance sheet £m £m 2004 2003 2002 2001 2000 1999 1998 Telereal disposals Property investment expenditure Capital returns Disposals LS Trillium acquisitions Corporate acquisitions Recycling capital to achieve higher returns

  6. Francis Salway (47) Group Chief Executive Andrew Macfarlane (48) Ian Ellis (49) Mark Collins (48) Group Finance Director Property Outsourcing Chief Operating Officer Mike Hussey (39) Richard Akers (43) Managing Director, London Managing Director, Retail Leading a group of 1,950 employees Experienced management team

  7. High level of activity The last 12 months 2004 • Organisational restructuring • Exit from industrial • Debt restructuring • Innovative financing solution • Retail • Scottish Real Estate Limited Partnership – joint venture with British Land • Metro Shopping Fund Limited – joint venture with Delancey • Asset swap with Slough Estates • Successful anchor tenant lettings for shopping centre developments in Exeter and Cardiff

  8. High level of activity The last 12 months 2004 • London office • Let, disposed or agreed terms for letting for over 145,000m2 of our London office development programme • Landflex roll-out • LS Trillium • 3 new contract wins – Employment Services, Norwich Union and Barlcays Bank • Strong profit and loss contribution

  9. Financial highlights6 months to 30 September 2004 Excludes FRS3 profits and exceptional items. Based on revenue profits. Excludes deferred tax on investment properties. Adds back deferred tax on investment properties and Telereal deficit Compared to 31 March 2004 Strong growth in adjusted EPS and NAV

  10. Vision of long term, dominant assets Retail Retail Investment • Active management creating value • Shopping centres +6.2%(1) • Retail warehouses +7.3%(1) • Innovative asset acquisitions • 18 shopping centres, 25 retail parks • Over one million m2 of retail accommodation • Nearly 300 million shopper visits per year Development • Meeting targets on development lettings • Planning consent for over 100,000m2 of retail development(2) • Estimated future development spend of c.£531m(2)(3) Valuation change for six months to 30 September 2004 LS share Excludes land costs and capitalised interest

  11. Scottish Retail Property Limited Partnership • Joint venture with British Land created in March 2004 • Over 130,000m2 of retail space, valued at circa £500m • Assets: • Aberdeen - Bon Accord Centre and St Nicholas Centre • East Kilbride – Princes Mall, Olympia, Plaza Centre and Centre West • Roles: • Land Securities – asset and property management • British Land – administration • Rationale • Coordinated asset management and tenant mix strategies • Future development opportunities Centre West, East Kilbride Maximise long-term value of centres

  12. Freehold • £6.4m p.a. rental income • 32,500m2 • 50% interest with Henderson • Long leasehold at peppercorn • £8.3m p.a. rental income (LS share) • 55,750m2 Buchanan Galleries, Glasgow Lewisham Centre, Lewisham • Long leasehold at peppercorn • £3.8m p.a. rental income • 21,350m2 • Freehold • £1.9m p.a. rental income • 9,500m2 Howard Centre, Welwyn Bishop Centre, Taplow Assets acquired through Slough Estates swap Asset management and development opportunities

  13. St David’s 2, Cardiff(1) 70,000m2 retail Whitefriars, Canterbury 37,100m2 retail Princesshay, Exeter 37,500m2 retail Broadmead, Bristol(1) 88,750m2 retail Retail developments One of the largest development pipelines

  14. Poised for market recovery phase Central London office Retail Investment • Disposal of ‘ex-growth’ assets • Valuation increase(1) +4.4% • Like-for-like portfolio(2): • Average passing rent £358 per m2 • Average estimated rental value £321 per m2 • Current income yield 7.1% • Over 810,000m2 of office accommodation • More than 50,000 people work in offices owned by us Development • Strong progress on development lettings • Potential to develop 500,000m2 of commercial and residential space over next 10 years • Estimated future development spend of c.£581m(3) for six months to 30 September 2004 As at 30 September 2004 Excludes land costs and capitalised interest

  15. Current income yield 7.1% Gross nominal equivalent yield 7.1% Average passing rent per m2 £358 Average ERV per m2 £321 Capital value Rental value Positioned for capital growth London investment portfolio opportunities Property A – long lease Property B – short leases London offices (like-for-like portfolio) as at 30 September 2004: • Mean lease length 9.0years • Gross reversionary potential 7.8% • Over-rented income (14.3)%

  16. New Street Square, EC4 120 Cheapside, EC2 Bankside 123, SE1 Cardinal Place, SW1 Can satisfy major occupiers’ property requirements Office developments Eastbourne Terrace, W2

  17. Landflex Land Securities Client Higher earnings from capital invested Increased renewal rates Improved IRRs Menu of lease lengths Indexed rent increases Inclusive charges No dilapidations Additional services Budget certainty Product innovation matched to market trends

  18. LS Trillium Client Freehold asset transfer Leasehold liability transfer Unitary charge Capital value payment/release Integrated property services Occupational flexibility Price certainty • More than 250,000 people work in offices managed by LS Trillium • 2.6m m2 = 1,700 buildings • 0.4m m2 = 76 buildings • 5.3m m2 = 6,700 buildings • 0.1m m2 = 19 buildings Property outsourcing Property outsourcing: risk transfer, price certainty, customer service

  19. Property outsourcing Including £36m Norwich Union assets defined as finance leases Strong growth from new contracts

  20. LS Trillium - new business pipeline Drivers: Corporates Public Sector Marketing and pre-proposal 5 7 Outline proposal 2 1 Final proposal 1 2 Final close 1 0 Mobilisation Growing private sector interest within pipeline

  21. 4 2 1 3 Urban community development Kent Thameside, south-east England (1) Eastern Quarry • 79% ownership • Outline planning application submitted • 7,250 homes, 267,250m2 commercial and community accommodation (2) Ebbsfleet • 42.5% ownership • Outline planning consent obtained • 789,500m2 commercial and residential floorspace (3) Springhead, Ebbsfleet phase I • 42.5% ownership • Quarter Master approval secured • 600 homes and 50,000m2 offices (4) Swanscombe Peninsula • Development management role • Outline planning application to be submitted • 1,700 residential units, 25,000m2 offices and 6,000m2retail and community accommodation Brentwood London Thurrock Kent Thameside Bexley Sevenoaks Maidstone Exciting opportunity – delivering profits over 20 years

  22. Effect of debt refinancingBased on final pricing • As if refinancing had happened at 30 September 2004 but based on final prices Improved flexibility with lower future funding costs

  23. Summary • Sharper focus to range of activities • More efficient debt structure – earnings enhancing • London portfolio well positioned for recovery phase: • short average lease lengths • development pipeline • Retail portfolio strengthened through organic growth • Increasing interest in property outsourcing from private sector A strategy delivering growing returns

  24. Contacts Emma Denne Jennifer van der Eem Director of Corporate Communication Investor Relations Manager Tel: +44 (0) 20 7024 5460 Tel: +44 (0) 20 7024 5185 Fax: +44 (0) 20 7024 5011 Fax: +44 (0) 20 7024 5011 Email: emma.denne@landsecurities.com Email: jennifer.vandereem@landsecurities.com www.landsecurities.com Land Securities Group PLC, 5 Strand, London, WC2N 5AF

  25. Robert Heskett Head of Asset Management, Central London portfolio UKSA Central London Tour 19 January 2005

  26. One New Change, EC4 • Description The building comprises 385,000ft2 of offices and 26,000ft2 of retail held on a long lease from the Corporation of London. The majority of the office building is let to Allen & Overy, who will occupy the premises until 2006. The retail accommodation is let to a mixture of tenants, including Lloyds Bank and Boots. • Comment Land Securities purchased New Change from the Bank of England during 2000 and provides the opportunity to develop a substantial landmark building adjacent to St Paul’s, with the ability to create the first major shopping complex on the City’s most prime retail frontage.

  27. 30 Gresham Street, EC2 • Description Gresham Street is one of the City’s largest buildings providing approximately 390,000ft2 net of offices with floor plates up to 49,220ft2, offering exceptional levels of flexibility to high density occupiers. In addition, the scheme will provide approximately 14,000ft2 net of retail accommodation. • Comment The scheme was completed in December 2003. The property stands on an island site providing a high profile frontage onto Gresham Street. The building was recently let in its entirety to DrKW, thus releasing their Fenchurch Street site to Land Securities.

  28. Red Lion Court, SE1 • Description This is a 128,325ft2 building of high quality specification with full air-conditioning and raised floors. The building is wholly let to Lloyds TSB Bank PLC for a term of 25 years from June 1990, expiring June 2015, on FRI terms and five yearly rent reviews. • Comment Land Securities purchased the property in December 2004. The building is let off a rent of £35ft2 and rental growth prospects are good, bearing in mind the improvements in the South Bank area. The value is underpinned by the possibility of a residential development in a popular riverside location.

  29. Bankside 123, SE1 • Description A mixed use development providing approximately 750,000ft2 net of offices, 110,000ft2 net retail and health and fitness, arranged over 3 buildings. Bankside neighbours the Tate Modern and is well connected to a number of transport hubs providing access to the City, West End and Docklands. • Comment The building has been demolished and, as a result of the early pre-letting campaign, Bankside 1 has been pre-sold to IPC. Tenants are being sought for the remainder of the space before construction starts.

  30. Hill House, 1 Little New Street, EC4 • Description This is a building comprising 133,260ft2 plus car parking let in its entirety to Deloittes. The terms of the lease is 35 years from 1983, expiring in 2018 at a rent of c. £38ft2 per annum exclusive. • Comment Land Securities purchased the freehold interest in this building in July 2004. The attractive running yield of 6.5% made this an attractive acquisition adjacent to the company’s existing holdings in New Street Square and based on a first class covenant.

  31. New Street Square, EC4 • Description Planning permission for a 700,000ft2 scheme on the site of New Fetter Lane was submitted in 2004. • Comment After carefully considering current market trends, Land Securities has now made a planning application for the site which will involve 3-4 buildings of between 150,000ft2 and 400,000ft2 each. A pre-letting marketing campaign is underway and Heads of Terms have been agreed with Deloittes to take over 200,000ft2, although it is not yet documented.

  32. Greater London House, NW1 • Description This is a landmark 335,000ft2 building between Camden and the West End. Major occupiers include Book Club Associates, Young & Rubicam and TUI. The building is fully occupied with most leases expiring in 2013. • Comment Land Securities purchased the freehold interest in this building in July 2004. Average rents are c. £23ft2 and the rental growth prospects are strong for this popular building.

  33. 6-17 Tottenham Court Road, W1 • Description A development completed in 1999 and comprising 56,500ft2 of retail space currently divided into six large units let to a variety of tenants, including Sainsbury’s, Boots the Chemist and Specsavers. There is also a restaurant and some offices. • Comment A new development providing good quality retail space, which is in short supply generally in the West End. The parade shows good rental growth prospects which should be reflected in the rent reviews in 2004, which are being progressed at present.

  34. Piccadilly Circus, W1 • Description Seven advertising screens let to international brands, such as Coca-Cola, McDonald’s and TDK. Two large ground floor retail/restaurant units let to Boots the Chemist and Burger King. • Comment A multi-let building in the heart of the West End. The signs have attracted household names for almost a century and the block continues to be popular with retailers and advertisers.

More Related