Hammerson Full Year Results 2013

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MAXIMISING INCOME THROUGH ACTIVE MANAGEMENT
Growth of 2.1% in like-for-like net rental income demonstrating continued tenant demand for our properties and the success of asset management initiatives
Strong demand for high-quality retail property, with new rents secured of £24m (2012: £19m) for 154,000m² (2012: 123,000m²)
Occupancy of 97.7% reflecting attractive venues. Occupancy exceeds our benchmark of 97% and is up since the half year
Leases signed overall at 2% above ERV, providing confidence in future income growth
Final dividend increased by 8%.Total dividend for the year of 19.1 pence per share (2012: 17.7 pence)
CREATING HIGH-QUALITY RETAIL DESTINATIONS
Les Terrasses du Port, Marseille now 93% let and on schedule to open May 3rd
Construction started at Le Jeu de Paume, Beauvais; Silverburn extension, Glasgow; and Cyfarftha, Merthyr Tydfil
Commenced enabling works at Victoria Gate, Leeds. Main contract scheduled to start on site this spring
Planning approval received for major retail developments at Croydon and Brent Cross in London
Investments in Bullring, Saint Sébastien and Value Retail improve quality of portfolio and provide opportunities to create value
ENHANCING CAPITAL STRENGTH
Reduction in cost:income ratio of 240 basis points
Liability management initiatives reduced weighted average interest rate to 4.8%
Year end loan to value of 38% and liquidity of £716 million provide flexibility for future investment
David Atkins, Chief Executive of Hammerson, said: “We have reported a good set of results in a year when we saw the beginning of economic and consumer recovery in the UK. In France the economic picture is less clear cut, although personal debt levels remain low, providing the opportunity for a rebound in consumer spending when growth returns.

We are seeing improving demand from retailers, and Hammerson is creating the right product to meet their future requirements, which provides the conditions for selected growth in rental values. We have clear visibility on a number of major development projects which will create the destination venues of the future, and drive returns to our shareholders. The first of these, Les Terrasses du Port in Marseille, will open in May this year. We remain on course to deliver strong growth in earnings and dividends over the medium term.”

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Hammerson Full Year Results 2013

  1. 1. 2013 Full-year 2013 Full-year Results Results Monday 17 February 2014 Monday 17 February 2014 2013 Half-year results
  2. 2. Today’s presentation Section 1 Introduction and market overview David Atkins, CEO Financial results Timon Drakesmith, CFO Performance drivers David Atkins, CEO Conclusion David Atkins, CEO Section 2 Section 3 Section 4 2013 half year results 2013 Full-year results 2
  3. 3. Vision Our vision is to be the best owner-manager and developer of retail property within Europe By capitalising on our strengths we aim to provide industry-leading shareholder returns EPS +10.5% 2013 half year results 2013 Full-year results Dividend +7.9% LfL NRI +2.1% NAV/share +5.7% 3 3
  4. 4. 2013 highlights Best in class retail portfolio Occupancy 97.7% Leasing +2% vs ERV 7% tenant rotation rate Active financial management WAIR reduced to 4.8% Reduction in cost ratio of 240bps Over £700m liquidity 2013 Half-year results 2013 half year results 2013 Full-year results Advancing developments Les Terrasses du Port 93% let Commenced on site at Leeds and Beauvais Planning consent at Croydon and Brent Cross Capital recycling to enhance growth Queensgate disposal Leisure extensions on site Acquisition of Value Retail stakes, Bullring and Nancy 44
  5. 5. Securing retail demand in France despite cyclical weakness Market indicators Structural attractiveness of indexation Index 105 105 French business confidence (Source: INSEE, France) 100 100 95 95 Low personal debt levels 90 90 Business confidence steady throughout 2013 85 85 Household disposable income increased throughout 2013 Portfolio initiatives 80 80 Jul 12 €bn 34 Jan 13 Jul 13 Jan 14 Total disposable income (Source: INSEE, France) 340000 Leasing progress at Les Terrasses du Port, Marseille and Jeu de Paume, Beauvais 335000 Repositioning existing assets through extensions and refurbishments 325000 Selective acquisitions 315000 33 330000 32 320000 31 310000 Jan 08 2013 half year results 2013 Full-year results Jan 10 Jan 14 Jan 12 5
  6. 6. Stronger Christmas trading in the UK Morrison Tesco Sainsbury M&S Food Waitrose Foodstores Dunelm Maplin Dixons Halfords Topps Tiles OOT retailers WH Smith Mothercare Superdrug Ryman Greggs Thorntons Argos Carphone Warehouse Robert Dyas Fragrance Shop The Works Lush Non fashion retailers New Look Blue Inc Bon Marche JD Sports White Stuff Ted Baker Next Karen Millen Jaeger Mountain Warehouse Moss Bross Moss Bros Boux Avenue Boux Avenue Fashion retailers Debenhams M&S Gen merch House of Fraser John Lewis Liberty Selfridges Department stores -10 Source: PMA (from company statements) 2013 half year results 2013 Full-year results -5 0 5 10 15 20 25 % p.a. like-for-like sales change, Christmas trading period 2013 vs 2012 6
  7. 7. Positive outlook driven by improving fundamentals Falling UK unemployment (Source: ONS) UK GDP growth (Source: ONS) % % 1.0 8.5 0.8 8 0.6 7.5 7 0.4 6.5 0.2 2013 half year results 2013 Full-year results 7 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 2013 - Q4 2013 - Q3 2013 - Q2 2013 - Q1 2012 - Q4 2012 - Q3 2012 - Q2 -0.2 2012 - Q1 0.0 Jan-12 6
  8. 8. Deep investor demand and firming yields Shopping centre investment in Europe (Source: DTZ research) €bn Volume LHS 20 Number of deals Number of deals RHS 300 250 Net initial yield (Source: PMA) % 6.5 Prime Shopping centres Prime shopping centres Retail warehousing Retail Warehousing 6.0 15 200 10 5.5 150 5.0 100 2013 half year results 2013 Full-year results 2014 2013 4.0 2012 2013 2011 2009 2007 2005 2003 2001 0 1999 0 4.5 2011 50 2010 5 8
  9. 9. Combined with limited supply Retail completions expected to remain modest (Source: PMA) Mil ft2 p.a. net 25 Shopping centres ShoppingCentre / Unit Shop 20 Retail Warehouse Retail warehouses 15 10 5 2013 half year results 2013 Full-year results 9 2018 2016 2014 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 1990 1988 0
  10. 10. Increased space requirements in selected locations International Fashion retailers multiples Leisure and catering Aspirational brands Homeware and Discounters furnishings London Regional shopping centres Out of town retail parks Prime towns Secondary towns Tertiary 2013 half year results 2013 Full-year results 10
  11. 11. Leading to market ERV growth Forecast UK retail ERV growth per annum (Source: PMA) % 3.0 Prime shopping centres Retail warehouses 2.9 2.5 2.5 2.0 2.0 1.9 1.5 1.8 1.6 1.3 1.0 1.1 0.8 0.5 0.0 -0.1 -0.2 -0.5 -0.2 -0.8 -0.9 -1.0 -0.1 -1.2 -1.5 2010 2013 half year results 2013 Full-year results 2011 2012 2013 2014 2015 2016 2017 11
  12. 12. Hammerson positioned to support multichannel retail Reported sales do not capture the whole picture Hammerson 2013 tenants’ sales UK France -0.4% -2.7% Click and collect sales not recorded Adjusted sales capture underlying picture Adjusted sales Reported store sales Retailer 1 +1.7% -0.7% Retailer 2 +5.7% +4.7% Online purchases returned to store reduce recorded sales Overall estimated benefit to reported sales of 1-2% increase 2013 half year results 2013 Full-year results 12
  13. 13. Leasing ahead of both ERV and previous rents 12 months to 31 December 2013 vs ERV vs previous rents UK retail +4% +1% France +0% +6% Group +2% +2% UK shopping centres Five Guys at The Oracle, Reading 2013 half year results 2013 Full-year results 2013 Half-year results UK retail parks Homebase at Battery Retail Park, Selly Oak French retail Eram at Place des Halles, Strasbourg 13
  14. 14. Summary Improving economic fundamentals Growing consumer confidence Increasing tenant demand Limited supply pipeline Conditions for selected ERV growth Hammerson positioned to outperform 2013 half year results 2013 Full-year results 14
  15. 15. Section 2 Financial results Timon Drakesmith 2013 Half-year results
  16. 16. Finance agenda and progress Focus area Drive top line growth Control operating costs Manage interest expense Optimise capital structure 2013 half year results 2013 Full-year results Half-year results Progress in 2013 Growth in NRI of 2.1% Marseille opening May 2014 On track to meet our £320m NRI forecast for 2015 Cost income ratio declined by 240 bps to 24.6% Operating costs reduced by 1.5% in 2013 Further actions announced today to reduce cost income ratio WAIR falls by 20bps to 4.8% Increased % of fixed debt for protection as rates rise Over £500m of new debt financing LTV below 40% target Well funded to support development schemes 16 16
  17. 17. Headline results Income statement 2013 % change 2012 Net rental income(1) (£m) 290.2 282.9 +2.1%(2) Adjusted profit before tax(3) (£m) 168.9 152.5 +10.8% EPRA EPS (p) 23.1 20.9 +10.5% Final dividend (p) 10.8 10.0 +8.0% Balance sheet 31 Dec 2013 Portfolio value (£m) EPRA NAV (pence per share) LTV (%) (1) (2) (3) (4) (5) 5,931 % change 31 Dec 2012 5,653(4) 573 542 38 +2.0%(5) +5.7% 36 - Continuing and discontinued operations On a like-for-like basis for continuing operations Continuing and discontinued operations Includes £195m for discontinued operations Underlying capital growth for total portfolio excluding Value Retail 2013 Full-year results 2013 half year results 2013 Half-year results 17 17
  18. 18. YoY change (LfL) Solid uplifts in like-for-like NRI Key drivers 2013 total(2) 3.2% 2.6% 2.1%(1) 0.2% UK retail parks France retail £82.1m £62.7m Union Square Cleveland Cergy Brent Cross Thanet O’Parinor Silverburn 2012 administrations Indexation UK shopping centres £124.7m GRI up 2.2% LfL Total £282.8m(3) In line with previous guidance (1) Includes other interests LfL of £7.2m which declined YoY by 4.0% (2) Total NRI for continuing portfolio (not LfL) (3) Continuing operations, including other interests total of £13.3m 2013 Half-year results 2013 Full-year results 2013 Half-year results 18 18
  19. 19. EPRA EPS vs 2012 +10.5% Net investment LfL NRI Value Retail Administration Net financing costs Exchange and other 24.0 0.2 0.6 22.5 (0.5) 0.2 23.1 0.7 1.0 21.0 20.9 2013 2012 19.5 18.0 EPRA EPS (pence) Earnings +20% since 2011 2013 half year results 2013 Full-year results 2013 Half-year results 19
  20. 20. Cost management delivering results EPRA Cost/income ratio(1)(2) % Operating costs(1) £m 88 29 28.3% 28 86 86.1 27.0% 27 84 26 82 80 24.6% 25 EPRA cost/income target for 2016 21-22% 24 79.8 79.8 78 23 78.6 76 22 21 74 20 2011 2012 Year 2013 2013 (1) Continuing operations (2) Cost ratio is defined as: (net service charge expense + property outgoings + administration expenses – management fees receivable)/Gross rental income 2013 half year results 2013 Full-year results 20
  21. 21. New resource management measures Additional investments to grow business Efficiency improvements Expected incremental costs - £5m p.a. from 2015 Target savings - £6m p.a. from 2016 Expanded development programme Senior management reorganisation - Headcount increases London office relocation in 2015 - Mobilisation of project teams Share incentive plans and pension benefits Digital marketing and multichannel London/Paris integration Implementation costs of £5m in 2014 Resources redeployed to growth areas Expense reductions push cost income ratio down to 21-22% 2013 half year results 2013 Full-year results 21
  22. 22. Portfolio valuation change FY 2013 % H2 2013 % H1 2013 % Value at 31 Dec 2013 (£m) UK shopping centres +2.4 +1.7 +0.7 2,524 UK retail parks +1.7 +3.2 -1.5 1,471 France retail -0.3 +0.8 -1.1 1,240 +10.4 +6.8 +3.4 497 Other UK interests(1) -6.5 -1.6 -5.0 199 Discontinued operations +3.7 -1.2 +5.0 - Total +2.0 +2.2 -0.2 5,931 Value Retail(2) +12.6 +6.8 +5.4 788(3) Current developments (1) Principally assets held for redevelopment (2) Underlying overall portfolio valuation change for Hammerson interests (3) Hammerson’s share of portfolio valuation at 31 Dec 2013 Full-year results 2013 half year results 2013 Full-year results 2013 Half-year results 22
  23. 23. EPRA NAV per share vs 2012 +5.7% Investment portfolio revaluation 590 Profit on disposals Value Retail revaluation Adjusted profit Dividends 23 Developments revaluation (18) 580 570 573 573 2 11 560 4 550 2013 530 542 2012 540 9 520 EPRA NAV per share (pence) 2013 Half-year results 2013 half year results 2013 Full-year results 23
  24. 24. Healthy financing ratios Financing policies 31 Dec 2013 31 Dec 2012 - £2,252m £2,036m Gearing <85% 56% 53% Loan to value <40% 38% 36% Cash/undrawn facilities - £716m £696m Weighted average cost of finance - 4.8% 5.0% >2.0x 2.8x 2.8x Net debt/EBITDA <10x 8.2x 7.9x Fixed rate debt >50% 82%(1) 80% Net debt Interest cover (1) Fixed rate debt percentage at 31 December 2013 was 70% but is shown on a pro forma basis for £275m US private placement issue arranged in November 2013 2013 half year results 2013 Full-year results 2013 Half-year results 24 24
  25. 25. Maturity profile of debt Bank drawn debt £m Secured debt Euro bonds 500 Sterling bonds USPP(1) Credit markets attractive 450 Weighted average coupon of 2015/2016 bonds 5.0% 400 USPP will refinance 2014 bank debt 350 300 250 200 150 100 50 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 (1) Undrawn committed US private placement due to fund February and June 14 2013 half year results 2013 Full-year results 2013 Half-year results 25 25 2028
  26. 26. Forecast development expenditure £m On site developments 300 Les Terrasses du Port, Marseille 250 Victoria Gate, Leeds Jeu de Paume, Beauvais 200 Other on site developments 150 Future developments New extensions/redevelopments 100 Whitgift, Croydon Brent Cross extension 50 0 2013 2014 2015 2016 2017 2018 Note: Croydon expenditure in 2013 and 2014 reflects property acquisitions Other on site developments: Abbotsinch Retail Park, Paisley; Cyfarthfa Retail Park, Merthyr Tydfil; Silverburn, Glasgow; O’Parinor, Paris New extensions/redevelopments: Elliott’s Field Retail Park, Rugby; Watermark WestQuay, Southampton; Brent Cross leisure extension 2013 half year results 2013 Full-year results 26
  27. 27. Focus on Value Retail Value Retail Villages Future growth drivers 2013 YoY change Brand sales €1.9bn +13% Forecast 72% growth in Chinese visits to Europe by 2018(2) EBITDA €111m +12% Village remerchandising with more premium brand stores Total portfolio value €3.1bn +12% More flagship stores Extensions at Barcelona and Dublin Hammerson share of(1) EPRA net income £19m +51% EPRA net assets £634m Hammerson investment plans +29% (1) Including benefit of new investments, interest receivable and loans (2) Source: European Travel Commission 2013 half year results 2013 Full-year results 27
  28. 28. Section 3 Performance drivers David Atkins 2013 Half-year results
  29. 29. Performance drivers Value Retail Growth from existing portfolio Major developments Contribution from extensions and refurbishments Selected examples 2013 half year results 2013 Full-year results 2013 Half-year results 29
  30. 30. Capital deployment Prime Shopping Centres Extension and refurbishment Premium Designer Outlets Convenient Retail Parks Silverburn Silverburn Abbotsinch Retail Park La Roca Village Kildare Village Development Les Terrasses du Port Cyfarthfa Retail Park Kildare Village Bullring Junction Fund La Vallée Village Acquisition 2013 Half-year results 2013 Full-year results 30
  31. 31. Acquisition of a further stake in Bullring Acquired additional 33% stake in 2013 in 50/50 JV with CPPIB, taking ownership to 50% 9% total property return Recent lease renewals +10% above previous rent Continues to attract new brands 2003 2011 2013 2014 2015 Bullring opens, with 1.5 million visitors in first week Spiceal Street opens, a 1,900m2 leisure and catering development Bullring celebrates 10 years of trading Explore opportunity to increase leisure offering and add a cinema New £100 million John Lewis store opens for trade in city 2013 Half-year results 2013 Full-year results 31
  32. 32. Saint Sébastien, Nancy % 105 £7m 99% 24,000m2 6% shops and restaurants annual rents let centre initial yield 2013 Half-year results 2013 Full-year results Development potential 32
  33. 33. Nearing completion at Les Terrasses du Port Countdown to launch Opening 3 May 2014 93% pre-let and 95% construction complete £28 million annual rents £460 million total development cost 7.3% yield on cost Anchor store Printemps and MSUs have commenced fitting out of units 2013 Half-year results 2013 Full-year results 33
  34. 34. Transforming Marseille’s retail offer 190 units 1 81 22 53 43 22 30 brands new to the portfolio catering units fashion brands international brands brands taking 1st store in a French shopping centre brands new to Marseille Brands recently signed include 2013 Half-year results 2013 Full-year results 34
  35. 35. Construction commenced at Leeds and Beauvais Victoria Gate, Leeds 34,300m2 luxury retail venue John Lewis anchor store 23,800m2 retail and leisure venue Out-turn financials Total development cost Annual income 28% pre-let Jeu de Paume, Beauvais Yield on cost £150m £10m 6.7% 80km north west of Paris Large catchment and poor retail provision Out-turn financials Total development cost Annual income £5m Yield on cost 7.1% Completion Q3 2016 42% pre-let Completion Q3 2015 2013 Half-year results 2013 Full-year results £70m 35
  36. 36. Advancing the development pipeline Silverburn, Glasgow O’Parinor, Paris Cyfarthfa Retail Park, Merthyr Tydfil Abbotsinch Retail Park, Paisley 10,900m2 extension 7,200m2 extension 14,500m2 extension 5,000m2 extension 14 screen cinema 14 screen cinema 4,300m2 Marks and Spencer anchor store 5 retail units in adjacent existing retail park 84% pre-let 100% pre-let 46% pre-let 87% pre-let Total development cost £13m Total development cost £4m Total development cost £23m Total development cost £9m Completion Q1 2015 Completion Q2 2014 Yield on cost 10% Yield on cost 13% Completion Q1 2015 Completion Q4 2014 Yield on cost 7% Yield on cost 5% 2013 Half-year results 2013 Full-year results 36
  37. 37. Key milestones at Brent Cross and Croydon Brent Cross Whitgift, Croydon 2013 Agree masterplan 2013 Brent Cross/Cricklewood phasing Submit planning 2014 S73 approval Establish JV Acquire RLAM stake Secure planning resolution 2014 Complete S106 2013 Half-year results 2013 Full-year results 2013 Half-year results Submit leisure planning application Secure CPO resolution Complete S106 Conclude land assembly Conclude anchor negotiations Complete design 37 37
  38. 38. Attractive future pipeline: The Goodsyard Total development area 260,000m2 50/50 10 acre joint venture with site in heart of Shoreditch Ballymore Properties 2013 Half-year results 2013 Full-year results £6m per acre valuation Spring 2014 19,000m2 Planning submission Retail space (90 shops) 60,000m2 1,400 office space residential units 38
  39. 39. Additional income from developments £56m £63m £m annual rents 120 90 £15m 60 £11m £30m 30 2014 2014 2015 2015 2016 2016 2017-2019 2017-2019 Notes: Annualised passing rents assuming 100% occupancy in year of project completion, post any rent free periods Assumes completion of all medium-term developments and extensions 2014 Les Terrasses du Port, O’Parinor, Abbotsinch Retail Park; 2015 Silverburn, Jeu de Paume Beauvais, Elliott’s Field Rugby, Cyfarthfa Retail Park Merthyr Tydfil 2016 Watermark WestQuay, Victoria Gate 2017-2019 Croydon, Brent Cross Leisure, Brent Cross extension 2013 Full-year results 2013 Half-year results 2013 half year results 39
  40. 40. Conclusion 2013 Half-year results
  41. 41. Key messages ERV growth returning to our markets 2013 half year results Major development activity amplifies returns On track with previous income growth guidance 41
  42. 42. Conclusion ERV growth from existing portfolio Contribution from extensions and refurbishments Overhead cost control Strong returns Confident outlook Major developments Liability management Value Retail 2013 half year results 2013 Full-year results 2013 Half-year results 42 42
  43. 43. Questions 2013 Half-year results
  44. 44. Disclaimer This presentation contains certain statements that are neither financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond Hammerson’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as the Company’s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Hammerson does not undertake any obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of these materials. Information contained in this presentation relating to the company or its share price, or the yield on its shares, should not be relied upon as a guide to future performance. 2013 half year results 2013 Half-year results 44
  45. 45. Appendices 2013 Half-year results
  46. 46. Our assets £5.9bn property portfolio Assets in UK and France 21 shopping centres 22 retail parks Investment in Value Retail 250m annual visitors 2013 half year results 2013 Full-year results 2013 Half-year results 46 46
  47. 47. Developments and extensions Ownership % Lettable area m2 Earliest start Potential completion Value at 31/12/13 £m Estimated cost to complete (1) £m Estimated annual income (2) £m Let (3) % Les Terrasses du Port, Marseille 100% 61,000 Commenced Q2 2014 386 80 28 93 Abbotsinch, Paisley 100% 5,000 Commenced Q2 2014 n/a 7 1 87 O’Parinor, Aulnay-sous-bois 25% 7,200 Commenced Q4 2014 n/a 2 1 100 Cyfarthfa, Merthyr Tydfil 100% 14,500 Commenced Q1 2015 n/a 19 2 46 Silverburn extension, Glasgow 50% 10,900 Commenced Q1 2015 n/a 8 1 84 Jeu de Paume, Beauvais 100% 23,800 Commenced Q3 2015 9 60 5 42 Victoria Gate, Leeds (Phase 1) 100% 34,300 Commenced Q3 2016 10 135 10 28 311 48 Scheme ON SITE TOTAL 156,700 MAJOR DEVELOPMENTS (>30,000M2) Croydon Town Centre The Goodsyard, London E1 50% 2015 2018 500 35 260,000 2016 Phased 140 - 41% Brent Cross Extension, London 200,000 50% (4) 90,000 2016 2019 350 26 990 61 TOTAL 550,000 EXTENSIONS/REDEVELOPMENTS (<30,000M2) Elliott’s Field, Rugby 100% 16,000 2014 2015 36 3 13 Watermark WestQuay, Southampton 100% 18,000 2014 2016 70 5 29 Brent Cross Leisure 41% 9,000 2016 2018 20 2 126 10 TOTAL 43,000 PIPELINE SQY Ouest, Saint Quentin-en-Yvelines 50% 31,700 2014 2015 11 2 Halle en Ville, Mantes 100% 32,000 2015 2017 120 9 Italie Deux, Paris 100% 4,800 2015 2017 25 2 Victoria Gate, Leeds (Phase 2) 100% 73,000 2018 2021 480 40 141,500 636 53 891,200 2,063 172 TOTAL (1) (2) (3) (4) (5) Incremental capital cost including capitalised interest Incremental income net of head rents and after expiry rent-free periods Let or in solicitors’ hands by income at 31 January 2014 Area and cost reflects phase 1 of the scheme only. Income not applicable due to residential component of the scheme € converted at £1 = €1.202 2013 half year results 2013 Half-year results 47 47 30
  48. 48. Hammerson’s investment in Value Retail Hammerson €58m shareholder loan Holding Companies 22% equity Bicester Village La Roca Village Las Rozas Village La Vallée Village Maasmechelen Village Fidenza Village Wertheim Village Ingolstadt Village Kildare Village Village Ownership via LP’s (%) 33 23 19 11 13 20 31 0 3 Total Village ownership (%) 45 35 31 22 24 32 43 11 14 Note: Hammerson also provided a €25million loan to Fidenza Village in July 2013 2013 Half-year results 2013 Full-year results 2013 Half-year results 48
  49. 49. Value Retail share of results Year ended 31 December 2013 £m 101.5 Year ended 31 December 2012 £m 47.5 Less: EPRA adjustments (88.1) (43.2) EPRA adjusted earnings of associate 13.4 4.3 - 4.9 5.6 3.4 19.0 12.6 31 Dec 2013 31 Dec 2012 Investment in associate 545.4 428.4 Add: EPRA adjustments 19.7 16.2 EPRA adjusted investment in associate 565.1 444.6 Loan to Value Retail 68.7 47.0 633.8 491.6 Income statement Share of results of associate Distributions received Interest receivable Total impact of Value Retail on income statement – EPRA basis Balance sheet Total impact of VR on balance sheet – ERPA basis 2013 Half-year results 2013 Full-year results 2013 Half-year results 49
  50. 50. Lease expiries and breaks as at 31 December 2013 Rents passing that expire/break in ERV of leases that expire/break in Weighted average unexpired lease term 2014 2015 2016 2014 2015 2016 £m £m £m £m £m £m (1) (1) (1) (2) (2) (2) 17.9 12.4 8.5 23.6 12.6 8.0 4.7 2.3 9.2 25.9 17.1 10.8 3.5 2.7 Total United Kingdom 29.4 France retail Notes to break years to expiry years 8.2 6.6 8.2 4.4 2.2 8.9 9.8 32.8 17.0 10.4 7.6 8.9 0.7 3.7 3.3 0.6 7.2 8.9 19.8 11.5 36.5 20.3 11.0 7.5 8.9 16.4 3.6 3.9 17.4 3.8 4.0 1.3 5.0 42.3 20.7 14.7 50.2 20.8 14.4 6.0 7.9 3.5 2.7 0.7 3.7 3.3 0.6 7.2 8.9 45.8 23.4 15.4 53.9 24.1 15.0 6.1 8.0 United Kingdom Retail Shopping Centres Retail Parks Other UK Group Retail Other UK Total Group (1) The amount by which rental income, based on rents passing at 31 December 2013, could fall in the event that occupational leases due to expire are not renewed or replaced by new leases. For the UK, it includes tenants’ break options. For France, it is based on the date of lease expiry. (2) The ERV at 31 December 2013 for leases that expire or break in each year and ignoring the impact of rental growth and any rent-free periods. 2013 Half-year results 2013 Half-year results 50 50
  51. 51. Rent reviews as at 31 December 2013 Projected rents at current ERV of leases subject to review in Rents passing subject to review in Outstanding 2014 2015 2016 Outstanding 2014 2015 2016 £m £m £m £m £m £m £m £m 1 1 1 1 2 2 2 2 Shopping Centres 40.8 15.8 9.3 9.9 43.7 17.1 10.4 10.8 Retail Parks 19.5 9.4 24.5 15.9 20.2 9.8 25.1 16.2 60.3 25.2 33.8 25.8 63.9 26.9 35.5 27.0 4.1 1.9 3.3 0.9 4.2 2.1 3.7 0.9 64.4 27.1 37.1 26.7 68.1 29.0 39.2 27.9 Notes United Kingdom Retail Other UK Total United Kingdom (1) Rents passing at 31 December 2013, after deducting head and equity rents, which are subject to review in each year. (2) Projected rents for space that are subject to review in each year, based on the higher of the current rental income and the ERV as at 31 December 2013 and ignoring the impact of changes in rental values before the review date. 2013 Half-year results 2013 Full-year results 2013 Half-year results 51 51
  52. 52. 2013 components of valuation change Yield Income Development and other Total £m 100 92.0 88.7 80 60 54.5 52.0 40 34.0 32.8 26.0 21.2 20 11.3 8.5 13.1 12.4 0 (2.7) (9.1) (8.8) (1.3) (0.5) -20 (23.9) (25.7) (24.4) -40 UK Shopping centres 2013 Half-year results 2013 Full-year results 2013 Half-year results France retail UK retail parks UK other Total continuing portfolio 52 52
  53. 53. Valuation data UK Shopping centres France retail UK Retail parks Other UK Total continuing portfolio 31 December 2013 5.8 5.5 6.1 7.4 5.9 31 December 2012 6.0 5.6 6.3 6.6 6.0 Change (bps) -20 -10 -20 +80 -10 31 December 2013 152.9 75.1 89.5 15.8 333.3 31 December 2012 150.4 73.4 88.7 12.6 325.1 +1.7 +2.3 +0.9 +25.4 +2.5 True equivalent yield (%) ERV (£m)(1) Change (%) (1) Total ERV for continuing portfolio on a non LfL basis 2013 Half-year results 2013 Full-year results 2013 Half-year results 53
  54. 54. 2013 leasing activity Area of new lettings (000m2) New rent from units leased (£m) 25 2012 180 2013 2013 2012 23.9 20 153.9 18.7 120 123.3 15 10 10.1 60 8.2 8.1 8.3 52.0 5 42.8 43.3 4.9 30.5 48.7 36.2 2.1 0 0 UK shopping centres UK retail parks 2013 Half-year results 2013 Full-year results 2013 Half-year results France retail Group UK shopping centres UK retail parks France retail Group 54 54
  55. 55. Tenants in administration as at 31 December 2013 31 December 2013 70 units in administration (1.2% passing rents) 22 units unoccupied (0.5% passing rents) 30 June 2013 63 units in administration (1.6% passing rents) 25 units unoccupied (0.6% passing rents) 31 Dec 2012 63 units in administration (1.2% passing rents) 25 units unoccupied (0.5% passing rents) 2013 Half-year results 2013 Full-year results 2013 Half-year results 55 55

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