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Great Portland Estates
Appendix 1
London Economy: Jobs growth
40
45
50
55
35
60
Dec 08
Source: Lloyds Purchasing Manager Index (PMI) Report.
Dec 09 Dec 10 Dec 11 Dec 12 Dec 13
Employment intentions Trend
Growth
Decline
Central London office potential completions1
0
2
4
6
8
10
12
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Million sq ft
Completed GPE projections West End West End core2
Source: CBRE and GPE data.
1. Excluding pre-lets.2. Includes W1 & SW1 postcode.
Headline office rents
£ per sq ft
2004 2006 2008 2010 2012 2014 2016 20180
120
140
40
60
80
20
100
PMA Prime West End PMA Prime City
GPE current office passing rent£42.00 per sq ft
PMA forecasts
Source: PMA
Great Portland Estates
Appendix 1
London equity demand and asset supply
0
25
30
10
20
15
5
0
10x
12x
4x
8x
6x
2x
May
10
Nov
10
May
11
Nov
11
May
12
Nov
12
May
13
May
14
Nov
13
£ bn
Equity demand
Source: CBRE/GPE
Asset supply Demand multiple (RHS)
Lead indicatorsGiven the cyclical nature of our markets, we actively monitor numerous lead indicators to help identify key trends in our market place which are described in the table below:Selected lead indicators Trends in year
Property capital values
Equity prices
Bond prices
Real yield spread (West End property)1
Volume of net new commercial property lending (including from non-bank sources)
Transaction volumes in central London direct real estate investment markets
Direction of pricing on IPD based derivative contracts
Rental values
Forecast UK GDP growth
Forecast London GVA growth
West End retail sales
Business confidence levels in the central London economy
UK output from the financial and business services sector
Employment levels in London’s finance and business services sectors
Central London office market balance2
1. West End property yields over ten year gilt yields adjusted for inflation.
2. Amount of space available to let given current rates of take-up expressed in terms of months.
Great Portland Estates
Portfolio performanceWholly-owned
£m
Joint ventures
£mTotal £m
Proportion of portfolio
%
Valuation movement
%
North of Oxford Street Office 806.7 78.5 885.2 33.1 19.4
Retail 117.1 122.2 239.3 8.9 19.1
Residential1 7.3 10.5 17.8 0.7 (53.3)
Rest of West End Office 272.4 17.5 289.9 10.8 12.1
Retail 191.7 25.0 216.7 8.1 27.8
Residential1 3.6 – 3.6 0.1 (9.4)
Total West End 1,398.8 253.7 1,652.5 61.7 17.1
City, Midtown and Southwark Office 177.4 151.1 328.5 12.3 11.2
Retail 4.8 – 4.8 0.1 4.4
Total City, Midtown and Southwark 182.2 151.1 333.3 12.4 11.1
Investment property portfolio 1,581.0 404.8 1,985.8 74.1 16.0
Development property 347.4 133.9 481.3 18.0 31.4
Total properties held throughout the year 1,928.4 538.7 2,467.1 92.1 18.7
Acquisitions 108.5 102.5 211.0 7.9 7.8
Total property portfolio 2,036.9 641.2 2,678.1 100.0 17.8
Portfolio characteristics
Investment properties
£m
Development properties
£m
Total property portfolio
£mOffice
£mRetail
£mResidential
£mTotal £m
Net internal area sq ft
000’s
North of Oxford Street 1,250.7 281.7 1,532.4 1,090.7 330.6 111.1 1,532.4 1,255
Rest of West End 612.8 – 612.8 367.0 242.1 3.7 612.8 616
Total West End 1,863.5 281.7 2,145.2 1,457.7 572.7 114.8 2,145.2 1,871
City, Midtown and Southwark 333.3 199.6 532.9 521.8 6.0 5.1 532.9 1,385
Total 2,196.8 481.3 2,678.1 1,979.5 578.7 119.9 2,678.1 3,256
By use: Office 1,642.6 336.9 1,979.5
Retail 532.7 46.0 578.7
Residential 21.5 98.4 119.9
Total 2,196.8 481.3 2,678.1
Net internal area sq ft 000’s 2,784 472 3,256
1. Residential values have been reduced as a result of our successful planning applications during the year which move lower value social housing requirements off-site to other parts of the portfolio.
Our portfolio – 100% central London
57%
23%
7%
9%
4%
22%
74%
4%
Locations
North of Oxford Street £1,532.4m
Rest of West End £612.8m
Southwark £241.8m
Midtown £182.2m
City £108.9m
Business mixOffice £1,979.5mRetail £578.7mResidential £119.9m
Appendix 2
Great Portland Estates
Appendix 2
Total property return (% p.a.) relative to IPD central London benchmarkYears to 31 March (%)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
GPEGPE IPD central LondonIPD central London RelativeRelative
-40
-30
-20
-10
0
10
20
30
40
Great Portland Estates
Purchases for the year to 31 March 2014
DescriptionPrice
£mNet
initial yieldNet internal
area sq ft£ per sq ft
Oxford House, W1 90.0 3.5% 79,000 1,139
Total 90.0 3.5% 79,000 1,139
Sales for the year to 31 March 2014
DescriptionPrice
£mNet
initial yieldNet internal
area sq ft£ per sq ft
90 Queen Street, EC4 61.0 5.4% 68,400 891
Park Crescent West, W11 52.5 2.0% 129,200 813
Hanover Square, W11 101.0 0.7% 208,000 971
20 St James’s Street, SW1 54.5 2.1% 55,500 982
Total 269.0 2.3% 461,100 916
1. Our share.
Appendix 3
Committed schemes and pipeline
DevelopmentAnticipated
finish
New building
area1
Cost to come
£m2
Current ERV £m2
Secured income
£m2Profit
on cost
Committed
Walmar House, 288/300 Regent Street, W1 Aug 2014 60,300 4.4 4.1 0.3 39%
12/14 New Fetter Lane, EC4 Sept 2015 142,500 50.0 8.3 8.3 42%
Total of committed 202,800 54.4 12.4 8.6 41%
Near-term
7 projects 2015–2017 828,100
Pipeline
13 projects 1,162,400
Total programme
22 projects, 50% of GPE’s existing portfolio 2,193,300
1. Areas in sq ft and at 100%.
2. For those held in JV, amounts shown at 50%.
GPE’s net investment in joint ventures
2010 2011 2012 20142013
25.2 23.8 12.515.6
14.77.1
25.2
7.5 10.27.9
5.29.47.4
%
Access to new properties Risk sharing Bank work out
0
5
10
15
20
25
30
35
40
45
Joint venture – partner
GRP – BP Pension fund £180.2m
GHS – Hong Kong Monetary Authority £103.2m
GVP – Liverpool Victoria £83.1m
GWP – Scottish Widows £106.3m
GSP – Starwood Capital £51.9m
GCP – Capital & Counties £0.1m
Total £524.8m
As % of Group net assets 27.2%
Great Portland Estates
Appendix 3
GPE tenant mix
Retailers & LeisureTechnology, media and telecoms
Banking & FinanceCorporates
29%
14%
17%
1%Professional services
GovernmentOther
13%
25%
1%
New letting and renewals by quarter
0
15
5
10
June 2013
September 2013
December 2013
March 2014
14.6
3.5
5.3
2.5
£m
Net gearing and interest cover
0
70
30
40
50
60
20
Net gearing (%)
2006
10
2007 2008 2009 2010 2011 2012 2013 2014
44.6
36.040.3
65.1
26.4
31.4
42.8
30.3
40.3
2.01.8
2.0 2.0
3.84.0
4.3
2.4
2.0
Interest cover (X)
Annual lettings by type
March2012
March2013
March 2014
0
30
10
15
20
5
25
7.010.3 10.7
18.2
3.1
12.1
3.1
£m
Other development lettingsPre-letsInvestment lettings
Great Portland Estates
Sources of debt funding1
Private placementConvertible bondDebentureJV debt (our share)Group bank debt
16%
21%
2%
41%
20%
1. Based on drawn position at 31 March 2014.
Appendix 3
Debt maturity profile1
0
400
200
250
300
350
Debt maturity profile1
£m
50
2015 2016 2017 2018 2019 2020 2021 202920222014
38
350
150
111
37
150
102
4826
40
143150
100
Group debt JV debt (our share)
1. Based on committed facilities at 31 March 2014.
Great Portland Estates
EPRA net assets per share
400
420
440
460
480
500
520
540
560
580
600Pence
446
6417
339
11
-9 -2569
March-13 Investment properties
Revaluations
Joint venture properties
Development properties
Profit on disposals
EPS Total dividend
Other March-14
EPRA profit before tax
0
5
10
15
20
25
30
35
40
45£m
March-13 Rental income and JV fees
JV profits Property costs
Admin costs
Net interest
March-14
22.2
13.4 0.2
-1.2 -1.8
5.6 38.4
Appendix 4
Great Portland Estates
Debt analysis
March 2014 March 2013
Net debt excluding JVs (£m) 586.1 658.9
Net gearing 30.3% 42.8%
Total net debt including 50% JV non-recourse debt (£m) 687.1 761.1
Loan-to-property value 25.7% 32.7%
Total net gearing 35.6% 49.5%
Interest cover 4.3x 2.4x
Weighted average interest rate 3.5% 3.7%
Weighted average cost of debt 3.9% 4.3%
% of debt fixed/hedged 98% 71%
Cash and undrawn facilities (£m) 508 282
EPRA performance measures
Measure Definition of Measure March 2014 March 2013
EPRA earnings Recurring earnings from core operational activities £38.4m £22.2m
EPRA earnings per share EPRA earnings divided by the weighted average number of shares 11.2p 6.9p
Diluted EPRA earnings per share EPRA earnings divided by the diluted weighted average number of shares 11.0p 6.9p
EPRA net assets Net assets adjusted to exclude the fair value of financial instruments £1,961.3m £1,533.9m
EPRA net assets per share EPRA net assets divided by the number of shares at the balance sheet date on a diluted basis 569p 446p
EPRA triple net assets EPRA net assets amended to include the fair value of financial instruments and debt £1,898.3m £1,491.4m
EPRA triple net assets per share EPRA triple net assets divided by the number of shares at the balance sheet date on a diluted basis 550p 434p
EPRA vacancy ERV of non-development vacant space as a percentage of ERV of the whole portfolio 5.0% 4.3%
Appendix 4
Great Portland Estates
Rental incomeWholly-owned Share of joint ventures
Rent roll £m
Reversionary potential
£m
Rental values
£mRent roll
£m
Reversionary potential
£m
Rental values
£m
Total rental values
£m
London North of Oxford Street Office 34.3 7.4 41.7 3.5 0.1 3.6 45.3
Retail 7.5 1.7 9.2 5.6 1.1 6.7 15.9
Rest of West End Office 12.1 3.8 15.9 0.9 0.6 1.5 17.4
Retail 7.8 1.7 9.5 1.6 0.6 2.2 11.7
Total West End 61.7 14.6 76.3 11.6 2.4 14.0 90.3
City, Midtown and Southwark Office 9.1 1.0 10.1 10.0 2.9 12.9 23.0
Retail 0.3 – 0.3 – – – 0.3
Total City, Midtown and Southwark 9.4 1.0 10.4 10.0 2.9 12.9 23.3
Total let portfolio 71.1 15.6 86.7 21.6 5.3 26.9 113.6
Voids 3.0 2.1 5.1
Premises under refurbishment 14.2 6.1 20.3
Total let portfolio 103.9 35.1 139.0
Rent roll security, lease lengths and voidsWholly-owned Joint ventures
Rent roll secure for five years
%
Weighted average
lease length Years
Voids %
Rent roll secure for five years
%
Weighted average
lease length Years
Voids %
London North of Oxford Street Office 49.4 9.7 3.9 100.0 11.1 –
Retail 31.3 4.6 – 87.3 8.0 –
Rest of West End Office 13.0 2.2 4.6 25.4 3.3 5.6
Retail 45.0 5.0 – 78.4 10.5 –
Total West End 39.5 7.0 3.5 85.0 8.9 0.6
City, Midtown and Southwark Office 61.4 7.1 – 23.9 4.1 10.1
Retail 85.4 15.9 – – – –
Total City, Midtown and Southwark 62.1 7.3 – 23.9 4.1 10.0
Total let portfolio 42.5 7.0 2.9 56.8 6.7 6.0
Rental values and yieldsWholly-owned Joint ventures Wholly-owned Joint ventures
Average rent £psf
Average ERV £psf
Average rent £psf
Average ERV £psf
Initial yield
%
True equivalent
yield %
Initial yield
%
True equivalent
yield %
London North of Oxford Street Office 49 60 84 88 2.5 4.6 – 4.2
Retail 42 53 105 118 3.5 4.7 3.6 4.5
Rest of West End Office 41 55 17 28 3.6 4.8 0.9 4.0
Retail 68 82 44 62 3.4 4.4 2.0 4.3
Total West End 48 58 63 71 2.9 4.6 1.8 4.3
City, Midtown and Southwark Office 33 44 33 44 4.9 5.4 5.1 5.6
Retail 25 28 – 32 5.8 5.6 – –
Total City, Midtown and Southwark 33 42 33 43 4.9 5.4 5.1 5.6
Total let portfolio 45 55 44 52 3.1 4.7 2.8 4.7
Appendix 5
Great Portland Estates
Top ten tenants
Tenant
Rent roll (our share)
£m
% of rent roll
(our share)
1 Savills plc 7.0 7.6
2 Double Negative 4.8 5.2
3 The Engine Group 3.8 4.1
4 New Look 3.0 3.3
5 Ipsos Mori UK 2.0 2.2
6 VNU Business Publications 1.8 1.9
7 Standard Chartered Bank 1.7 1.8
8 Fallon London Limited 1.6 1.7
9 Lane Clark & Peacock 1.5 1.7
10 Carlton Communications 1.5 1.6
Total 28.7 31.1
Appendix 5
Great Portland Estates
Appendix 6M
arke
t ris
k
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Cen
tral L
ondo
n re
al e
stat
e m
arke
t un
derp
erfo
rms
othe
r UK
pro
pert
y se
ctor
s
Red
uced
mar
gin
of o
utpe
rfor
man
ceTh
e ex
ecut
ion
of th
e G
roup
’s st
rate
gy c
over
ing
the
key
area
s of
inve
stm
ent,
deve
lopm
ent a
nd a
sset
man
agem
ent
is a
djus
ted
and
upda
ted
thro
ugho
ut th
e ye
ar, in
form
ed b
y re
gula
r res
earc
h in
to th
e ec
onom
y, th
e in
vest
men
t and
oc
cupa
tiona
l mar
kets
.
The
Gro
up’s
stra
tegi
c pr
iorit
ies
and
trans
actio
ns a
re
cons
ider
ed in
ligh
t of r
egul
ar re
view
of d
ashb
oard
le
ad in
dica
tors
and
ope
ratio
nal p
aram
eter
s.
The
Gro
up a
ims
to m
aint
ain
low
fina
ncia
l lev
erag
e th
roug
hout
the
prop
erty
cyc
le.
The
cent
ral L
ondo
n re
al e
stat
e m
arke
t has
co
nsid
erab
ly o
utpe
rfor
med
the
wid
er U
K m
arke
t du
ring
the
year
end
ed 3
1 M
arch
201
4, d
emon
stra
ted
by IP
D’s
cent
ral L
ondo
n TP
R e
xcee
ding
IPD
’s un
iver
se
by 2
.5 p
erce
ntag
e po
ints
on
an a
bsol
ute
basi
s an
d th
e ou
tlook
con
tinue
s to
be
favo
urab
le.
Econ
omic
reco
very
fa
lters
Wor
se th
an e
xpec
ted
perf
orm
ance
of
the
busi
ness
Reg
ular
eco
nom
ic u
pdat
es a
re re
ceiv
ed a
nd s
cena
rio
plan
ning
is u
nder
take
n fo
r diff
eren
t eco
nom
ic c
ycle
s.
69.3
% o
f inc
ome
from
com
mitt
ed d
evel
opm
ents
al
read
y se
cure
d.
The
Gro
up a
ims
to m
aint
ain
low
fina
ncia
l lev
erag
e th
roug
hout
the
prop
erty
cyc
le.
Ove
r the
last
12
mon
ths,
the
UK
eco
nom
y ha
s su
bsta
ntia
lly im
prov
ed, w
ith th
e fo
cus
shift
ing
from
th
e ris
k of
an
impe
ndin
g Eu
rozo
ne c
risis
to e
cono
mic
gr
owth
and
the
outlo
ok fo
r int
eres
t rat
es.
Inve
stm
ent m
anag
emen
t
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Diffi
culty
in
sour
cing
inve
stm
ent
oppo
rtun
ities
at
attra
ctiv
e pr
ices
, poo
r in
vest
men
t dec
isio
ns
and
mis
-tim
ed
recy
clin
g of
cap
ital
Not
suf
ficie
ntly
ca
pita
lisin
g on
mar
ket
inve
stm
ent c
ondi
tions
The
Gro
up h
as d
edic
ated
reso
urce
s w
hose
rem
it is
to
con
stan
tly re
sear
ch e
ach
of th
e su
b-m
arke
ts w
ithin
ce
ntra
l Lon
don
seek
ing
the
right
bal
ance
of i
nves
tmen
t an
d de
velo
pmen
t opp
ortu
nitie
s su
itabl
e fo
r cur
rent
and
an
ticip
ated
mar
ket c
ondi
tions
.
Reg
ular
revi
ew o
f pro
pert
y cy
cle
by re
fere
nce
to d
ashb
oard
of
lead
indi
cato
rs.
Det
aile
d du
e di
ligen
ce is
und
erta
ken
on a
ll ac
quis
ition
s pr
ior t
o pu
rcha
se to
ens
ure
appr
opria
te re
turn
s.
Bus
ines
s pl
ans
are
prod
uced
on
an in
divi
dual
ass
et b
asis
to
ens
ure
the
appr
opria
te ro
tatio
n of
thos
e bu
ildin
gs w
ith
limite
d re
lativ
e po
tent
ial p
erfo
rman
ce.
Reg
ular
revi
ew o
f the
pro
spec
tive
perf
orm
ance
of i
ndiv
idua
l as
sets
and
thei
r bus
ines
s pl
ans
with
join
t ven
ture
par
tner
s.
The
Gro
up h
as c
ontin
ued
to in
vest
and
recy
cle
capi
tal
agai
nst a
bac
kdro
p of
mod
erat
e ca
pita
l val
ue g
row
th in
ce
ntra
l Lon
don
and
a su
rfei
t of b
uyer
s to
sel
lers
in th
e in
vest
men
t mar
ket.
Lack
of a
vaila
ble
stoc
k m
itiga
ted
by d
epth
of
oppo
rtun
ity in
cur
rent
por
tfol
io.
Dur
ing
the
year
one
acq
uisi
tion
of £
90 m
illion
was
m
ade
toge
ther
with
dis
posa
ls o
f £26
9 m
illion
at
prem
ium
to b
ook
valu
e of
9.5
%.
Inap
prop
riate
ass
et
conc
entra
tion,
mix
an
d lo
t size
Red
uced
liqu
idity
an
d re
lativ
e pr
oper
ty
perf
orm
ance
Reg
ular
revi
ew o
f por
tfol
io m
ix a
nd a
sset
con
cent
ratio
n.
Adj
ustm
ent o
f the
por
tfol
io a
s ap
prop
riate
thro
ugh
unde
rtak
ing
acqu
isiti
ons
and/
or d
evel
opm
ent p
roje
cts
in jo
int v
entu
re o
r for
war
d fu
ndin
g.
The
Gro
up c
ontin
ues
to m
onito
r its
por
tfol
io m
ix a
nd
asse
t con
cent
ratio
n ris
k. O
ur la
rges
t ass
et is
onl
y 7.
7%
of th
e to
tal p
ortf
olio
and
23
.9%
of t
he p
ortf
olio
is h
eld
in jo
int v
entu
res.
Great Portland Estates
Appendix 6A
sset
man
agem
ent
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Poo
r man
agem
ent
of v
oids
, ren
tal
mis
-pric
ing,
low
te
nant
rete
ntio
n,
sub-
optim
al re
nt
revi
ews,
tena
nt fa
ilure
s an
d in
appr
opria
te
refu
rbis
hmen
ts
Failu
re to
max
imis
e in
com
e fr
om
inve
stm
ent p
rope
rtie
s
The
Gro
up’s
in-h
ouse
ass
et m
anag
emen
t and
leas
ing
team
s pr
oact
ivel
y m
anag
e te
nant
s to
ens
ure
chan
ging
ne
eds
are
met
with
a fo
cus
on re
tain
ing
inco
me
in li
ght o
f va
cant
pos
sess
ion
requ
irem
ents
for r
efur
bish
men
ts a
nd
deve
lopm
ents
and
liai
se re
gula
rly w
ith e
xter
nal a
dvis
ers
to e
nsur
e co
rrec
t pric
ing
of le
ase
trans
actio
ns.
The
Gro
up h
as a
div
erse
tena
nt b
ase
with
its
ten
larg
est
tena
nts
repr
esen
ting
only
31.
1% o
f ren
t rol
l.
Tena
nts’
cove
nant
s ar
e an
alys
ed a
nd s
ecur
ity s
ough
t as
appr
opria
te a
s pa
rt o
f the
leas
e ap
prov
al p
roce
ss. R
egul
ar
cont
act w
ith te
nant
s is
mai
ntai
ned
to id
entif
y if
tena
nts
are
suff
erin
g fin
anci
al d
ifficu
lties
and
thei
r pro
pose
d ac
tions
.
The
Gro
up c
ontin
ues
to m
onito
r a lo
w v
oid
rate
whi
ch
was
3.7
% a
t 31
Mar
ch 2
014.
Ten
ant d
elin
quen
cies
w
ere
0.7%
of t
he re
nt ro
ll for
the
year
to 3
1 M
arch
201
4.
The
Gro
up c
ontin
ues
to a
ctiv
ely
man
age
the
port
folio
to
max
imis
e oc
cupa
ncy
and
driv
e re
ntal
gro
wth
.
Dur
ing
the
year
we
secu
red
£25
.9 m
illion
of n
ew re
ntal
in
com
e in
clud
ing
£12.
1 m
illion
pre
-lets
.
69.3
% o
f inc
ome
from
com
mitt
ed d
evel
opm
ents
al
read
y se
cure
d.
Great Portland Estates
Appendix 6D
evel
opm
ent m
anag
emen
t
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Poo
r exe
cutio
n of
dev
elop
men
t pr
ogra
mm
e th
roug
h:
– in
corr
ect r
eadi
ng o
f th
e pr
oper
ty c
ycle
;
– in
appr
opria
te
loca
tion;
– fa
ilure
to g
ain
viab
le
plan
ning
con
sent
s;
– fa
ilure
to re
ach
agre
emen
t with
ad
join
ing
owne
rs o
n ac
cept
able
term
s;
– le
vel o
f spe
cula
tive
deve
lopm
ent;
– co
nstru
ctio
n co
st
infla
tion;
– co
ntra
ctor
ava
ilabi
lity
and
inso
lven
cy ri
sk;
– a
build
ing
bein
g in
appr
opria
te to
te
nant
dem
and;
– po
or d
eman
d fo
r res
iden
tial
apar
tmen
ts
– qu
ality
and
be
nchm
arks
of t
he
com
plet
ed b
uild
ings
;
– co
nstru
ctio
n an
d pr
ocur
emen
t del
ays;
– in
effe
ctiv
e m
arke
ting
to
pros
pect
ive
tena
nts;
an
d
– po
or d
evel
opm
ent
man
agem
ent.
Poo
r dev
elop
men
t re
turn
sS
ee M
arke
t ris
k ab
ove.
Prio
r to
com
mitt
ing
to a
dev
elop
men
t the
Gro
up c
ondu
cts
a de
taile
d Fi
nanc
ial a
nd O
pera
tiona
l app
rais
al p
roce
ss w
hich
ev
alua
tes
the
expe
cted
retu
rns
from
a d
evel
opm
ent i
n lig
ht o
f lik
ely
risks
. Dur
ing
the
cour
se o
f a d
evel
opm
ent,
the
actu
al c
osts
and
est
imat
ed re
turn
s ar
e re
gula
rly m
onito
red
to s
ignp
ost p
rom
pt d
ecis
ions
on
proj
ect m
anag
emen
t, le
asin
g an
d ow
ners
hip.
Ear
ly e
ngag
emen
t with
adj
oini
ng o
wne
rs.
69.3
% o
f inc
ome
from
com
mitt
ed d
evel
opm
ents
alre
ady
secu
red.
In-h
ouse
Pro
ject
Man
agem
ent t
eam
util
ise
appr
opria
te
proc
urem
ent m
etho
ds to
opt
imis
e th
e ba
lanc
e of
pric
e ce
rtai
nty
and
risk.
Due
dilig
ence
is u
nder
take
n of
the
finan
cial
sta
bilit
y of
de
mol
ition
, mai
n co
ntra
ctor
s an
d m
ater
ial s
ub-c
ontra
ctor
s pr
ior t
o aw
ardi
ng o
f con
tract
s.
Wor
king
with
age
nts,
pot
entia
l occ
upie
rs’ a
nd p
urch
aser
s’
need
s an
d as
pira
tions
are
iden
tified
dur
ing
the
plan
ning
ap
plic
atio
n an
d de
sign
sta
ges.
In-h
ouse
Lea
sing
/Mar
ketin
g te
am li
aise
with
ext
erna
l ad
vise
rs o
n a
regu
lar b
asis
and
mar
ketin
g tim
etab
les
desi
gned
in a
ccor
danc
e w
ith le
asin
g/m
arke
ting
obje
ctiv
es.
All
our m
ajor
dev
elop
men
ts a
re s
ubje
ct to
BR
EE
AM
ratin
gs
with
a ta
rget
to a
chie
ve a
ratin
g of
‘Ver
y G
ood’
on
maj
or
refu
rbis
hmen
ts a
nd ‘E
xcel
lent
’ on
new
bui
ld p
rope
rtie
s.
Pro
-act
ive
liais
on w
ith e
xist
ing
tena
nts
befo
re a
nd d
urin
g th
e de
velo
pmen
t pro
cess
.
Sel
ectio
n of
con
tract
ors
and
supp
liers
bas
ed o
n tra
ck
reco
rd o
f del
iver
y an
d cr
edit
wor
thin
ess.
In-h
ouse
Pro
ject
Man
agem
ent t
eam
clo
sely
mon
itor
cons
truct
ion
and
man
age
cont
ract
ors
to e
nsur
e ad
equa
te
reso
urci
ng to
mee
t pro
gram
me.
Reg
ular
revi
ew o
f the
pro
spec
tive
perf
orm
ance
of i
ndiv
idua
l as
sets
and
thei
r bus
ines
s pl
ans
with
join
t ven
ture
par
tner
s.
Pos
t-co
mpl
etio
n re
view
s un
dert
aken
on
all d
evel
opm
ents
to
iden
tify
best
pra
ctic
e an
d ar
eas
for i
mpr
ovem
ent.
The
Gro
up’s
deve
lopm
ent p
rogr
amm
e of
hig
h qu
ality
co
re c
entra
l Lon
don
proj
ects
con
tinue
s to
att
ract
qu
ality
tena
nts
with
£12
.1 m
illion
of p
re-le
ts s
ecur
ed
sinc
e 1
Apr
il 20
13.
Great Portland Estates
Appendix 6D
evel
opm
ent m
anag
emen
t
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
An
inap
prop
riate
le
vel o
f dev
elop
men
t un
dert
aken
as
a pe
rcen
tage
of t
he
port
folio
Und
erpe
rfor
man
ce
agai
nst K
PIs
Reg
ular
revi
ew o
f the
leve
l of d
evel
opm
ent u
nder
take
n as
a p
erce
ntag
e of
por
tfol
io, in
clud
ing
the
impa
ct o
n th
e G
roup
’s in
com
e pr
ofile
and
fina
ncia
l gea
ring,
am
ongs
t oth
er
met
rics.
Dev
elop
men
ts o
nly
com
mitt
ed w
hen
pre-
lets
obt
aine
d an
d/or
mar
ket s
uppl
y co
nsid
ered
to b
e su
ffici
ently
con
stra
ined
.
With
fore
cast
ed s
uppl
y of
cen
tral L
ondo
n of
fice
spac
e ex
pect
ed to
be
scar
ce in
the
near
to m
ediu
m te
rm,
the
Gro
up h
as c
ontin
ued
its n
ear-t
erm
dev
elop
men
t pr
ogra
mm
e to
cap
italis
e on
the
expe
cted
resu
lting
re
ntal
gro
wth
giv
en im
prov
ing
tena
nt d
eman
d.
Fina
ncia
l ris
ks
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Lim
ited
avai
labi
lity
of fu
rthe
r cap
ital
Gro
wth
of b
usin
ess
is c
onst
rain
ed o
r un
able
to e
xecu
te
busi
ness
pla
ns
Cas
h flo
w a
nd fu
ndin
g ne
eds
are
regu
larly
mon
itore
d to
en
sure
suf
ficie
nt u
ndra
wn
faci
litie
s ar
e in
pla
ce.
Fund
ing
mat
uriti
es a
re m
anag
ed a
cros
s th
e sh
ort,
med
ium
an
d lo
ng te
rm.
The
Gro
up’s
fund
ing
mea
sure
s ar
e di
vers
ified
acr
oss
a ra
nge
of b
ank
and
bond
mar
kets
. Stri
ct c
ount
erpa
rty
limits
ar
e op
erat
ed o
n de
posi
ts.
The
Gro
up h
as c
ontin
ued
to d
iver
sify
the
sour
ce a
nd
exte
nd th
e m
atur
ity la
dder
of i
ts d
ebt fi
nanc
ing.
In S
epte
mbe
r 201
3, t
he C
ompa
ny ra
ised
£15
0 m
illion
th
roug
h a
conv
ertib
le b
ond
at 1
% c
oupo
n.
Cas
h an
d un
draw
n cr
edit
faci
litie
s ar
e £
508
milli
on.
Incr
ease
d in
tere
st
rate
s or
a fa
ll in
ca
pita
l val
ues
Adv
erse
mar
ket
mov
emen
ts n
egat
ivel
y im
pact
on
debt
co
vena
nts
Reg
ular
revi
ew o
f cur
rent
and
fore
cast
deb
t lev
els
and
finan
cing
ratio
s.
Form
al p
olic
y to
man
age
inte
rest
rate
exp
osur
e by
hav
ing
a hi
gh p
ropo
rtio
n of
deb
t with
fixe
d or
cap
ped
inte
rest
rate
s th
roug
h de
rivat
ives
.
Sig
nific
ant h
eadr
oom
ove
r all
finan
cial
cov
enan
ts a
t 31
Mar
ch 2
014.
We
estim
ate
that
val
ues
coul
d fa
ll by
48%
from
thei
r 31
Mar
ch 2
014
leve
ls b
efor
e gr
oup
debt
cov
enan
ts
coul
d be
end
ange
red.
Cen
tral L
ondo
n pr
oper
ty v
alue
s ar
e ex
pect
ed to
be
nefit
from
rent
al v
alue
gro
wth
and
con
tinue
d st
rong
in
vest
men
t dem
and.
Sho
rt te
rm in
tere
st ra
tes
have
re
mai
ned
low
ove
r the
last
12
mon
ths,
alth
ough
ther
e is
a g
row
ing
expe
ctat
ion
of in
crea
ses
in th
e m
ediu
m
term
as
the
econ
omy
grow
s.
Inap
prop
riate
cap
ital
stru
ctur
eS
ub-o
ptim
al N
AV
per s
hare
gro
wth
Reg
ular
revi
ew o
f cur
rent
and
fore
cast
cap
ital r
equi
rem
ents
an
d ge
arin
g le
vels
and
fina
ncin
g ra
tios.
The
Gro
up’s
exis
ting
capi
tal s
truct
ure
is w
ell p
lace
d to
take
adv
anta
ge o
f opp
ortu
nitie
s as
they
aris
e an
d to
del
iver
our
nea
r-ter
m d
evel
opm
ent p
rogr
amm
e.
Great Portland Estates
Appendix 6P
eopl
e
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Inco
rrec
t lev
el a
nd m
ix
rete
ntio
n of
peo
ple
to
exec
ute
our b
usin
ess
plan
. Stra
tegi
c pr
iorit
ies
not a
chie
ved
Inab
ility
to a
ttra
ct,
deve
lop,
mot
ivat
e an
d re
tain
tale
nted
em
ploy
ees
Reg
ular
revi
ew is
und
erta
ken
of th
e G
roup
’s re
sour
ce
requ
irem
ents
and
suc
cess
ion
plan
ning
.
The
Com
pany
has
a re
mun
erat
ion
syst
em th
at is
stro
ngly
lin
ked
to p
erfo
rman
ce a
nd a
form
al s
ix-m
onth
ly a
ppra
isal
sy
stem
to p
rovi
de re
gula
r ass
essm
ent o
f ind
ivid
ual
perf
orm
ance
and
iden
tifica
tion
of tr
aini
ng n
eeds
.
Ben
chm
arki
ng o
f rem
uner
atio
n pa
ckag
es o
f all
empl
oyee
s is
und
erta
ken
annu
ally
.
An
addi
tiona
l Pro
ject
Man
ager
and
Dev
elop
men
t M
anag
er w
ere
recr
uite
d in
201
4.
Staf
f ret
entio
n is
hig
h at
95%
aga
inst
a b
ackd
rop
of a
n in
crea
sing
ly c
ompe
titiv
e em
ploy
men
t mar
ket.
Oth
er s
enio
r man
ager
s re
mai
n un
chan
ged.
Reg
ulat
ory
Ris
kIm
pact
Miti
gatio
nIm
pact
cha
nge
from
last
yea
r Li
kelih
ood
chan
ge
from
last
yea
rC
omm
enta
ry
Adv
erse
regu
lato
ry
risk
incl
udin
g ta
x, p
lann
ing,
en
viro
nmen
tal
legi
slat
ion
and
EU
dire
ctiv
es in
crea
ses
cost
bas
e
Red
uces
flex
ibilit
y an
d m
ay in
fluen
ce
pote
ntia
l inv
esto
r and
oc
cupi
er in
tere
st in
bu
ildin
gs
Sen
ior G
roup
repr
esen
tativ
es s
pend
con
side
rabl
e tim
e,
usin
g ex
perie
nced
adv
iser
s as
app
ropr
iate
, to
ensu
re
com
plia
nce
with
cur
rent
and
pot
entia
l fut
ure
regu
latio
ns.
Lobb
ying
pro
pert
y in
dust
ry m
atte
rs is
und
erta
ken
by a
ctiv
e pa
rtic
ipat
ion
of th
e E
xecu
tive
Dire
ctor
s th
roug
h re
leva
nt
indu
stry
bod
ies.
Env
ironm
enta
l Pol
icy
Com
mitt
ee m
eets
at l
east
qua
rter
ly
to c
onsi
der s
trate
gy in
resp
ect o
f env
ironm
enta
l leg
isla
tion.
Dur
ing
2013
new
bui
ldin
g re
gula
tions
cam
e in
to e
ffec
t re
quiri
ng fu
rthe
r red
uctio
ns o
n ca
rbon
em
issi
ons
whi
ch
will
impa
ct o
n B
RE
EA
M re
quire
men
ts a
nd p
lann
ing.
Th
e ris
k to
the
Gro
up fr
om in
crea
sing
regu
latio
n in
clud
ing
cert
ain
EU d
irect
ives
hav
ing
unfo
rese
en
cons
eque
nces
rem
ains
. How
ever
, pos
t pub
licat
ion
of
FCA
rule
s in
Jun
e 20
13, t
he G
roup
was
det
erm
ined
to
be
outs
ide
scop
e of
AIF
MD
.
Hea
lth a
nd S
afet
y in
cide
nts
Loss
of o
r inj
ury
to e
mpl
oyee
s,
cont
ract
ors
or te
nant
s
Res
ulta
nt re
puta
tiona
l da
mag
eTh
e G
roup
has
ded
icat
ed H
ealth
and
Saf
ety
pers
onne
l to
over
see
the
Gro
up’s
man
agem
ent s
yste
ms
whi
ch in
clud
e re
gula
r ris
k as
sess
men
ts a
nd a
nnua
l aud
its to
pro
activ
ely
addr
ess
key
Hea
lth a
nd S
afet
y ar
eas
incl
udin
g em
ploy
ee,
cont
ract
or a
nd te
nant
saf
ety.
On
deve
lopm
ents
, the
Gro
up o
pera
tes
a pr
e-qu
alifi
catio
n pr
oces
s to
ens
ure
sele
ctio
n of
com
pete
nt c
onsu
ltant
s an
d co
ntra
ctor
s w
hich
incl
udes
a H
ealth
and
Saf
ety
asse
ssm
ent.
Con
tract
ors’
resp
onse
s to
acc
iden
ts a
nd n
ear m
isse
s ar
e ac
tivel
y m
onito
red
and
follo
wed
-up
by o
ur P
roje
ct
Man
ager
s an
d H
ead
of S
usta
inab
ility.
The
Gro
up h
ad n
o re
port
able
acc
iden
ts d
urin
g th
e ye
ar.
Ther
e w
ere
no o
ther
inci
dent
s ac
ross
the
Gro
up’s
in
vest
men
t or d
evel
opm
ent p
ortf
olio
.