Half-year Report- Part 3

RNS Number : 2797P

British Land Co PLC

16 November 2016

 

SUPPLEMENTARY TABLES

(Data includes Group's share of Joint Ventures and Funds)

From 1 April 2016			Price (Gross)	Price       (BL Share)	Annual Passing Rent
Acquisitions	Sector	Region	£m	£m	£m2
Completed
New George Street Estate, Plymouth	Retail	South	64	64	5
Hercules Unit Trust unit purchase1	Retail	Various	18	18	1
Dock Offices	Canada Water	London	8	8	-
Total			90	90	6
1 Units purchased over the course of the period. £18m represents purchased GAV
2 BL share of annualised rent topped up for rent frees
From 1 April 2016			Price (Gross)	Price        (BL Share)	Annual Passing Rent
Disposals	Sector	Region	£m	£m	£m1
Completed
Debenhams, Oxford Street	Retail	London	400	400	13
Superstores	Retail	Various	147	79	3
Dumfries Cuckoo Bridge	Retail	Scotland	20	20	1
The Hempel Collection	Residential	London	5	5	-
Aldgate Place	Residential	London	13	6	-
Exchanged
Portfolio of Retail assets (York Clifton Moor,  Debenhams Manchester, Wakefield Westgate)	Retail	North	191	191	12
The Hempel Collection	Residential	London	8	8	-
Aldgate Place	Residential	London	1	1	-
Total			785	710	29
1 BL share of annualised rent topped up for rent frees

Gross Rental Income1,2
Accounting Basis £m	6 months to 30 September 2016			Annualised as at 30 September 2016
	Group	JVs & Funds3	Total	Group		JVs & Funds3		Total
Regional	29	43	72	58		84		142
Local	49	13	62	97		26		123
Multi-lets	78	56	134	155		110		265
Department Stores and Leisure	26	-	26	43		-		43
Superstores	5	16	21	10		31		41
Solus/Other	10	-	10	20		-		20
Retail and Leisure	119	72	191	228		141		369
West End	66	-	66	127		-		127
City	2	60	62	4		120		124
Offices	68	60	128	131		120		251
Residential4	2	-	2	3		-		3
Offices and Residential	70	60	130	134		120		254
Canada Water	5	-	5	8		-		8
Total	194	132	326	370		261		631
Table with previous Retail classification provided on Company website at www.britishland.com/results
1 Excluding developments under construction and assets held for development
2 Gross rental income will differ from annualised rents due to accounting adjustments for fixed and minimum contracted rental uplifts and lease incentives
3 Group's share of properties in joint ventures and funds including HUT at share
4 Stand-alone residential

Major Holdings
At 30 September 2016	BL Share		Sq ft		Rent		Occupancy	Lease
(excl. developments under construction)	%		'000		£m pa1		rate %2,4	length yrs3,4
Broadgate	50		4,721		225		98.7	8.0
Regent's Place	100		1,590		80		99.1	7.1
Paddington Central	100		806		34		99.9	7.3
Meadowhall, Sheffield	50		1,500		82		98.3	6.6
The Leadenhall Building	50		603		40		99.9	10.8
Sainsbury's Superstores5	52		2,259		49		100.0	10.8
Drake Circus, Plymouth6	100		1,132		21		98.0	5.1
Teesside, Stockton	100		523		17		98.5	6.1
Glasgow Fort	77		510		20		97.4	6.4
Ealing Broadway	100		423		13		93.1	6.1
1 Annualised EPRA contracted rent including 100% of Joint Ventures and Funds
2 Includes accommodation under offer or subject to asset management at 30 September 2016
3 Weighted average to first break
4 Excludes committed developments (100 Liverpool Street)
5 Comprises stand-alone stores
6 Includes New George Street Estate, Plymouth acquired during the period

  Portfolio Valuation

At 30 September 2016	Group	JVs & Funds1	Total1	H1 Change²
	£m	£m	£m	%	£m
Regional	1,087	1,791	2,878	(2.8)	(83)
Local	1,796	471	2,267	(4.8)	(116)
Multi-lets	2,883	2,262	5,145	(3.7)	(199)
Department Stores and Leisure	638	1	639	3.2	32
Superstores	139	542	681	(3.0)	(24)
Solus/Other	346	-	346	3.7	13
Retail and Leisure	4,006	2,805	6,811	(2.4)	(178)
West End	3,868	-	3,868	(2.4)	(95)
City	103	2,653	2,756	(4.9)	(143)
Offices	3,971	2,653	6,624	(3.5)	(238)
Residential3	173	22	195	-	-
Offices and Residential	4,144	2,675	6,819	(3.3)	(238)
Canada Water	289	-	289	(2.1)	(6)
Total	8,439	5,480	13,919	(2.8)	(422)
Standing Investments	7,810	5,287	13,097	(2.8)	(395)
Developments	629	193	822	(3.0)	(27)
1 Group's share of properties in joint ventures and funds including HUT at ownership share 2 Valuation movement during the period (after taking account of capex) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales 3 Stand-alone residential

  Portfolio Valuation - Previous Classification Basis

At 30 September 2016	Group	JVs & Funds1	Total1	H1 Change²
	£m	£m	£m	%	£m
Shopping parks	2,104	1,137	3,241	(4.1)	(139)
Shopping centres	1,125	1,121	2,246	(2.1)	(47)
Superstores	139	542	681	(3.0)	(24)
Department stores	241	1	242	5.6	34
Leisure	397	4	401	(0.5)	(2)
Retail and Leisure	4,006	2,805	6,811	(2.4)	(178)
1 Group's share of properties in joint ventures and funds including HUT at ownership share 2 Valuation movement during the period (after taking account of capex) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales

Portfolio Weighting
At 30 September	2015	2016	2016	2016
		(current)	(current)	(pro-forma1)
	%	%	£m	%
Regional Lifestyle	19.5	20.7	2,878	19.5
Local Lifestyle	16.3	16.3	2,267	16.1
Multi-lets	35.8	37.0	5,145	35.6
Department Stores and Leisure	7.0	4.6	639	4.4
Superstores	6.0	4.9	681	4.8
Solus/Other	2.6	2.5	346	2.3
Retail and Leisure	51.4	49.0	6,811	47.1
West End	25.5	27.8	3,868	28.4
City	19.6	19.8	2,756	21.1
Offices	45.1	47.6	6,624	49.5
Residential2	1.5	1.4	195	1.5
Offices and Residential	46.6	49.0	6,819	51.0
Canada Water	2.0	2.0	289	1.9
Total	100.0	100.0	13,919	100.0
London Weighting	57%	58%	8,508	58%
Table with previous/IPD classification provided on Company website at www.britishland.com/results
1 Pro forma for developments under construction and committed developments at estimated end value (as determined by the Group's external valuers) and post period end transactions
2 Stand-alone residential

Total Property Return (as calculated by IPD)
6 months to 30 September 2016	Retail		Offices		Total
%	British Land	IPD	British Land	IPD	British Land	IPD
Capital Return	(2.4)	(3.0)	(3.4)	(2.9)	(2.8)	(2.1)
- ERV Growth	0.9	0.5	0.1	1.0	0.5	0.8
- Yield Expansion1	18 bps	20 bps	21 bps	21 bps	19 bps	15 bps
Income Return	2.6	2.5	1.7	1.8	2.1	2.3
Total Property Return	0.1	(0.5)	(1.8)	(1.1)	(0.8)	0.2
1 Net equivalent yield movement

Portfolio Yields and ERV Movements 1,2
At 30 September 2016		EPRA net initial yield %	EPRA topped up net initial yield %3		Overall topped up net initial yield %4	Net equivalent yield %	Net equivalent yield expansion bps5	Net reversionary yield %		ERV Growth %5,6
Regional		4.5	4.7		4.7	5.0	16	5.0		1.3
Local		5.1	5.3		5.4	5.5	29	5.5		1.3
Multi-lets		4.8	4.9		5.0	5.2	22	5.2		1.3
Department Stores and Leisure		6.0	6.0		7.5	6.1	4	4.5		0.4
Superstores		5.5	5.5		5.5	5.4	8	5.3		(3.0)
Solus/Other		5.7	5.7		5.7	5.3	9	4.9		4.8
Retail and Leisure		5.0	5.1		5.3	5.3	18	5.1		0.9
West End		3.8	4.0		4.1	4.5	16	4.8		0.3
City		3.3	4.6		4.6	4.6	27	5.3		(0.2)
Offices		3.6	4.2		4.3	4.6	21	5.0		0.1
Canada Water		2.7	2.7		2.8	3.3	4	3.4		0.9
Total		4.3	4.7		4.8	4.9	19	5.0		0.5
1 Including notional purchaser's costs 2 Excluding developments under construction, committed developments, assets held for development and residential assets 3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth 4 Including fixed/minimum uplifts (excluded from EPRA definition) 5 6 months to 30 September 2016 6 As calculated by IPD

Portfolio Yields and ERV Movements1,2 - Previous Classification Basis
At 30 September 2016	EPRA net initial yield %	EPRA topped up net initial yield %3		Overall topped up net initial yield %4		Net equivalent yield %	Net equivalent yield expansion bps5			Net reversionary yield %			ERV Growth %5,6
Shopping Parks	5.0	5.1		5.2		5.3	26			5.3			1.6
Shopping Centres	4.6	4.8		4.8		5.0	14			5.1			1.3
Superstores	5.5	5.5		5.5		5.4	8			5.3			(3.0)
Department Stores	5.3	5.3		7.3		5.5	3			4.1			0.4
Leisure	6.4	6.4		7.7		6.5	4			4.8			0.4
Retail and Leisure	5.0	5.1		5.3		5.3	18			5.1			0.9
1 Including notional purchaser's costs 2 Excluding developments under construction, committed developments, assets held for development and residential assets 3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth 4 Including fixed/minimum uplifts (excluded from EPRA definition) 5 6 months to 30 September 2016 6 As calculated by IPD
Lease Length and Occupancy1
At 30 September 2016			Average lease length yrs						Occupancy rate %
			To expiry		To break				Occupancy		Occupancy (underlying) 2
Regional			8.0		6.9				96.6		98.1
Local			8.4		7.4				97.6		98.0
Multi-lets			8.2		7.2				97.1		98.1
Department Stores and Leisure			18.3		18.2				99.9		99.9
Superstores			12.0		11.6				100.0		100.0
Solus/Other			13.0		12.8				100.0		100.0
Retail and Leisure			10.0		9.2				97.8		98.5
West End			9.1		7.2				95.5		96.7
City			10.1		8.5				98.2		98.5
Offices			9.6		7.8				96.8		97.5
Canada Water			7.1		6.9				96.9		98.1
Total			9.8		8.5				97.3		98.1
Table with previous or IPD classification provided on Company website at www.britishland.com/results
1 Excluding developments under construction, committed developments, assets held for development and residential assets
2 Including accommodation under offer or subject to asset management and owner-occupied space

Annualised Rent and Estimated Rental Value (ERV)1
At 30 September 2016	Annualised rent (valuation basis) £m2			ERV £m	Average rent £psf
	Group	JVs & Funds	Total	Total	Contracted3		ERV
Regional	60	85	145	158	31.2		33.3
Local	98	28	126	135	24.3		25.2
Multi-lets	158	113	271	293	27.6		29.0
Department Stores and Leisure	41	-	41	32	13.8		10.6
Superstores	8	32	40	38	20.7		19.7
Solus/Other	20	-	20	17	19.8		17.0
Retail and Leisure	227	145	372	380	23.7		23.7
West End	137	-	137	171	53.0		61.7
City	4	88	92	149	51.0		60.2
Offices	141	88	229	320	52.4		60.9
Residential4	4	-	4	4
Offices and Residential	145	88	233	324
Canada Water	8	-	8	10	18.5		21.7
Total	380	233	613	714	29.7		31.9
Table with previous classification provided on Company website at www.britishland.com/results
1 Excluding developments under construction, committed developments (100 Liverpool Street with annualised rents £9m and ERV £13m)  and assets held for development
2 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group's external valuers), less any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift
3 Annualised rent, plus rent subject to rent free
4 Stand-alone residential

Rent subject to Open Market Rent Review1
For period to 31 March	2017	2018	2019	2020	2021	2017-19	2017-21
At 30 September 2016	£m	£m	£m	£m	£m	£m	£m
Regional	6	11	17	10	18	34	62
Local	4	25	21	12	10	50	72
Multi-lets	10	36	38	22	28	84	134
Department Stores and Leisure	-	-	-	-	-	-	-
Superstores	1	4	8	11	13	13	37
Solus/Other	-	-	-	-	-	-	-
Retail and Leisure	11	40	46	33	41	97	171
West End	4	22	20	15	9	46	70
City	-	4	14	14	16	18	48
Offices	4	26	34	29	25	64	118
Canada Water	-	2	-	-	-	2	2
Total	15	68	80	62	66	163	291
Potential uplift at current ERV2	-	2	4	3	1	6	10
Table with previous classification provided on Company website at www.britishland.com/results
1 Excluding developments under construction, committed developments and assets held for development
2 As determined by the Group's valuers, excluding near term developments

Rent Subject to Lease Break or Expiry1
For period to 31 March	2017	2018	2019	2020	2021	2017-19	2017-21
At 30 September 2016	£m	£m	£m	£m	£m	£m	£m
Regional	6	15	9	13	10	30	53
Local	6	5	8	11	9	19	39
Multi-lets	12	20	17	24	19	49	92
Department Stores and Leisure	-	1	-	-	-	1	1
Superstores	-	-	-	-	-	-	-
Solus/Other	-	-	2	-	-	2	2
Retail and Leisure	12	21	19	24	19	52	95
West End	6	11	10	4	18	27	49
City	10	-	18	11	8	28	47
Offices	16	11	28	15	26	55	96
Canada Water	1	-	-	-	1	1	2
Total	29	32	47	39	46	108	193
% of contracted rent	4.3%	4.7%	6.9%	6.0%	6.7%	15.9%	28.6%
Potential uplift at current ERV (excl. Near and Medium term developments)	2	2	6	1	2	10	13
Table with previous classification provided on Company website at www.britishland.com/results
1 Excluding developments under construction, committed developments and assets held for development

Superstores
	Stand-alone Superstores1					In Multi-let assets 2					Total Exposure1,2,3
Store Size '000 SQ FT	No of Stores	Valuation (BL share) £m		Capital Value psf	WALL to FB yrs	No of Stores	Valuation (BL share) £m		Capital Value psf	WALL to FB yrs	No of Stores	Valuation (BL share) £m	Capital Value psf	WALL to FB yrs
>100	8	171		256	11.9	5	339		423	12.5	13	510	347	12.3
75-100	11	197		398	12.1	3	61		276	15.8	14	258	361	13.0
50-75	16	248		353	12.1	1	12		189	10.6	17	260	339	12.0
25-50	8	50		220	7.8	2	27		502	13.0	10	77	274	9.4
0-25	2	6		145	8.6	18	79		426	10.6	20	85	373	10.4
September 2016	45	672		315	11.6	29	518		391	12.6	74	1,190	344	12.1
March 2016	47	763		383	13.9	28	536		482	12.7	75	1,299	419	13.5
Geographical Spread					Gross Rent (BL Share)						Lease Structure
London and South				54%	Tesco					£38m	RPI and Fixed			9%
Rest of UK				46%	Sainsburys					£26m	OMRR			91%
					Other					£5m
1 Excludes £9m non-foodstore occupiers in superstore led assets
2 Excludes non food-format stores e.g. Asda Living
3 Excludes £93m of investments held for trading comprising freehold reversions in a pool of Sainsbury's Superstores

Occupiers Representing over 0.5% of Total Contracted Rent
At 30 September 2016	% of total rent			% of total rent
UBS AG1	5.8		Microsoft Co	0.9
Tesco plc	5.7		Vodafone	0.9
J Sainsbury plc	4.7		Aon Plc	0.9
Debenhams	3.8		SportsDirect	0.8
Kingfisher (B&Q)	2.6		Asda Group	0.8
Next plc	2.3		JPMorgan	0.8
HM Government	2.2		Deutsche Bank	0.7
Virgin Active	2.0		JD Sports	0.7
Facebook	1.7		Reed Smith	0.7
Wesfarmers (Homebase/Bunnings)	1.6		H&M	0.7
Spirit Group	1.6		Mothercare	0.7
M&S Plc	1.5		Mayer Brown	0.7
Alliance Boots	1.5		Lewis Trust (River Island)	0.6
Visa Inc	1.4		ICAP Plc	0.6
Dixons Carphone	1.4		Lend Lease	0.6
Dentsu Aegis	1.4		TGI Fridays	0.6
Arcadia Group	1.3		Pets at Home	0.6
Herbert Smith	1.2		Steinhoff	0.5
RBS	1.1		MS Amlin Plc	0.5
TJX Cos Inc (TK Maxx)	1.0		Credit Agricole	0.5
Gazprom	1.0		Henderson	0.5
New Look	0.9
1 Rent contracted on both 5 Broadgate and run off of 1-3 Finsbury Avenue and 100 Liverpool Street. 3.0% pro-forma for run off of UBS rent at 1-3 Finsbury Avenue/100 Liverpool Street.

 Recently Completed and Committed Developments

At 30 September 2016	Sector		BL Share		Sq ft	PC Calendar Year	Current Value			Cost to complete				ERV			Let & Under Offer		Resi Sales Exchanged & not completed
			%		'000		£m1			£m2				£m3			£m		£m4
Aldgate Place, Phase 1	Residential		50		221	Completed	7			9				-			n/a		-
Clarges Mayfair - Offices	Offices		100		51	Completed	120			9				5.5			2.0		n/a
Glasgow Fort Leisure Quarter	Retail		75		12	Completed	8			-				0.4			0.3		n/a
Total Completed in Period					284		135			18				5.9			2.3		-
4 Kingdom Street	Offices		100		147	Q2 2017	111			39				9.4			-		n/a
Clarges Mayfair - Retail and Residential	Residential		100		114	Q4 2017	322			74				0.8			-		259
The Hempel Phase 1	Residential		100		25	Q4 2016	16			1				n/a			n/a		13
The Hempel Phase 2	Residential		100		32	Q4 2016	55			6				n/a			n/a		14
100 Liverpool Street	Offices		50		520	Q4 2019	115			157				18.5			-		-
Total Under Construction and Committed					838		619			277				28.7			-		286
Retail Capex5										117
Data includes Group's share of properties in Joint Ventures and Funds (except area which is shown at 100%)
1 Excludes completed sales of £93m
2 From 1 October 2016. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
3 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)
4 At agreed sales price
5 Capex committed and underway within our investment portfolio relating to leasing and asset management
Near term Pipeline
At 30 September 2016		Sector		BL Share		Sq ft		Start On Site				Total Cost 1				Status
						'000						£m
1 Finsbury Avenue		Offices		50		281		2017				102				Consented
Speke (Leisure)		Retail		67		66		2017				18				Consented
Plymouth (Leisure)		Retail		100		102		2018				35				Consented
Total Near term						449						155
Retail Capex2												100
1 Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
2 Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement

Medium term Pipeline
At 30 September 2016	Sector					BL Share			Sq ft				Status
									'000
2-3 Finsbury Avenue	Offices					50			560				Resolution to grant
135 Bishopsgate	Offices					50			340				Pre-submission
Blossom Street	Offices					100			340				Consented
1 Triton Square	Offices					100			338				Submitted
5 Kingdom Street	Offices					100			240				Consented
Gateway Building	Offices					100			104				Pre-submission
Aldgate Phase 2	Residential					50			145				Consented
Canada Water Phase 11	Mixed Use					100			5,500				Pre-submission
Bradford (Retail & Leisure)	Retail					100			43				Consented
Meadowhall Leisure	Retail					50			330				Submitted
Eden Walk Retail and Residential	Mixed Use					50			562				Resolution to grant
Total Medium Term									8,502
1 Assumed net area based on gross area of up to 7m sq ft
Residential development programme
At 30 September 2016		Sq Ft		No. Market Units			PC Date/ Status			BL Share		Current Value1	Cost To come2	Sales Exchanged & not Completed1,3
		'000								%		£m	£m	£m
Clarges Mayfair4		103		34			Q4 2017			100		308	72	259
Mixed Use		103		34								308	72	259
The Hempel Phase 1		25		15			Q4 2016			100		16	1	13
The Hempel Phase 2		32		19			Q4 2016			100		55	6	14
Aldgate Place Phase 1		221		154			Completed			50		7	9	-
Resi-led		278		188								78	16	27
Total Committed Residential		381		222								386	88	286
Data includes Group's share of properties in Joint Ventures and Funds (except area which is shown at 100%)
1 Excludes completed sales of £93m
2 From 1 October 2016. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
3 At agreed sales price
4 Includes 9,500 sq ft of affordable housing (11 units)

GLOSSARY

Adjusted net debt is the Group net debt and the Group's share of joint venture and funds' net debt excludes the mark-to-market on effective cash flow hedges and related debt adjustments and non-controlling interests. A reconciliation between Group net debt and adjusted net debt is included in table A within the supplementary disclosures.

Annualised rent is the gross property rent receivable on a cash basis as at the reporting date. Additionally, it includes the external valuers' estimate of additional rent in respect of unsettled rent review, turnover rent and sundry income such as that from car parks and commercialisation, less any ground rents payable under head leases.

Assets under management is the full value of all assets owned and managed by British Land and includes 100% of the value of all joint ventures and funds.

BREEAM (Building Research Establishment Environmental Assessment Method) assesses the sustainability of buildings against a range of social and environmental criteria.

Capital return is calculated as the change in capital value of the UK portfolio, less any capex incurred, expressed as a percentage of capital employed (start value plus capex) over the period, as calculated by IPD. Capital returns are calculated monthly and indexed to provide a return over the relevant period.

Capped rents are rents subject to a maximum level of uplift at the specified rent reviews as agreed at the time of letting.

Collar rents are rents subject to a minimum level of uplift at the specified rent reviews as agreed at the time of letting.

Contracted rent is the annualised rent adjusting for the inclusion of rent subject to rent free periods.

Developer's profit is the profit on cost estimated by the valuers that a developer would expect. The developer's profit is typically calculated by the valuers to be a percentage of the estimated total development costs, including land and notional finance costs.

Development uplift is the total increase in the value (after taking account of capex and capitalised interest) of properties held for development during the period. It also includes any developer's profit recognised by valuers in the period.

Development cost is the total cost of construction of a project to completion, excluding site values and finance costs (finance costs are assumed by the valuers at a notional rate of 5% per annum).

EPRA is the European Public Real Estate Association, the industry body for European REITs.

EPRA cost ratio (including direct vacancy costs) is the ratio of net overheads and operating expenses against gross rental income (with both amounts excluding ground rents payable). Net overheads and operating expenses relate to all administrative and operating expenses including the share of joint ventures' overheads and operating expenses, net of any service fees, recharges or other income specifically intended to cover overhead and property expenses.

EPRA cost ratio (excluding direct vacancy costs) is the ratio calculated above, but with direct vacancy costs removed from net overheads and operating expenses balance.

EPRA earnings is the IFRS profit after taxation attributable to shareholders of the Company excluding investment and development property revaluations, gains/losses on investing and trading property disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. These items are presented in the capital and other column of the income statement. A reconciliation between profit attributable to shareholders of the Company and EPRA earnings is included in table B within the supplementary disclosures.

EPRA NAV per share is EPRA NAV divided by the diluted number of shares at the period end.

EPRA net asset value (EPRA NAV) is a proportionally consolidated measure, representing the IFRS net assets excluding the mark-to-market on effective cash flow hedges and related debt adjustments, the mark-to-market on the convertible bonds as well as deferred taxation on property and derivative valuations. It includes the valuation surplus on trading properties and is adjusted for the dilutive impact of share options. A reconciliation between IFRS net assets and EPRA NAV is included in table B within the Supplementary Disclosures.

EPRA net initial yield is the annualised rents generated by the portfolio, after the deduction of an estimate of annual recurring irrecoverable property outgoings, expressed as a percentage of the portfolio valuation

(adding notional purchaser's costs), excluding development and residential properties.

EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of debt and derivatives and to include deferred taxation on revaluations.

EPRA topped-up net initial yield is the current annualised rent, net of costs, topped-up for contracted uplifts, where these are not in lieu of rental growth, expressed as a percentage of capital value, after adding  notional purchaser's costs (adding notional purchaser's costs), excluding development and residential properties.

EPRA vacancy rate is the estimated market rental value (ERV) of vacant space divided by ERV of the whole portfolio, excluding developments and residential property.

Estimated rental value (ERV) is the external valuers' opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a property.

ERV growth is the change in ERV over a period on the standing investment properties expressed as a percentage of the ERV at the start of the period. ERV growth is calculated monthly and compounded for the period subject to measurement, as calculated by IPD.

Fair value movement is accounting adjustment to change the book value of an asset or liability to its market value.

Footfall is the annualised number of visitors entering our assets.

Footfall growth movement in footfall against the same period in the prior year, on properties owned throughout both comparable periods, aggregated at British Land's ownership share for each asset..

Gross investment activity as measured by our share of acquisitions, sales and investment in committed development.

Gross rental income is the gross accounting rent receivable (quoted either for the period or on an annualised basis) prepared under IFRS which requires that rental income from fixed / minimum guaranteed rent reviews and tenant incentives is spread on a straight-line basis over the entire lease to first break. This can result in income being recognised ahead of cash flow.

Group is The British Land Company PLC and its subsidiaries and excludes its share of joint ventures and funds (where not treated as a subsidiary) on a line-by-line basis (i.e. not proportionally consolidated).

Headline rent is the contracted gross rent receivable which becomes payable after all the tenant incentives in the letting have expired.

IFRS are the International Financial Reporting Standards as adopted by the European Union.

Income return is calculated as net income expressed as a percentage of capital employed over the period, as calculated by IPD. Income returns are calculated monthly and indexed to provide a return over the relevant period.

Interest cover is the number of times net financing costs is covered by underlying profit before net interest payable and taxation.

IPD is Investment Property Databank Ltd which produces an independent benchmark of property returns and British Land UK portfolio returns.

Lettings and lease renewals are compared both to the previous passing rent as at the start of the financial year and the ERV immediately prior to letting. Both comparisons are made on a net effective basis.

Letting performance against ERV comparison of achieved letting terms on long term lettings and renewals against valuation assumptions on like-for-like space, calculated on a net effective basis, aggregated at 100% share.

Leverage see loan to value (LTV).

Like-for-like rental income growth is the growth in net rental income on properties owned throughout the current and previous periods under review. This growth rate includes revenue recognition and lease incentive adjustments but excludes properties held for development in either period and lease accounting adjustments related to guaranteed rent reviews.

Loan to value (LTV) is the ratio of principal value of gross debt less cash, short term deposits and liquid investments to the aggregate value of properties and investments.

Managed portfolio consists of multi-let properties where we have control of facilities and utilities management.

Mark-to-market is the difference between the book value of an asset or liability and its

market value.

Managed portfolio consists of multi-let properties where we have control of facilities and utilities management.

Multi-channel retailing is the use of a variety of channels in a customer's shopping experience, including research, before a purchase. Such channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. Transacting includes browsing, buying, returning as well as pre- and post-sale service.

Net development value is the estimated end value of a development project as determined by the external valuers for when the building is completed and fully let (taking into account tenant incentives and notional purchaser's costs). It is based on the valuers view on ERVs, yields, letting voids and tenant incentives.

Net effective rent is the contracted gross rent receivable taking into account any rent-free period or other tenant incentives. The incentives are treated as a cost-to-rent and spread over the lease to the earliest termination date.

Net equivalent yield 'NEY' is the weighted average income return (after adding notional purchaser's costs) a property will produce based upon the timing of the income received. In accordance with usual practice, the equivalent yields (as determined by the external valuers) assume rent is received annually in arrears.

Net initial yield 'NIY' is the current annualised rent, net of costs, expressed as a percentage of capital value, after adding notional purchaser's costs.

Net rental income is the rental income receivable in the period after payment of direct property outgoings which typically comprise ground rents payable under head leases, void costs, net service charge expenses and other direct irrecoverable property expenses. Net rental income is quoted on an accounting basis.

Net rental income will differ from annualised net cash rents and passing rent due to the effects of income from rent reviews, net property outgoings and accounting adjustments for fixed and minimum contracted rent reviews and lease incentives.

Net reversionary yield is the anticipated yield to which the initial yield will rise (or fall) once the rent reaches the estimated rental value.

Occupancy rate is the estimated rental value of let units as a percentage of the total estimated rental value of the portfolio, excluding development and residential properties. It includes accommodation under offer, subject to asset management (where they have been taken back for refurbishment and are not available to let as at the balance sheet date) or occupied by the Group.

Omni-channel retailing is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels i.e. mobile internet devices, computers, bricks and mortar, television, radio, direct mail, catalogue, etc.

Over rented is the term used to describe when the contracted rent is above the estimated rental value (ERV).

Overall 'topped-up' net initial yield is the EPRA Net 'topped-up' Initial Yield, adding all contracted uplifts to the annualised rents.

Passing rent is the gross rent, less any ground rent payable under head leases.

Property income distributions (PIDs) are profits distributed to shareholders which are subject to tax in the hands of the shareholders as property income. PIDs are normally paid net of withholding tax currently at 20% which the REIT pays to the tax authorities on behalf of the shareholder. Certain types of shareholder (i.e. pension funds) are tax exempt and receive PIDs without withholding tax. REITs also pay out normal dividends, called non-PIDs, which are taxed in the same way as dividends received from non REIT companies; these are not subject to withholding tax and for UK individual shareholders qualify for the tax free dividend allowance.

Portfolio valuation is reported by the Group's external valuers. In accordance with usual practice, they report valuations net, after the deduction of the notional purchaser's costs, including stamp duty land tax, agent and legal fees.

Proportionally consolidated measures include the Group's share of joint ventures and funds and exclude non-controlling interests in the Group's subsidiaries.

Rack rented is the term used to describe when the contracted rent is in line with the estimated rental value (ERV), implying a nil reversion.

Rent-free period see Tenant (or lease) incentives.

REITs are property companies that allow people and organisations to invest in commercial property and receive benefits as if they directly owned the properties themselves. The rental income, after costs is passed directly to shareholders in the form of dividends. In the UK REITs are required to distribute at least 90% of their tax exempt property income to shareholders as dividends. As a result, over time, a significant proportion of the total return for shareholders is likely to come from dividends. The effect is that taxation is moved from the corporate level to the investor level as investors are liable for tax as if they owned the property directly. British Land became a REIT in January 2007

Rent reviews take place at intervals agreed in the lease (typically every five years) and their purpose is usually to adjust the rent to the current market level at the review date. For upwards-only rent reviews, the rent will either remain at the same level or increase (if market rents have increased) at the review date.

Rents with fixed and minimum uplifts are either where rents are subject to contracted uplifts at a level agreed at the time of letting; or where the rent is subject to an agreed minimum level of uplift at the specified rent review.

Retailer sales growth movement in retailer sales against the same period in the prior year, on occupiers providing sales data throughout both comparable periods, aggregated at British Land's ownership share for each asset.

Retail planning consents are separated between A1, A2 and A3 - as set out in The Town and Country Planning (Use Classes) Order. Within the A1 category, Open A1 permission allows for the majority of types of retail including fashion to be accommodated, while Restricted A1 permission places limits on the types of retail that can operate (for example, a restriction that only bulky goods operators are allowed to trade at that site).

Class	Description	Use for all/any of the following purposes
A1	Shops	Shops, retail warehouses, hairdressers, undertakers, travel and ticket agencies, post offices, pet shops, sandwich bars, showrooms, domestic hire shops dry cleaners, funeral directors and internet cafes.
A2	Financial and professional services	Financial services such as banks and building societies, professional services (other than health and medical services) and including estate and employment agencies. It does not include betting offices or pay day loan shops - these are now classed as "sui generis" uses.
A3	Restaurants and cafes	For the sale of food and drink for consumption on the premises - restaurants, snack bars and cafes.
D2	Assembly and leisure	Cinemas, music and concert halls, bingo and dance halls (but not night clubs), swimming baths, skating rinks, gymnasiums or areas for indoor or outdoor sports and recreations.

Reversion is the increase in rent estimated by the external valuers, where the passing rent is below the estimated rental value. The increases to rent arise on rent reviews and letting of vacant space or re letting of expiries.

Scrip dividend For certain periods, British Land offers its shareholders the opportunity to receive dividends in the form of shares instead of cash. This is known as a Scrip dividend.

Standing investments are assets which are directly held and not in the course of, or held for development.

Tenant (or lease) incentives are incentives offered to occupiers to enter into a lease. Typically this will be an initial rent-free period, or a cash contribution to fit-out. Under accounting rules the value of lease incentives is amortised through the income statement on a straight-line basis to the earliest lease termination date.

TMT stands for technology, media and telecommunications.

The residual site value of a development is calculated as the estimated net development value, less development profit, all development construction costs, finance costs (assumed at a notional rate) of a project to completion and notional site acquisition costs. The residual is determined to be the current site value.

Topping out is a traditional construction ceremony to mark the occasion when the structure of the building reaches the highest point.

Total property return is calculated as the change in capital value, less any capex incurred, plus net income, expressed as a percentage of capital employed over the period, as calculated by IPD. Total property returns are calculated monthly and indexed to provide a return over the relevant period.

Total accounting return is the growth in EPRA NAV per share for the period plus dividends paid expressed as a percentage of EPRA NAV per share at the beginning of the period.

Total shareholder return is the growth in value of a shareholding over a specified period, assuming dividends are reinvested to purchase additional units of stock.

Total tax contribution is a more comprehensive view of tax contributions than the accountancy-defined tax figure quoted in most financial statements. It comprises taxes and levies paid directly, as well as taxes collected from others which we administered.

Turnover rents is where all or a portion of the rent is linked to the sales or turnover of the occupier.

Under rented is the term used to describe when the contracted rent is below the estimated rental value (ERV), implying a positive reversion.

Underlying earnings per share (EPS) consists of underlying profit after tax divided by the diluted weighted average number of shares in issue during the period.

Underlying profit is the pre-tax EPRA earnings measure with additional Company adjustments.

No Company adjustments were made in either the current or prior period.

Valuation uplift is the increase in the portfolio valuation and sales receipts of properties sold during the period, net of capex, capitalised interest and development team costs, and transaction costs incurred, expressed as a percentage of the portfolio valuation at the start of the period plus net capex, capitalised interest and development team costs, and transaction costs.

Virtual freehold represents a long leasehold tenure for a period of up to 999 years. A 'peppercorn', or nominal, rent is paid annually.

Weighted average debt maturity Each tranche of Group debt is multiplied by the remaining period to its maturity and the sum of the results is divided by total Group debt in issue at the period end.

Weighted average interest rate is the Group loan interest and net derivative costs per annum at the period end, divided by total Group debt in issue at the period end.

Weighted average unexpired lease term is the average lease term remaining to first break, or expiry, across the portfolio weighted by contracted rental income (including rent-frees). The calculation excludes residential leases and properties allocated as developments.

Yield on cost is the estimated annual rent of the completed development divided by the total cost of development including site value and notional finance costs to the point of assumed rent commencement, expressed as a percentage return.

Yield shift is a movement (usually expressed in bps) in the yield of a property asset, or like-for-like portfolio, over a given period. Yield compression is a commonly used term for a reduction in yields. Yield expansion refers to an increase in yields.

 

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