Transcript UBS Best of British conference 2006

innovation
respect
excellence
integrity
customer service
Richard Akers, Managing Director Retail
Princesshay, Exeter
12 July 2006
1
Itinerary

11.40
Presentation by Richard Akers, Managing Director Retail and
Graham Thompson, Development Manager

12.30
Tour of Princesshay

13.30
Lunch at The Royal Clarence Hotel

15.00
Leave for St David’s Station

15.20
Direct train to London Paddington Station
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Land Securities’ business model
Retail £7.6bn assets
£356m annual net rent
(1)
London Offices £4.8bn assets
£219m annual net rent
Property outsourcing
£536m assets / £0.9bn income(1)
Gross property income for year to 31 March 2006, excluding share of Telereal joint venture
Focus on sectors with significant market share
3
Key elements of Group strategy
Capital allocation model

Active recycling of capital

Strong customer relationships

Developments

Exposure to growth markets –
property outsourcing

Use scale to reduce operating
costs
Seeking competitive advantage in a period of low yields
4
Retail market
Retail property - floorspace
Market
million ft2
Land
Securities
million ft2
% market
share
Shopping centres
160
12.9
8.0
Retail parks
156
5.4
3.4
Total core markets
316
18.3
5.8
Other retail markets
920
2.2
n/a
1,236
20.5
n/a
Total
Source: Property Market Analysis/Office of the Deputy Prime
Minister
Providing 5.8% of core retail market space
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Retail strategy

Focus on management
intensive assets

Delivery of market leading
levels of customer service

Portfolio regeneration and
renewal through development

Portfolio regeneration and
renewal through asset
management
Long-term investment in dominant retail assets
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Our portfolio
Land Securities top retail properties (> £50m)
Shopping centres

£6.9bn portfolio
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53% of total investment portfolio
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1.9m2 of retail accommodation
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30 shopping centres
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30 retail parks
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10 supermarkets
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Some 300 million consumer
visits per year

£1.1bn development pipeline, to
create 64,000m2
Retail parks
A retail property portfolio of substantial scale
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Achievements
Rental and capital value growth(1)
6 months to
30 Sep ’05
%
Shopping centres
Retail warehouse
14.5
6.8
2.0
5.4
3.3
8.9
Low vacancy levels – 3.1%(1)

Over 310,000 ft2 of
development lettings

LS shopping centre footfall up
1.3%, Footfall National Index
down 1.9%
(1)
Like-for-like portfolio
1.2
14.7
8.6
4.0
2.3
Rental value increase

10.6
0.1
7.7
Portfolio net reversionary
potential – 12.2%(1)
2.3
3.8
6.1
1.7

18.3
9.4
0.3
1.1
Acquisition of retail portfolios
with opportunities, including
Tops Estates PLC and Lxb
4.6
2.7
7.7
6.8
London shops
RETAIL
1.8
1.9
Other shops
6 months to 12 months to
31 Mar ’06 31 Mar ’06
%
%

7.8
Capital value surplus
15.5
Low portfolio voids and good growth in retail values
8
Retail development pipeline
Total
development cost
(TDC)
Capital
expenditure
outstanding
TDC
outstanding(1)
Prospective
cash net
rental
income(2)
Prospective
SIC 15 adj.
net rental
income(3)
% let(4)
Cumulative
valuation
surplus to
31.03.06
£m
£m
£m
£m
£m
%
£m
Dev. programme
620
343
332
43
41
40.3
38
Proposed dev.
456
419
423
32
30
2.1
n/a
(1)
(2)
(3)
(4)
Total Development Cost outstanding comprises capital expenditure, capitalised interest less future residential proceeds
Rents secured on lettings and ERV of vacant space – net of ground rents
SIC15 adjusted net rental income received in year to 31.03.06 was £8.5m, equivalent on an annualised basis to £17.3m
% let based on cash net rental income
£1.1bn development pipeline
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Historic town redevelopment

Variety and diversity

Mixed use

Sustainability

Community engagement

Extended dwell time
A competitive advantage
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innovation
respect
excellence
integrity
customer service
Graham Thompson, Development Manager
Princesshay, Exeter
11
Exeter Phoenix
A plan for rebuilding 1945
Sharp’s proposed Central Redevelopment Plan
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Exeter - Princesshay

Post war rebuilding

Economic and physical
obsolescence

Lifestyle factors

Latent potential

A new approach
Active in Exeter since 1950’s
13
Exeter urban strategy
Key
 Cathedral Quarter
 Castle Quarter
 High Street
 Leisure Quarter
 Office Quarter
(Southernhay)
 Princesshay
14
Exeter masterplan
Key
Planned development
 Princesshay
 Central station site
 Bus and coach station site
 Exeter Courts, Southernhay
 Exeter Quayside
Existing retail provision
 Core retail
 Guildhall Centre
 Harlequins Shopping Centre
Existing major stores
 Marks and Spencer
 Debenhams
 Dingles
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Urban design principles

Urban form

Mixed-use development

Active public frontages

Permeability of the city grid

Pedestrian dominated
framework

Public realm

Sustainable development
16
The architects
1
3
4
1. Panter Hudspith: Davy Gate, York
2. Wilkinson Eyre: Magna Centre, Rotherham
3. Chapman Taylor: Whitefriars, Canterbury
2
4. Livingston Eyre: Castle Mall, Norwich
17
Urban design appraisal
Appraisal of the area’s key
strengths and weaknesses

Areas of positive open space

Poor quality open space

Prominent landmarks

Important gateways

Important views
18
Design reviews

Collaborative design reviews with key stakeholders

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
Exeter City Council
Land Securities
English Heritage
CABE
English Heritage
 “The now genuine mixed use approach to the assembling of the project
emphasises a truly sustainable and regenerative quality”

Formal CABE design review
 “The pleasing variety of the architecture is, we believe, in tune with the
relatively informal and responsive nature of the site planning”

English Heritage Urban Panel
 “Commends the adoption in Exeter of best practice principles for the
regeneration of historic cities”
19
Accessibility
Key
 Motorways
 A roads
 Major Rail
Links
20
Drive time and catchment
Drive time and catchment
 20 mins - 154,875
 40 mins - 492,811
 60 mins - 850,312
Source : CB Richard Ellis - Exeter Retail Capacity Study 2004
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Demographics

High population growth - forecast to continue
 Higher than the national average

Unemployment consistently low
 1.7% versus 2.6% for PMA centres

Affluent population with high car ownership
Exeter
Own 1+ car
79%
Avg. PMA centre
72%
Source : The Retail Group - Retail Strategy Study June 2004
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Demographics

Exeter’s shoppers are typical of the South West

Stronger concentrations of Affluent Greys and Settled Families than UK

Balanced by weaker concentrations of Disadvantaged Lifestyles

Good concentration of Wealthy Executives, Flourishing Families,
Prosperous Professionals, Secure Families and Settled Suburbia

Shopper profile is similar to Norwich, York, Colchester and Southampton
– good opportunity for a wide range of occupiers
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Economy

Increasing inward investment




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
Princesshay
Regional Development Agency
The Met Office
Centre of Science
Crown Courts
Innovation Centre
Central Station Site
Bus Station Site
SWEB
Catalyst
for
future
investment
“Exeter has emerged as the 3rd best location for big businesses in the UK
according to a survey of top companies in 150 towns and cities”
Dunn & Bradstreet Survey 2001
24
Met Office, Exeter
25
Exeter Airport
26
Benchmarking

Competing centres:



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Plymouth, Drakes Circus
Bath, Southgate
Taunton
Bristol

Princesshay will increase its catchment penetration from 20% to 26%

Comparison expenditure of the city will increase by 30% from £528m pa
to £684m pa

Princesshay will lift Exeter 5 places to 34th

Seasonal expenditure of additional of £48m will lift Exeter to 32nd
27
CACI key conclusions

Sustainable in terms of design and forecasted retail expenditure

£225m investment in Exeter

Realistic response to competition

Continued support of the business community

Princesshay represents significant opportunity for retailers

Will enhance quality of current retail offer and satisfy under fulfilled
shoppers

Princesshay will address particular weaknesses and Exeter can be
amongst the top centres for growth over the next decade
28
Princesshay - CACI
“Princesshay will be amongst the best
performing schemes in the current national
retail development pipeline “
29
Princesshay 1952 - 2005
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Scheme details
530,000 ft2 mixed-use scheme
including:

130,000 ft2 Debenhams 2010
anchor store

6 MSU’s - 107,000 ft2

60 new shops - 200,000 ft2

121 city centre apartments

restaurants and cafés

extensive public realm /
landscape improvements
£225m total development cost
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Archaeology

The Big Dig is the largest archaeological excavation ever
in the city centre and South West

Started in July 2005 by Exeter Archaeological completed
March 2006

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
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
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
peaked at 40 archaeologists on site
they found 15,000 pottery pieces and 133 Roman Coins
they found six burials within the friary
they found evidence off 4 timber houses, 2 stones houses
and a grand town house all 1st – 3rd AD
the oldest pieces where pieces of pottery dating to 5575AD
the latest pieces recorded where war time artefacts
finds to go to the Museum and archived
archaeological viewing platform created off High Street –
3,000 visits per week
32
Ground floor plan
Car Park
St Stephens House
Contract 6
33
First floor plan
34
Second floor plan
35
Third floor plan
36
Basement servicing
37
Weather protection
38
Tenant fit out – access dates
Occupied
Occupied
Trading
11 Dec 06
12 Jan 07
30 Jan 07
29 May 07
19 Jun 07
25 Jun 07
25 Jun 07
06 Jul 07
20 Jul 07
30 Jul 07
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Princesshay
Exeter
4
2
London Inn
Square
1
2
Mid Market
Fashion
Young
Fashion
16
1
NEXT
Telephone
Exchange
15
2
9
Argyl
e
Hous
e
Exchanged
Under offer
In negotiation
Available
FULFORDS
NANDOS
Freemasons
Hall
MSU1a
NANDOS
P
Entrance to
Basement
Servicing
GIRAFFE
Access to
Car Park
6
Fashion
Leaders
P
Marketing
Suite Entrance
16
40
Bedford
Square
12
Independents /
Flexible Terms
1
1
21
Royal Clarence
Hotel
Household
Lifestyle
Restaurants
& Local
22
1a
1
24
Chapel Street
24
7
8
25
9
14
Indicative Plans - Not to Scale
June 2006
1
0
19
40
Programme

January 2005
Started on site

February 2005
Refurbishment of St Stephens House

April 2005
Land assembly completed

August 2005
Demolition completed

September 2005
Catherine Square & Almshouses opened

December 2006
Handover to Debenhams
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April 2007
Bedford Street units trading

Autumn 2007
Scheme fully trading
41
Exeter, Princesshay
42
Quality design pays

Public realm contributes to
creating successful places

Public art is an effective way of
contributing to the natural and
built environments

Public art defines an image
ensuring commercial success
43
Catherine Square
44
Public art - Almhouses
45
Public art - Almhouses
46
Residential

121 apartments

Bedford House – 32 units, all reserved within 4 weeks, 26 exchanged,
completion July 2006

Blocks G & H – completion August 2007

Remaining units completion December 2007
47
Residential
48
Construction progress – June 2006
49
Where we are now – completion sequence
Legend
R
Substructure
Superstructure
S
Roof
B
T
Envelope
C
Finishes
/ Services
A
E
Externals
D
Handed Over
F
J
H
G
McA/GPRESEN/01
50
Completion sequence – January 2007
51
Independent shops – Roman Walk
52
Princesshay Square - Debenhams
53
Eastgate - Next
54
Blue Boy Square
55
Princesshay
56
Itinerary

11.40
Presentation by Richard Akers, Managing Director Retail and
Graham Thompson, Development Manager

12.30
Tour of Princesshay

13.30
Lunch at The Royal Clarence Hotel

15.00
Leave for St David’s Station

15.20
Direct train to London Paddington Station
57
Contact
Jennifer van der Eem
Investor Relations Manager
Tel:
+44 (0) 20 7024 5185
Fax: +44 (0) 20 7776 9305
Email: [email protected]
www.landsecurities.com
Land Securities Group PLC, 5 Strand, London WC2N 5AF
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