Good financial and operational performance – delivering against strategy            

Simon Carter, CEO said: “We have delivered good financial and operational performance. Strong leasing activity, significantly improved rent collection and increasing values across our Campuses and Retail Parks have driven 6.1% total returns in the half.

Current market trends reinforce the conviction we have in our strategy, and we are already seeing the benefits of our decision to focus on our unique campus proposition, the value play in retail parks and urban logistics development in London. Innovative growth businesses are focused more than ever on the highest quality, most sustainable workspace which we deliver at our Campuses. We expect the value opportunity in retail parks to continue with rents stabilising and yields moving in.  The fundamentals for urban logistics development to support last mile delivery in London remain excellent.

In the last six months we have made good progress recycling capital from mature assets into our 1.6m sq ft development programme and £501m of acquisitions. We look ahead with confidence in our ability to drive performance from our development, asset management and repositioning skills.”

Performance summary

• Delivering against our strategy – actively recycling capital into growth markets
  • £814m total capital activity behind our strategy since 1 April 2021
  • £102m of acquisitions in Cambridge and Guildford, building our exposure to innovation sectors
  • £189m of acquisitions with potential for urban logistics in London, total GDV of urban logistics pipeline of c.£600m
  • £210m investment into retail parks, leveraging the value play opportunity
  • 718,000 sq ft of new Campus development commitments bringing total development on site to 1.6m sq ft
  • £196m sales of dry or mature assets; 6.0% ahead of book value

• Good operational performance with positive market trends supporting strategic activity  
  • Portfolio value up 2.9% with Campuses up 3.0% and Retail & Fulfilment up 2.7% driven by Retail Parks up 7.1%
  • 15 bps yield contraction overall; 6 bps yield contraction in Campuses; 54 bps in Retail Parks; rate of yield expansion slowing in Shopping Centres
  • 1.8m sq ft leasing activity across the portfolio
  • Strong rent collection: 96% for the half, close to pre-pandemic levels in retail, with offices fully collected
  • Footfall and sales on our Retail portfolio 89% and 98% (97% and 98% for Retail Parks) of pre pandemic levels respectively; footfall 879bps ahead of benchmark

• Good financial performance and strong balance sheet driven by strategic and operational progress  
  • Underlying EPS up 22.9% reflecting a significant reduction in provisions in the half
  • EPRA Net Tangible Assets (NTA) up 5.1% to 681p
  • HY22 dividend of 10.32p per share, representing 80% of underlying EPS
  • 6.1% Total Accounting Return for the half
  • LTV at 33.4% with 43% headroom to Group debt covenants
  • £1.5bn undrawn facilities and cash with no requirement to refinance until late 2024
  • Fitch affirmed senior unsecured credit rating at ‘A’

• Further progress against 2030 sustainability strategy
  • Delivered our second net zero carbon development at 1 Triton Square
  • 100 Liverpool Street named Green Building Project of the Year by BusinessGreen
  • Community Funds established in partnership with occupiers at Paddington Central and Broadgate, following the success of our Regent’s Place Community Fund
  • New Diorama Theatre launched at Broadgate following its success at Regent’s Place
  • First UK REIT to achieve the Disability Smart Standard from the Business Disability Forum
  • Awarded GRESB 5* rating and AAA rating from MSCI

Progress against our priorities

• Realising the potential of our Campuses
  • Total lettings and renewals at 819,000 sq ft; including 315,000 sq ft to Facebook at 1 Triton Square and 129,000 sq ft pre-let to JLL at 1 Broadgate with a further 254,000 sq ft pre-let to Allen & Overy post period end
  • Lettings and renewals over one year on the standing portfolio 6.1% ahead of ERV
  • Under offer on a further 330,000 sq ft
  • Recently completed and committed developments 41% pre-let or under offer generating £91m of rent when fully let; committed office space 46% pre-let or under offer
  • Storey operational across 345,000 sq ft (c.5% of Campuses); occupancy on stabilised space increased to 81%
  • Acquisition of £102m of assets in Cambridge and Guildford leveraging our Campus proposition and increasing our exposure to innovation sectors

• Progressing value accretive development  
  • Delivered 1 Triton Square, our second net zero carbon development which is fully let to Facebook
  • New development commitments of 718,000 sq ft across Canada Water and Aldgate Place, Phase 2
  • Total committed development covering 1.6m sq ft
  • 1 Broadgate offices space fully pre-let or under option (see note 1)  

• Targeting the opportunities in Retail & Fulfilment
  • Total leasing activity of 1m sq ft; occupancy high at 95.9%
  • 632,000 sq ft of deals over one year; in line with ERV, 18.5% below previous passing rent;
  • 571,000 sq ft under offer, 6.6% above ERV
  • Acquired £189m of assets with urban logistics potential, including Heritage House, Enfield; Finsbury Square car park and Thurrock Retail Park; total GDV of urban logistics pipeline of c.£600m
  • Acquired £210m of other retail parks including Blackwater Shopping Park in Farnborough and the remaining interest in HUT, targeting the value opportunity in retail parks   

• Active capital recycling  
  • £196m assets sold, including £117m retail sales and £79m residential sales
  • Reinvesting proceeds into value accretive acquisitions and development
  • Total financing activity of £527m including £420m new ‘Green Loan’ and £107m bond redemption

Summary performance

¹ 383,000 sq ft pre let and 114,000 sq ft space under option
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
² See Note 2 to the condensed interim financial statements

Results Presentation and Investor Conference Call

A presentation of the results will take place at 8.30am on 17 November 2021 at Peel Hunt, 100 Liverpool Street, Broadgate and will be broadcast live via webcast (Britishland.com) and conference call. The details for the conference call and weblink are as follows:

For Information Contact