Bringing people from further, for longer, more often

Transcription

1 Bringing people from further, for longer, more often Business Overview August 2013 intu Eldon Square 1,350,000 sq. ft. intu Braehead 1,135,000 sq. ft. intu Metrocentre 2,092,000 sq. ft. intu Victoria Centre 981,000 sq. ft. intu Broadmarsh 490,000 sq. ft. intu Chapelfield 487,000 sq. ft. Manchester Arndale 1,600,000 sq. ft. intu Trafford Centre 1,967,000 sq. ft. intu Potteries 566,000 sq. ft. intu Midsummer Place 430,000 sq. ft. intu Lakeside 1,434,000 sq. ft. St David's 1,391,000 sq. ft. The Mall at Cribbs Causeway 1,075,000 sq. ft. intu Watford 726,000 sq. ft. intu Uxbridge 440,000 sq. ft. intu Bromley 463,000 sq. ft.

2 Our focus, scale and quality set us apart Creating value for shoppers, retailers and shareholders We have kept our clear focus on the best UK shopping centres and, with 7.4 billion invested in the sector and ten of the UK s top 25, have a scale unmatched by any other operator in the UK: as illustrated by the chart, two-thirds of our investment properties value is accounted for by five super-regional centres and over 80 per cent by our largest ten centres aiming to improve the experience of our customers to generate footfall, dwell time and spending, we provide the environment to which leading retailers are attracted and in which they flourish. This creates the virtuous circle which drives our financial return created nationwide consumer facing brand, intu, offering an engaging and digitally connected experience 10 Of the top 25 UK shopping centres 2/3 Of the population live within 45 minute drive of an Intu centre Intu asset valuations Super-regional centres (63%) 1 Intu Trafford Centre ( 1,850 million) 2 Intu Lakeside ( 1,116 million) 3 Intu Metrocentre ( 884 million) 4 Intu Braehead ( 602 million) 5 Cribbs Causeway ( 233 million) Town and city centres (37%) 3,399m Net assets attributable to shareholders Debt maturity profile 48.6% Debt to assets ratio 1,658 6 Arndale ( 391 million) 7 St David s ( 266 million) 8 Intu Eldon Square ( 249 million) 9 Intu Watford ( 323 million) 10 Intu Victoria Centre ( 305 million) 11 Intu Midsummer Place ( 251 million) 12 Intu Chapelfield ( 245 million) 13 Intu Uxbridge ( 212 million) 14 Intu Potteries ( 163 million) 15 Intu Bromley ( 159 million) 1,600 1, , , * bn m * Includes 300m convertible bond Our business model We provide people with the perfect shopping experience Allowing us to establish enduring relationships with retailers Which delivers long-term growth for Intu And generates returns for shareholders 02

3 Intu aims to provide great retail & leisure experiences This drives rental levels over the long term Our aim is to provide the very best places to meet, eat, drink and be sociable. We focus on offering people access to the top retailers and iconic brands they love, along with attractive entertainment and leisure options. This gives customers more reasons to come to our centres and encourages them to stay longer. Dwell time has a strong relationship with retail spend. This relationship is stronger in visitors who purchase some form of catering, a particular driver of evening trading. Our research indicates that customers who eat or drink at a centre stay around two-thirds longer and spend around two-thirds more than those who solely shop in the centre. Catering and leisure operators now account for 11 per cent of the aggregate rent roll, 17 per cent of units across the portfolio and, we estimate, generate turnover of around 330 million. New long-term leases for 78 stores and 17 restaurants were signed in the first six months of 2013, representing 23 million of new annual rent. These include: 6 million of new lettings and renewals at Cribbs Causeway, Bristol, representing 22 of the 35 units and two-thirds of the income expiring in This includes a new flagship Topshop/Topman store which opened in May first lettings for the intu portfolio for The White Company at St David s, Cardiff, and Blott at intu Lakeside, Manchester Arndale and St David s, Cardiff further broadening of the catering offer with Circle 360 Champagne & Cocktails at intu Lakeside, Ed s Diner at intu Metrocentre and intu Chapelfield, Nando s at intu Braehead and Mount Fuji at St David s, Cardiff a major new flagship store, key to repositioning the retailer mix at intu Watford ahead of its expansion with the Charter Place redevelopment The retail environment in the UK has continued to be testing. Like-for-like net rental income was lower in 2012 and in the first half of 2013 than the same periods of the previous years. While gross rent on like-for-like assets was higher due to increases on letting activity, this was more than offset by the rent foregone and direct costs associated with tenant failures. Becoming digitally connected We recognise that digital connectivity is an essential part of the shopping centre experience and will enable us and our retailers to build a closer relationship with our customers. That s why we are investing in a future-proofed multichannel digital environment that provides free WiFi in centres and a seamlessly integrated online shopping platform. Consumers will be able to buy online around the clock from our centres websites or intu.co.uk, for delivery to home or one of our centres. The free, high quality WiFi will enable customers in our centres to stay in touch with news and social networks and also to receive high value location-based offers. We have installed fibre optic infrastructure and launched free WiFi in four centres. The other centres will follow each month, until Spring Our ownership of the network will allow us to understand the customer s digital as well as physical journey. All these initiatives, together with adding 4G capabilities to our centres, will give us the complete digital proposition. Change in like-for-like net rental income % 6.0% % % 2.3% 8.5% 8.5% 3.5% 4.3% 3.4% 2.1% 3.6% 2.7% 2.9% H m Unique devices accessed our centre websites for the year to June m Being invested in digital infrastructure 03

4 Building momentum and reinforcing our destinations We are investing across our estate to reinforce the destination status of each centre within its catchment, in particular looking to provide the right environment to support an extension of trading hours wherever possible. As well as generating income from incremental space, the projects are designed to provide more reasons for shoppers to visit, to come from further afield and stay longer in our centres. The table below sets out a summary of the project pipeline. We would expect our major extensions, to generate an initial stabilised yield on cost in the range of 7 to 8.5 per cent. In the case of expansionary projects creating additional lettable space, we would expect to generate an initial stabilised yield on cost in the range of 6 to 10 per cent. Other projects are focused on reconfiguration or refurbishment of existing space in order to generate enhanced tenant mix and rental tone. The motivation of these initiatives is the wider improvement of the centre and its attractions, with returns generated over the medium term through future rent reviews and new lettings. Committed Size sq. ft. Intu Indicative investment timing 2 m Intu Lakeside food court refurbishment Intu Eldon Square refurbishment Other committed expenditure Active management pipeline Intu Victoria Centre refurbishment Intu Eldon Square Sidgate redevelopment and restaurants Intu Metrocentre Platinum mall Intu Potteries leisure extension Intu Bromley Queen s Gardens restaurants Intu Trafford Centre, Barton Square courtyard enclosure and second floor retail Other active management Major extensions Intu Watford Charter Place Intu Lakeside Northern extension Intu Braehead extension Intu Lakeside leisure extension Nottingham projects , Represents net additional floor space of retail, catering and leisure 2 Timing subject to change due to a number of internal and external factors 3 Intu s share of the total project cost is 9 million of which 2 million has already been spent 4 The majority of smaller committed and pipeline projects do not involve the creation of additional floor space 5 Size excludes arena and hotel 49 Our progress in 2013 Intu Eldon Square: we are half way through major refurbishment works to the original centre and have consolidated temporary lettings into the Sidgate area ahead of our planned 20 restaurant, two level dining quarter. Intu Metrocentre: we have begun work to create the new Platinum Mall which has already resulted in new lettings to Mamas & Papas, Tessuti and Phase Eight. Intu Victoria Centre: we plan to start in early 2014 major refurbishment work including new entrances and reconfigured public areas. We are in negotiation with some exciting new retailers and have also submitted a planning application for a cluster of 12 new restaurants. This is a precursor to major investment in intu Broadmarsh and the extension to intu Victoria Centre. Intu Lakeside: we are about to embark on the refurbishment and extension of the food court which will increase direct rent and raise the quality of the catering offer. Intu Potteries: the pre-letting of our development of a cinema and five restaurants is in solicitors hands and we expect to start construction later this year. Intu Bromley: having secured planning consent, we now have leases in solicitors hands for the five new restaurants in Queen s Gardens. We expect to start construction in the Autumn and will at the same time undertake some high impact, low outlay refurbishment works across the centre. Intu Watford: we have acquired the adjoining Charter Place which we intend to replace with a cinema, restaurants and large format retail units to create a combined 1.4 million sq. ft. shopping and leisure destination. We have been encouraged by the level of interest from retailers and operators and plan to start on site with pre-lets secured during billion Project pipeline 04

5 First half 2013 highlights Operational highlights Building momentum reinforcing our destinations Investment projects underway or close to commencement at intu Eldon Square, intu Victoria Centre, intu Lakeside, intu Metrocentre and intu Potteries, in aggregate 90 million; part of our 1 billion pipeline across the portfolio Strategic acquisitions in period Midsummer Place, Milton Keynes, and Charter Place, Watford Created nationwide consumer-facing brand, intu, offering an engaging and digitally-connected experience Single brand for company and shopping centres bringing operating efficiencies and nationwide business opportunities Previously out-sourced facilities management and customer-facing teams brought in-house Installed fully-owned fibre-optic infrastructure and launched high quality free WiFi in four centres to date; intu Trafford Centre is UK s first 4G-enabled shopping centre UK s first multi-channel shopping centre, intu.co.uk, in live testing phase before full consumer launch in Autumn 2013 Improved financial flexibility and strengthened balance sheet Long-term debt issuance of 1.15 billion, refinancing one-third of Group s debt, including 10 and 15 year bond issues Equity placing of 280 million, with shareholders on the South African register for the first time able to participate in Rand Net assets increased from 3.0 billion to 3.4 billion Debt to assets ratio 48.6 per cent (31 December per cent) Cash and available facilities 250 million at 30 June; augmented in July by raising 125 million bank loan secured on intu Midsummer Place Property valuations increased 1.0 per cent, comparing favourably with benchmark index which fell 1.1 per cent NAV per share (diluted, adjusted) of 377 pence with 70 million valuation surplus offset by derivative liability crystallised on refinancing and impact of equity placing Steady occupancy and letting progress Occupancy remains firm at the 95 per cent level reported in the first quarter IMS (31 December per cent) Like-for-like net rental income down 2.9 per cent, with rental increases offset by tenant failures 95 new long-term leases signed, 23 million annual rent, in line with valuation assumptions and 3 per cent above previous passing rent (like-for-like units) Footfall down 2 per cent, significantly out-performing Experian benchmark down 4 per cent Estimated retailer sales up 1 per cent, in line with BRC benchmark Financial highlights Six months ended 30 June Net rental income ( m) Underlying earnings ( m) Property revaluation surplus ( m) 70 Profit for the period ( m) Underlying EPS (pence) Interim dividend per share (pence) As at 30 June 2013 As at 31 December 2012 Market value of investment properties ( m) 7,386 7,073 Net external debt ( m) 3,593 3,504 Net assets attributable to shareholders ( m) 3,339 2,977 NAV per share (diluted, adjusted) (pence) Debt to asset ratio (per cent)

6 Corporate Responsibility Better together People are at the heart of our business and our CR projects and community partnerships focus on them. Our approach targets support, primarily for disadvantaged young people, by complementary actions involving centre-based initiatives and larger corporate programmes, the latter increasingly arranged to develop and grow over more than a single year reflecting our long-term vision. Current partners include Education Business Partnerships, The Conservation Volunteers, Outward Bound and the Tyneside Cinema. All our projects promote the direct involvement of intu team members and this approach was celebrated by our achievement of the BitC Community Mark in Only 40 UK organisations currently hold the 3 year award. In March 2012 we successfully renewed our Carbon Trust Standard accreditation, a measure of our embedded approach to energy sustainability and carbon management. Further evidence of our success came when we were ranked as a Green Star in the 2012 round of the Global Real Estate Sustainability Benchmark (GRESB). Supporting community green spaces Intu has supported The Conservation Volunteers (TCV) Green Gyms since ,917,000 of community support provided in % of waste diverted from landfill in ,000 20,000 15,000 10,000 9% reduction in carbon emissions in Green Gyms work to improve green spaces and provide opportunities for local people to volunteer and improve fitness. Starting at intu Braehead in 2007, our support now covers four Green Gyms, near intu Watford, intu Bromley and in August 2013 we launched our fourth Green Gym at Partington supported by intu Trafford Centre. Our partnership with TCV means we are supporting the work of more than 100 registered volunteers as well as working in partnership with local councils. Green Gyms also enable Intu to work with other organisations in the local community. For the past two years West Herts College has used the Watford Green Gym as part of their photography programme with the results displayed to the public at two exhibitions hosted by intu Watford. 5,000 tonnes % Waste recycled (tonnes) Waste to energy (tonnes) Waste to landfill (tonnes) Benchmarks and accolades 20 Waste to landfill (%) Waste diverted from landfill (%) An additional benefit is that over time these Green Gyms become self-sufficient community volunteer projects, as our first Bromley Green Gym did in early This allows us to move our support to new sites close to intu centres and to broaden our reach within the community. Contacts Kate Bowyer Head of Investor Relations Alexander Nicoll Director of Corporate Responsibility Tel: +44 (0) feedback@intu.co.uk This document includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Intu Properties plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this document on the price at which shares or other securities in Intu Properties plc have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance. 06