Half-year Report - Part 3 | Company Announcement

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Since 1 April 2017		Price (100%)	Price (BL Share)	Annual Passing Rent
Acquisitions	Sector	£m	£m	£m²
Completed
Tesco, Brislington - Tesco exchange transaction¹	Retail	46	23	2
Harlech, Newport - Tesco exchange transaction¹	Retail	41	20	1
10 - 40 The Broadway, Ealing	Retail	49	49	2
Total		136	92	5
¹ Part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets
²BL share of annualised rent topped up for rent frees

Since 1 April 2017		Price (100%)	Price (BL Share)	Annual Passing Rent
Disposals	Sector	£m	£m	£m⁶
Completed
The Leadenhall Building¹	Offices	1,150	575	17
Superstores^2,3	Retail	428	242	15
B&Q, Bury & Grimsby⁴	Retail	56	56	4
The Hempel Collection	Residential	50	50	-
Exchanged
Clarges, Mayfair⁵	Residential	66	66	-
The Hempel Collection	Residential	2	2	-
Aldgate Place	Residential	2	1	-
Total		1,754	992	36
¹Exchanged during the year ended 31 March 2017
² Of which £116m (BL share) was part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets
³ Of which £21m of superstores exchanged in period and completed post period end
⁴Exchanged in period and completed post period end
⁵Exchanged post period end
⁶BL share of annualised rent topped up for rent frees

Portfolio Valuation by Sector
At 30 September 2017	Group	JVs & Funds	Total	H1 Change
	£m	£m	£m	%¹	£m
Regional	1,121	1,866	2,987	0.1	2
Local	1,745	461	2,206	(0.9)	(21)
Multi-let	2,866	2,327	5,193	(0.4)	(19)
Department Stores and Leisure	588	1	589	2.4	14
Superstores	130	315	445	0.8	5
Solus and Other	365	-	365	5.8	20
Retail	3,949	2,643	6,592	0.3	20
West End	4,137	-	4,137	3.2	128
City	113	2,269	2,382	1.7	50
Offices	4,250	2,269	6,519	2.6	178
Residential²	116	18	134	3.6	7
Offices and Residential	4,366	2,287	6,653	2.6	185
Canada Water	270	-	270	(4.5)	(13)
Total	8,585	4,930	13,515	1.4	192
Standing Investments	7,827	4,587	12,414	1.2	157
Developments	758	343	1,101	3.3	35
¹Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales
² Stand-alone residential

Retail Portfolio Valuation - Previous Classification Basis
At 30 September 2017	Group		JVs & Funds		Total	H1 Change
	£m	£m		£m		%¹	£m
Shopping Parks	2,056	1,154		3,210		(0.1)	(3)
Shopping Centres	1,175	1,169		2,344		0.2	4
Superstores	130	315		445		0.8	5
Department Stores	168	1		169		2.1	4
Leisure	420	4		424		2.5	10
Retail & Leisure	3,949	2,643		6,592		0.3	20
¹ Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales

Gross Rental Income¹
Accounting Basis £m	6 months to 30 September 2017			Annualised as at 30 September 2017
	Group	JVs & Funds	Total	Group	JVs & Funds	Total
Regional	31	44	75	59	87	146
Local	45	15	60	92	27	119
Multi-let	76	59	135	151	114	265
Department Stores and Leisure	23	-	23	38	-	38
Superstores	2	12	14	5	21	26
Solus and Other	10	-	10	21	-	21
Retail	111	71	182	215	135	350
West End	65	-	65	134	-	134
City	3	60	63	5	81	86
Offices	68	60	128	139	81	220
Residential²	2	-	2	4	-	4
Offices and Residential	70	60	130	143	81	224
Canada Water	4	-	4	8	-	8
Total	185	131	316	366	216	582
¹Gross rental income differs from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives
² Stand-alone residential

Half-year Report - Part 3

Companies

UK 100

Latest directors dealings

Portfolio Net Yields^1,2
At 30 September 2017	EPRA net initial yield %	EPRA topped up net initial yield %³	Overall topped up net initial yield %⁴	Net equivalent yield %	Net equivalent yield movement bps⁶	Net reversionary yield %	ERV Growth %^5,⁶
Regional	4.4	4.7	4.8	4.9	4	5.0	1.2
Local	5.1	5.3	5.4	5.5	11	5.6	1.1
Multi-let	4.7	5.0	5.0	5.2	7	5.2	1.1
Department Stores and Leisure	5.8	5.8	7.0	5.8	(11)	4.6	5.9
Superstores	5.8	5.8	5.8	5.5	(7)	5.3	(1.2)
Solus and Other	5.3	5.3	5.3	5.4	16	4.2	(5.8)
Retail	4.9	5.1	5.3	5.3	5	5.1	1.0
West End	3.4	3.8	3.8	4.3	(11)	4.7	1.0
City	4.3	4.3	4.3	4.5	1	4.9	1.3
Offices	3.7	4.0	4.0	4.4	(6)	4.8	1.2
Canada Water	2.8	2.9	2.9	3.6	11	3.7	(1.1)
Total	4.3	4.6	4.7	4.8	-	5.0	1.0
¹Including notional purchaser's costs
²Excluding committed developments, assets held for development and residential assets
³Including 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)
⁵As calculated by IPD; 6 months to 30 September 2017
⁶Excludes Euston Tower; as we move closer to tenant break in 2021, valuation now reflects refurbishment assumption which, if included, would distort these movements

Total Property Return (as calculated by IPD)
6 months to 30 September 2017	Retail		Offices		Total
%	British Land	IPD	British Land	IPD	British Land	IPD
Capital Return	0.3	0.9	2.9	2.2	1.5	2.6
- ERV Growth	1.0	0.5	1.2	0.6	1.0	1.0
- Yield Movement¹	5 bps	-6 bps	-6 bps	-10 bps	0 bps	-13 bps
Income Return	2.7	2.5	1.9	1.9	2.3	2.3
Total Property Return	3.0	3.4	4.8	4.1	3.8	5.0
¹Net equivalent yield movement

Occupiers Representing over 0.5% of Total Contracted Rent
At 30 September 2017	% of total rent		% of total rent
Tesco	4.6	New Look	1.0
J Sainsbury	4.3	Asda Group	1.0
UBS AG	3.6	Microsoft	1.0
Debenhams	3.5	Sports Direct	0.9
Kingfisher (B&Q)	3.0	Virgin Active	0.9
HM Government	2.8	Deutsche Bank	0.8
Next	2.5	JD Sports	0.8
Facebook	1.9	Reed Smith	0.8
Dentsu Aegis¹	1.8	H&M	0.7
M&S	1.7	Mayer Brown	0.7
Spirit Group	1.7	Mothercare	0.7
Wesfarmers (Homebase/Bunnings)	1.6	TGI Fridays	0.6
Alliance Boots	1.6	River Island	0.6
Visa Inc	1.6	NEX Group	0.6
Dixons Carphone	1.5	Primark	0.6
Arcadia Group	1.4	Credit Agricole	0.6
Herbert Smith	1.3	Pets at Home	0.6
TK Maxx	1.2	Henderson	0.5
David Lloyd Leisure	1.1	Aramco	0.5
Gazprom	1.1	House of Fraser	0.5
Vodafone	1.1
¹ Represents current occupation of 10 Triton Street covering 118,000 sq ft of space. Taking into account their post period end letting of 310,000 sq ft at 1 Triton Square, % of contracted rent would rise to 5.2%. As part of this new letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land.

Major Holdings
At 30 September 2017	BL Share	Sq ft	Rent	Occupancy	Lease
	%	'000	£m pa¹	rate %^2,4	Length yrs^3,4
Broadgate	50	4,850	180	98.4	8.3
Regent's Place	100	1,740	75	97.2	7.7
Paddington Central	100	958	41	93.8	6.8
Meadowhall, Sheffield	50	1,500	85	97.8	6.7
Teesside, Stockton	100	569	17	95.5	5.5
Drake's Circus, Plymouth	100	1,082	20	97.9	8.8
Sainsbury's Superstores⁵	51	1,742	40	100.0	9.8
Ealing Broadway⁶	100	540	14	94.9	5.2
Glasgow Fort	77	510	21	99.0	6.2
10 Portman Square	100	134	10	100.0	7.6
¹Annualised EPRA contracted rent including 100% of Joint Ventures & Funds
² Including accommodation under offer or subject to asset management
³ Weighted average to first break
⁴Excludes committed and near term developments
⁵ Comprises stand-alone stores
⁶Includes 10-40 The Broadway acquired during the period

Lease Length & Occupancy
At 30 September 2017	Average lease length yrs		Occupancy rate %¹
	To expiry	To break	EPRA Occupancy	Occupancy²
Regional	7.9	6.8	96.9	97.4
Local	7.7	6.7	97.6	98.4
Multi-let	7.8	6.7	97.2	97.9
Department Stores and Leisure	16.9	16.9	99.7	99.7
Superstores	10.7	10.0	100.0	100.0
Solus and Other	12.1	12.0	100.0	100.0
Retail	9.2	8.3	97.7	98.3
West End	8.9	7.3	95.8	96.1
City	9.4	8.2	97.2	98.1
Offices	9.1	7.7	96.3	96.9
Canada Water	6.4	6.3	95.5	97.3
Total	9.1	8.0	97.1	97.6
¹Space allocated to Storey is shown as occupied where there is a Storey tenant in place otherwise it is shown as vacant. Offices occupancy would rise from 96.9% to 97.5% and total occupancy would rise from 97.6% to 97.9% if Storey space were assumed to be fully let.
²Includes accommodation under offer or subject to asset management

Portfolio Weighting
At 30 September	2016	2017	2017	2017
		(current)	(current)	(pro-forma¹)
	%	%	£m	%
Regional	20.7	22.1	2,987	20.8
Local	16.3	16.3	2,206	15.4
Multi-let	37.0	38.4	5,193	36.2
Department Stores and Leisure	4.6	4.4	589	4.1
Superstores	4.9	3.3	445	3.1
Solus and Other	2.5	2.7	365	2.5
Retail	49.0	48.8	6,592	45.9
West End	27.8	30.6	4,137	32.2
City	19.8	17.6	2,382	19.1
Offices	47.6	48.2	6,519	51.3
Residential²	1.4	1.0	134	0.9
Offices and Residential	49.0	49.2	6,653	52.2
Canada Water	2.0	2.0	270	1.9
Total	100.0	100.0	13,515	100.0
Of which London	58%	57%	8,627	60%
¹ Pro forma for developments under construction and committed developments at estimated end value (as determined by the Group's external valuers)
² Stand-alone residential

Annualised Rent & Estimated Rental Value (ERV)
At 30 September 2017	Annualised rent (valuation basis) £m¹			ERV £m	Average rent £psf
At 30 September 2017	Group	JVs & Funds	Total	Total	Contracted²	ERV
Regional	61	86	147	166	31.5	33.7
Local	95	26	121	132	25.3	26.5
Multi-let	156	112	268	298	28.4	30.0
Department Stores and Leisure	36	-	36	29	14.8	12.0
Superstores	7	19	26	24	21.3	19.7
Solus and Other	21	-	21	16	20.1	16.0
Retail	220	131	351	367	24.9	25.2
West End³	128	-	128	176	57.8	61.6
City³	5	89	94	108	51.1	57.2
Offices³	133	89	222	284	54.8	59.7
Residential⁴	5	-	5	4
Offices and Residential	138	89	227	288
Canada Water	8	-	8	10	16.1	20.8
Total	366	220	586	665	31.0	33.3
¹ 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
² Annualised rent, plus rent subject to rent free
³£psf metrics shown for office space only
⁴ Stand-alone residential

Rent Subject to Open Market Rent Review
For period to 31 March	2018	2019	2020	2021	2022	2018-20	2018-22
At 30 September 2017	£m	£m	£m	£m	£m	£m	£m
Regional	7	17	11	17	14	35	66
Local	16	17	11	12	6	44	62
Multi-let	23	34	22	29	20	79	128
Department Stores and Leisure	-	-	-	-	-	-	-
Superstores	3	5	8	7	1	16	24
Solus and Other	-	-	-	-	-	-	-
Retail and Leisure	26	39	30	36	21	95	152
West End	12	27	15	10	9	54	73
City	2	13	4	9	-	19	28
Offices	14	40	19	19	9	73	101
Canada Water	1	1	-	-	-	2	2
Total	41	80	49	55	30	170	255

Rent Subject to Lease Break or Expiry
For period to 31 March	2018	2019	2020	2021	2022	2018-20	2018-22
At 30 September 2017	£m	£m	£m	£m	£m	£m	£m
Regional	10	10	13	10	15	33	58
Local	7	8	10	9	12	25	46
Multi-let	17	18	23	19	27	58	104
Department Stores and Leisure	-	-	-	-	-	-	-
Superstores	-	-	-	-	-	-	-
Solus and Other	-	1	-	-	-	1	1
Retail	17	19	23	19	27	59	105
West End	2	4	4	17	21	10	48
City	-	13	9	8	1	22	31
Offices	2	17	13	25	22	32	79
Canada Water	1	1	1	1	-	3	4
Total	20	37	37	45	49	94	188
% of contracted rent	3.2%	6.0%	6.0%	7.3%	8.0%	15.2%	30.5%

Committed Developments
At 30 September 17	Sector	BL Share	100% sq ft	PC Calendar Year	Current Value	Cost to come	ERV	Let & Under Offer
At 30 September 17		%	'000	PC Calendar Year	£m	£m¹	£m²	£m

Clarges Mayfair - Retail & Residential³	Mixed Use	100	104	Q4 2017	402	26	0.8	-
100 Liverpool Street	Office	50	522	Q4 2019	132	136	18.8	5.1
1 Triton Square⁴	Office	100	366	Q4 2020	182	196	23.1	21.8
1 Finsbury Avenue	Office	50	288	Q1 2019	85	32	7.8	2.2
Speke (Leisure)	Retail	67	66	Q3 2018	9	8	1.1	0.9
Plymouth (Leisure)	Retail	100	107	Q4 2019	-	48	3.1	1.5
Total Committed			1,453		810	446	54.7	31.5
Retail Capex⁵						79
¹ From 1 October 2017. Cost to come excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
² Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)
³ Current value includes units exchanged and not completed of £278m. Further sales of £66m exchanged post period end.
⁴ERV let & under offer of £21.8m represents space taken by Dentsu Aegis. As part of this letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land
⁵ Capex committed and underway within our investment portfolio relating to leasing and asset management

Medium Term Development Pipeline
At 30 September 17	Sector	BL Share %	100% Sq ft	Planning Status
At 30 September 17	Sector	BL Share %	'000	Planning Status

2-3 Finsbury Avenue	Office	50	563	Resolution to Grant
1-2 Broadgate	Office	50	471	Pre-submission
Blossom Street	Office	100	340	Consented
5 Kingdom Street¹	Office	100	332	Consented
Meadowhall (Leisure)	Retail	50	330	Resolution to Grant
Peterborough (Leisure)	Retail	100	204	Submitted
Ealing - 10-40 The Broadway	Retail	100	298	Pre-submission
Aldgate Place Phase 2	Residential	50	145	Consented
Eden Walk Retail & Residential	Mixed Use	50	533	Consented
Total Medium Term excl. Canada Water			3,216
Canada Water - Phase 1²	Mixed Use	100	1,835	Pre-submission
¹Planning consent for previous 240,000 sq ft scheme
² Canada Water site covers 5.5m sq ft in total based on net area based on gross area of up to 7m sq ft

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.

Near Term Development Pipeline
At 30 September 17	Sector	BL Share	100% sq ft	Expected Start On Site	Current Value	Cost to Come	ERV	Let & Under Offer	Planning Status
At 30 September 17	Sector	%	'000		£m	£m¹	£m²	£m	Planning Status

135 Bishopsgate	Office	50	325	Q4 2017	89	49	9.1	4.4	Consented
Gateway Building	Leisure	100	105	Q3 2018	7	105	6.0	-	Res to Grant
Bradford (Leisure)	Retail	100	49	Q3 2018	1	16	0.9	-	Pre-submission
Teesside (Leisure)	Retail	100	83	Q3 2018	34	48	4.6	-	Res to Grant
Total Near-Term			562		131	218	20.6	4.4
Retail Capex ³						95
¹ From 1 October 2017. Cost to come excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
² Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)
³ Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement