British Land : third quarter trading update

19 Jan 2017

Chris Grigg, Chief Executive said: 'British Land has had a positive quarter reflecting the strong positioning of our portfolio and our engagement with occupiers and consumers. We have completed over 400,000 sq ft of lettings across the business and are progressing discussions with a broad range of occupiers. Retail footfall and sales growth continue to outperform industry benchmarks and we have made further disposals of non-core assets and residential units ahead of valuation. The business is well placed; we remain mindful of potential headwinds going forward.'

Quality portfolio attracting strong occupier demand

• 314,000 sq ft of Retail lettings and renewals, 8.7% ahead of ERV; a further 189,000 sq ft under offer.
• Retailer sales for the quarter were up 0.6% year on year outperforming the benchmark by 200 bps; footfall for the quarter was -0.6% year on year outperforming the benchmark by 220 bps.
• 51,000 sq ft of Office lettings and renewals, in-line with ERV. 7 Clarges Street offices now over 80% let or under offer at an average rent of £113 psf, in line with pre-referendum ERVs.
• Leasing discussions with a wide range of occupiers are progressing across our London campuses; ten major discussions are under way totalling 1.4 million sq ft.
• Enabling works commenced on the 520,000 sq ft redevelopment of 100 Liverpool Street.

Further disposals ahead of valuation

• £119 million disposals exchanged in the quarter including £85 million of non-core Retail and Office disposals 2% ahead of September 2016 valuations; £191 million Retail portfolio sale previously announced completed in January 2017.
• £34 million of Residential disposals exchanged 10% ahead of valuation including sales at Aldgate Place and one further apartment at Clarges Mayfair.

Resilient positioning with secure income and robust finances

• High quality, diverse occupier base with 97% occupancy and an average lease length of 8 years; speculative development commitment remains at 5% of the portfolio.
• Proportionally consolidated LTV at 30.5% based on September 2016 valuations, including sales completed post period end (September 2016: 31.6%) with weighted average interest rate of 3.3% (September 2016: 3.2%). Based on current commitments the Group has no requirement to refinance until 2020.
• Third quarter dividend confirmed at 7.30 pence, 3.0% ahead of prior year.

Note 1 - Dividend

The third interim dividend payment for the quarter ended 31 December 2016 will be 7.30 pence per share, a 3.0% increase on the comparable period last year. The third interim dividend will be paid on 5 May 2017 to shareholders on the register at close of business on 31 March 2017. The current issued share capital (excluding Treasury shares) is 1,029,760,766 ordinary shares of 25p each. An announcement on the split between PID and non-PID along with the availability of any scrip dividend alternative will be made no later than 4 business days before the ex-dividend date of 30 March 2017.

Forward-Looking Statements

This release contains certain 'forward-looking' statements reflecting, among other things, current views on our markets, activities and prospects. Forward-looking statements can be identified by the use of forward-looking terminology, including but not limited to terms such as 'believes', 'estimates', 'anticipates', 'expects', 'intends' or 'plans' or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are not guarantees of future performance. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond British Land's ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Except to the extent required by law or regulation, British Land does not undertake to update or revise forward-looking statements to reflect any changes in British Land's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

Notes to Editors:

About British Land
We are one of Europe's largest publicly listed real estate companies. We own, manage, develop and finance a portfolio of high quality UK commercial property, focused on Retail and London Offices and Residential. We own or manage total assets of £19.0 billion (British Land share is £13.9 billion) as valued at 30 September 2016. Our properties are home to over 1,200 different organisations ranging from international brands to local start-ups.

Our strategy is to create Places People Prefer. It is based on long term trends and creates a portfolio suited to current and future needs which are aligned to modern lifestyles. We employ our placemaking skills, and increasingly our mixed-use expertise to expand the appeal to a broader range of occupiers and drive long term performance.

Retail accounts for 49% of our portfolio. We create outstanding places for modern consumer lifestyles, places to shop eat and be entertained. Comprising over 20 million sq ft of Retail and Leisure space across regional and local multi-let destinations, superstores, department stores and leisure assets, the Retail portfolio is modern, flexible and adaptable to a wide range of formats.

Office and Residential accounts for 49% of our portfolio. It comprises 7.6 million sq ft of well-connected office-led campuses and 'campus-lite' clusters of high quality buildings. Office campuses include Regent's Place and Paddington Central in the West End and Broadgate (50% share) in the City. Other assets include The Leadenhall Building, York House, 10 Portman Square and Marble Arch House and our residential assets are at Clarges Mayfair, The Hempel Collection and Aldgate Place.

Two per cent of our portfolio is at Canada Water - a 46 acre redevelopment opportunity in our medium term pipeline to create a new mixed-use urban centre for London.

Sustainability is embedded throughout our business. Our places become part of their local communities and promote health, improve productivity and increase enjoyment. We protect asset value and generate income from energy generation and efficiency, materials innovation and flood risk reduction, and develop skills and opportunities to help local people and businesses grow.

In April 2016 British Land received the Queen's Award for Enterprise: Sustainable Development, the UK's highest accolade for business success for economic, social and environmental benefits achievements over the last five years.

Further details can be found on the British Land website at www.britishland.com.

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