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Preliminary Results Presentation 2010!
Agenda!<br />
Introduction<br />
!Toby Courtauld!<br />
!Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market !Toby Courtauld, Chief Executive !!<br />
Valuation!<br />
Acquisitions & Disposals!<br />
Asset Management<br />
Development Update!<br />
!Neil Thompson, Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
2!<br />
Strong Operational Results!<br />
1. Investment successes!<br />
• £166m raised in June!<br />
• £161m, 97% committed by December!<br />
• Valuations 24% in 5 months!<br />
• Further acquisitions announced today <br />
- £111.5m 2 , 2 adjoining City blocks <br />
- New JV!<br />
• £53.0m under offer – 100% off-market!<br />
2. Development programme kicked off!<br />
• 2 schemes started, £67m project cost!<br />
• 7 further schemes in near term programme!<br />
• 1.56m sq ft on site or near term!<br />
• JV established for 100 Bishopsgate, EC3!<br />
• Total programme 2.8m sq ft, 53% of existing assets!<br />
3. Asset management driving rents!<br />
• £13.3m 1 in 144 new lettings!<br />
• Retention rate 71%, up from 57% (yr to Sept 2009)!<br />
• 3.4% void rate vs 7.8% @ March 2009!<br />
• Pro forma void rate 2.7%!<br />
• Strong rent collection / low delinquencies!<br />
• ERVs return to growth in Q4!<br />
1. Including JV properties 2. Acquisition price excludes transaction costs!<br />
3!
Positioned for Growth!<br />
• Strong acquisitions!<br />
• Pipeline of further investment opportunities!<br />
• Portfolio rich with opportunity!<br />
• Exceptional development programme!<br />
- Big upside!<br />
- Off-market!<br />
- 100% central London <br />
- Off low rents!<br />
- Well timed, flexible start dates!<br />
• Strong balance sheet ! - Gearing low at 34%!<br />
- Firepower of £409m!<br />
• Quality team!<br />
- Strength in depth!<br />
Positioned to outperform!<br />
4!<br />
Headline Results!<br />
To March 2010! 12 months ! H1! H2! Q4!<br />
Property Valuation*! +15.0%! -1.2%! +16.3%! +6.7%!<br />
Portfolio ERV movement*! -6.2%! -8.8%! +1.8%! +3.1%!<br />
Total Property Return! +18.4%! -0.2%! +18.6%! +8.7%!<br />
NAV! +15.5%! -8.2%! +25.8%! +12.7%!<br />
*Like-for-like, including share of joint ventures! 5!
Total Property Return <br />
vs IPD Central London Index!<br />
Quarters, June 2003 – Mar 2010 (%)!<br />
15!<br />
10!<br />
5!<br />
GPE!<br />
IPD central London!<br />
Relative!<br />
0!<br />
-5!<br />
-10!<br />
-15!<br />
Jun 2003! Jun 2004! Jun 2005! Jun 2006! Jun 2007! Jun 2008! Jun 2009!<br />
Source: IPD!<br />
6!<br />
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results !Timon Drakesmith !<br />
!Finance Director!<br />
Market !Toby Courtauld, Chief Executive !!<br />
Valuation!<br />
Acquisitions & Disposals!<br />
Asset Management<br />
Development Update!<br />
!Neil Thompson, Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
7!
Financial Highlights!<br />
Balance Sheet / Returns! March 10! March 09! Change!<br />
Portfolio value 1 ! £1,248m! £1,129m! 15.0% 2 !<br />
NAV per share 3 ! 283p! 245p! 15.5%!<br />
REIT NNNAV per share 3! 291p! 251p! 15.9%!<br />
Income Statement! March 10! March 09! Change (%)!<br />
Adjusted PBT! £28.8m! £21.9m! 31.5%!<br />
EPS 3 ! 10.1p! 9.1p! 11.0%!<br />
Total dividends paid! £25.0m! £21.7m! 15.2%!<br />
Dividend per share! 8.0p! 9.0p! (11.1)%!<br />
1<br />
Including share of JVs 2 Like-for-like change excluding sales !!<br />
3<br />
Adjusted and diluted restated by the bonus factor to reflect the new number of shares post rights issue!<br />
8!<br />
Adjusted NAV per share 1 <br />
Movement since 31 March 2009!<br />
Pence!<br />
350!<br />
300!<br />
34!<br />
16! -6!<br />
-6! 10! -8!<br />
-2!<br />
8!<br />
250!<br />
15.5%!<br />
200!<br />
150!<br />
100!<br />
245!<br />
283!<br />
291!<br />
50!<br />
0!<br />
March-09! Investment Group! / JV!Joint Joint ventures! Loss CPO on of<br />
disposal &<br />
properties! properties! Hanover<br />
other!<br />
Sq!<br />
Derivative<br />
termination!<br />
EPS! Dividend! Total Other! Mar-10! M to M M to debt! M NNNAV!<br />
dividend!<br />
debt!<br />
Revaluations!<br />
1 Adjusted per EPRA guidance!<br />
9!
Change in Quarterly NAV!<br />
NAV by quarter (%)!<br />
15.0!<br />
11.3!<br />
11.6!<br />
12.7!<br />
10.0!<br />
7.2!<br />
8.0! 8.1!<br />
5.0!<br />
2.8!<br />
4.2!<br />
0.0!<br />
-5.0!<br />
-10.0!<br />
-6.4! -5.8!<br />
-7.6!<br />
-8.4!<br />
-11.8!<br />
-15.0!<br />
-16.2!<br />
-20.0!<br />
-20.5!<br />
-25.0!<br />
Sep 2006! Mar 2007! Sep 2007! Mar 2008! Sep 2008! Mar 2009! Sep 2009! Mar 2010!<br />
10!<br />
Adjusted Profit Before Tax <br />
12 months to March 2010!<br />
£m!<br />
30.0!<br />
28.0!<br />
9.2!<br />
26.0!<br />
24.0!<br />
22.0!<br />
21.9!<br />
1.6! -1.0!<br />
-3.9!<br />
28.8!<br />
31.5%!<br />
20.0!<br />
1.0!<br />
18.0!<br />
16.0!<br />
14.0!<br />
12.0!<br />
10.0!<br />
Mar Mar-09!<br />
Rental income & joint<br />
venture fees!<br />
& joint venture<br />
fees!<br />
Adjusted JV profits! JV<br />
profits!<br />
Development<br />
profits!<br />
management<br />
profits!<br />
Property costs! & Net interest! Mar-10! 10!<br />
admin costs!<br />
11!
Portfolio Balance <br />
Wholly Owned and JV property assets!<br />
Portfolio Valuation, March 2010!<br />
Wholly Owned!<br />
62%!<br />
Joint Ventures (GPE share)!<br />
38%!<br />
£773m!<br />
Access to new<br />
properties!<br />
Development / risk<br />
sharing!<br />
Bank work out!<br />
£431m!<br />
£363m!<br />
£66m!<br />
£46m!<br />
Additional values for CPH / CT transactions assumes 50% interest, including transaction costs<br />
12!<br />
Debt Analysis!<br />
Pro forma 1! March 2010! March 2009!<br />
Net debt excluding JVs (£m)! 300.6! 232.6! 371.0!<br />
Net gearing! 34.3%! 26.5%! 65.2%!<br />
Total net debt including 50% JV<br />
non-recourse debt (£m)!<br />
427.2! 359.2! 506.4!<br />
Loan-to-property value! 34.2%! 28.8%! 44.9%!<br />
Total net gearing! 48.7%! 41.0%! 89.0%!<br />
Pro forma! March 2010! March 2009!<br />
Interest cover! n/a! 3.4x! 2.1x!<br />
Weighted average interest rate! n/a! 4.9%! 5.8%!<br />
% of debt fixed / capped! n/a! 61%! 86%!<br />
Cash & undrawn facilities (£m)! 409! 477! 330!<br />
1. 31 March 2010 balance sheet adjusted for transactions announced on 20 th May 2010!<br />
13!
Balance Sheet Capacity <br />
Net Debt!<br />
Illustrative increase in net debt 2010 – 2014 (£m)<br />
700!<br />
600!<br />
500!<br />
200!<br />
400!<br />
300!<br />
68!<br />
130!<br />
631!<br />
200!<br />
100!<br />
233!<br />
0!<br />
March 2010! New JV Investments! 2<br />
! Illustrative Net<br />
Acquisitions!<br />
Illustrative<br />
Development Capex!<br />
1<br />
March 2014! !<br />
Gearing! 27%! 72% 1!<br />
1 Pro forma gearing at March 2014 is £631m / £877m based on March 2010 book value<br />
2 Additional values for CPH / CT transactions assumes 50% interest, including transaction costs<br />
14!<br />
Key Financial Messages!<br />
Robust financial results!<br />
• Strong improvement in portfolio value and NAV from March 2010!<br />
• Good PBT and EPS !<br />
• Solid operating performance!<br />
• Plentiful financial resources for new investment!<br />
• Excellent financial position!<br />
Market environment unpredictable but GPE in good shape to grow!<br />
15!
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market !Toby Courtauld !<br />
Valuation<br />
!Chief Executive!<br />
Acquisitions & Disposals!<br />
Asset Management<br />
Development Update!<br />
!Neil Thompson, Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
16!<br />
Market Messages!<br />
London investment pricing turned corner – surfeit of acquisitive equity <br />
Key question: Where next? <br />
Medium term, more to play for. !<br />
!Why?!<br />
1. Price correction selective – market not expensive!<br />
2. Occupational market turned!<br />
3. Weight of money!<br />
!But:!<br />
1. Numerous political and economic uncertainties!<br />
2. Deleveraging process just started!<br />
Opportunity for GPE!<br />
17!
Capital Growth Index!<br />
Indexed<br />
110!<br />
100!<br />
Dec 89 to Dec 93 ! Aug 07 to Mar 10 !<br />
90!<br />
80!<br />
70!<br />
60!<br />
50!<br />
40!<br />
1! 3! 5! 7! 9! 11! 13! 15! 17! 19! 21! 23! 25! 27! 29! 31! 33! 35! 37! 39! 41! 43! 45! 47! 49!<br />
Quarters!<br />
Source: PMA, IPD Monthly Digest!<br />
18!<br />
Yields and why theyʼve fallen!<br />
Central London Prime Yields (%)<br />
Investment Demand and Supply (£bn)<br />
7.0<br />
Demand!<br />
Equity!<br />
6.0<br />
Private! 5.0!<br />
UK REITs! 3.0!<br />
Sovereign! 2.0!<br />
5.0<br />
UK Funds! 2.0!<br />
US Opp Funds! 2.0!<br />
German! 1.5!<br />
4.0<br />
15.5! at least!<br />
West End<br />
City<br />
Supply! Now! Jan 2010!<br />
3.0<br />
City! 4.0! 0.7!<br />
1987<br />
1989<br />
1991<br />
1993<br />
1995<br />
1997<br />
1999<br />
2001<br />
2003<br />
2005<br />
2007<br />
2009<br />
West End! 3.0! 0.7!<br />
7.0! 1.4!<br />
Source: GPE, CB Richard Ellis!<br />
19!
Significant yield gap remains <br />
Prime West End yield gap over 10 year gilts!<br />
% Yield Gap!<br />
6!<br />
4!<br />
Nominal Yield Gap!<br />
Real Yield Gap!<br />
2!<br />
0!<br />
-2!<br />
-4!<br />
-6!<br />
-8!<br />
1982!<br />
1983!<br />
1984!<br />
1985!<br />
1986!<br />
1987!<br />
1988!<br />
1989!<br />
1990!<br />
1991!<br />
1992!<br />
1993!<br />
1994!<br />
1995!<br />
1996!<br />
1997!<br />
1998!<br />
1999!<br />
2000!<br />
2001!<br />
2002!<br />
2003!<br />
2004!<br />
2005!<br />
2006!<br />
2007!<br />
2008!<br />
2009 Q1!<br />
2009 Q2!<br />
2009 Q3!<br />
2009 Q4!<br />
2010 Q1 Est!<br />
Source: PMA! 20!<br />
Real Capital Values!<br />
£ psf real prices!<br />
3,500!<br />
3,000!<br />
Prime City Offices!<br />
Prime West End Offices!<br />
2,500!<br />
2,000!<br />
1,500!<br />
1,000!<br />
500!<br />
0!<br />
1982!<br />
1984!<br />
1986!<br />
1988!<br />
1990!<br />
1992!<br />
1994!<br />
1996!<br />
1998!<br />
2000!<br />
2002!<br />
2004!<br />
2006!<br />
2008!<br />
2010!<br />
Source: PMA Main Scenario! 21!
Improving London Economy <br />
50 = no change!<br />
70!<br />
65!<br />
Employment!<br />
Business activity!<br />
60!<br />
55!<br />
50!<br />
45!<br />
40!<br />
35!<br />
30!<br />
Jan-97! Jan-99! Jan-01! Jan-03! Jan-05! Jan-07! Jan-09!<br />
Source: PMI London Report! 22!<br />
Rent Cycles!<br />
Index, 1 st quarter = 100!<br />
1990-2001 !2001-2007 !2008 onwards!<br />
110!<br />
City<br />
110!<br />
West End<br />
100!<br />
100!<br />
90!<br />
90!<br />
80!<br />
80!<br />
70!<br />
70!<br />
60!<br />
60!<br />
50!<br />
50!<br />
40!<br />
40!<br />
30!<br />
1! 5! 9! 13! 17! 21! 25! 29! 33! 37! 41! 45!<br />
Quarters!<br />
30!<br />
1! 5! 9! 13! 17! 21! 25! 29! 33! 37! 41!<br />
Quarters!<br />
Source: CB Richard Ellis!<br />
23!
Rent Forecasts <br />
Central London Office Market <br />
Grade A Rents*!<br />
£ per sq ft!<br />
Today!<br />
West End!<br />
City!<br />
120!<br />
100!<br />
PMA Prime West End!<br />
PMA Prime City !<br />
IPD Average West End!<br />
PMA forecasts!<br />
Headline rent!<br />
(£ per sq ft)!<br />
Rent free <br />
(months)!<br />
Agency forecasts for next peak!<br />
£77.00! £47.50!<br />
23! 28!<br />
80!<br />
60!<br />
Headline rent <br />
(£ per sq ft)!<br />
£114.00! £70.00!<br />
40!<br />
Growth from today! 48%! 47%!<br />
Rent free <br />
(months)!<br />
9! 10!<br />
Date! 2014! 2014!<br />
20!<br />
0!<br />
2002! 2004! 2006! 2008! 2010! 2012! 2014!<br />
Source: PMA / GPE, *10 year term, 10,000 sq ft in West End, 20,000 sq ft in City. PMA Prime Rents to 95 th percentile!<br />
24!<br />
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market !Toby Courtauld !<br />
Valuation<br />
!Chief Executive!<br />
Acquisitions & Disposals!<br />
Asset Management<br />
Development Update!<br />
!Neil Thompson, Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
25!
The Valuation <br />
Including share of Joint Ventures!<br />
Movement<br />
%!<br />
To 31 March 2010! £m! 12 months!<br />
North of Oxford St! 634.9! 20.3%!<br />
Quarterly Valuation Movement for Total Portfolio!<br />
9.1!<br />
7.1!<br />
Rest of West End! 331.7! 8.5%!<br />
Total West End! 966.6! 16.0%!<br />
3.3!<br />
Total City & Southwark! 92.5! 3.8%!<br />
Investment Portfolio! 1,059.1! 14.8%!<br />
Development properties! 24.0! 24.4%!<br />
Q1! Q2! Q3! Q4!<br />
Properties held<br />
throughout period!<br />
1,083.1! 15.0%!<br />
Acquisitions! 164.6! 16.6%! / 23.9% 1! -4.4!<br />
Total Portfolio! 1,247.7! 15.2%!<br />
1. Excluding 100 Bishopsgate, EC3 – sold & 50% bought on 31 March 2010<br />
26!<br />
The Valuation 1 <br />
Drivers of Valuation Movement 2! 27!<br />
% movement!<br />
Q1!<br />
Rental value movement Yield shift !Residual!<br />
Q2!<br />
Q3!<br />
Q4!<br />
12<br />
months!<br />
-10%! -5%! 0%! 5%! 10%! 15%! 20%! 25%!<br />
1 Including share of Joint Ventures 2 Excludes development properties!
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market<br />
!Toby Courtauld!<br />
Valuation<br />
!Chief Executive!<br />
Acquisitions & Disposals!<br />
Asset Management<br />
Development Update!<br />
!Neil Thompson, Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
28!<br />
Acquisition Summary <br />
Transaction Type! Examples! £m 2!<br />
Asset management plays!<br />
90 Queen St, EC4!<br />
Austin Reed, Regent St, W1!<br />
Kingsland House, Regent St, W1!<br />
City Place House, Basinghall St, EC2!<br />
45.8ʼ!<br />
13.5 1!<br />
4.0 1!<br />
94.0ʼ!<br />
Redevelopment plays! Marcol House, 289/295 Regent St, W1!<br />
& 23/24 Newman St, W1!<br />
Development costs including new debt!<br />
Major refurbishment plays! Piccadilly / Jermyn St, W1!<br />
City Tower, Basinghall St, EC2!<br />
10.0ʼ!<br />
78.1 3!<br />
6.0 1!<br />
17.5 1 !<br />
Transaction Summary!<br />
Transacted / Committed!<br />
Under offer!<br />
£m!<br />
268.9! 83% off market!<br />
53.0! 100% off market!<br />
Under review! 1,300.0!<br />
1. GPE 50% share 2. Values are before acquisition costs 3. Expected Capex at acquisition date!<br />
29!
Acquisitions <br />
Austin Reed, Regent St, W1!<br />
1. After headrent deduction 2. Pre settlement of outstanding headlease and occupational lease rent reviews!<br />
30!<br />
Acquisitions <br />
City Place House, Basinghall St, EC2!<br />
• Quality building – good floor plates!<br />
• Headlease from City for 108 years!<br />
• 7 tenants @ avg. £47 per sq ft!<br />
• £94m 1 (£531 per sq ft), 7.2% NIY <br />
Base case!<br />
• Refurbish reception etc. !<br />
• Restructure tenancies !<br />
• Lengthen leases!<br />
• Surrender, refurb & re-lease!<br />
• Attractive IRRs!<br />
1 Acquisition price excludes transaction costs<br />
31!
Acquisitions <br />
City Tower, Basinghall St, EC2!<br />
• 50/50 JV with Starwood Capital!<br />
• Adjoins City Place House!<br />
• Grade B building – improvement potential!<br />
• Headlease from City for 100 years <br />
• 36 tenants!<br />
• Let @ £31 per sq ft avg.!<br />
• £35m (£17.5m GPE share) 1 <br />
or £263 per sq ft @ 8.3% NIY!<br />
• 17% vacancy!<br />
• 10% yield assuming vacant space let <br />
Base case !<br />
• Comprehensive refurb!<br />
• Accretive ungeared IRR!<br />
1 Acquisition price excludes transaction costs<br />
32!<br />
Acquisitions <br />
Basinghall Estate Joint Venture!<br />
• 1.3 acres!<br />
• 310,000 sq ft <br />
London Wall!<br />
• JV purchase price £129m 1 (£416 per sq ft)!<br />
• 7.4% NIY!<br />
• 8.0% post letting vacant space (34,600 sq ft)!<br />
• GPE will manage, including!<br />
• Asset management!<br />
• Development management <br />
Aldermanbury!<br />
Basinghall St!<br />
Summary!<br />
• Good yield, with upside!<br />
• Beneath replacement cost!<br />
• <strong>Great</strong> location!<br />
• Medium term, development potential!<br />
1 Acquisition price excludes transaction costs<br />
33!
Where next for acquisitions?!<br />
• Selective value <br />
• Usual discipline will prevail!<br />
• Central London!<br />
• Beneath replacement cost!<br />
• Decent running yields!<br />
• Supportable rents!<br />
• Angles to reposition <br />
• £409m committed firepower <br />
• £1.3bn under review!<br />
More to come!<br />
34!<br />
Disposals!<br />
Date sold! Price !<br />
Relative to <br />
Mar 09 ! NIY !<br />
Price <br />
(£ psf) !<br />
29/35 <strong>Great</strong> <strong>Portland</strong> St, W1 ! May-09! £3.5m 1 ! +0.0%! 6.9%! £450!<br />
Freehold<br />
equivalent <br />
(£ psf)!<br />
Bond St House, W1! May-09! £45.0m 2 ! +4.0%! 5.8%! £1,540! £2,057!<br />
Spirella House, W1! Aug-09! £11.4m 1 ! +12.5%! 4.0% ! £1,640! £1,730!<br />
First half total! £59.9m ! 4.9%! £1,280! £1,476!<br />
79/83 <strong>Great</strong> <strong>Portland</strong> St, W1 ! Dec-09! £2.4m! -0.8%! 6.2%! £540!<br />
18/19 Hanover Square, W1! Dec-09! £35.9m! -34.9%! 7.1%! £510!<br />
Bishopsgate Estate, EC3<br />
(50%)!<br />
Mar-10! £43.0m! -1.6%! 8.2%! £340!<br />
Second half total! £81.3m! 7.6%! £405!<br />
Total! £141.2m ! 6.9%! £600!<br />
1. 50% share of Joint Venture 2. Includes £5m of deferred consideration received in second half!<br />
35!
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market<br />
Valuation !!<br />
Acquisitions & Disposals!<br />
!Toby Courtauld, Chief Executive!<br />
Asset Management !Neil Thompson !<br />
Development Update !Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
Asset Management <br />
Tenant retention, Year to March 2010!<br />
Area (000 sq ft)!<br />
450!<br />
400!<br />
350!<br />
300!<br />
250!<br />
71%!<br />
200!<br />
150!<br />
100!<br />
50!<br />
6%!<br />
16%!<br />
10%!<br />
0!<br />
Expiries & breaks! Retained! Under refurbishment! Relet! Under offer! Remaining!<br />
7%!<br />
37!
Asset Management <br />
Kent House, W1!<br />
ERV 1 (£ psf)!<br />
80!<br />
70!<br />
60!<br />
50!<br />
40!<br />
1. Valuerʼs ERV!<br />
38!<br />
Asset Management <br />
Void rate, % by rental value!<br />
% by rental value!<br />
14.0!<br />
12.0!<br />
Investment Portfolio<br />
Development / Refurbishment!<br />
10.0!<br />
3.2!<br />
8.0!<br />
6.0!<br />
1.8!<br />
8.9!<br />
9.4!<br />
4.0!<br />
2.0!<br />
7.8!<br />
5.8!<br />
3.4!<br />
2.7!<br />
0.0!<br />
Mar-09! Sep-09! Mar-10! Pro forma!<br />
39!
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Valuation<br />
Market !!<br />
Acquisitions & Disposals!<br />
!Toby Courtauld, Chief Executive!<br />
Asset Management !Neil Thompson !<br />
Development Update !Portfolio Director!<br />
Outlook<br />
!Toby Courtauld, Chief Executive!<br />
40!<br />
Development Update!<br />
• Central London development pipeline!<br />
• Construction costs!<br />
• Near term programme and pipeline!<br />
• Development case studies!<br />
41!
Central London Development Pipeline <br />
Vacancy rates!<br />
Vacancy rates (%) !<br />
16!<br />
12!<br />
8!<br />
Central London! City! West End !<br />
• Grade A vacancy rate!<br />
• City 3.5%!<br />
• West End 3.8%!<br />
• Central London speculative <br />
construction down 48% !<br />
4!<br />
0!<br />
Q1 2000! Q1 2002! Q1 2004! Q1 2006! Q1 2008! Q1 2010!<br />
Source: CB Richard Ellis / JLL / DJD!<br />
42!<br />
Central London Development Pipeline <br />
Development Completions!<br />
Million sq ft!<br />
16!<br />
14!<br />
12!<br />
10!<br />
Proposed Available!<br />
U/C Available!<br />
U/C Let/Under Offer!<br />
Completed!<br />
8!<br />
6!<br />
Grade A Take Up long term average!<br />
4!<br />
2!<br />
0!<br />
1985! 1988! 1991! 1994! 1997! 2000! 2003! 2006! 2009! 2012!<br />
Source: CB Richard Ellis!<br />
43!
Construction Costs <br />
Forecast!<br />
Rebased to 100 Q1 2006!<br />
120!<br />
110!<br />
23/24 Newman Street, W1!<br />
Marcol House, 289/295 Regent St, W1 !<br />
184/190 Oxford Street, W1!<br />
240 Blackfriars Road, SE1!<br />
12/14 & 43 Fetter Lane, EC4!<br />
79/97 Wigmore Street, W1 !<br />
24/25 Britton Street, EC1!<br />
Walmar House, 288/300 Regent St, W1!<br />
100 Bishopsgate, EC3 !<br />
100!<br />
90!<br />
2007! 2007! 2008! 2008! 2009! 2009! 2010! 2010! 2011! 2011! 2012! 2012! 2013! 2013! 2014! 2014!<br />
Source: Davis Langdon and GPE!<br />
44!<br />
GPE Near Term Programme and Pipeline!<br />
Earliest Start Anticipated Finish New building area 1<br />
Cost<br />
£m<br />
Started<br />
Marcol House, 289/295 Regent St, W1 Aug 12 102,500 55.5<br />
23/24 Newman Street, W1 Sep 11 25,200 11.1<br />
2010 / 2011<br />
184/190 Oxford St, W1 Sep 10 Dec 10 26,500 2.0<br />
240 Blackfriars Road, SE1 Sep 10 Aug 13 233,500 59.8<br />
12/14 & 43 Fetter Lane, EC4 Sep 10 Jul 13 139,200 43.3<br />
79/97 Wigmore Street, W1 Oct 10 Jun 13 112,700 34.1<br />
24/25 Britton Street, EC1 Oct 10 Apr 11 51,300 3.7<br />
Walmar House, 288/300 Regent St, W1 Jun 11 Dec 12 59,800 11.6<br />
100 Bishopsgate, EC3 Jun 11 Oct 14 815,400 273.9<br />
Total of near term projects 1,566,100 495.0<br />
Pipeline<br />
15 projects 2011+ - 1,198,800 -<br />
Total Programme<br />
(24 projects, 53% of GPE existing portfolio)<br />
2,764,900 -<br />
1. Areas are in sq ft and at 100%. 2. For those held in JV, costs is shown at 50% and excludes book value 45!
Development Case Studies <br />
Marcol House, 289/295 Regent St, W1!<br />
• Strip out / demolition work started!<br />
• Completion Summer 2012!<br />
• Revised planning application <br />
(April 2010)!<br />
• Improved floor plate!<br />
• Reduced construction risk <br />
- removed sub-basement!<br />
• Increased ERV (+5%)!<br />
• GPE priority return of £26.3m <br />
– now exceeded!<br />
46!<br />
Development Case Studies <br />
79/97 Wigmore St, W1 <br />
47!
Development Case Studies <br />
New JV, 100 Bishopsgate, EC3!<br />
• Sold March 2010!<br />
• 50:50 GPE/Brookfield!<br />
• £85.95m (March 2010 book value)!<br />
Why sell now?!<br />
• Site assembly completed!<br />
• Planning consent for 815,000 sq ft!<br />
• Vacant possession March 2011 <br />
Preparation!<br />
• Complementary skills!<br />
• Financial capacity!<br />
• Brookfield perfect partner!<br />
Delivery!<br />
48!<br />
Development Case Studies <br />
New JV, 100 Bishopsgate, EC3 <br />
Where next?!<br />
• Design enhancement!<br />
• Brookfield high rise development /<br />
construction skills!<br />
• <strong>Great</strong>er efficiency!<br />
• Increased area >850,000 sq ft!<br />
• City of London supportive!<br />
• Target start date mid 2011!<br />
• VP process started!<br />
• Some pre-letting required!<br />
• Non-recourse finance likely!<br />
• Tenant handover H2 2014!<br />
World class building!<br />
49!
Developments Summary!<br />
• Portfolio position will deliver growth via refurbishment and development!<br />
• Activity set to increase!<br />
• Delivery early in the cycle!<br />
• Investments are creating new opportunities!<br />
• Experienced / focused team – maximising performance!<br />
50!<br />
Agenda!<br />
Introduction<br />
!Toby Courtauld, Chief Executive!<br />
Financial Results<br />
!Timon Drakesmith, Finance Director!<br />
Market<br />
Valuation !!<br />
Acquisitions & disposals!<br />
!Toby Courtauld, Chief Executive!<br />
Asset Management<br />
Development Update !<br />
!Neil Thompson, Portfolio Director!<br />
Outlook !Toby Courtauld !<br />
!Chief Executive!<br />
51!
Outlook!<br />
Londonʼs occupational markets turned corner – beware the risks!<br />
Investment market to slow – selective value exists!<br />
GPE well placed!<br />
• Portfolio, off low rents, central London, rich with opportunity!<br />
• High quality development programme - Well-timed!<br />
• Flexible capital structure – deliver programme, new opportunities!<br />
• Team working well - strength in depth!<br />
Confident outlook!<br />
52!<br />
Preliminary Results Presentation 2010!
Total Property Return <br />
vs IPD Central London Index!<br />
Years to 31 March!<br />
40.0!<br />
30.0!<br />
20.0!<br />
GPE!<br />
IPD central London!<br />
Relative!<br />
10.0!<br />
0.0!<br />
-10.0!<br />
-20.0!<br />
-30.0!<br />
2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010!<br />
Source: IPD<br />
54!<br />
Debt Funding Strategy!<br />
Current Debt Maturity Profile (£m)!<br />
900!<br />
£50m GPE facility <br />
600!<br />
£300m GPE Bank facility <br />
300!<br />
£200m GPE Bank facility <br />
£28m GVP Bank facility <br />
£113m GCP Bank facility <br />
£143m 5.625% Debenture <br />
0!<br />
2009! 2010! 2011! 2012! 2013! 2014!<br />
2029!<br />
55!
Tenant delinquencies <br />
Six month periods!<br />
H2 2008! H1 2009! H2 2009! H1 2010! H2 2010!<br />
Number of<br />
delinquencies !<br />
Value of delinquencies<br />
as % of Rent Roll !<br />
Rent collected within 7<br />
working days!<br />
5! 4! 9! 5! 6!<br />
0.2%! 0.3%! 0.4%! 0.1%! 0.9%!<br />
95.8%! 96.9%! 97.0%! 94.3%! 95.0%!<br />
Delinquencies by sector!<br />
Other!<br />
Professional<br />
Services!<br />
Media!<br />
Retail!<br />
12!<br />
10!<br />
8!<br />
6!<br />
4!<br />
2!<br />
0!<br />
H2 2008! H1 2009! H2 2009! H1 2010! H2 2010!<br />
56!<br />
Central London Investment Turnover!<br />
£ billion!<br />
7!<br />
6!<br />
Overseas Purchasers!<br />
Domestic Purchasers!<br />
5!<br />
4!<br />
3!<br />
2!<br />
1!<br />
0!<br />
1998 Q3!<br />
2000 Q1!<br />
2001 Q3!<br />
2003 Q1!<br />
2004 Q3!<br />
2006 Q1!<br />
2007 Q3!<br />
2009 Q1!<br />
Source: CB Richard Ellis, 13/04/2010!
Capital Values!<br />
£ psf!<br />
2,500!<br />
Prime City! Prime West End ! Average (IPD) West End!<br />
2,000!<br />
1,500!<br />
1,000!<br />
500!<br />
0!<br />
1989! 1992! 1995! 1998! 2001! 2004! 2007! 2010!<br />
Source: PMA Main Scenario!<br />
West End Offices <br />
Under Offer!<br />
000 sq ft!<br />
1,200<br />
1,000<br />
JLL<br />
CBRE<br />
800<br />
600<br />
400<br />
200<br />
0<br />
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10<br />
Source: JLL / CBRE!<br />
59!
City and West End Take-up!<br />
Million sq ft!<br />
2.5!<br />
City!<br />
2.5<br />
West End!<br />
2.0!<br />
2.0<br />
1.5!<br />
1.5<br />
1.0!<br />
1.0<br />
0.5!<br />
0.5<br />
0.0!<br />
2004 Q3!<br />
2005 Q1!<br />
2005 Q3!<br />
2006 Q1!<br />
2006 Q3!<br />
2007 Q1!<br />
2007 Q3!<br />
2008 Q1!<br />
2008 Q3!<br />
2009 Q1!<br />
2009 Q3!<br />
2010 Q1!<br />
0.0<br />
2004 Q3<br />
2005 Q1<br />
2005 Q3<br />
2006 Q1<br />
2006 Q3<br />
2007 Q1<br />
2007 Q3<br />
2008 Q1<br />
2008 Q3<br />
2009 Q1<br />
2009 Q3<br />
2010 Q1<br />
Secondhand! New completed! Pre-let!<br />
Source: CB Richard Ellis!<br />
60!<br />
West End Active Requirements <br />
>10,000 sq ft!<br />
Change<br />
000 sq ft<br />
Nov<br />
2008<br />
May<br />
2009<br />
Nov<br />
2009<br />
May<br />
2010 12 months<br />
1 st 6<br />
months<br />
2 nd 6<br />
months<br />
Professional Services! 40! 35! 85! 77! 220%! 143%! -9%!<br />
Financial Services! 157! 166! 272! 402! 242%! 64%! 148%!<br />
Manufacturing & Corporates! 59! 145! 260! 124! 86%! 79%! -52%!<br />
Miscellaneous! 142! 108! 684! 362! 335%! 533%! 53%!<br />
Marketing & Media! 213! 145! 315! 155! 107%! 117%! -51%!<br />
IT & Technology! 65! 15! 60! 195! 1300%! 300%! 325%!<br />
Government! 146! 205! 397! 568! 277%! 94%! 143%!<br />
Total! 822! 819! 2,073! 1883! 221%! 153%! -13%!<br />
Source: Knight Frank! 61!
The Valuation <br />
Including share of Joint Ventures!<br />
Movement %!<br />
To 31 March 2010! £m! 12 months! Q1! Q2! Q3! Q4!<br />
North of Oxford St!<br />
Offices! 470.9! 21.3! (3.3)! 5.8! 11.6! 7.4!<br />
Retail! 164.0! 17.4! (1.6)! 2.0! 13.0! 4.9!<br />
Rest of West End!<br />
Offices! 187.6! 4.9! (9.2)! 2.6! 7.1! 5.4!<br />
Retail! 144.1! 13.5! (2.2)! 3.1! 9.1! 3.9!<br />
Total West End! 966.6! 16.0! (4.1)! 4.1! 9.5! 6.0!<br />
City & Southwark!<br />
Offices! 86.1! 3.7! (7.7)! (2.9)! 4.8! 10.7!<br />
Retail! 6.4! 4.6! (1.4)! 0.7! 2.4! 2.9!<br />
Total City & Southwark! 92.5! 3.8! (7.3)! (2.6)! 4.4! 10.1!<br />
Investment Portfolio! 1,059.1! 14.8! (4.4)! 3.4! 9.0! 6.4!<br />
Development properties! 24.0! 24.4! (4.8)! (2.5)! 9.5! 22.6!<br />
Properties held throughout period! 1,083.1! 15.0! (4.4)! 3.3! 9.0! 6.7!<br />
Acquisitions! 164.6! 16.6! (23.9 1 ) ! -! -! 9.5! 9.5!<br />
Total Portfolio! 1,247.7! 15.2! (4.4)! 3.3! 9.1! 7.1!<br />
1. Excluding 100 Bishopsgate, EC3 – sold & 50% bought on 31 March 2010 62!<br />
The Valuation <br />
Wholly Owned!<br />
12 months to<br />
Value<br />
£m<br />
Mar 2010<br />
£m<br />
Change<br />
%<br />
3 months<br />
%<br />
6 months<br />
%<br />
North of Oxford St 470.4 83.7 21.6% 7.0% 18.9%<br />
Rest of West End 156.3 13.6 9.5% 4.1% 12.2%<br />
Total West End 626.7 97.3 18.4% 6.3% 17.1%<br />
City and Southwark 73.4 3.5 5.1% 10.1% 14.9%<br />
Investment portfolio 700.1 100.8 16.8% 6.7% 16.9%<br />
Development properties 17.2 3.5 25.3% 20.6% 32.3%<br />
Properties held throughout the year 717.3 104.3 17.0% 6.9% 17.2%<br />
Acquisitions 55.6 7.5 15.6% 4.3% 15.6%<br />
Total portfolio 772.9 111.8 16.9% 6.8% 17.1%<br />
63!
The Valuation <br />
Joint Ventures!<br />
12 months to<br />
Value<br />
£m<br />
Mar 2010<br />
£m<br />
Change<br />
%<br />
3 months<br />
%<br />
6 months<br />
%<br />
North of Oxford St 329.2 46.5 16.4% 6.1% 16.0%<br />
Rest of West End 350.8 24.8 7.6% 5.2% 12.6%<br />
Total West End 680.0 71.3 11.7% 5.6% 14.2%<br />
City and Southwark 38.3 (0.3) (0.9%) 10.2% 15.0%<br />
Investment portfolio 718.3 71.0 11.0% 5.9% 14.2%<br />
Development properties 13.5 2.5 22.4% 28.2% 34.4%<br />
Properties held throughout the year 731.8 73.5 11.1% 6.2% 14.6%<br />
Acquisitions 172.3 17.8 11.5% 8.0% 11.5%<br />
Total portfolio 904.1 91.3 11.2% 6.6% 14.0%<br />
64!<br />
The Valuation 1 <br />
ERV and Reversionary Potential!<br />
To 30 March!<br />
North of Oxford St!<br />
12 months!<br />
%! £m!<br />
Movement in ERV!<br />
6 months <br />
%!<br />
Average Office !<br />
Rent Passing!<br />
Average !<br />
Office ERV!<br />
Reversionary !<br />
Potential!<br />
3 months <br />
%! £ per sq ft! £ per sq ft! %!<br />
Offices! (5.3)! (1.4)! 1.7! 3.9! 38.50! 38.70! (6.0)!<br />
Retail! 0.7! 0.0! 3.0! 2.4! 16.1!<br />
Rest of West End!<br />
Offices! (13.9)! (1.8)! (0.7)! 1.2! 36.10! 33.10! (7.2)!<br />
Retail! (0.4)! 0.0! 0.4! 0.9! 10.9!<br />
Total West End! (6.0)! (3.2)! 1.1! 2.7! 37.70! 36.90! 0.2!<br />
City & Southwark!<br />
Offices! (0.7)! (0.6)! 6.6! 5.3! 30.00! 29.80! 0.9!<br />
Retail! (6.7)! (0.1)! 0.1! 0.1!<br />
Total City & Southwark! (7.0)! (0.7)! 5.9! 4.6! 4.9!<br />
Total Let Portfolio! (6.2)! (3.9)! (1.8)! 3.1! 35.30! 34.70! 1.2!<br />
1 Including share of Joint Ventures! 65!
The Valuation 1 <br />
Yield Profile 2!<br />
31 March 2010! Initial Yield ! True Equivalent Yield!<br />
%! %! Basis Point +/- like-for-like!<br />
3 months ! 6 months! 12 months!<br />
North of Oxford Street!<br />
Offices! 4.4 ! 5.3 ! (33)! (100)! (155)!<br />
Retail! 4.6 ! 5.2 ! (16)! (81)! (97)!<br />
Rest Of West End!<br />
Offices! 5.2 ! 5.2 ! (39)! (89)! (137)!<br />
Retail! 4.2 ! 4.5 ! (14)! (64)! (79)!<br />
Total West End ! 4.5 ! 5.2 ! (28)! (88)! (129)!<br />
City & Southwark! 6.4 ! 6.5 ! (52)! (82)! (94)!<br />
Total Let Portfolio! 4.8 ! 5.4 ! (30)! (88)! (126)!<br />
/ 5.3 3 6 months to!<br />
1 Including share of Joint Ventures!<br />
2 Excludes development properties !<br />
3 Initial yield post expiry of rent free periods under contracted leases!<br />
66!<br />
Asset Management <br />
Movement in Reversions!<br />
30 Sept 2009! 31 March 2010!<br />
At beginning of period! £4.9m! £1.3m!<br />
Asset management! £2.0m! £0.1m!<br />
Disposals / acquisitions! (£0.5m)! (£2.7m)!<br />
ERV movement! (£5.1m)! £2.1m!<br />
At end of period! £1.3m! £0.8m!<br />
67!
Where next for acquisitions? !<br />
Deals under review (£m)!<br />
3,000!<br />
2,500!<br />
% @ ‘fair value’<br />
2,000!<br />
1,500!<br />
1,000!<br />
0%<br />
39%<br />
500!<br />
48%<br />
0!<br />
Mar-08!<br />
Apr-08!<br />
May-08!<br />
Jun-08!<br />
Jul-08!<br />
Aug-08!<br />
Sep-08!<br />
Oct-08!<br />
Nov-08!<br />
Dec-08!<br />
Jan-09!<br />
Feb-09!<br />
Mar-09!<br />
Apr-09!<br />
May-09!<br />
Jun-09!<br />
Jul-09!<br />
Aug-09!<br />
Sep-09!<br />
Oct-09!<br />
Nov-09!<br />
Dec-09!<br />
Jan-10!<br />
Feb-10!<br />
Mar-10!<br />
Apr-10!<br />
68!<br />
Asset Management <br />
New lettings, Renewals and Rent Reviews!<br />
£m!<br />
5.0!<br />
4.0!<br />
38 events!<br />
New lettings and renewals!<br />
Rent reviews!<br />
47 events!<br />
0.6!<br />
39 events!<br />
0.7!<br />
3.0!<br />
1.1!<br />
30 events!<br />
2.0!<br />
4.1!<br />
3.8!<br />
1.0!<br />
2.5!<br />
2.9!<br />
0.0!<br />
Jun 2009! Sep 2009! Dec 2009! Mar 2010!<br />
69!
GPE Longer Term Pipeline!<br />
2011+ Start<br />
New Build area,<br />
sq ft<br />
Park Crescent, W1 2011+ 143,985<br />
40/48 Broadway, SW1 2011+ 82,066<br />
Jermyn Street <strong>Estates</strong>, SW1 2011+ 137,464<br />
Buchanan House, 24/31 Holborn, EC1 2011+ 74,000<br />
Hanover Square, W1 2011+ 211,502<br />
Bramah House, 65/71 Bermondsey St, SE1 2011+ 20,000<br />
14/28 Shand St, SE1 2011+ 50,000<br />
St Lawrence House, 26/34 Broadwick St, W1 2011+ 85,000<br />
79/89 Oxford St, W1 2011+ 35,000<br />
82/86 <strong>Great</strong> <strong>Portland</strong> St, W1 2011+ 21,409<br />
88/92 <strong>Great</strong> <strong>Portland</strong> St, W1 2011+ 13,759<br />
Mount Royal, 508/520 Oxford St, W1 2011+ 88,352<br />
Kingsland/Carrington House, 122/130 Regent Street, W1 2011+ 51,400<br />
103/113 Regent Street, W1 2011+ 65,000<br />
26/40 Kensington High St, 10/14 Old Court Place, W8 2011+ 119,863<br />
Longer Term Pipeline 1,198,800<br />
70!<br />
Asset Management <br />
Vacant possession / expiry profile 1 71!<br />
% of total rental income subject to lease expiry or break!<br />
19/05/2010 Devt Near Term Dev Pipeline v04 amended.xls<br />
45.0%!<br />
40.0%!<br />
35.0%!<br />
30.0%!<br />
25.0%!<br />
Investment income!<br />
Income to be developed!<br />
3.7%!<br />
20.0%!<br />
15.0%!<br />
10.0%!<br />
5.0%!<br />
0.0%!<br />
13.1%!<br />
3.2%!<br />
6.2%! 4.6%!<br />
2.2%!<br />
7.4%!<br />
1.5%!<br />
13.1%!<br />
0.3%!<br />
9.1%!<br />
35.6%!<br />
2011! 2012! 2013! 2014! 2015! 2016 +!<br />
Years to March!
Disclaimer!<br />
This presentation contains certain forward-looking statements. By their nature, forward-looking statements<br />
involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and<br />
results may differ materially from any outcomes or results expressed or implied by such forward-thinking<br />
statements. <br />
Any forward-looking statements made by or on behalf of <strong>Great</strong> <strong>Portland</strong> <strong>Estates</strong> plc (“GPE”) speak only as of<br />
the date they are made and no representation or warranty is given in relation to them, including as to their<br />
completeness or accuracy or the basis on which they were prepared. GPE does not undertake to update<br />
forward-looking statements to reflect any changes in GPEʼs expectations with regard thereto or any changes<br />
in events, conditions or circumstances on which any such statement is based. <br />
Information contained in this presentation relating to the Company or its share price, or the yield on its<br />
shares, should not be relied upon as an indicator of future performance. !<br />
72!
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