Kl Lender Update Presentation -june 16_v6

June 2016

PHASE 2 PROJECT UPDATEBATTERSEA POWER STATION

Progressing to Drawdown

ContentsBATTERSEA POWER STATION

2

a. Overall Project Progress Update b. Market Update c. Phase 2 Updates & Approvals

1. Sales & leasing 2. Delivery & procurement 3. Appraisal & funding 4. Drawdown CPs 5. Facility amendments 6. Next steps

OVERALL PROGRESS UPDATE

Overall Progress UpdateBATTERSEA POWER STATION

• Sold 1,415 apartments of the 1,661 launched (85%) with GDV of c£1.85bn - successfully capitalised on market conditions and de-risked the project.

• Very positive progress with commercial leasing. Phase 1 is +90% leased. Entire Phase 2 office under HoT to a market leading global tech form - capitalising on the strong commercial market conditions.

• Procurement cost pressures are being offset by strong commercial revenue performance - margin preserved.

• Phase 1 on track to complete from Q4 2016 to Q1 2017.

• Phase 2 main works have commenced with Skanska.

• Phase 3 works have commenced.

• NLE works making good progress.

• Value added across the site - improving affordable housing values, improving future residential mix and achieving planning consent for the Wharves.

Strong Residential Sales PerformanceBATTERSEA POWER STATION

5

PHASE UNITS SOLD TO DATE % Sold Average £ sq ft

Phase 1 863 99% £1,067

Phase 2 232 >90% £2,172

Phase 3a 320 >58% £1,681

TOTAL 1,415

• Strong sales performance to date means the project is well positioned within the current residential market conditions.

• Provides the opportunity for a proactive sales strategy which focuses on the medium / long term value drivers.

Strong Commercial Letting PerformanceBATTERSEA POWER STATION

6

• Phase 1 commercial is over 90% let - independent artisan strategy to create London’s new riverside village.

THE POWER STATION

CIRCUS WEST

Arch No.759HARBOUR CLUB

Arch No.758 HARBOUR CLUB

Arch No.757 DODD’S

Arch No.756

Arch No.755

Arch No.754

Arch No.753

Arch No.752 RAW DUCK

Arch No.751

Arch No.750 WHIRLED CINEMA


Academy

Public WC’s

StaffWelfare

EstateStorage

EstateStorage

Arch No.748

Arch No.747

Arch No.746

Arch No.745

Arch No.744

KEY

As at 22nd April 2016

Advanced Negotiations

HOT’s Issued

In Solicitor’s Hands

Exchanged

Available

UNIT131368sf

UNIT 16 16485sf BPSDC OFFICE 1

UNIT 245069sf

UNIT 17436sf

UNIT 17440sf

UNIT17414sf

UNIT18344sf

UNIT18419sf

UNIT 201997sf

& UNIT 21UNIT 225439sf

RESI MARKETINGSUITE

UNIT 253288sf

UNIT 263708sf

UNIT 272890sf

UNIT 294699sf

UNIT 28ResidentialEntrance-Bessborough

UNIT 23ResidentialEntrance- Scott

UNIT 19Residential

Entrance-Ambrose UNIT 11

ResidentialEntrance-DAWSON

UNIT 08ResidentialEntrance-PEARCE

UNIT 04ResidentialEntrance-FLADGATE

UNIT 0 2

Residential Entrance-

HALLIDAY

Residential

Entrance

UNIT 012884sfESTATE AGENCY

UNIT 031966sf

UNIT 051385sf

UNIT 062623sf

UNIT 075678sfESTATE

MANAGEMENTOFFICE

UNIT 1410832sfGYM

UNIT 09

UNIT 10 6431sf

UNIT 122704sf

UNIT 156111sfBPSDC OFFICE 2

UPPER GROUNDPHASE ONE

COFFEEWORKS PHILIPPA

CRADDOCK

VAGABONDTHE MARKET PLACE

ALLENS

PAUL EDMONDS

FLOUR POWERCITY

DARWIN & WALLACE

PEDLER

WRIGHT BROTHERS

RESTAURANT

RESTAURANT

Note: For office units, net of WCs areas is being used

BPSDC Space

THE POWER STATION

CIRCUS WEST

Arch No.759HARBOUR CLUB

Arch No.758 HARBOUR CLUB

Arch No. 757 DODD’S

Arch No.756

Arch No.755

Arch No.754

Arch No.753

Arch No.752 RAW DUCK

Arch No.751



Academy

Public WC’s

StaffWelfare

EstateStorage

EstateStorage

Arch No.748

Arch No.747

Arch No.746

Arch No.745

Arch No.744

KEY

As at 22nd April 2016

Advanced Negotiations

HOT’s Issued

In Solicitor’s Hands

Exchanged

Available

UNIT 29 LOWER LEVEL4043sf

UNITS 01 & 03ARCHES ROAD4,585 sf

UNIT 051413sf

SECURITY HUB

BOOM CYCLE

GROUND FLOORPHASE ONE

DARWIN & WALLACE

Note: For office units, Net of WCs area is being used

BPSDC Space

BATTERSEA POWER STATION

Darwin & WallaceThe Market Place

Strong Commercial Letting Performance

8

Arch

No

759.

Arch

No.

758

Arch

No.

757

Arch

No.

756

Arch

No.

755

Arch

No.

754

Arch

No.

753.o

752

N hcrAAr

ch N

o. 7

51

Arch

No.

750

Arch

No.

749

Arch

No.

748

Arch

No.

747

Arch

No.

746

Arch

No.

745

Arch

No.

744

UNIT13

1300sf


UNIT 24 4965sfUNIT 17 399sfUNIT 17 415sf

UNIT17

392sf

UNIT18

323sf

UNIT18

383sf

UNIT 25 3274sf

UNIT 26 3675sf

UNIT 27 2860sf

UNIT 29 4631sf

UNIT 28 Residential Entrance- Bessborough

UNIT 11 Residential Entrance- DAWSON

UNIT 08 Residential Entrance- PEARCE

U13

UNIT 06 2565sf

UNIT 07 5983sf ESTATEMANAGEMENT OFFICE

UNIT 14 10,761sf GYM

UNIT 09 3551sf

UNIT 10 2884sf

UNIT 12 2678sf


UNIT 15 10,322sf BPSDC OFFICE 1

FLORIST

WINE MERCHANT/ BAR

BATTERSEA GENERAL STOREB

BAKERY & CHEESEMONGER

LUNCH/LIGHT BITES/BAKERY/COFFEE

ALL DAY DINING

CASUAL/ALL DAY/BISTRO

LUNCH/DINNERCASUAL/ ALL DAY/ TAPAS

LUNCH & DINNER 36

UNIT 27 2860sf

UNIT 29 4631sf

UNIT 28 Residential Entrance- Bessborough

ALL DAY DININ

CASUAL/ALL DA

LUN

KEY

As at 30 March 2016

F&B

Village Hall

Small format cinema / Pop-up / Co-working spaceBPSDC Space

PHASE ONE ARCHES

Arch 757 Dodd’s

Arch 758/759 Harbour Club

Arch 749/750 Whirled Cinema

Arch 751 Pizza Pilgrims / Homeslice / Locappy

Arch 752 Bao / Arlos Arch 753

Raw Duck

Arch 755 Bone Daddies / Jose Pizarro

Arch 754 Bleecker St / Tommi’s

BATTERSEA POWER STATIONStrong Commercial Letting Performance


9

• Very strong interest in leasing the Phase 2 office space with bids received from several very large high quality TMT companies.

• Entire Phase 2 office (470k sqft) is under board approved HoTs to a global tech firm for their new European HQ - a pre-let of this magnitude adds enormous value.


10

• Phase 3 Hotel (165 room) leased under a 15 year management agreement with Art’Otel (Park Plaza Group).

BATTERSEA POWER STATIONNorthern Line Extension - Construction Progress

East end of Crossover Box

• TfL continues to make good progress on site with construction works - have been on site for c15 months

• Crossover box primary structure complete

• Station box primary structure commenced

• Crossover box piling in progress

View of Station and Crossover Box Diaphragm walling to Station Box

13

BATTERSEA POWER STATIONFuture Phases - Adding Value

14

WRWA & BATTERSEA POWER STATION AUGUST 2015 SCHEME SUMMARY

WRWA SITE REDEVELOPMENT (10.08.2015)

• Phase 4a affordable housing RP tenders indicate material premium to appraisal values (up to c£30m) - adds value to site.

• Planning approval achieved to improve the residential site wide mix across Phases 3b and 4 and change the Phase 4 hotel to residential - adds value to site.

• Planning approval achieved for the redevelopment of the neighbouring Wharfs - adds value to site.

MARKET UPDATE

16

Market Update - ResidentialBATTERSEA POWER STATION

• A range of macro factors currently impacting the central London residential market.

• Impact being felt predominantly in sales volumes.

17


• JLL remain confident in medium to long term growth potential due to key fundamental factors.

18


• BPS remains well positioned to continue to outperform the market due to its many beneficial characteristics.

- The north / south value gap

- Redefining prime central London

- The NLE

- The maturing masterplan / placemaking as Phases 1, 2 & 3 complete

- The critical mass of visitor numbers

19

Market Update - CommercialBATTERSEA POWER STATION

• Central London retail market is buoyant with significant tenant and investor demand.

• Forecast for continued rental growth over the next five years remain positive.

20


• Office market continues to experience strong occupier demand and extremely low vacancy rates putting upward pressure on rents.

• An increase in future supply will ease the vacant pressure whilst still promoting strong rental growth.


21

• The appraisal ERV’s are priced conservatively in comparison to the market - strong upside potential

56

70

120

-‐

20

40

60

80

100

120

140

Office -‐ Phase 2

Appraisal vs Market Rents -‐ Office

Appraisal

City Prime

West End Prime

200

475

1,000

-‐

200

400

600

800

1,000

1,200

Retail (Zone A) -‐ Phase 2

Appraisal vs Market Rents -‐ Retail

Appraisal

West End Prime

ShoppingCentre Prime


22

• Sustained appetite for central London assets from investors, although yield levels stabilised.

• The appraisal yields are priced very conservatively in comparison to the market - strong upside potential

4.75%4.50%

4.00%4.25%

3.50%

2.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

Office -‐ Phase 2 Retail -‐ Phase 2

Appraisal vs Market Yields

AppraisalAppraisal

City PrimeShopping Centre Prime

West End Prime

West End Prime

Market Update - ConstructionBATTERSEA POWER STATION

23

• London construction market remains extremely busy; clients competing to use a limited pool of contractors.

• Many clients experiencing difficulty in agreeing price and contract with contractors due to high volumes of work.

• Recent examples where clients have had to change contractors include One Nine Elms (Dalian Wanda) and Ram Brewery (Green Land).

• First and early signs appearing that the slowdown in London residential market will lead to a downgrade in construction cost growth forecasts.

PHASE 2 UPDATE

• Residential sales values have been underwritten - c90% pre-sales.

• Commercial values have been underwritten - entire office space under HoT.

• Construction contract being agreed with Skanska - optimum transfer of risk in the market.

• Construction works well underway and progressing well - onsite for +24 months.

• Revenue growth has outperformed cost growth - margin preserved.

• No increase in debt sizing - cost to complete remains fully funded.

• Programme shift requires extension to facility expiry - 5 year utilisation timing maintained.

25

The Power Station - Key Status UpdateBATTERSEA POWER STATION

CON-TROL

RESIDENTIAL: 410,000 sq ftOFFICE: 580,000 sq ftEVENT SPACE: 105,000 sq ftRETAIL AND F&B: 420,000 sq ft

A Global ly Unique Retai l Dest inat ion

An Retai l Exper ience Attract ing +40m Vis i tors Per Year

Dest inat ion Enhanced by Leisure and Event Space

2,000 capaci ty events venue

Chimney l i f t look out

Sought after f i lming locat ion History of h igh prof i le events

Chimney l i f t look out Iconic event spaces

Workspace L ike No Other

Sales & Leasing

31

32

The Power Station - Residential Sales UpdateBATTERSEA POWER STATION

• Over 90% of units sold, underwriting all product pricing and types.

• The strong sales position offers the ability to focus on a long term value enhancement strategy.

No. Units GDV £psf Average Capital Value

Sold 229 £568,528,965 £2,172 £2,482,659

Reserved 3 £18,270,847 £2,897 £6,090,282

Held 5 £38,370,000 £3,192 £7,674,000

Off-Market 18 £154,393,000 £3,163 £8,577,389

Total 255 £779,562,812 £2,370 £3,057,109

BATTERSEA POWER STATION

• The Power Station leasing campaign is focused on pre-letting the office space in the first instance, coupled with building brand awareness of retail letting in the medium term.

• The market interest in the office is extremely strong - especially comforting given the quality of tenants (TMT), attractive terms and early timing.

• Interest driven by the iconic building, large floor plates, centrality / accessibility and scheme amenity / mix of uses.

• Over 50 notable viewings and +350 people visiting site from brands such as ITV, Warner Brothers and the British Fashion Council.

• AFL offers for all or part of the space received from Discovery Communications, The Office Group, Expedia and ‘Cezanne’.

• Interest at this level underwrites the commercial values, implies strong opportunity for future outperformance, provides the ability to enhance leverage and offers an excellent endorsement for the entire project.

The Power Station - Commercial Leasing Update

33

The Power Station - Commercial Leasing UpdateBATTERSEA POWER STATION

November 2015 PADDINGTON AND KING’S CROSS RENTAL GROWTH

Source: CBRE

£ per sq ft

0

10

20

30

40

50

60

70

80

90

1991

19

92

1993

19

94

1995

19

96

1997

19

98

1999

20

00

2001

20

02

2003

20

04

2005

20

06

2007

20

08

2009

20

10

2011

20

12

2013

20

14

2015

20

16

2017

20

18

2019

Paddington King's Cross

Visa, £40.00 PSF Q4 2001

BNP £47.50 PSF 2013

FORECAST

M&S, £53.50 PSF Q2 2008

Nokia, £57.50 PSF Q4 2015

Statoil, £60.00 PSF Q3 2008

M&S, £35.00 PSF Q2 2001

Orange, £35.00 PSF Q1 2001

Google, £55 PSF Q1 2014 (estimate for land

value purposes) LB Camden, £47.50 PSF

(estimate for land value purposes) Q4 2011

Google, £62.50 PSF Q4 2014 (old BNP space)

Havas, £62.50 PSF Q2 2014

M&S, £57.50 PSF Q4 2015

Q2 2015 1-Google, £56.50 PSF (S2)and 2-UMG Oct 2015 (Pancras) at £75

34

• Cezanne offers the opportunity for a similar ‘Google’ effect, as experienced at Kings Cross - over 40% rental growth.

• Knight Frank have suggested this deal may also offer further yield compression of c75bps - additional £100m value.

• Retail leasing strategy is to:

- continue to build awareness and seek new contacts.

- seek to secure anchor letting for fashion hub space i.e Selfridges, Galeries Lafayette as first key letting.

- secure up to 25% of income by year end 2017.

- announce anchor letting as preface to further leasing.

- focus on new market entrants, specifically; new leads, British Fashion brands.

The Power Station - Commercial Leasing UpdateBATTERSEA POWER STATION

35

BATTERSEA POWER STATIONThe Power Station - Value Opportunities

• We continue to strive to increase the value of the Power Station and studies are ongoing to;

1. Increase the retail area internally (reduce mall widths and push out the shop fronts)

2. Convert the Fashion Hub into an Anchor Store to drive retail rents

3. Redesign the halo landscaping from water to grass and introduce retail pop-outs into the revised Halo landscaping

4. Convert the Hotel into an Office

5. Relocate the Turbine Hall A bridge to access the Control Room A from the Events space

6. Detailing of the Food Market and introduction of the Chimney Lift shop

7. Convert the Leisure club into Retail

• The benefit of these opportunities is not factored into the appraisal and the anticipated value uplift could be £50m before costs.

36

37

The Power Station - Value OpportunitiesBATTERSEA POWER STATION

• The below illustrates the potential to push out the shop fronts and increase area - Turbine Halls A and B current.

38


• The below illustrates the potential to push out the shop fronts and increase area - Turbine Halls A and B enhanced.

39


• The potential to create a 40,000 sq ft anchor store within level 1 of the retail space and benefit from additional footfall and covenant.

40


• Proposal to replace the water feature along the Halo Road with hard landscaping to allow the creation of additional retail frontage pop-outs.

• Creates an active facade, compliments the existing retail offer and enhanced F&B areas.

41


• Conversion of existing Hotel to an office/business club use in order to capitalise on the strong office demand (The Office Group).

• Creates an additional 40,000 sq ft of office space located on levels 2 and 3 of the Boiler House with an entrance lobby at ground level.

Delivery & Procurement

42

A view in the Boiler House showing the size of the existing steel members

Inside the North East Chimney the rebuild has commenced, first levels of shutters going in

43

The Power Station - Construction ProgressBATTERSEA POWER STATION

High level steel adaptions A view from the North East Chimney deck over the East roof as we prepare to commence demolition

44


Great progress continues on the East Wall

Piling in the Boiler house and adaptions to the Historical Façade retention system.

In the turbine hall progress drives on

45


The Power Station - Route to ContractBATTERSEA POWER STATION

46

47

• Direct trade contracts of c£260m have been procured to satisfy the drawdown CP - will shortly be issued for sign off.

• The direct trade contracts will be novated to Skanska under the Main Contract thereafter.

• The key contracts include:

- Internal enabling and north secant (BLU-3) - £21m

- External cladding (Focchi) - £27m

- Internal piling (Bauer) - £29m

- North sub-structure capping beam (Carey) - £17m

- Internal sub-substructure (Mitchellson) - £60m

- Steel (William Hare) - £67m

- Demolition (Keltbray) - £42m

The Power Station - £240m Direct Trade Contracts for CPBATTERSEA POWER STATION

48

The Power Station - Main Contract Terms BATTERSEA POWER STATION

• The Main Contract terms are being negotiated with Skanska.

• The terms reflect the evolving construction market during the procurement process and subsequent need to consider appropriate risk sharing between the developer and contractor in order to obtain an optimum risk adjusted price.

• Some of the key terms which reflect a shift in risk allocation (compared to Phase 1) are as follows:

- OH&P

- Advanced payment amounts

- Caps on liability and LAD’s

- Limits on PI levels

- Limits on concept design responsibility

- Limit ground, inclement weather and utility performance risk liability

- Limit phase interface liabilities

Key Terms! Anticipated Outcome

Advanced Payment

•  £23m payment for Early Works Contract •  £50 - 60M (c£78m total), fully bonded on demand

OH & P •  4.25% to achieve the contract programme •  0.25% incentivised should they achieve a 60 day programme

betterment

LAD’s •  LAD’s at c£450,000 per week at PC (August 2020) – payback

period currently under negotiation.

The Power Station - Construction Cost OverviewBATTERSEA POWER STATION

• The below illustrates the construction cost position.

49


Preliminary Repair Works (Refurb Co)

•  Chimney replacement works •  Elevation Repairs •  Wash Tower Works •  Miscellaneous trade packages

Deferred Works

•  Offices CAT A fit-out •  Retail shop fronts •  Boiler House offices lounge and

reception •  Food Market Fit-out (Ex S&C

Services) •  Control Rooms A & B •  Bandstand •  26nr Residential Apartments

Tenants, MUSCO and Others

•  Tenant fit out (Offices CAT B+, Retail, Events Space, Cinema)

•  Utility & infrastructure services fit out (i.e. Musco / Esco)

•  Landlord ICT / Asset Management business systems

•  UKPN

Other Phases / Site Wide Costs

•  Malaysia square finishes, Gallery and Leisure Box

•  Hard landscaping/road build up to roundabout and access roads to East

•  River cooling/HRP •  Site wide roads (i.e. pump

house lane) and phase / infrastructure interface

•  Jetty •  CIL

£87.9m

£57.5m

Costs outside P2 Appraisal

• The following are held outside the Skanska contract.

51

• The Phase 2 construction costs include c£130m of site wide infrastructure which benefits the wider project but practically needs to be funded and delivered as part of Phase 2.

• The key additional site wide items include:

- Increased boundary

- Northern basement incl service road and north loading bays

- ESCO box and infrastructure

- Southern basement incl Phase 3 access

- South east loading bay

- East basement

- Phase 1 temporary flu tower

- Phase 1 halo road works

- Phase 3 basement box, halo road and infrastructure works

- Phase 4 access ramp piling


52


BATTERSEA POWER STATIONThe Power Station - Construction Programme

53

• Skanska have proposed a contract programme on which they are willing to contract.

• The programme completion represents a 12 month extension to the original estimates, overall PC in August 2020.

• Therefore a 12 month shift to the facility expiry date is required (from Oct 19 to Oct 20).

• The programme change requires a shift of the debt utilisation period of 12 months, not an extension - utilisation remains 5 years.

Appraisal & Funding

54

55

The Power Station - Appraisal UpdateBATTERSEA POWER STATION

• The latest forecast represents a c£33m improvement in profit since funding financial close (£163m improvement net of site wide costs).

• Revenue estimates reflect underwritten values and a conservative view of market conditions.

• Cost estimates represent the appointments and procurement agreed to date and the latest position being agreed with Skanska.

• Contingency and inflation provisions of c£187m remain to mitigate against risks.

DEVELOPMENT FEASIBILITY SUMMARY (£'000)

REVENUETotal Residential Proceeds £775 mTotal Commercial Value £1,409 mTotal Revenue £2,184 m

DEVELOPMENT COSTSAllocated Land Cost £91 mSurvey & Enabling Works £5 mStatutory £6 mInsurance £35 mConstruction Costs £1,275 mConstruction Contingency £134 mConstruction Inflation £66 mProfessional Fees £89 mSales & Marketing - Residential £23 mSales & Marketing - Commercial £94 mOther Development Costs £56 mTotal Development Costs £1,872 m

Total Finance Costs £128 m

Less: Phase 2 Funded Site Wide Costs -£130 m

PERFORMANCEProject Profit £314 mReturn on Equity (ROE) 42%Profit on Cost (PoC) 17%

FUNDINGPeak Equity £745mPeak Debt £750m

56

The Power Station - Revenue AssumptionsBATTERSEA POWER STATION

• The appraisal residential revenue is underwritten by the strong sales performance to date (90% sold).

- The average value of £2,370 psf reflects actual sales to date and a 5% buffer against unsold JLL price list.

- Agents fees of 2% are applied to the unsold units, which compares against the average cost of sales to date of 1.4%.

• The appraisal office revenue is underwritten by the Cezanne lease HoT’s.

• Valuation based on a conservative NIY of 4.75% to reflect the strength of the tenant and commercial terms.

• Knight Frank advised of further yield compression potential of 75bps due to the Cezanne deal.

• The JLL Dec 15 valuation did not take into account any leasing demand to date, excludes this upside.

57

The Power Station - Revenue AssumptionsBATTERSEA POWER STATION

• The appraisal retail, F&B and leisure revenue reflect a conservative interpretation of the latest market rental and yield evidence, agent advice and JLL Dec 15 valuation.

R entps ft /p.a.

Annual R ent

R ent F ree

(months )NIY

Net Value at PC

R entps ft /p.a.

Annual R ent

R ent F ree

(months )NIY

Net Value at PC

R etail 296,879 £81.0 £24.0m 20.0 mo 4.50% £464.9m £76.5 £22.7m 20.0 mo 4.00% £502.5m +£37.6m

F&B 73,533 £51.1 £3.8m 16.0 mo 4.50% £74.0m £46.3 £3.5m 16.0 mo 4.00% £79.5m +£5.5m

L eisure 80,720 £105.2 £8.5m 11.0 mo 6.29% £119.7m £116.7 £9.4m 2.0 mo 4.00% £220.9m +£101.2m

Other ** n/a n/a £13.8m n/a 6.50% £194.90 n/a £9.2m n/a 5.87% £173.6m £(21.3)m

* E xc ludes the BandS tand, P arking and ATMS**Inc lude the C himney L ift and C ommerc ialis ation £123.0m

Assets *

BPSDC APPRAISAL JLL VALUATION DEC 2015

TOTAL VAL UE UPL IF T B AS E D ON J L L VAL UAT ION

DIFFERENCE IN

NET VALUE AT PC

Area Assets * B PS DC J L LK night F rank

R etail 4.50% 4.00% 4.00%

F&B 4.50% 4.00% 4.00%

L eisure 6.29% 4.00% 5.50%

Other ** 6.50% 5.87% 5.50%

58

The Power Station - Cost AssumptionsBATTERSEA POWER STATION

• The key development cost assumptions are summarised as follows:

- The construction cost assumptions reflect the anticipated main contract price from Skanska and is also supported by a G&T cost plan.

- A contingency and inflation provision of £184m is budgeted to offset future risk. This allowance takes into account that the risk on the construction costs has been significantly reduced during the Skanska main contract procurement process, works completed to date and agreement of c£260m of direct trade contracts.

- The professional fee budget of £89m reflects the key consultant appointments - represents c7% of the construction cost.

- The sales and marketing budget (excl incentive capex) reflects 2.5% of residential and commercial GDV.

59

The Power Station - Funding UpdateBATTERSEA POWER STATION

• Debt facility maintained at £750m.

• Peak equity funding £745m.

• Bankable pre-lets offer ability to increase leverage in the future.

• Debt utilisations occurring within 5 years. £0m

£200m

£400m

£600m

£800m

£1,000m

£1,200m

£1,400m

£1,600m

Equity Equity (above max debt) DebtDeposits & Stage Payments Resi Revenue Funding Revenue for RepaymentResi Proceeds Office Proceeds Retail Proceeds

Peak Equity

Peak Debt

Deposit/stage payment funding

60


• Project spend to date of c£150m excluding land cost.

Phase 2 Development Costs Total Budget Spend To Date % Budget Remaining

Acquisition CostsAllocated Land Cost £90.85 m £90.85 m 100% -‐

Development CostsSurvey & Enabling Works £5.21 m £2.59 m 50% £2.62 mStatutory £5.66 m £0.25 m 4% £5.41 mInsurance £34.77 m £3.52 m 10% £31.25 mConstruction Costs £1,391.39 m £61.36 m 4% £1,330.04 mProfessional Fees £75.46 m £35.35 m 47% £40.11 mSales & Marketing -‐ Residential £23.09 m £12.09 m 52% £11.01 mSales & Marketing -‐ Commercial £93.71 m £1.69 m 2% £92.02 mSitewide & Phase Specific Admin & Legal £55.79 m £15.19 m 27% £40.59 mTotal Development Costs £1,685.08 m £132.04 m 8% £1,553.04 m

Total Power Station Refurb Costs £96.27 m - 0% £96.27 m

Total Finance Costs £127.78 m £17.08 m 13% £110.69 m

Total Development Costs £1,999.98 m £239.97 m 12% £1,760.00 m

£0m

£200m

£400m

£600m

£800m

£1,000m

£1,200m

£1,400m

£1,600m

£1,800m

£2,000m

Allocated Land Cost Statutory Other Development CostsConstruction Costs Professional Fees Power Station Refurb Cost from Phase 1Total Finance Costs Sales & Marketing

Costs to Date

Costs to Complete

61


• Costs to date (excl land) funded predominantly by equity.

• Costs to complete remain fully funded on a conservative capital structure.

• First drawdown will include the funding of costs to date (balance D:E) plus Skanska advanced payments.

PH2 SOURCE & APPLICATION OF FUNDS Total Budget To Date % Budget Remaining

Funding Sources (£'000)DepositsExchange / Stage Payments £163.55 m £12.56 m 32% £150.98 m

Revenue FundingSales Proceeds to cover PS Refurb Costs £99.81 m - 0% £99.81 m

Equity RequirementsDevelopment Equity £717.31 m £136.56 m 13% £580.75 mLand Equity £27.26 m £27.26 m 100% -‐Total Equity £744.56 m £163.81 m 17% £580.75 m

Debt RequirementsDevelopment Debt £928.46 m -‐ 0% £928.46 mLand Debt £63.60 m £63.60 m 100% -‐Total Debt £992.06 m £63.60 m 6% £928.46 mTotal Funding Sources £1,999.98 m £239.97 m 12% £1,760.00 mCost Applications (£'000)Total Ph2 Development Costs £1,775.93 m £222.89 m 13% £1,553.04 mTotal PS Refurb Costs £96.27 m -‐ 0% £96.27 mTotal Finance Costs £127.78 m £17.08 m 13% £110.69 mTotal Cost Applications £1,999.98 m £239.97 m 12% £1,760.00 m

Drawdown Conditions Precedent

62

63

The Power Station - Drawdown CPsBATTERSEA POWER STATION

• CPs to drawdown Term Facility B and Revolver almost complete.

• Awaiting approval for items in the deal room.

• c£260m of construction contracts have been procured, to be submitted for approval shortly.

• Will engage with the Project Monitor and B&M to complete their reports.

• Target CP satisfaction to enable drawdown in August.

KEY DRAWDOWN CONDITION PRECEDENTS STATUS-‐ Presales threshold (£511m) Achieved, awaiting sign off-‐ Rights of light reliance Achieved, awaiting sign off-‐ Planning report Achieved, awaiting sign off-‐ NHBC buildmark scheme Achieved, awaiting sign off-‐ Requisite consents Achieved, awaiting sign off-‐ Executed DMA Achieved, awaiting sign off-‐ Executed PCSA Achieved, awaiting sign off-‐ Executed key professional team appointments Achieved, awaiting sign off-‐ CW's & TPR's for key professional team Achieved, awaiting sign off-‐ Executed construction contracts totaling £240m Procured, awaiting execution & sign off-‐ CW's for construction contracts Procured, awaiting execution & sign off-‐ Perfomance and advanced payment bonds for contracts Procured, awaiting execution & sign off-‐ Development appraisal To be submitted-‐ Project Monitor report To be completed-‐ Baker McKenzie report To be completed

Facility Amendments

64

65

The Power Station - Facility AmendmentsBATTERSEA POWER STATION

• The programme shift dictates the need for an extension of the Phase 2 facility expiry date by 12 months (from Oct 19 to Oct 20).

• The availability period remains within 5 years (no extension), therefore avoids Bank Negara ‘R+R’ process

• Minor amendments to the facility agreement to reflect the programme shift - markup to be circulated shortly.

• Not required to satisfy drawdown conditions.

NEXT STEPS

67

The Power Station - Next StepsBATTERSEA POWER STATION

• The target timing of key next steps summarised as follows:

1. Sign off completed CPs - June 16

2. Complete key outstanding CPs

A. Execute £260m direct trade contracts - June 16

B. Complete Project Monitor and B&M reports - July 16

3. Complete first drawdown - August 16

4. Enter into Skanska main contract (not required for drawdown) - August 16

5. Complete facility agreement amendments (not required for drawdown) - August 16

Kl Lender Update Presentation -june 16_v6

Documents

Transcript of Kl Lender Update Presentation -june 16_v6