INVESTOR PRESENTATION

NOVEMBER 2010 www britishland comNOVEMBER 2010 www.britishland.com

British Land At A Glance

• One of Europe’s leading REITs• One of Europe’s leading REITs

• High quality £8.9bn prime UK retail and London office portfolio

• Secure income flows underpinned by long leases and quality occupiers

• Well positioned to deliver growth and value from existing portfolio

• Strong balance sheet and access to debt finance

• Opportunities to create further value through acquisitions and development

Generating Superior Total Shareholder Returns

2

High Quality £8.9bn Prime Real Estate Portfolio 

• £14.0bn owned or under management (BL Share £8.9bn)

• Over 33m sq ft of prime retail and London office properties 

Other 3%

Retail Warehouses 28% City Offices 20%

West End Offices

Superstores 15%

West End Offices12%

Europe 4%

Department Stores 5%

Shopping Centres 13%

Europe 4%

3

Property With Enduring Occupier Appeal: Retail

Glasgow Fort Shopping Park, Glasgow Meadowhall Shopping Centre, Sheffield

• One of 6 super regional shopping centres in the UK• Dominant out of town retail destination• Attracts more than 24m visitors each years• Over 280 retail national and international brands 

• Premier 390,000 sq ft Open A1 fashion park • Convenient out of town location• Annual footfall of c.13m• 220,000 sq ft consented extensions, 80,000 sq ft 

4

pre‐let to M&S

Property With Enduring Occupier Appeal: Offices

Broadgate, City of London Regent’s Place, West End of London

• 1.2 m sq ft of mixed office and retail• Further 500,000 sq ft: starting soon• Good infrastructure (national rail/6 tube lines)• Broad mix of quality tenants 

• 4.4m sq ft premier City of London office estate• Built around Liverpool Street station• Agreement for leases with UBS to develop a new 

700,000 sq ft building on site of 4 & 6 Broadgate

5

• Major refurbishment of 199 Bishopsgate

Secure Long‐Term Income ‐ Broad Base of High Quality OccupiersOccupiers

OfficeRetail Office

% of total rent

UBS 4

Retail

% of total rent

Tesco 8

HM Government 2

RBS 2

Bank of Tokyo‐Mitsubishi UFJ 2

Sainsbury’s 7

Debenhams 4

B&Q 2 Bank of Tokyo‐Mitsubishi UFJ  2

Macquarie Group 2

Herbert Smith 2

B&Q 2

Homebase 2

Next 2

JP Morgan 1

Aegis Group 1

Reed Smith 1

Asda 1

Boots 1

Marks & Spencer 1 eed S

Gazprom 1

Marks & Spencer 1

Curry’s 1

6

Secure Long‐Term Income ‐ High Occupancy and Long Leases

Income Profile

Leases

Income Profile

Annualised Rent £m1

Net Reversion          (5 years) £m2

Occupancy Rate (%)3

Lease Length Years4

Retail Warehouses 164 14 98.9 11.0

Superstores 73 1 100.0 17.6

Shopping Centres 77 10 97.7 10.8

Department Stores2 26 2 98.7 26.3

All Retail 340 27 98.8 13.7

City 79 20 96.3 10.2

West End 45 18 98.0 8.6

All Offices 124 38 96.9 9.6

Oth 16 3 93 3 20 3Other 16 3 93.3 20.3

Total 480 70 98.0 12.5

1 Gross rent receivable plus any increases to current ERV from outstanding rent reviews (net of ground rents payable)

7

Gross rent receivable plus any increases to current ERV from outstanding rent reviews (net of ground rents payable) 2 Within 5 years ‐ includes rent reviews, lease break/expiry, and letting of vacant space at current ERV (as determined by external valuers), plus expiry of rent free periods and contracted fixed/minimum uplifts

3 Including accommodation subject to asset management and under offer4 To first break

Secure Long‐Term Income – Lease Expiries

Year to 30 September (£m pa)Year to 30 September (£m pa)Excluding developments 2011 2012 2013 2014 2015 2011‐13 2011‐15

Retail Warehouses 3 2 5 4 5 10 19

SuperstoresSuperstores ‐ ‐ ‐ ‐ ‐ ‐ ‐

Shopping Centres 3 2 4 4 5 9 18

Department Stores1 ‐ 1 ‐ ‐ ‐ 1 1

All Retail 6 5 9 8 10 20 38

City 1 ‐ 2 10 11 3 24

West End 1 10 2 4 13 17West End 1 10 2 ‐ 4 13 17

All Offices 2 10 4 10 15 16 41

Other ‐ ‐ 2 ‐ ‐ 2 2

Total 8 15 15 18 25 38 81

% of Contracted Rent 1.5% 2.8% 2.8% 3.3% 4.9% 7.1% 15.3%

81Including High Street

Our Strategy

• High quality income stream to support strong dividend• High quality income stream to support strong dividend

• Optimal asset allocation to deliver future capital value growth

• Optimal financial structure to drive total returns

Our objective is to be the premier UK commercial real estate company

9

2010 Half Year Results

10

Results Highlights

• U d l i fit th +12%1• Underlying profit growth +12%1

• Continued strong lettings in offices

• E l i f t l th i i t il• Early signs of rental growth in prime retail

• 4% growth in Net Asset Value 

£1 5b 2 L d ffi d l t• £1.5bn2 London office development programme

111Excluding £16m 2009 credit risk provision release2BL share £1bn

2010 Half Year Financial Results Summary

• New lettings result in profits at pre Broadgate JV levels• New lettings result in profits at pre‐Broadgate JV levels

• Dividend payment in line with 2009 

• Loan to Value fallen for fourth consecutive quarterLoan to Value fallen for fourth consecutive quarter

Half Year to 30 SepFirst Half

2009First Half

2010Half Year to 30 Sep 2009 2010

Net  Asset Value per share1 372p 525p

Underlying Profit Before Tax2 £129m £127m

Underlying Diluted EPS 14.8p 14.2p

Dividend per share 13.0p 13.0p

( )LTV (Group) 47% 22%

LTV (inc joint ventures and funds) 58% 45%

Total Return ‐3.0%  +6.7%

121EPRA (European Public Real Estate Association) basis2Excluding gains on property revaluations & disposals, and intangible asset movements

Lettings and Reduced Operating Costs Offset Disposals

Reconciliation of Underlying Profit Before Tax1

(£14m) £127mFees: £3m £3m

£14m

Reconciliation of Underlying Profit Before Tax1

(£16m)

Costs: £6m£129m

£4m

£14m(£16m)

£99m(£2m)

H12009

H12009

proforma

H12010

Broadgate JV 

formation

Netfinance costs

Credit provision release

Acquisitionsless otherdisposals

Leaseexpiries

Newlettings& rent

Operatingcosts & fees2

131With proportional consolidation of Funds & JVs2Operating costs consist of property outgoings and admin expenses

proformaformation costsrelease disposals & rentreviews

& fees

Continued Valuation Growth

BL Portfolio Valuation Movement1 BL Capital Return vs IPDBL Portfolio Valuation Movement1% change

BL  Capital Return vs. IPD

+18 1%6 monthsS 2010

12 monthsS 2010+18.1% to Sept 2010 to Sept 2010

Capital Return2

ERV +1.3% +1.1%

Yield compression3 9 bps 112 bps

Total 2.7% 19.2%

+2.6%

Performance Relative to IPD

ERV growth 1 5% +2 8%2.6%+1.2%

ERV growth 1.5% +2.8%

Yield impact ‐0.5% +2.2%

Total +0.1% +3.2%

14

1Valuation movement (net of capital expenditure) of properties held at the balance sheet date2Calculated by IPD for all UK assets on average capital employed and excluding capitalisedinterest

3Equivalent yield

Retail Performance Highlights

• Continued ERV outperformance • All BL sectors ahead or stable in Q2• Continued ERV outperformance

• Q2 ERV ahead +0.1%

• All BL sectors ahead or stable in Q2

l h b l

BL

BL Retail ERV movement vs. IPDERV growth %

Q2 ERV growth by Retail Sector

Retail Warehouses +0.1%

Superstores +0.0%

Shopping Centres +0.2%

D t t St 0 0%Department Stores +0.0%

Total +0.1%Q22009

Q32009

Q42009

Q12010

Q22010

15

Retail Performance Highlights

• Nearly 500 000 sq ft of new lettings and lease renewals 80% long term leases• Nearly 500,000 sq ft of new lettings and lease renewals: 80% long term leases

• Improving rental trends through the half 

− 210,000 sq ft new lettings in Q2 broadly in line with ERV, q g Q y

− Average lease to first break 9 years ahead of industry at 5 years

• £23.7 million of annual rental income

New Lettings, Renewals and Rent ReviewsNew Lease Rent

6 months to 30 Sep 2010New 

LettingsLease 

RenewalsRent 

Reviews Total

Number 99 51 54 204

Sq ft (’000s) 393 96 1 208 1 697Sq ft ( 000s) 393 96 1,208 1,697

Lease to first break (yrs) 9.3 2.7 n/a n/a

Annual Rent (BL Share) £6.6m £1.2m £15.9m £23.7m

16

Office Performance Highlights

• Over 200 000 square feet of new lettings in first half• Over 200,000 square feet of new lettings in first half 

• Occupancy levels increased to 97%: new buildings almost fully let 

• Over 200 000 square feet of rent reviews/renewals (incl Axa and Barings)Over 200,000 square feet of rent reviews/renewals (incl. Axa and Barings)

• £14.4 million of annualised rent

New Lettings, Renewals and Reviews (excludes UBS agreement) in Half Year

Half year to Sept 2010

Sq ft (000s) excl pre‐lets

Annual Rent £m

Relative to ERV

Lease to 1st Break

New Lettings 217 9.4 +14% 11.9 years

Lease Renewals 139 2.4 +11% 14.8 years

Rent Reviews 76 2.6 +2% n/a

Total 432 14.4 +11% n/a

17

Well Positioned to Deliver Growth

18

Portfolio Development – Increasing Exposure to Growth Sectors

Portfolio Weighting by Value • Increased exposure to out of town retail

Increasing Exposure to Growth Sectors

Portfolio Weighting by Value

September 2010 Reported Pro forma1

Retail Warehouses 31% 28%

• Increased exposure to out‐of‐town retail

− Retail warehouses up from 13% in 2005

Superstores 15% 14%

Shopping Centres 14% 13%

• London offices increases from 33% to nearly 40% of portfolio

• Increasing long term West End exposureDepartment Stores 5% 4%

Retail 65% 59%

City Offices 20% 23%

• Increasing long‐term West End exposure 

− Up from 5% in 2005 to 15% 

• Taking advantage of shortage of Grade A City Offices 20% 23%

West End Offices 12% 15%

Provincial Offices 1% 1%

g g gspace in the City

Offices 33% 39%

Other 2% 2%

191Pro forma reflecting independent valuation of committed London development programme at completion

Portfolio Well Positioned For Growth

BL Sector Weightings Relative to IPDERV Growth Forecasts by Sector1 BL Sector Weightings Relative to IPD

Retail Parks

ERV Growth Forecasts by Sector1

S t

Retail Parks

Sh

Shopping Centres

Superstores

Shops

Shopping Centres

Superstores

West End offices

City offices

Shops

West End offices

City offices

Shops

Industrial

Provincial offices

Industrial

Provincial offices

‐15 ‐10 ‐5 0 5 10 15 20‐2 0 2 4 6 8

YOY Change (%) ‐ next 5 years

201 PMA Autumn 2010 forecast

Strong Balance Sheet And Access To Capital ‐ Group

Group Financing Statistics Group Debt Maturity ProfileGroup Financing Statistics

As at 30 Sept (£m) 2009 2010 500£m

Group Debt Maturity Profile 

Property & Investments 6,570 6,070

Net debt 3,171 1,378400

Interest cover 2.1x 3.0x

d b i 2 0 200

300

Average debt maturity 14.7 yrs 12.0 yrs

LTV 47% 22% 100

200

FY

Cash & undrawn facilities 3,519 3,206

Unsecured credit rating BBB+ A‐

0

2011 2012 2013 2014 2015FY 

21

g

Retail

22

UK Portfolio Focused on High Performing Locations

• Average BL assets rank in top 5% of mostBritish Land UK Retail Portfolio • Average BL assets rank in top 5% of most dominant retail centres (source: CACI)

• BL retail parks: 5% of market covering 32% of UK population1

British Land UK Retail Portfolio 

UK population1

• Superstores 31% by value

− Consistent above average rental growth 31%

4%

of over 4% pa

• 37% of portfolio in CACI rated top 50 retail and retail park locations 

Top 50 

31% 23%

− 3rd most attractive shopping centre

− 9 of top 25 retail parks

− 3 of top 4 super parks

Top 50 

14%3 of top 4 super parks

28%

231CACI2Includes superstores at retail parks and shopping centres

Strong Regional Presence Drives Rental Outperformance 

• High occupancy rates across the portfolio• High occupancy rates across the portfolio

• Positive relative ERV performance in every region except London

Retail Portfolio Performance

Share of BL UK retail portfolio

Occupancy1

%6 month ERV 

movement vs. IPD

London 11% 98.4% ‐30 bps

South East/East 17% 97.6% +90 bps

South West/Wales 10% 99 6% +80 bpsSouth West/Wales 10% 99.6% +80 bps

Midlands 11% 99.2% +130 bps

Yorkshire/Humberside2 24% 99.4% + 40 bps

North West 12% 98.8% +160 bps

North East 6% 100.0% +230 bps

Scotland 9% 97.9% +100 bps

241Including accommodation subject to asset management and under offer2Principally Meadowhall

Scotland 9% 97.9% +100 bps

Continued Retail Market Polarisation

• Large retailers significantly increasing • Polarisation of performance between• Large retailers significantly increasing share

• Polarisation of performance between best locations and the rest

Share of all UK Retail Sales1 All Retail ERV Growth (IPD)2

Large Food Retailers

Share of all UK Retail Sales1% share

All Retail ERV Growth (IPD)2March 2007 = 100

Large Food RetailersPrime

Large  Non‐Food Retailers

SecondarySmall Retailers

Jun07

Dec07

Jun08

Dec08

Jun09

Dec09

Jun10

251ONS2IPD

07 07 08 08 09 09 10

Retailers Renewed Focus on Higher Performing LocationsLocations

“Phase2 will deliver a significant shift in footprint from in‐town to the more profitable 

t f t ti t f t d i i

“Arcadia could shrink by as many as 200 stores over the coming three years as the group 

fi it t tf liout‐of‐town parenting centre format – driving profit per square foot but leaving the overall retail space unchanged.”

reconfigures its property portfolio. 

About 500 leases expire over the next three years, giving Arcadia a good opportunity to reshape the portfolio”reshape the portfolio . 

“New Look’s average store size has grown from 2,000 sq ft 10 years ago to 6,000 sq ft today. Its shops have 10 size formats that range from 800

“M&S will increase the pace of its store openings, to ensure 95 per cent of UK consumers are no more than a 30‐minute drive shops have 10 size formats that range from 800 

sq ft to 30,000 sq ft. 

Most UK high streets cannot cater for this size, so growing our presence out of town will be 

consumers are no more than a 30 minute drive from an M&S store by 2015. 

The run‐rate of store space will increase from 2 to 3 per cent pa over the next five years.”

Company reports

g g p fimportant.”

p p f y

26

Renewed Demand from Quality Retailers

Expansion of Existing Formats New Formats Out of TownExpansion of Existing FormatsLettings 000 sq ft

New Formats Out of TownLettings 000 sq ft

0 5 10 15 20 25 30 35

27

6 months to 30 Sep 2010

High Level of Secondary Lease Expiries Facilitates Further Polarisation

• Significant near term expiries in secondary

Further Polarisation

Retail Lease Expiries 2011 2015 (IPD)

12 0

• Significant near term expiries in secondary retail in next five years

• 43% of all secondary retail income

Retail Lease Expiries 2011‐2015 (IPD)%

12.0

Secondary Primary• 47% of secondary shopping centre income

• Compares with:

− 19% for all prime8.0

19% for all prime

− 11% for British Land

4.0

0.0

2011 2012 2013 2014 2015

28

But a Growing Shortage of Prime Retail Locations

Retail Vacancy Rate (IPD) Retail Development Completions1

14Retail Warehouses

Forecast

Retail Vacancy Rate (IPD) Retail Development Completions1

m sq ft

Vacancy rate %

10

12Town Centre  Forecastrate %

ShoppingCentres

Prime 3.3

Secondary 11.9

6

8RetailWarehouses

Prime 1.6

Secondary 10.5

Prime 2 5

2

4

All RetailPrime 2.5

Secondary 11.4

0

2

2000 2002 2004 2006 2008 2010 2012 2014

291PMA

ERV Growth Forecast to Return – But Continued PolarisationPolarisation

End 2010‐15 2010

Solus Ret Warehouse

Supermarkets

Big Shopping Centre

Retail Parks

Prime Smaller SC's

Secondary SC's

Retail Big Towns

Central London

5 4 3 2 1 0 1 2 3 4

Retail Small Towns

Retail Big Towns

30PMA

‐5 ‐4 ‐3 ‐2 ‐1 0 1 2 3 4ERVs % change pa

Planned and Prospective Retail Development

Planned/Prospective UK Retail ExtensionsPlanned/Prospective UK Retail Extensions 

Sq ft(’000)

BLShare

Whiteley Village Southampton 278  50%

Glasgow Fort Glasgow 220 38%

Broughton Park Chester 70 38%g

Fort Kinnaird Edinburgh 110 19%

Surrey Quays London 101 50%

S i 8 0%Superstore extensions 87 50%

Other 66 28%

Total 932

31

Re‐developing an Existing Scheme ‐Whiteley Village

• Existing outlet scheme close to  Southampton 

• Core catchment of 1.1m population

• Re‐development to provide 278,000 sq ft of A1/A2/A3 space

32

Re‐developing an Existing Scheme ‐Whiteley Village

33

Extending an Existing Scheme ‐ Glasgow Fort 

• 395 000 sq ft395,000 sq ft

• Open A1

• Annual footfall c 13mAnnual footfall c 13m

• Planning for 220,000 sq ft extensions

• Phase II ‐ Retail anchored by M&S pre‐let

Ph III L i d• Phase III ‐ Leisure and food

34

Extending an Existing Scheme ‐ Glasgow Fort 

35

Offices

36

Office Portfolio ‐ Shifting toward Developments

• 40% high quality long term incomeOffice Portfolio1 • 40%  high quality long‐term income

• 31% active management

− Includes near term potential pipeline Active Management

Office Portfolio1

p p pdevelopments 16%

• 29% committed development

Lease Length5‐10 yrs Lease

Length0‐5 yrs

15%

− Of which 30% pre‐let

Pre‐let8%

0 5 yrs

16%

L t

40%

Spec

8%

CommittedDevelopmentLong‐term

income21%

Development

371Pro forma to reflect independent valuation of committed London office developments at completion

Long‐Term Income – New Offices with High Quality OccupiersOccupiers

Value Lease length Occupancy1 Rent2 Equiv. Yield3 CV psf

£1,520 m 13.2 years 95% £93m 5.7% £635

10 & 20 Triton Street Ropemaker Place

The Broadgate Tower

38

1Including asset management and under offer

2Total contracted rent3After notional purchaser’s costs

Active Management – Offices with  Medium to Longer‐Term Development PotentialTerm Development Potential

Value Lease length Occupancy1 Rent2  Initial Yield3 CV psf

39 Victoria Street • 76 000 sq ft

£1,132m 5.6 years 99% £82m 7.1% £575

• 76,000 sq ft• 1.8 yrs average lease length

• 7.2% initial yield

100 Liverpool Street • 382,000 sq ft• 4.9 yrs average lease lengthlease length

• 9.1% initial yield

39

1Including asset management and under offer2Total contracted rent3After notional purchaser’s costs

2.1m sq ft of London Office Developments

• 2 1m sq ft of prime office space• 2.1m sq ft of prime office space

• Attractive development yields of >7% net of current letting voids/tenant incentives

C i d L d D lCommitted London Developments

Sq ft’000

BL Share

Practical Completion

Site Value  £m

Total Cost1

£mERV2

£m

NEQ, Regent’s Place 500 100% Q2 2013 39 257 19

Baker Street 158 100% Q1 2013 40 79 8

5 Broadgate 700 50% Q3 2014 57 200 195 Broadgate 700 50% Q3 2014 57 200 19

Leadenhall 610 50% Q3 2014 39 204 19

199 Bishopsgate 142 50% Q4 2012 19 23 3

Total  2,110 194 763 68

401Estimated costs to complete including notional 6% finance (excludes site value)2Headline (excluding tenant incentives)

London Office Market – Demand Outlook

• London has deep embedded advantages asLondon Financial & Business Services Employment1

300City West End & Mid‐town Docklands

• London has deep embedded advantages as 

a financial centre

− Time zone

Size/expertise of financial and business

London Financial & Business Services Employment1

Jobs (‘000)

200

250

− Size/expertise of financial and business 

services sectors

− Hard and soft infrastructure 

• Global financial firms require London

150

200 • Global financial firms require London 

quality advisory support

• GDP growth forecast of 4.3% pa to 20202

B t h ll

50

100• But challenges:

− Long‐term trend for capital and financial 

& business services activity to migrate 

i k0

198019841988199219962000200420082012

to emerging markets

− Increasing taxation and regulationActual Forecast

681 PMA2 Oxford Economics real GDP growth forecast for Inner London (compares with New York: 3.8%; Tokyo: 2.0%; Paris: 2.2%)

Demand For Modern Office Working Environments

Average City Development Size1 City & West End Take up1Average City Development Size1

175

City & West End Take‐up1

12’000 sq ft m sq ft

125

150

9

Other

Grade A

75

1006

50

75

3

0

25

82 85 88 91 94 97 00 03 06 09

0

FY 05 FY 06 FY 07 FY 08 FY 09 Q1 10

42

82 85 88 91 94 97 00 03 06 09 FY 05 FY 06 FY 07 FY 08 FY 09 Q1 10

1 Jones Lang LaSalle

Classic Signs Of A Cyclical Recovery in London Offices

Vacancy rate (%)1 2003 Peaked at 

16

18

20City West End

2008 Peaked at

17.8% City10.4% West End

1992 Peaked at 17 3% City

12

14

16 2008 Peaked at 12.9% City7.8% West End

17.3% City14.2% West End

8

10

4

6

0

2

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Actual Forecast

51 PMA

Significant City Office Lease Expiries

City Office Lease Expiries1• Long‐term annual City take up of 5m sq ft

m sq ft

City Office Lease Expiries1

• 12m sq ft of lease expiries 2010 ‐ 2015

4.0Known City Office Requirements

Sq ft3.0Bloomberg 500,000

PWC 300,000

CMS Cameron McKenna 250,0002.0

Schroders 250,000

Bank of America 200,000

Aon 130,000 – 180,0001.0

Trowers & Hamlins 110,000

Capita Symonds 100,000

Markel 70,0000.0

2011 2012 2013 2014 2015

91 Drivers Jonas Deloitte

Shortage of Prime Office Space in the City

• Supply pipeline constrained by lack of Major City Offices Under Construction or Committed• Supply pipeline constrained by lack of development finance

City Office Market – Development1

Major City Offices Under Construction or Committed

‘000 Sq ft Completion Let

5 Broadgate2

700 2014 100%m sq ft

6.0

Available under construction

Completed

A T k U

122 Leadenhall St 610 2014 0%

20 Fenchurch St 690 2013 0%

199 Bishopsgate 142 2012 0%

4.0

Av Take UpHeron Tower  440 2011 6%

Cannon Place  389 2011 0%

200 Aldersgate 370 2010 0%

2.0

40 Gracechuch Street 120 2010 0%

0.085 90 95 00 05 10

451Drivers Jonas Deloitte

85 90 95 00 05 10

Long‐Term Shortage of Prime Offices in the West End

Major West End Offices Under Construction/CommittedWest End Market Development1 Major West End Offices Under Construction/Committed

‘000 Sq ft Completion Let

NEQ, Regent’s Place 380 2013 0%4.0

West End Market – Development1

m sq ft

62 Buckingham Gate 269 2013 0%

Park House 163 2012 0%

2‐14 Baker Street 139 2013 0%3.0

3.5

Available under Completed

2.0

2.5construction

Av Take Up

1.0

1.5

0.0

0.5

85 90 95 00 05 10

61 Drivers Jonas Deloitte2 Subject to planning approval

85 90 95 00 05 10

Prime London Rents Growing Strongly

Prime Rent £psf1

100

120City West End  Docklands

Prime Rental Growth Forecasts 2010‐20151

City

80

y

% change pa 7.3%

Implied Rent £68 psf

40

60 West End

% change pa 6.8%

Implied Rent £106 psf

20

40p p

0

86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Actual Forecast

1 Average agents’ consensus (including PMA) 4

West End Development ‐ Creating Incremental Rental Growth at Regent’s Placeat Regent s Place

• Adjacent to core West End withEvolution of Regent’s Place rents • Adjacent to core West End with excellent transport links

• 18% growth in rental value since 2000140

Evolution of Regent s Place rents vs. core West End Offices Index 2000 = 100

− Significantly above West End market

• Latest rents over £50 psf120

140Regents PlaceIPD West EndVictoriaMayfair

• Latest rents over £50 psf

• Strong growth in net effective rents at Triton Street

100

120

80

100

60

80

60

2000 2002 2004 2006 2008 201048

West End Development – Completing Regent’s Place

• NEQ completes the final phase• NEQ completes the final phase 

• 500,000 sq ft (including some retail and residential)

• Due for completion in Q2 2013

49

West End Office Development ‐ Investing in Portman Village

• Prime location north of Oxford Street

Village

• Prime location north of Oxford Street

• British Land investment

− York House, Seymour St, y

− 2‐14 and 95‐99 Baker St

• Prospective purchase of Marble Arch House, Seymour St

• Revitalising Portman village

R ti ill t f th• Regeneration will create further incremental value

50

City Office Development ‐ Investing in Broadgate

• 5 Broadgate• 5 Broadgate

− 700,000 sq ft

− Secures UBS on the estate

− £54.50 psf rising with inflation

− 18.2 year average lease

• 199 Bishopsgate

− 142,000 sq ft

− Substantial refurbishmentSubstantial refurbishment

− Ready for delivery in 2012

51

City Office Development – Leadenhall

• Leadenhall Building in the City• Leadenhall Building in the City

• Joint venture with Oxford Properties

• 610 000 sq ft of spectacular space610,000 sq ft of spectacular space

• Due to complete in 2H 2014

52

The Leadenhall Building – Broad Occupier Appeal

6 000 sq ft

• In the heart of the insurance district

• Half an acre of public 6,000 sq ft a a ac e o pub cspace at the base

• Regular, rectangular floor platesfloor plates

• Floor plates ranging from 21,000 sq ft to 

f

21,000 sq ft

6,000 sq ft

• Expected to appeal to a broad occupier base

53

APPENDIX

54

Income Statement

Summary Income Statement1Summary Income Statement1

Half Year to 30 Sep£m 2009

2009  Pro forma2 2010

Q1 2010

Q2 2010

Gross rental income 295 251 267 135 132

Property outgoings (4) (18) (12) (7) (5)

N t i t t (136) (108) (105) (53) (52)Net interest (136) (108) (105) (53) (52)

Net rental income less interest 155 125 150 75 75

Fees & other income 6 6 9 4 5

Admin expenses (32) (32) (32) (15) (17)

Underlying Profit Before Tax 129 99 127 64 63

Underlying Diluted EPS 14.8p 14.2p 7.1p 7.1p

551With proportional consolidation of Funds & JVs2Pro forma for Broadgate JV formation and release of credit risk provision

Gross (Accounting) Rental Income – Sectoral Analysis

Gross Rental Income (£m pa) Annualised as at 30 Sept 2010Gross Rental Income (£m pa) Annualised as at 30 Sept 2010

Group Funds & JVs Total

Retail Warehouses 101 64 165

S 10 62 72Superstores 10 62 72

Shopping Centres  16 59 75

Department Stores1 33 ‐ 33

All Retail 160 185 345

City Offices 24 81 105

West End Offices 56 ‐ 56

All Offices  80 81 161

Other 18 ‐ 18

Total – recurring items 258 266 524g

561 Including High Street

Like for Like Rental Income Growth

Analysis of annualised gross rental income1 2Analysis of annualised gross rental income1,2

As at 30 Sep2009£m

2010£m

Properties owned throughout:

Retail  327 330 +0.9%

Offices 123 124 +1.3%

Other 18 18 +0.6%

Total ‐ like for like 468 472 +1.0%

A i i i 1Acquisitions ‐ 17

Disposals 88 ‐

Developments 7 35

Annualised gross rental income 563 524

57

1With proportional consolidation of Funds & JVs2As an improvement to previous disclosures, the calculation here is based on annualised accounting rental income, not the gross rental income recognised in the period

Future Income

Analysis of Gross Reversion (based on current ERV)Analysis of Gross Reversion (based on current ERV)

As at 30 Sept 2010 (£m)Cash Flow

BasisAccounting

Basis

Annualised rent 480524

Expiry of rent frees and fixed/minimum uplifts1 73

Total contracted 553 524

Letting of current vacant space 12 10

Rent reviews 6 6

G i 571 540Gross reversion 571 540

Committed developments at ERV 78 67

Total  649 607

581Within 5 years

Reconciliation of Underlying Profit Before Tax

30 Sept 30 Sept£m

30 Sept 2010

30 Sept 2009

IFRS Profit/(Loss) before tax 328 (113)

Net valuation movement (includes disposals) (216) 232

Deferred and current taxation of joint ventures & funds 3 3

Amortisation of intangible asset 8 7

Other non‐recurring items 4 ‐

Underlying profit before tax 127 129

59

Further Growth in Net Asset Value

Reconciliation of Net Asset Value1

525p14p

Reconciliation of Net Asset Value1

Scrip: (6p)Cash: (7p) (3p)13p

10

504p

14p Sc p (6p)10p

601EPRA basis

Portfolio Valuation by Sector

Group Funds & Total Portfolio Change2Group Funds & Total Portfolio Change2

As at 30 Sept 2010 £m JVs £m1 £m % 6 months % 3 months %

Retail Warehouses 1,699 1,028 2,727 30.8 1.1 0.4

Superstores 169 1,169 1,338 15.1 2.6 1.9

Shopping Centres 203 1,023 1,226 13.8 2.6 0.9

Department Stores3 435 ‐ 435 4.9 (0.3) (0.4)

All Retail 2,506 3,220 5,726 64.6 1.7 0.8

City4 521 1,292 1,813 20.5 3.7 1.3

West End4 1,075 ‐ 1,075 12.1 6.0 3.3

Provincial4 33 7 40 0.5 19.8 12.2

All Offices4 1,629 1,299 2,928 33.1 4.8 2.1

Other 191 12 203 2 3 0 7 (0 7)Other 191 12 203 2.3 0.7 (0.7)

Total 4,326 4,531 8,857 100.0 2.6 1.21Group’s share of properties in Funds & Joint Ventures2Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use) and

61

p p , g p ( y )purchases

3Including High Street with a total value of £20m (0.2% of portfolio), 1.5% decrease for the 6 months

4Includes developments: total value £273m (3.1% of portfolio), 3.4% increase for the 6 months

Yield Profile

Excluding developments (%) Net Gross Gross Gross NetExcluding developments (%) NetInitialYield1

GrossInitial Yield2

GrossTop‐up 

Initial Yield2,3

GrossReversionary 

Yield2

NetEquivalent Yield1

Retail Warehouses 5.6 6.1 6.3 6.7 5.9Retail Warehouses 5.6 6.1 6.3 6.7 5.9

Superstores 5.1 5.4 5.4 5.5 5.1

Shopping Centres 5.6 6.3 6.7 7.2 6.2

Department Stores4 5.7 6.1 7.0 7.0 6.8

All Retail 5.5 6.0 6.2 6.5 5.9

City 4.6 4.8 7.1 6.0 5.9y

West End 4.2 4.5 6.5 6.3 5.7

All Offices 4.4 4.7 6.9 6.1 5.8

Other 8.4 8.7 9.5 10.1 9.4

Total 5.2 5.6 6.5 6.5 5.9

62

1After notional purchaser’s costs2Excluding notional purchaser’s costs (i.e. yield to British Land)3Adding back rent frees and contracted rental uplifts 4Includes High Street

Dividend Supported by Strong Income Profile

• Q2 dividend of 6 5p• Q2 dividend of 6.5p

• Focus on prime assets and high occupancy (98%)

• Optional scrip take‐up over 40% to dateOptional scrip take up over 40% to date

Dividend Cover

H lf Y t 30 S 2010Half Year to 30 Sep 2010

On Earnings 1.1x

On cash profits 0 9x1On cash profits 0.9x

Cash dividend (i.e. exc. scrip) on cash profits 1.6x

631Underlying EPS less spreading of tenant incentives & guaranteed rent increases,and non-cash admin expenses

Contracted Cash Flow Growth

Annualised Rent (cash flow and accounting basis)Annualised Rent (cash flow and accounting basis)

30 SeptCumulative

£mCumulative

£m

Annualised gross rental income 2010 524

Annualised net rents 2010 480

Rent free shortfall (44)Rent free shortfall (44)

Run‐off of rent frees and fixed/minimum uplifts 2011 18 (26)

2012 34 (10)

2013 58 14

2014 68 24

2015 73 29

Cumulative annualised surplus after 2015 29

64

Net Debt

d lAs at 30 Sept 2010

Group                                 £m

Funds & JVs                                £m

Total                                     £m

Gross debt  1,746 2,853 4,599

Market value of derivatives  61 125 186

Cash & liquid investments (429) (187) (616)

EPRA adjustments1 (62) (117) (179)j ( ) ( ) ( )

Net debt (EPRA basis) 1,316 2,674 3,990

Average interest rate 5.3% 5.1% 5.2%

Interest cover2 3.0x 1.8x 2.2x

651 Excludes mark to market on effective cash flow hedges and related debt adjustments2 Underlying profit before interest and tax (UPBIT)/net interest

Further Reduction in Net Debt

Reconciliation of Movement in Net Debt (EPRA Basis)Reconciliation of Movement in Net Debt (EPRA Basis)

As at 30 Sep 2010 £m

Opening Net debt as at 31 Mar 2010 (4 081)Opening Net debt as at 31 Mar 2010 (4,081)

Operating cash flow after interest – Group 43

Operating cash flow after interest – Funds & JVs 52Operating cash flow after interest  Funds & JVs 52

Dividends paid (64)

Operating cash flow less dividends paid 31p g p

Purchases, development & other capital expenditure (61)

Re‐payment of loans and deferred considerations 132

Other (11)

Closing Net Debt as at 30 Sep 2010 (3,990)

66

Strengthened Balance Sheet – Proportionally Consolidated

• Market pricing and availability of debt continues to improve• Market pricing and availability of debt continues to improve

Key Financing Statistics (inc share of Funds & JVs)Key Financing Statistics (inc. share of Funds & JVs)

As at 30 Sep2009£m

2010£m

P t & I t t 8 358 8 908Property & Investments 8,358 8,908

Net debt 4,824 3,990

Interest cover 1.9x 2.2x

Average debt maturity 12.2 yrs 10.7 yrs

LTV 58% 45%

67

Fund and Joint Venture Financing

Fund & JV Financing (BL Share) Funds & JVs Debt Maturity Profile (BL Share)Fund & JV Financing (BL Share)

As at 30 Sep 10Funds

£mJVs£m

Total£m 500

£m

Funds & JVs Debt Maturity Profile (BL Share)

Net debt 402 2,389 2,791

Interest cover 1 9x 1 8x 1 8x 300

400

Interest cover 1.9x 1.8x 1.8x

Average interest rate 5.5% 5.1% 5.1% 200

300

Average debt maturity

3.0 yrs

11.4 yrs

9.9 yrs

100

LTV 45% 62% 59% 0

2011 2012 2013 2014 2015FY

68

Top 10 Properties

S ft BL R t O LAs at 30 Sept 2010

Sq ft’000

BL Share

Rent£m pa1

Occupancyrate %2

Lease length, yrs3

1 Broadgate3  3,866 50% 171 96.5 8.7

2 Meadowhall Shopping Centre 1,387 50% 78 99.2 10.8

3 Regent’s Place4 1,210 100% 47 97.4 9.4

4 Ropemaker Place 594 100% 24 94.9 15.8p %

5 Fort Kinnaird Shopping Park 510 19% 18 99.5 7.5

6 New Mersey Shopping Park 473 19% 16 100.0 10.0

7 Glasgow Fort Shopping Park 389 38% 15 99.2 8.0

8 Teesside Shopping Park 458 100% 13 100.0 10.0

9 Bon Accord Shopping Centre 476 50% 15 99 4 7 39 Bon Accord Shopping Centre 476 50% 15 99.4 7.3

10 Parkgate Shopping Park 560 38% 12 100.0 9.1

69

1Annualised contracted rent including 100% of Funds and Joint Ventures2Including accommodation subject to asset management and under offer3Excludes 4 & 6 Broadgate and 199 Bishopsgate (classified as development)4Excluding NEQ (classified as development)

Lease Length & Occupancy

E l di d l t Average Lease Length (yrs) Occupancy Rate (%)Excluding developments Average Lease Length (yrs) Occupancy Rate (%)

To Expiry To First Break Underlying1 Overall

Retail Warehouses 12.0 11.0 98.9 98.9

Superstores 17.6 17.6 100.0 100.0

Shopping Centres 11.4 10.8 97.7 94.8

Department Stores2 29 5 26 3 98 7 98 7Department Stores2 29.5 26.3 98.7 98.7

All Retail 14.5 13.7 98.8 98.1

City 12.3 10.2 96.3 96.0

West End 11.5 8.6 98.0 97.8

All Offices 12.0 9.6 96.9 96.7

Other 20 6 20 3 93 3 93 3Other 20.6 20.3 93.3 93.3

Total 13.9 12.5 98.0 97.5

701Including accommodation subject to asset management and under offer2Including High Street

Estimated Future Development Spend

Costs to complete

300 Retail

Costs to complete(excluding land and notional interest)£m

278£m Offices Retail Total

Offices

189

278Current value1

194 30 224

Cost to648 75 723200 189

171Cost to compete2

648 75 723

Notional interest2

115 9 124

100

22

56

interest

Total 957 114 1,071

0

2011 2012 2013 2014 2015

22

711As at 30 Sept 20102To PC (based on notional cost of finance of 6%)

FY

Creating Value Through Office Development

• Largest office developer in Central London over the past five years

l d f i• Completed 4m sq ft since 2004

• 54% of schemes were pre‐let with typical lease terms of around 20 years

• Over 95% of developments let or sold 

Willis Building( ld)

201 Bishopsgate & Broadgate Tower (85% let)

RopemakerPlantation Place (sold)

Plantation Place South (sold)

York House(100% let)

(sold)35 BasinghallStreet (sold)

1 ColemanS ( ld)

Ludgate West (sold)

pPlace (95% let)

10 & 20 Triton Street (95% let)10 Exchange Sq

Street (sold) (95% let)g q(100% let)

20040.9m sq ft

20050.2m sq ft

20060.1m sq ft

20071.0m sq ft

20080.8m sq ft

20091.0m sq ft

11

201 Bishopsgate & Broadgate Tower

• Completed in 2008

• 35 storey tower and 13 storey building

• 822,000 sq ft

• 58% pre‐let to Henderson Global investors, Mayer Brown and Reed Smith

201 Bi h t 97% l t d• 201 Bishopsgate 97% let and Broadgate Tower 73% let 

• Contracted annual income £33mContracted annual income £33m 

• Average lease 14 years

73

Ropemaker Place

• New office development completed in May 2009

• 594,000 sq ft building over 20 floors

Cl M d Li l• Close to Moorgate and Liverpool Street transport hubs

• 95% occupied: average lease 16 years

• Contracted annual income £25m

• Occupiers include major financial i i i l diservices companies, including 

– The Bank of Tokyo‐Mitsubishi, Macquarie Group and Markit

74

10 & 20 Triton Street, Regent’s Place

• Second phase of development of Regent’s Place completed end‐2009

• Two buildings totalling 376,000 sq ft of officesof offices

• 110,000 sq ft of residential pre‐sold ahead of expectations

• 10 Triton Street offices fully let to Aegis

• Contracted annual income £16mContracted annual income £16m

• 20 Triton Street  93% let with range of quality occupiers, including

– Gazprom, Lend Lease, Ricoh Europe and Dimensional Fund Advisors

75

Disclaimer

The information contained in this presentation has been extracted largely from the Half Year Results announcement for the six months ended 30 September2010.

This presentation may contain certain “forward‐looking” statements. By their nature, forward‐looking statements involve risk and uncertainty because theyrelate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by suchforward‐looking statements. Any forward‐looking statements made by or on behalf of British Land speak only as of the date they are made and norepresentation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. British Landd t d t k t d t f d l ki t t t t fl t h i B iti h L d’ t ti ith d th t h i tdoes not undertake to update forward‐looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in events,conditions or circumstances on which any such statement is based.

This presentation is made only to investment professionals as defined in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order2005 ('the FP Order'). The content of this presentation has not been approved by a person authorised under the Financial Services and Markets Act 2000(“FSMA”). Accordingly, this presentation may only be communicated in the UK with the benefit of an exemption set out in the FP Order. An investmentprofessional includes:professional includes:

(i) a person who is authorised or exempt under FSMA; and

(ii) a person who invests, or can reasonably be expected to invest, on a professional basis for the purposes of a business carried on by him; and

(iii) a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation; and

(iv) any director, officer, executive or employee of any such person when acting in that capacity.

This presentation is published solely for information purposes. This presentation does not constitute an offer to sell or the solicitation of an offer to subscribe foror buy any security, nor a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to inthis presentation in any jurisdiction in contravention of applicable law. No representation or warranty, either express or implied, is provided in relation to theaccuracy, completeness or reliability of the information contained herein.

The distribution of this presentation in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of anyThe distribution of this presentation in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of anyjurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. This presentation has been prepared for the purposeof complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this presentationhad been prepared in accordance with the laws of jurisdictions outside the UK.

All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere.

76