Quintain Estates and Development PLC Y E d R lt t 31 M h ... 31 M h 2011to 31 March 2011 Rebecca...

Quintain Estates and Development PLCY E d R lt t 31 M h 2011Year End Results to 31 March 2011

25 May 2011

Agendag

O iOverview

Financial Review

Urban Regeneration

Fund Management

Outlook

Quintain Estatesand Development PLC 2

Driving Growth for Profit: Progressg g

Urban Regeneration programme strategically placed

Fund Management continues to grow

Financial platform further stabilised


Driving Growth for Profit: March 2011 Milestonesg

Milestone ProgressWembleyStart construction of the Hilton Hotel √

Progress the student accommodation √

Secure anchor tenants for the London Designer Outlet √

Greenwich Peninsula

Conclude the sale of Pier Walk and recycle the capital √

Start construction of the next building at Greenwich X

Fund Management

Invest designated equity from the rights issue √Expand the number of income-generating beds in iQ √Introduce an equity partner to Corsham Street √Create a new income generating fund √


Achieve a 25% increase in funds under management √

Finance Review t 31 M h 2011to 31 March 2011

Rebecca Worthington, Finance Director

Ravensbourne College with new restaurant operator

Financial Highlightsg g

31 March 2011

£

31 March 2010

££m £m

Gross profit 26.2 25.9

Operating profit 5.6 4.8

Adj d fi (b f i l ) b f 3 6 2 6Adjusted profit (before capital movements) before tax 3.6 2.6

Loss before tax (48.1) (10.2)

EPRA diluted EPS 1.2p 0.1p

Net asset value per share31 March

2011pence

31 March 2010

penceChange

%

Basic 116 120 (3.3)

Diluted 115 120 (4.2)

EPRA 125 133 (6.0)


Income Statement31 March

2011£m

31 March 2010

£m

Net rent 15.1 16.5

Trading sales - 0.1

Income from hotel operations 3.9 4.2

Fees from fund management 5.5 11.9

Other income 2.1 1.3

Impairment of trading properties (0.4) (8.1)

Gross profit 26.2 25.9

Administration expenses (20.6) (21.1)

Profit (loss) on sale of non-current assets 2 8 (7 7)Profit (loss) on sale of non current assets 2.8 (7.7)

Impairment of non-current assets - (3.3)

Net finance expenses (11.9) (11.6)

Joint ventures and associates 9.4 0.1

Pre tax profit (loss) excluding revaluation 5 9 (17 7)Pre-tax profit (loss) excluding revaluation 5.9 (17.7)

Revaluation movements on investment properties (54.0) 7.5

Pre-tax loss (48.1) (10.2)

Tax 13.4 2.1

L f fi i l i d (34 7) (8 1)


Loss for financial period (34.7) (8.1)

Movement in Net Assets

EquityTaxFinanceOperations

650(0.4)

6.0

5.5

15.1640

£m

598.60.211.3

(20.6)622.4

600

610

620

630

560

12.82.8

(11.9)

9.4

(54.0)570

580

590

1 April Net rental Net fund Net hotel Impairment Adminis- Revaluation Share of profit Profit on Net finance Fair value of Taxation Other equity 31 March1 April 2010

Net rentalIncome

Net fundmanagement

income

Net hoteland otherincome

Impairmentof tradingproperties

Administrative

expenses

Revaluationof properties

Share of profitfrom JVs

andassociates

Profit onsales ofassets

Net financecosts

Fair value ofderivatives

Taxation Other equitymovements

31 March 2011


Divisional Income Analysisy

Urban R i

Quercus iQ SeQuel OtherTotal QFM

Other Central Total

Proportional Accounting of Joint Ventures

Underlying movements

Regeneration

£m

Quercus

£m

iQ

£m

SeQuel

£m

Other

£mQFM

£m

Other

£m

Central

£m

Total

£m

Operating profit 15.1 8.4 7.4 7.3 0.2 23.3 1.3 (20.6) 19.1

Net finance expenses (2.3) (1.8) (4.5) - 0.2 (6.1) - (7.2) (15.6)

Net profit before disposalsand revaluation

12.8 6.6 2.9 7.3 0.4 17.2 1.3 (27.8) 3.5

Tax 0.1 - - - - - - (0.2) (0.1)

12.9 6.6 2.9 7.3 0.4 17.2 1.3 (28.0) 3.412.9 6.6 2.9 7.3 0.4 17.2 1.3 (28.0) 3.4

Capital movements

Profit from disposals 2.6 0.1 - 0.7 (0.7) 0.1 - - 2.7

Impairment (0.4) - - - - - - - (0.4)

Swap adjustments (2.3) - 1.4 - - 1.4 - (4.7) (5.6)

Revaluation movements (15.5) 1.7 9.4 (4.9) (33.2) (27.0) (2.7) - (45.2)

Tax (0.8) 1.4 (3.8) - - (2.4) - 13.6 10.4

P fit ft t (3 5) 9 8 9 9 3 1 (33 5) (10 7) (1 4) (19 1) (34 7)


Profit after tax (3.5) 9.8 9.9 3.1 (33.5) (10.7) (1.4) (19.1) (34.7)

Valuations

Deficit Surplus Valuation

S h S h

Key Sectors

Six months30 September

2010

Six months31 March

2011

31 March2011

£m £m £m

Wembley City Retail & leisure, residential (13.1) 4.7 486.6

Greenwich Peninsula Commercial, residential (3.9) 6.4 241.5

Regional schemes Land residential (7.6) (2.0) 50.6

Quercus Long term healthcare 1.2 0.5 79.6

Q 6 1 3 3 154 4iQ Student accommodation 6.1 3.3 154.4

SeQuel Secondary property (3.5) (1.4) 83.7

Investment Portfolio Secondary property (2.0) (0.7) 32.5

Quantum Science parks 0.1 (0.2) 2.6

Corsham Street and other QFM

Student accommodationSecondary property (34.6) 1.5 23.7

Portfolio Total (57.3) 12.1 1,155.2


Finance

Covenant31 March

201130 September

2010

Net debt £420m £408m

Committed but undrawn debt £191m £171m

Average maturity 2.8 years 3.2 years

Average cost of debt 4.5% 4.7%

Hedging- fixed

caps fixed79.9%20 1%

73.5%26 5%- caps fixed 20.1% 26.5%

Gearing – per banking covenants 110% 60% 60%

Interest cover – per banking covenants 1.25x 1.9x 3.4x


Capital Commitmentsp

31 March 20112011

£m

Group:

Middlehaven 6.4

Wembley Hilton Hotel, student accommodation and site wide

Dashwood Studios

Others

Joint ventures:

81.7

17.6

0.2

iQ – student accommodation in course of construction

SPark

Greenwich – MDL

62.6

3.8

1.4

173 7173.7


Debt Maturity Profile at 30 September 2010

450

£m

y p(Excluding Joint Ventures)

350

400

450

£396m

200

250

300

£235m

100

150

200

0

50

2010 2011 2012 2013 2014 2015 2016


Debt Maturity Profile with Options and Extensiony p

£m

As at 25 May 2011

300

350

£295m

200

250

100

150

£110m£126m

0

50

2011 2012 2013 2014 2015 2016


Financial Outlook

Milestone Action

• Build recurring income and manage costs • Move towards positive operating cash flow

• Extend debt maturity profile • Extend, fully or through options, at least £400m of total debt facilities to 2016


Urban Regenerationg


North West lands at Wembley City

London – The Opportunitypp y

• Per capita GDP forecast to grow to $95,266 by 2025 1

Top six big cities with material GDP growth potential

2025

• No2 on the Global Cities Index2:

- Business activity

- Human capital

CityCountry

GDP in 2008

($bn*)

Pop.2008

(m)

Per CapitaGDP in

2008

GDP 2008

($bn1)

Pop.2025

(m)

Per CapitaGDP in

2025

London 565 9 $65 698 821 9 $95 266- Information exchange

- Cultural experience

- Political engagement

• London extends 607 square miles3

London U.K.

565 9 $65,698 821 9 $95,266

São Paulo Brazil

388 19 $20,638 782 21 $36,542

Mexico City

390 19 $20,526 745 21 $35,476

• It comprises 3.3 million homes 4

• Commercial floor space in Central London approximately 220 million square feet5

• Serviced by two major and three smaller

City Mexico

Shanghai China

233 15 $15,533 692 19 $35,670

Buenos Aires

362 13 $28,281 651 14 $47,174

• Serviced by two major and three smaller international airports

Argentina

Mumbai India

209 19 $11,000 594 26 $22,500

*$bn at PPP Source: (1) Pricewaterhouse Coopers and United Nations


(2) Foreign Policy, A.T. Kearney, Chicago Council on Global Affairs

(3) Government Office for London

(4) Department for Communities and Local Government

(5) West-End, City and Canary Wharf – Savills

London – The Opportunitypp yM25

Hatfield 30 minutes

Central London

20 minutes to Central London by

Jubilee Line


Quintain - The OpportunityM25

Hatfield 30 minutes

pp y

Wembley City Unit

Total consents 8 m sq ft

Incl 5 521 homesGreenwich Peninsula Unit

Total consents

Residential 10,000 homes

Commercial 3.5m sq ft

R t il 0 4 ft

Incl 5,521 homes

Western Core



Retail, hotel and leisure 1.4m sq ft

Retail 0.4m sq ft

Peninsula Quays

Total 3.2m sq ft


Retail 0 9m

North West Lands 1.7m


Retail, hotel and leisure 0.6m sq ft


Central London

Retail 0.9m

20 minutes to Central London by

Jubilee Line


Potential to deliver the equivalent of three new ‘Great Estates’

Wembley Cityy y

Valuation £m Income

31 March 2011

£m

31 March 2010

£mValuation £m

As at 1 April 2010 488.9

Capital expenditure on investment assets 32.0

Income £m £m

Rental income1 8.8 9.0

Income from trading property sales1

9.1 14.2

Capitalised interest 11.9

Disposals (21.0)

Valuation deficit (8.5)

A t 31 M h 2011 503 3

Hotel income 7.6 7.7

Fees from joint ventures 0.1 -

Other income 3.8 3.2

29 4 34 1As at 31 March 2011 503.3 29.4 34.1

1Includes share of joint venture income

Quintain Estates& Development plc 20

Wembley City Progressy y g

Planning

• Resolution to grant consent received in May for 1.7m sq ft of mixed use accommodation

Construction

• Hilton Hotel and student accommodation topped out in Mayin May

Commercial

• LDO now 30% let with a further 12% in solicitors’ hands (net internal floorspace)

• Discussions underway with Marks and Spencer• Discussions underway with Marks and Spencer

Residential

• 99% of 520 homes now sold or let

• £2.0m of rental income generated by rental business in 2011 ib i £0 5 fi2011 contributing £0.5m to profit

Commercialisation and estates management

• £3.8m income generated in 2011 (2010: £3.2m)Wembley City’s new Civic Square


Wembley City Milestonesy y

Milestone Key Actions• Release £100m of capital • Secure joint venture partners:

- Hilton Hotel • Sell student accommodation

• Finalise planning on North West lands • Gain approval for Section 106 Agreements

• Focus on residential and place making to

• Fund and start building the London Designer Outlet this year

p gsupport delivery in the near term

• Secure 40% pre-lets at the London Designer Outletg y

• Increase income and profit contribution

g• Secure joint venture partner

• Increase operating profit at Wembley City by at least £1m


y

Greenwich Peninsula

Valuation £m Income

31 March 2011

£m

31 March 2010

£mValuation £m

As at 1 April 2010 277.1

Capital expenditure 9.0

Income £m £m

Rental income 1.5 2.8

Fees from joint venture 0.2 0.7

Disposals (47.1)

Valuation surplus 2.5

As at 31 March 2011 241 5 1 7 3 5As at 31 March 2011 241.5 1.7 3.5


Greenwich Peninsula Progressg

Construction

• £7.6m infrastructure investment

• Cable car to start on site creating direct link to Crossrail NEW IMAGE

Commercial

• TfL building sold for £97.1m (6% higher than latest valuation)

Residential

• Agreement reached with Lend Lease to develop two plots each independently

• Draft solution to affordable housing in place, awaiting l f LBGapproval from LBG

• Reserved matters planning to be progressed at Peninsula Quays


Greenwich Peninsula Milestones

Milestone Key Actions• Accelerate residential development • Finalise and agree affordable housing

provision • Revisit master plan at Peninsula Quays

• Secure inward investment

• Attract new office and retail occupiers

• Secure forward sales of two plots at the Southern end of the Peninsula

• Attract two office and two retailer p

• Build Greenwich Peninsula’s sense of place

occupiers to Peninsula Central

• Improve marketing and landscaping to prepare the scheme for sustained p p presidential sales


Fund Managementg


iQ Hoxton

Quintain Fund Management 2010/11g

Sector Assets under management

Assets under management

QED equity invested

QED equity invested

31 March 2011

£m

31March 2010

£m

31 March 2011

£m

31 March 2010

£m

Healthcare 744 680 46 2 55 1Healthcare 744 680 46.2 55.1

Higher Education 324 243 94.0 68.0

Science Parks 22 7 10.5 6.9

Secondary Property 185 78 42.6 24.5Secondary Property 185 78 42.6 24.5

Total 1,275 1,008 193.3 154.5


Quintain Fund Management Approachg pp

• Specialist fund management in niche k

Historic and forecast growth in funds under management

2 5property markets

- Healthcare

- Higher education

S i k

2.0

2.5

- Science parks

- Secondary property

• Compelling social, economic and environmental trends

1.0

1.5

£m

environmental trends

• Proven track record

• Target £2bn fund under management by 2013

0.0

0.5

2007 2008 2009 2010 2011 2012 2013

Year2013 Year


Healthcare

Investment strategySupply and demand characteristics

• Liquidity proven in • Demographics

Growth in population of over 65s

• Liquidity – proven in Quercus

• Target NIY of 7-8%

• Target geared IRR of 12-14%

• Demographics

• Key supply issues / opportunities

• Demand trends

M k t th t ti l0

5

10

15

20

m

• Lease characteristics

• Strategic fit with QED

• Market growth potential2012 2016 2021 2026 2031

• 14 acquisitions completed

• 8 disposals

31 March 2011

31March 2010

Quintain holding 11.22% 14.95 %

Assets under management £744m £680m

• Practical completion achieved at Warrington

• 20 smaller refurbishment projects undertaken

• 13 care homes in administration

Capital invested £51.8m £57.2m

Income generated1 £10.9m £21.3m

Contribution to profits £9.8m (£3.7m)

Average lease length 28 yrs 29 yrs

Quintain Estatesand Development PLC

Average lease length 28 yrs 29 yrs

29

1 Fee income and joint venture revenue

Student Accommodation


• Co investor interest • Demographics still 800

Student applications supply / demand

• Co-investor interest



Di it l

• Demographics – still favourable

• Key supply issues/opportunities

• Demand trends 100200300400500600700

000s

• Diversity - leases

• Strategic fit with QED• Growth potential – HE

infrastructure

0100

2004 2005 2006 2007 2008 2009 2010

Accepted applicants Surplus demand

• 75.5% occupancy for next year

• 930 rooms under construction in London

31 March 2011

31March 2010

Quintain holding 49.98% 49.98 %

Assets under management £309m £209m

• Cash generative

• Strong platform for second phase of growth



Contribution to profits £9.9m (£1.0m)



Science Parks


• Secure new investment • 78 UK Science Parks

Occupier by type

• Secure new investment



• Build critical mass

• 78 UK Science Parks

• Science central to Government’s growth agenda

• 2010 CSR: £4.6bn of

32%

3.%

9%

13% Bio related

Environmental

Energy

Computer Telecoms

Ind Technlogies

• Build critical mass resource and £1.9bn of capital to 2014/15

• Corporates collaborating more on R&D

3%

4%

21%

15% Materials

Tech Consultancy

Business Services

• Construction of buildings underway

• National Composites Centre almost ready for occupation

31 March 2011

31March 2010

Quintain’s holdings 50% 50%

Assets under management £22.0m £7.0m

• 'SPark one, 70,000 sq ft comprising an innovation centre, catering and conferencing facilities and grow on space will be ready late summer

• Good tenant interest



Contribution to profits £0.4m £0.1m



Secondary Propertyy p y


• Secure new investment • 250bps yield gap

Prime versus Secondary All Property Yields• Secure new investment



• Distressed pricing

• 250bps yield gap between prime and secondary

• Pricing/value opportunities

02468

1012

• Distressed pricing

• Asset management intensive

• Letting risk0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Prime Secondary

Secondary Property

SeQuel

• £6.4m of sales

• £14 7m acquisitions

31 March 2011

31March 2010

Assets under management £83.7m £78.9m

Capital invested £37.4m £36.7m• £14.7m acquisitions

• £144,000 new leases

• Post year end £167,000 of income secured for 5 year term

• £553,000 income in solicitors’ hands

Albemarle


Contribution to profits £3.1m £13.4m

Average lease length 5.1yrs 4.8yrs

Quintain Estatesand Development PLC

• Completed investment on excellent terms

32

1 Rental income and joint venture revenue

Fund Management Milestonesg

Milestone• Grow funds under management to at least £1.5bn

• Support growth by securing £40-50m of third party investment

• Increase income and profit contribution

• Create a new fund and/or secure partners for the residential elements at Greenwich and W blWembley

Key Actions Healthcare Higher Education Science and Technology Secondary Property

Q Q Q Q Q Q Q F dQuintainNew Bus.

Quercus QuintainNew Bus

iQ QuintainNew Bus

Quantum QuintainNew Bus

Funds

Secure third party investment

√ √ √ √ √

Acquisitions √ √ √ √

Development DashwoodStudios

Hoxton Bristol & Bath SP

Refurbishment

Increase/stabilise income √ √ Rent roll to £23m

√ Major pre-let

Property mgmt

E h kill b √ √ √ √


Enhance skills base √ √ √ √

Summaryy

To drive profit for growth:

• Establish Wembley City as a thriving leisure and retail destination

• Re-invigorate development at Greenwich Peninsula

• Grow specialist fund management to £2bn by 2013

• Extend debt maturity

• Build recurring income and manage costs through our activities


Quintain Estates and Development PLCY E d R lt t 31 M h 2011Year End Results to 31 March 2011

25 May 2011

Quintain Estates and Development PLC Y E d R lt t 31 M h ... 31 M h 2011to 31 March 2011 Rebecca...

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