We Are Real Estate Investors and Create Value by Actively Managing

London Office Developments Tour

Tuesday, 10 October 2006 We are real estate investors and create value by actively managing, financing and developing prime commercial property to provide the environment in which modern business can thrive. Introduction

Outline

Office Strategy, Outlook & Activity Tim Roberts Co-Head of Asset Management

London Office Market John Forrester Head of Central London Markets, DTZ

London Development Pipeline Nigel Webb Head of Developments

Project Delivery Richard Elliott Head of Construction

Lettings Strategy & Update Paul Burgess Head of London Leasing

London Office Developments Tour Figures based on 30 June 2006 Office Strategy, Outlook & Activity

Tim Roberts Co-Head of Asset Management, with responsibility for Offices

London Office Developments Tour Figures based on 30 June 2006 Strategy

Office Portfolio Strategy Strategy

Investment concentrated on markets and buildings with positive supply/demand characteristics – Bias towards London offices with favourable long-term demand characteristics

Intense focus on providing occupiers with the right space – Detailed focus on location, quality, efficiency, flexibility and service – Bias towards high quality buildings with enduring demand

Strong emphasis on pro-active asset management – Intensified asset management including take backs, lease regears, refurbishment and development

Active portfolio reshaping to optimise customer appeal, work our capital and improve risk adjusted returns

Development focused on occupier requirements, timed to suit cycles of supply/demand

London Office Developments Tour Figures based on 30 June 2006 1 Market Outlook

London Office Market Outlook

Strategy focused on 5 themes Total supply falling with London vacancy rates at 6.1%1, City 8.5%1 City Vacancy2 Concentration on supply/ demand

16 Take-up strong in the City, with

Customer focus - providing healthy levels of demand 14 the right accommodation BL Forecast

3 12 Assuming average take up

Pro-active asset management vacancy rates will continue to fall, 10

as supply is being delayed 8 Active recycling of capital

Vacancy % 6

Well timed and customer

Prime headline City rents in 2006 focused development 4

programme already have increased from 1 1

£50 psf to £55 psf , plus letting 2

incentives reduced 0

2003 2004 2005 2006 2007 2008 2009

Outlook is for attractive growth in rents, but since increased supply is likely over time the right product and timing are key

London Office Developments Tour 1 Jones Lang LaSalle September 2006 (provisional) 2 Jones Lang LaSalle and BL Forecast

Figures based on 30 June 2006 3 10 year average take up 5.25m sq ft pa 2 Strategy & Activity

£5.3bn Prime Offices - Meeting Occupiers’ Requirements

Broadgate Regent’s The Willis

Strategy focused on 5 themes Place Building £5.3bn portfolio, 35% of British Land’s portfolio

Concentration on supply/ demand

6.2m sq ft of prime office

Customer focus - providing investments in City & West End the right accommodation

Pro-active asset management 4m sq ft of London office developments

Active recycling of capital

£0.6bn (0.8m sq ft), ‘look through’

Well timed and customer York The Broadgate Tower The Leadenhall focused development House & 201 Bishopsgate Building investment in Canary Wharf (10%) programme

£41.70 psf average contracted London office rent1

Average lease length to first break more than 10 years

2 Low vacancy rate of 4%

London Office Developments Tour 1 Average contracted passing rent (post expiry of rent free periods) 2 Excluding asset management voids Figures based on 30 June 2006 3 Strategy & Activity

£5.3bn Prime Offices – Increasing Customer Focus

Strategy focused on 5 themes More than 420 occupiers across the London Office portfolio

Concentration on supply/ demand

Committed to greater understanding of our customers’ needs and

Customer focus - providing providing buildings of choice: the right accommodation – Functional, efficient with flexible floor plates

Pro-active asset management – Offering architectural merit, plus attractive working environment

Active recycling of capital – Positioned in improving/enduring locations

Well timed and customer focused development programme Committed to providing customers with high levels of support and service – Broadgate Estates flagship management services across the portfolio – Issued a ‘Service Commitment’ to improve management of buildings – Regular occupier communication and contact – Compliance with new service charge code – Landlord and tenant environmental working group at Broadgate

London Office Developments Tour Figures based on 30 June 2006 4 Strategy & Activity

Pro-active Asset Management to Enhance Returns

Strategy focused on 5 themes Agreed take back of over 116,000 sq ft for re-letting to establish new rental levels at Broadgate & Regent’s Place: – 38,000 sq ft at 155 Bishopsgate now refurbished for marketing at £55 psf

Concentration on supply/ demand – Agreed terms to take back 66,000 sq ft at 6 Broadgate

– Take back of 12,700 sq ft at 338 Euston Road with plans to refurbish and market in Q1 2007

Customer focus - providing the right accommodation

Rent review cycle to capture future rental growth

– 1.7m sq ft at Broadgate due for review in 2008/9 with average passing Pro-active asset management rent of £43 psf

– 376,000 sq ft at Regent’s Place due for review in 2007 with average

Active recycling of capital passing rent of £36 psf

Well timed and customer Lease re-gears focused development – At 1,4&7 Triton Square, lease re-gear completed with JP Morgan on programme 83,000 sq ft to extend term certain by 5 years

Good lettings progress confirms growing improvement in City occupational market and increased rental levels at Broadgate – First £50 psf headline new letting in Broadgate this cycle

– At Plantation Place South, 25,000 sq ft under offer at £47.50 psf, with 60,000 sq ft to let at increased asking terms of £49.50 psf

Broadgate 2020 master-planning exercise to establish future development potential

London Office Developments Tour Figures based on 30 June 2006 5 Strategy & Activity

Broadgate 2020

Broadgate currently low rise and low Highest Redevelopment Potential density Moderate Redevelopment

– Buildings range from 7-13 floors Potential Low Redevelopment – Gross plot ratio of 5:1 Potential

Narrowing of view corridors will offer increased future redevelopment potential

Master-planning exercise examining long- term future potential to increase density

Critical factors to be considered:

– Lease expiries

– View corridors

– Liverpool Street station/ Crossrail

– Conservation areas and Rights of light

Potential total uplift in building area of over 1.2m sq ft

London Office Developments Tour Figures based on 30 June 2006 6 Strategy & Activity

Value Creation - £1.7bn Sales & Purchases in 20061

Strategy focused on 5 themes Taking advantage of strong investment market to sell properties with low or riskier growth profiles

Concentration on supply/ demand

£1.5bn disposals (£1.1bn net) completed/exchanged in 2006 to date, 11% above

Customer focus - providing December 2005 valuation the right accommodation Office Disposals Price BL Share

Pro-active asset management £m £m Plantation Place, EC3 527 527

Active recycling of capital CityPoint, EC2 520 187

Well timed and customer Plumtree Court, EC4 120 43 focused development programme 133 Houndsditch, EC3 110 110 51 Eastcheap, EC3 55 55

2-12 & 20-21 Cornwall Terrace, NW1 50 50

Provincial Offices 102 102 Total in 2006 to date1 1,484 1,074

£190m of acquisitions in 2006 to date, including Ropemaker Place, and recycling capital into £2.3bn2 of committed and prospective London developments

London Office Developments Tour 1 January to August 2006 2 June 2006 valuation plus costs to complete and notional interest to PC Figures based on 30 June 2006 7 Strategy & Activity

Well Timed & Customer Focused London Developments

Strategy focused on 5 themes York The Willis 35 Basinghall One Coleman Ludgate The Ropemaker Regent’s The House Building Street Street West Broadgate Place Place - Leadenhall (138,100 sq ft) (475,000 sq ft) (199,000 sq ft) (180,000 sq ft) (127,000 sq ft) Tower & 201 (548,000 sq ft) Osnaburgh Building

Concentration on supply/ Bishopsgate Street (601,000 sq ft) demand (822,000 sq ft) (490,000 sq ft)

Customer focus - providing the right accommodation

Pro-active asset management Pre-let

Active recycling of capital

Well timed and customer Pre- Pre- focused development sold sold programme

2006 2007 2008 2009 2010 0.1m sq ft 1.0m sq ft 0.8m sq ft 1.0m sq ft 0.6m sq ft

London Office Developments Tour Figures based on 30 June 2006 8 Central London Office Market

Outlook to 2010

John Forrester Head of Central London Markets, DTZ

London Office Developments Tour Figures based on 30 June 2006 12 DTZ

London Office Developments Tour Figures based on 30 June 2006 9 DTZ

Central London Take Up and Availability Annual

35.0 Million sq ft Million sq ft 25

30.0 20 25.0

15 20.0

15.0 10

10.0 5 5.0

0.0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Availability Take Up Note: Take Up is a quarterly rolling annual total (left axis) (right axis) Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 10 DTZ City Take Up and Availability Quarterly

16.0 Million sq ft Million sq ft 10.00 City Take Up and Availability Quarterly 9.00 14.0 8.00 12.0 7.00 10.0 6.00

8.0 5.00

4.00 6.0 3.00 4.0 2.00 2.0 1.00

0.0 0.00 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 Availability/ Projected Availability Take Up/ Projected Demand (left axis) (right axis) Note: Take Up is a Rolling Four-Quarter Total Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 11 DTZ City Sources of Demand City Sources of Demand 1985 - 2004. 2005 - Q2 2006.

Other Professional Legal Other 4% Other Professional 8% Other 5% Media Association Association 3% 16% 4% 2% 2% Corporate IT Corporate 6% 7% 4% Legal Government 14% 4%

Insurance 8% Media 4%

Finance IT 32% 6% Government Finance 1% 56% Insurance 14% Source: DTZ Research

Source: DTZ Research

London Office Developments Tour

Figures based on 30 June 2006 12 DTZ What’s the story?

Global Headcount for five major Wall Street banks vs City and Docklands Office Space Availability 170,000 16 165,000 14 160,000 12 155,000 10 150,000 8

No. Staff 145,000 6

140,000 4 Sq ft (millions) 135,000 2 130,000 0 2001 Q4 2002 Q1 2002 Q2 2002 Q3 2002 Q4 2003 Q1 2003 Q2 2003 Q3 2003 Q4 2004 Q1 2004 Q2 2004 Q3 2004 Q4 2005 Q1 2005 Q2 2005 Q3 2005 Q4 2006 Q1 2006 Q2

Staff (LHS) Available space (m sq ft) (RHS) Source: DTZ Research, company reports for Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 13 DTZ

City Availability vs Headline Rents. Rent psf % 70.00 City Availability vs Headline Rents. 7.00

60.00 6.00

50.00 5.00

40.00 4.00

30.00 3.00

20.00 2.00

10.00 1.00

0.00 0.00 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q2 Headline Rents (LHS) Grade A Availability Ratio (RHS) Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 14 DTZ

Recent Leasing Transactions – A Twelve Month Comparison

Summer 2005 Moorhouse 100,000 sq ft £45-47.50 per sq ft

HVB London EC2 32 months rent free 15 year term certain

Summer 2006 Aldermanbury 150,000 sq ft £55-60 per sq ft Fortis Bank Wood Street 27 months rent free London EC2 18 year term certain

London Office Developments Tour Figures based on 30 June 2006 15 DTZ

Issues – Under Supply in 2007?

Grade A availability ratio – August 2006

9 % 8 7 6 5 4 3 2 1

0 E1 SE1 EC3 EC4 EC2 EC1 WC1 WC2 Soho Mayfair St Victoria St James's Docklands North Oxford North Knightsbridge

Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 16 DTZ

Issues – Speculative Potential for City development pipeline

Sq.f t. (million) 7.0 Sq.m. (million) 0.65

6.0 0.56

5.0 0.46 Forecast 4.0 Committed 0.37

3.0 0.28

2.0 0.19

1.0 0.09

0.0 0.00

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Speculative Let during construction F'cast speculative Pr e- let

Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 17 DTZ

Central London Prime Offices Nominal Rental Growth, 1982-2010

100 £/sq.ft. £/sq.m. 1076 Forecast 90 969 80 861 70 753 60 646 50 538 40 431 30 323 20 215 10 108 0 0 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 City Mid Town West End

Source: DTZ Research. Note: All rents are headline rents and are end-year for new prime space. Source: DTZ Research

London Office Developments Tour Figures based on 30 June 2006 18 DTZ

City Rental Growth Summary, Incentives & Initial Yields

Headline Incentives Initial Yield £/sq ft £/sq m Growth % Months % 2005 48.00 516.68 6.7 30 5.00 2006 55.00 592.01 14.6 21 4.50 2007 61.00 656.62 10.9 15 4.75 2008 61.00 656.62 0.0 18 5.00 2009 61.25 659.31 0.4 21 5.25 2010 62.00 667.38 1.2 21 5.25

Source: DTZ Research Notes:

• All rents end-year nominal for new prime space. City rents refer to grade A (top quartile) rents, which will be representative of a select group of core City buildings. It does not take account of prestige floors or tower buildings, which can achieve premium rents and have historically been 10% to 15% higher than the top quartile grouping.

• Incentives are based upon a 15-year lease. Effective rents are calculated by reducing the incentive period by a standard 3-month fit out period, the resultant period represents the incentive, which is written off over the 10 year period on a straight line basis.

• Prime initial yields refer to newly let, rack-rented buildings. Capital values are calculated on the basis of prime annualised rent and prime initial yield. Rents, capital values and initial yields are end-year.

London Office Developments Tour Figures based on 30 June 2006 19 London Development Pipeline

Nigel Webb Head of Developments

London Office Developments Tour Figures based on 30 June 2006 Strategy

Development Objectives & Strategy

Development Objectives

Enhance income and portfolio quality

Create investments with potential for sustained growth

Realise enhanced capital returns

Development Strategy

Develop highly specified and flexible buildings that meet occupiers’ needs – Location: transport, infrastructure and environment – Quality of specification – Space requirements: size, configuration and flexibility – Architecture: developing quality buildings with profile – Cost: whole cost of occupancy – Timing: ability to deliver when market requires

Acute focus on timing and risk trade-offs arising from the supply “cycle”

London Office Developments Tour Figures based on 30 June 2006 20 Overview

4m sq ft of Developments Focused in Core Growth Areas

The Broadgate Tower & 201 Bishopsgate (822,000 sq ft)

Regent’s Place (1,000,000 sq ft1) Ropemaker Place (548,000 sq ft) The Leadenhall Building (601,000 sq ft)

Ludgate West (127,000 sq ft) York House (138,100 sq ft1) The Willis Building (475,000 sq ft) 35 Basinghall Street (199,000 sq ft) One Coleman Street (180,000 sq ft)

London Office Developments Tour 1 Including residential Figures based on 30 June 2006 21 Overview

London Office Development Programme

The Broadgate Tower & The Willis The Leadenhall 1 201 Bishopsgate Building Building First class 4m sq ft London office development programme

Accelerated programme – committed to develop 2.5m sq ft of which: – 0.9m sq ft pre-let – 1.6m sq ft speculative

Ropemaker York Regent’s Well timed for delivery to market during Place House Place 2006 – 2010

Proven track record of delivering major projects on time and budget

Potential for highly profitable development programme

London Office Developments Tour 1 Including North East quadrant of Regent’s Place, where a planning application is to be submitted in Q4 2006 Figures based on 30 June 2006 22 Overview

£2.3bn London Developments – Key Facts & Figures Sq ft Value Costs to Notional Rent5 Of which Planning Practical June 2006 Complete4 Interest Pre-let Completion ‘000 £m £m £m £m pa £m Committed projects York House1 138 70 17 1 6.4 - Detailed Q4 2006 The Willis Building 475 227 81 6 21.3 21.0 Detailed Q1 2007 Coleman Street2 180 19 20 - 2.7 2.7 Detailed Q1 2007 Basinghall Street2 199 20 18 - 3.3 3.3 Detailed Q2 2007 Ludgate West 127 44 35 2 6.2 - Detailed Q4 2007 The Broadgate Tower 822 255 230 20 41.4 - Detailed Q3 2008 & 201 Bishopsgate Ropemaker Place 548 137 207 10 27.6 - Detailed3 Q2 2009 Total committed 2,489 772 608 39 108.9 27.0 Prospective projects The Leadenhall Building 601 113 281 26 32.1 N/A Detailed N/A Osnaburgh Street1 490 8 242 12 20.0 N/A Detailed N/A NE Quadrant1 509 28 188 9 18.4 N/A Pending N/A Total prospective 1,600 149 711 47 70.5 N/A Total programme 4,089 921 1,319 86 179.4 N/A

London Office Developments Tour 1 Including residential 2 City of London Office Unit Trust (CLOUT) – both pre-let and forward sold Figures based on 30 June 2006 3 Existing planning consent for 505,000 sq ft – amended application to be submitted in Q4 2006 to maximise efficiency and floor area 23 4 Estimated construction costs to complete, excluding land and interest 5 Current estimated headline rent (before tenant incentives) Committed Developments

The Willis Building, EC3

New City landmark opposite Lloyd’s of London

– Striking addition to the

London skyline

475,000 sq ft development, comprising a 29-storey building and adjoining 10-storey building

465,000 sq ft pre-let at £45 – 47.50 psf to Willis for 25 years

– Minimum uplift to

£53 psf on the Tower

Contracted rent £21m pa, rising to £23m pa

Development yield 1 – On cost 6.2% 2 – On valuation 5.5%

Construction on programme for completion Q1 2007

1 Yield on total costs including capitalised and notional interest to PC and tenant incentives London Office Developments Tour 2 Yield on current valuation plus costs to complete, notional interest to PC and tenant incentives Figures based on 30 June 2006 24 Committed Developments

Developments adding Value – Willis Case Study

£m Acquired site in Feb 2001 for £52m in joint arrangement with Lloyd’s of London Initial purchase costs 52

Received planning and agreement to buyout Lloyd’s overage buy-out 24 Lloyd’s overage for £24m in May 2004 Construction & other costs to June 2006 93 Estimated costs to complete 81

Pre-let of entire building to leading insurance Notional & capitalised interest to PC 20 broker, Willis Group in Nov 2004 at a rent of Total construction costs 218 £45-47.50 psf (minimum uplift £53 psf) and term Total development cost 270 of 25 years, without breaks

1 Construction commenced in 2004 and on Estimated end value £356m programme for completion early in 2007 Estimated development surplus £86m Return on cost 32%

Estimated development surplus of £86m at Total rent pa £21.3m June 2006, of which £42m not yet recognised

2 – 32% return on cost Yield on cost 6.2%

London Office Developments Tour 1 Estimate of end value at June 2006 based on valuation yield of 4.75% and estimated current rent of £21.3m pa 2 Including rent free of £73m as a cost Figures based on 30 June 2006 25 Committed Developments

The Broadgate Tower & 201 Bishopsgate, EC2

Two buildings totalling 822,000 sq ft, to form the next phase of Broadgate

– 35-storey Tower

– 13-storey Building

Positive benefits on Broadgate estate providing new flexible & multi-let accommodation

Largest speculative office development ever to be undertaken in the City

Average headline rent at current market levels: – Broadgate Tower £53 psf – 201 Bishopsgate £50 psf

Development yield – On cost 9.1%1 – On valuation 7.2%2

Commenced construction for delivery to market Q3 2008

Developments adding Value – 201 Case Study

Established 50:50 joint arrangement with Railtrack £m in Sept 1998 Initial purchase costs1 68 Built 4,000 tonne steel raft over operational Liverpool Street railway for £40m4 in 2000 to enable fast-track build and purchased head leases Construction & other costs to June 2006 62 4 for £16m Estimated costs to complete 230

Received planning for 650,000 sq ft in 2001, and subsequently improved planning to increase Notional & capitalised interest to PC 23 density Total construction costs 315

During restructuring of Railtrack, took advantage of opportunity to buyout our JV partners for £40m in Total development cost 383 July 2002

Secured planning for a 35-storey Tower and a 13-storey building totalling 822,000 sq ft in Estimated end value2 £640m November 2005 Estimated development surplus £257m

Construction commenced in Autumn 2005 to Return on cost 67% enable delivery to market in 2008 Total rent pa £41.4m

Estimated development surplus of £257m at June 2006, of which £135m not yet recognised – 67% return on cost Yield on cost3 9.1%

London Office Developments Tour 1 Including JV buy-out 2 Estimate of end value at June 2006 based on valuation yield of 5.58% and estimated current rent of £41.4m pa Figures based on 30 June 2006 3 Including estimated rent free of £71m as a cost 4 British Land’s share of costs £28m 27 Committed Developments

York House, W1

Island site close to Marble Arch

Total floor area 138,100 sq ft:

– 93,000 sq ft efficient and adaptable office space

– 19,000 sq ft retail/ancillary space

– 22 high quality residential apartments

British Land to occupy c.40,000 sq ft as new Head Office

Headline rent £55 psf based on original base appraisal

Development yield 1 – On cost 7.4% 2 – On valuation 6.9%

Construction on time and on budget for target completion Q4 2006

Ludgate West, EC4

Next phase of successful Ludgate development

10-storey building to provide 127,000 sq ft of high specification office space with some ancillary retail space

New building will front both Fleet Place and Farringdon Street

Headline rent £50 psf at current market levels

Development yield 1 – On cost 6.9% 2 – On valuation 6.6%

Under construction for target completion Q4 2007

Ropemaker Place, EC2

1.2 acre island site with consent for 505,000 sq ft of offices

Reviewing existing 20-storey consented design to maximise efficiency and floor space

Amended planning application to be submitted in Q4 2006

– Substantial potential uplift

on existing consent

targeted

Average headline rent of £51.50 psf at current market levels

Development yield 1 – On cost 7.0% 2 – On valuation 7.0%

Enabling works commenced for delivery to market in mid 2009

Regent’s Place, NW1 – Further 1m sq ft planned

North East Quadrant (509,000 sq ft) Osnaburgh Street (490,000 sq ft)

London Office Developments Tour Figures based on 30 June 2006 31 Prospective Developments

Regent’s Place, NW1 – Further 1m sq ft planned Osnaburgh Street North East Quadrant (490,000 sq ft) (509,000 sq ft)

Planning consent for Proposals are being 381,000 sq ft of offices progressed for 340,000 and 109,000 sq ft of sq ft of offices and residential space 169,000 sq ft of residential units

2.5 acre site on the West

of Regent’s Place 2.4 acre site on the North East Quadrant of the

Agreed purchase of estate Crown freehold interest

Headline rent of £45 psf

Headline rent of £47.50 at current market levels psf at current market

levels Office development yield on valuation 7.9%1

Office development yield 1 on valuation 7.6% Planning application to be submitted in Q4

Expect to start on site 2006 to facilitate Q1 2007 for delivery in delivery in 2012 2009 London Office Developments Tour 1 Yield on current valuation plus costs to complete, notional interest to PC and tenant incentives Figures based on 30 June 2006 32 Prospective Developments

The Leadenhall Building, EC3

Planning consent for 601,000 sq ft of offices

736 ft, 47-storey tower

– One of the City’s tallest

buildings

Triple floorspace of existing building

Headline average rent of £54.50 psf at current market levels

Development yield on valuation 7.0%1

Vacant possession secured for end 2006 to facilitate development start Q1 2007 to enable delivery in 2010 London Office Developments Tour 1 Yield on current valuation plus costs to complete, notional interest to PC and tenant incentives Figures based on 30 June 2006 33 Development Spend

Estimated Future Development Spend

£1.3bn of estimated future spend 600 on London office developments over 4 years 500 – £608m on committed projects 400 – £711m on prospective projects 265 300 325 £m Spend on prospective developments will 64 depend on actual timing of commitments to build 200

235 100 223 Funded from existing group resources 144 57 6 0

Proforma for total costs to complete, London 2007 2008 2009 2010 offices will rise from 35% to 40% of total portfolio Year ending 31 March Committed Prospective

London Office Developments Tour Figures based on 30 June 2006 34 Summary

Office Development Prospective Returns

Office Developments £m Illustrative sensitivity of potential development surpluses5 to yield shift and rental growth (£m) June 2006 Valuation 960 Average valuation yield %

Costs to Complete1 1,502 £m +25bp 5.46% -25bp -50bp -75bp

-5% 346 485 637 805 991 Tenant Incentives 305

4 Estimated Rent2 196 £196m 504 650 811 988 1,184

Development Yield3 7.1% +5% 663 816 985 1,170 1,376

Estimated End Value 3,417 +10% 821 982 1,158 1,353 1,569 Estimated headline rent £m pa Estimated Future Profit 6504 +15% 980 1,148 1,332 1,536 1,761

London Office Developments Tour 1 Estimated construction costs to complete including notional interest during construction period to PC 2 Current estimated headline rent (before tenant incentives) Figures based on 30 June 2006 3 Yield on current valuation plus costs to complete, notional interest to PC and tenant incentives 4 London office development prospective returns represent £590m of the total £650m 35 5 Estimated remaining valuation surpluses (after tenant incentives) on committed and prospective office developments (excluding residential), based on valuers June 2006 assumptions (sensitised for movements in valuation yields and headline rents) Project Delivery

Richard Elliott Head of Construction

London Office Developments Tour Figures based on 30 June 2006 Project Delivery

Key Objectives Main Challenges

Deliver to the required programme Choosing the right teams and securing good people

Secure the outturn cost within agreed

budget Selecting the right procurement strategy

Ensure the desired quality is achieved in Providing accurate and timely information the design and implementation

Defining the right quality that meets

Maintain a high standard of health & safety occupiers’ requirements

London Office Developments Tour Figures based on 30 June 2006 36 Project Delivery

Typical London Development Team

Development/Project Manager

20 – 30 Consultants Construction Manager 30 – 40 Trade Contractors Architect Piling Structural engineer Substructure Service engineer Frame Cost consultant Cladding Planning supervisor Lifts [etc] Mechanical Electrical Internal finishes

London Office Developments Tour Figures based on 30 June 2006 37 Project Delivery

Forms of Procurement

Form of procurement selected to meet each project’s specific objectives

Three forms of procurement generally used

– Design & Build • Out of Town, straight forward projects with limited need for change (e.g. Blythe Valley) – Two Stage Lump Sum • Considered for straight forward single building schemes (e.g. York House) – Construction Management • Adopted for major City and West End schemes (e.g. Willis and 201 Bishopsgate)

Professional team appointments back to back with construction contracts

London Office Developments Tour Figures based on 30 June 2006 38 Project Delivery

Construction Management

Fast start

Flexible

Transparent

Direct control

Managed cost risk

London Office Developments Tour Figures based on 30 June 2006 39 Project Delivery

Risk Management

Late information causing delay – Managed through design release programmes, reviews and assessment of resources

Cost escalation

– Managed through accurate cost planning and agreement of realistic budgets; minimised by active cost management and change control procedures; accepted through allocation of realistic contingencies

Failure of the design resulting in delays to programme or the potential for latent defects

– Managed through design peer reviews and transferred through latent defects and professional indemnity insurance

Major accident or fatality

– Minimised through selection of contractors; managed through independent inspections and site visits

Contractor insolvency

– Minimised through rigorous selection process; transferred using performance bonds and guarantees; accepted through allocation of realistic contingencies

London Office Developments Tour Figures based on 30 June 2006 40 Project Delivery

Delivering the Right Quality

British Land Office Design Brief

Selection of appropriate design team

Benchmarking against other projects and industry standards

Peer reviews of critical areas

Technical audits by independent teams

Input from agents and potential tenants

London Office Developments Tour Figures based on 30 June 2006 41 Lettings Strategy & Update

Paul Burgess Head of London Leasing

London Office Developments Tour Figures based on 30 June 2006 Lettings Update

London Office Lettings Update

As at 31 August 2006 Practical Sq ft Let/under Rental income Completion offer contracted2 ‘000 % £m Investments

10 Exchange Square Q2 2004 163 90% 5.9

Plantation Place South Q3 2004 158 62% 3.2

321 9.1 Committed Developments 1

York House Q4 2006 138 41% -

The Willis Building Q1 2007 475 100% 21.0

Coleman Street Q1 2007 180 100% 2.7

Basinghall Street Q2 2007 199 100% 3.3

Ludgate West Q4 2007 127 - -

The Broadgate Tower & 201 Bishopsgate Q3 2008 822 - -

Ropemaker Place Q2 2009 548 - - 2,489 27.0

1 c.40,000 sq ft to be occupied by British Land London Office Developments Tour 2 Rental income contracted from third parties (excluding rental income under offer) Figures based on 30 June 2006 42 Letting Strategy

Our Letting Process

Get the product right

Deal direct Repeat and persist Identify targets

Product knowledge

London Office Developments Tour Figures based on 30 June 2006 43 Delivering Right Quality

The Broadgate Tower & 201 Bishopsgate, EC2 Highly specified

Dual electricity supply and destination hall control lifts

High performance facades and plant – 57% reduction in CO2 emissions against notional comparable building

Meticulously planned, with occupier focus

Open, clear floor plates – well suited to both financial and professional occupiers 201 Bishopsgate (Level 2)

Trading Floor – 593 Traders The Broadgate Tower is first developer led tower in City and first to provide completely column free floors - ranging between 11,000 – 13,000 sq ft

201 Bishopsgate - highly efficient and adaptable floor plates of between 36,000 – 38,000 sq ft – Major trading potential – enhanced floors with extra power and cooling to take over 900 dealing positions

London Office Developments Tour Figures based on 30 June 2006 44 Letting Strategy

The Broadgate Tower & 201 Bishopsgate, EC2

201 Bishopsgate

Target occupiers – banking, financial and business services

Pre-let of whole unlikely

Maximum pre-let possibilities for 150,000 – 200,000 sq ft

Leasing period up to two years post completion

The Broadgate Tower

Target occupiers – financial services, asset management, legal, corporate

Highly unlikely to pre-let

Designed for multi-letting, flexible leasing approach

Leasing period up to two years post completion

London Office Developments Tour Figures based on 30 June 2006 45 Delivering Right Quality & Letting Strategy

Ropemaker Place, EC2

New Arup Associates design – regular, orthogonal floor plates of between 22,000 and 43,000 sq ft

Striking architecture – giving prominence and identity

Large roof terraces – proven to be highly attractive to occupiers

Target occupiers – legal, financial, consultancy, business services

Marketing to start once new planning consent secured

Pre-let of whole unlikely

Likely occupier mix is two or three major occupiers plus floor by floor letting

London Office Developments Tour Figures based on 30 June 2006 46 Delivering Right Quality & Letting Strategy

The Leadenhall Building, EC3

True ‘icon’ building – one that will distinguish the City skyline

Combination of tower prestige with efficient, regular floor plates

Proven location for tower leasing

Huge profile and presence – particularly for insurance sector

Target occupiers – insurance, legal and financial

Marketing planning underway to start alongside demolition

Pre-let of whole is highly unlikely

Likely occupier mix is two to three major occupiers of 80,000 to 150,000 sq ft each plus floor by floor letting

London Office Developments Tour Figures based on 30 June 2006 47 Delivering Right Quality & Letting Strategy

Ludgate West, EC4

SOM design – great presence to both Ludgate and Farringdon Street

Favoured legal and professional location

Expanding local occupier base now being joined by West End occupiers being forced east

Targeted marketing underway: legal, local and financial

Pre-let of whole unlikely

Likely occupier mix is one major occupier of 60,000 to 80,000 sq ft plus floor by floor letting

Leasing period up to two years post completion

London Office Developments Tour Figures based on 30 June 2006 48 Delivering Right Quality & Letting Strategy

York House, W1

Striking contemporary classic design – takes maximum advantage of prominent island site

17,000 sq ft floors – very rare in West End

Level 2 (17,000 sq ft) under offer – 38,000 sq ft available

Very limited West End supply – occupiers increasingly looking to north of Oxford Street locations

Remaining accommodation to be launched late November/early December

Leasing period up to 12 months post completion

London Office Developments Tour Figures based on 30 June 2006 49 Delivering Right Quality & Letting Strategy

Regent’s Place, NW1

New buildings at west end of Regent’s Place make natural link with Fitzrovia/Noho

Occupiers pushing out from constrained and expensive core West End

Strong communication links

Kings Cross – Paddington corridor increasingly appealing to occupiers

Good balance of floor plates and opportunity to create separate points of entry and identity for occupiers

Established estate environment

Pre-letting possibilities as major West End occupiers look to consolidation and co-location

Marketing planning underway

London Office Developments Tour Figures based on 30 June 2006 50 Appendix

London Office Developments Tour Figures based on 30 June 2006 Overview

Office Portfolio – Key Facts & Figures

Value Annualised ERV2 Average Initial Reversionary Vacancy Lease net rent1 rent3 yield4 yield4 rate5 length6 £m £m £m £psf % % % yrs At 30 June 2006

City 3,711 164 192 44.9 4.4 5.2 4.9 10.2

West End 715 32 36 30.3 4.5 5.1 0.6 12.2

Business parks 178 10 12 15.8 5.7 6.7 7.2 9.6 & provincial

Developments 911 N/A N/A N/A N/A N/A N/A N/A

All Offices 5,515 206 240 38.9 4.5 5.2 4.4 10.4

Post 30 June 2006

Acquisitions 59 3 4 28.8 5.2 6.1 8.7 5.5

Disposals 209 12 9 36.6 5.9 4.4 22.2 5.9

Proforma total 5,365 197 235 39.1 4.4 5.3 3.6 10.6

1 Net rental income under IFRS differs from annualised net rents which are cash based, due to accounting items such as London Office Developments Tour spreading lease incentives and contracted future rental uplifts, as well as direct property costs and disposals in the year Figures based on 30 June 2006 2 Includes rent reviews, expiry of rent free periods, lease break/expiry and letting of vacant space at ERV over the next 5 years 3 Average contracted passing rent (post expiry of rent free periods) 51

4 Gross yield to British Land (ignoring purchasers’ costs)

5 Excluding asset management voids

6 To first break Disclaimer

This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. British Land does 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) Order 2005 ('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 investment 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.

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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 any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. This presentation has been prepared for the purpose of 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 presentation had 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.

London Office Developments Tour Figures based on 30 June 2006