Investor briefing
September 2019
Sensory Garden, Westquay, Southampton Agenda
01 Half-year overview 02 Half-year financial results 03 Portfolio overview 04 Summary and Q+A
Appendices
2 Half-year overview Facing up to the challenges
Debt reduction remains a key priority The Oracle, Reading 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1) Earnings drag from disposals, dividend unchanged EPS 14.0p (-7.3%), DPS 11.1p (no change)
Valuations under pressure UK flagship capital return -9.1%, France -3.9%, Ireland -3.2% NAVPS 685p (-7.2%) UK continues to be challenging UK flagship LfL NRI -6.8%, Leasing -1% below previous passing rent, volumes 35% below record 2018 Actively managing the mix to attract visitors 92%(2) of new UK flagship leasing in H1 to non-fashion brands Footfall up in all regions: UK flagships +0.5%; France +0.5%; Ireland +0.6% Diverse portfolio helps to offset UK weakness Premium outlets brand sales +10%, LfL NRI +11.1%, capital return +4.5% Stronger leasing trends in France and Ireland
1 43% fully proportionally consolidated 3 2 By area Half-year overview Continued focus on debt reduction, active portfolio management and multi-use development
Capital Optimised Operational efficiency portfolio excellence
Reduce debt Exit Retail Parks and Manage the structural pursue portfolio-wide shift in retail disposals
Establish City Quarters
4 Half-year overview Debt reduction remains a key priority
Reduce debt and portfolio-wide disposals
• Contracts exchanged with AXA for 75% of Italie Deux and the forward sale of Capital the Italik extension for €473m (£423m), representing 8.5% discount to December 2018 book value, NIY 4.1% efficiency • Total disposals of £456m YTD, pro forma net debt of £3.1bn • Transactions taking longer
• Pursuing further disposals into 2020 Optimised Commitment to exit retail parks over the medium term portfolio • £33m of disposals from retail parks completed year to date
5 Half-year overview Manage the structural shift in retail – actively repurposing space, maintaining vibrancy
Softer UK leasing metrics, stronger in France and Ireland
UK flagships over last 18 months:
• Passing rents -6.2%
UK flagships H1 2019: Operational excellence • Tenant restructuring a continuing theme; 45 units affected in H1 2019 • High street fashion under pressure, increased temporary leasing (<3 years)
• Principal leasing (>3 years) to target categories more resilient
6 2019 half-year financial results
Victoria, Leeds 2019 half-year results H1 headline results
Income statement 30 June 2019 30 June 2018 Change Net rental income (£m) 156.6 178.5 (12.3%)
Adjusted profit (£m) 107.4 120.0 (10.5%)
Adjusted EPS (p) 14.0 15.1 (7.3%)
Interim dividend (p) 11.1 11.1 —
Balance sheet 30 June 2019 31 December 2018 Change
Portfolio value (£m) 9,542 9,938 (4.0%)
EPRA NAVPS (p) 685 738 (7.2%)
Net debt (£m) 3,447 3,406 +1.2%
LTV - headline 40% 38% +2 pp
LTV - fully proportionally 46% 43% +3 pp consolidated
8 2019 half-year results
Portfolio valuation summary See appendices slides 56-57
Sector H1 2019 H1 2019 Value at Portfolio capital return(1) revaluation 30 June 2019(2) weighting(2) change % £m £m %
Flagship destinations UK (9.1) (266) 2,655 28 France (3.9) (71) 1,820 19 Ireland (3.2) (30) 948 10 Premium outlets 4.5 111 2,590 27 Developments & UK other (9.8) (74) 776 8 UK retail parks (10.9) (93) 753 8 Total (4.4) (423) 9,542 100
1 At constant exchange rates 9 2 Figures on a proportionally consolidated basis
2019 half-year results H1 2019 components of valuation change
Components of capital return in H1 2019, total portfolio (%)(1)
5% 4.2% 4.5%
0.6% 0.2% 0% -0.2% -0.7% -0.4% -0.5%
-2.4% -2.3% -2.5% -3.0% -3.2% -3.9% -3.8% -3.9% -3.6% -5% -4.9% -4.4%
-6.0% -6.7%
-9.1% -10% -9.8%
-10.9%
-15% UK flagship destinations France flagship Ireland flagship Premium outlets Developments and UK UK retail parks Group destinations destinations Other (2)
(3) Yield Income Development and other Total
1 On a proportionally consolidated basis 10 2 Developments and UK Other includes the movement in the UK Other portfolio where valuations decreased by 12.0%. Developments decreased by 9.2% 3 Development and other capital movements reflects the impact of changes in purchasers’ costs, development surpluses and capital expenditure
2019 half-year results
Credit ratios See appendices slides 59-63
30 June 2019 Internal 30 June 2019 31 Dec 2018 (Pro forma)(1) guidelines Net debt £3,055m — £3,447m £3,408m
Gearing 61% <85% 69% 63%
LTV – headline(2) 37% <40% 40% 38%
LTV – fully proportionally consolidated(2) 43% <45% 46% 43%
Cash and undrawn facilities £1,129m — £736m £729m
Net debt/EBITDA 9.5x <10x 10.2x 9.5x
Weighted average cost of debt — 2.5% 2.7%
Interest cover >2.0x 3.4x 3.4x
Fixed rate debt >50% 73% 74%
GBP/EUR FX balance sheet hedging 70-90% 80% 79%
1 Refelcts gross proceeds from sale of Iitalie Deux (75%) and Oldbury land, excluding forward sale of Italik 11 2 See slide 59 in appendices for calculation bases 2019 half-year results LfL NRI movements
LfL NRI movements across the portfolio (%)
UK Flagships -6.8
Ireland Flagships -7.4
France Flagships 0.1
UK Retail Parks 1.0
(1) Premium Outlets 11.1
Group -0.1
-8 -6 -4 -2 0 2 4 6 8 10 12
1 Value Retail 13.9%, VIA 4.1% 12 2019 half-year results Flagships LfL NRI analysis
H1 2019 LfL NRI analysis UK flagships Ireland flagships France flagships
Tenant restructuring -1.8% -4.1% -1.3%
Leasing(1) -0.6% 1.0% 2.2%
Void costs -1.4% -0.5%
Surrender premiums -0.2% -2.1% -0.7%
Marketing -0.6% 0.1%
Car park, commercialisation -1.7% and other -2.1% -0.2%
Total -6.8% -7.4% 0.1%
1 Includes rent reviews and indexation 13
2019 half-year results EPS walk
H1 2019 EPS walk (pence per share)
16.0
15.0
(1.9) 14.0 0.3
1.0 13.0 (0.8) 15.1 0.5 (0.2) 12.0 14.0
11.0
10.0 H1 2018 Net disposals LfL NRI Net admin Premium outlets Interest FX, tax and H1 2019 other(1)
1 Other includes change in NRI due to developments (-0.1p) and impact of share buyback (+0.6p) 14 2019 half-year results G uidance
Debt reduction phase Future 2021+ 2019-2020
Net disposals Negative Neutral
LfL NRI Negative Positive
Development and other Neutral Positive
Interest, net admin and Positive Positive other
Premium outlets Positive Positive
EPS Negative Positive
15 The Oracle, Reading
Portfolio overview 2019 half-year overview Agenda
01 UK flagships
02 Premium outlets
03 France
04 Ireland
05 Sustainability and City Quarters
Westquay, Southampton
17 UK flagship destinations H1 2019 operational update
UK flagship destinations H1 2019 H1 2018 Occupancy (%) 96.4 97.2 Leasing activity (£m) 4.4 6.8 Leasing vs. ERV (%)(1) -4 +5 Leasing vs. previous passing (%)(1) -8 +5 In-store retail sales (%)(2) -2.0 -2.5 Footfall (%)(3) +0.5 -1.6
Cabot Circus, Bristol
1 Principal leases only 18 2 Sales: benchmark -1.7% (Source: Visa) Retail sales on same-centre basis 3 Footfall: benchmark -3.2% (Source: Shoppertrak) What is happening to UK flagship rental income:
6.2% decline in passing rent over last 18 months, excluding disposal of 50% of Highcross
Decline primarily driven by temporary leasing, tenant restructuring, car parking and vacancy
Principal leasing more resilient and directed towards winning categories and brands
Bullring & Grand Central, Birmingham UK flagship destinations Passing rent analysis – 18 months to 30 June 2019
Movement in passing rent – 31 December 2017 to 30 June 2019 (£m)
180
175
170 (14.3)
165
160 175.7 (6.1) 155 -6.2% (5.5) 150 161.4 4.8 (4.2) 1.0 145 151.4
140 (1) Dec-17 Highcross (50%) Dec-17 (post Vacancy/Temp Tenant Other Rent New principal Jun-19 disposal disposal) leasing restructuring reviews/stepped leasing rents
1 Other changes in passing rent relates to car parking, commercialisation, and turnover rent 20
UK flagship destinations
Managing the challenge from tenant restructuring See appendices slides 51-53
Cumulative restructuring impact on rent - Q1 2018 – Q2 2019 (£m) Key stats since January 2018(1)
18.0 • 100 units affected by restructuring • £5.5m run rate of rent lost (1.6% of 16.0 passing rent)(2)
14.0 • 49% of Hammerson units subject to CVA in no rent change category vs 12.0 37% of market(3)
10.0 • 74% units trading, 64% with original occupier
8.0
6.0 2019 CVAs:
4.0
2.0
.0 Q118 Q218 Q318 Q418 Q119 Q219
Annualised rent pre restructuring Annualised rent lost
1 UK flagships only 21 2 Run rate of passing rent lost reflects difference between pre-restructuring rent and rent at 30 June 2019 from units affected 3 Analysis based on Hammerson leases impacted by CVAs between December 2017 and June 2019, weighted by Hammerson’s share of passing rent pre-CVA
UK flagship destinations Passing rent declines driven by high street fashion See appendices slides 71-72
UK flagship destinations leasing(1) vs previous passing rent by category - H1 2019 (£’000s)
250 Type £’000s No. % vs previous passing 200 High street fashion 1,681 13 -25% 150 Non-fashion consumer brands 1,442 20 +32% 100
F&B 407 12 +13% 50
Aspirational fashion 622 7 +27%
-50 Total 4,152 52 -1%
-100 Leasing performance varies by type • Higher proportion of temporary leases (25%) -150 • New leases skewed towards target categories -200 • Renewal and temporary leases biased to high High street fashion Non-fashion consumer brands F&B Aspirational fashion street fashion
1 All leasing, new and renewal, ex storage and three reconfigurations 22
UK flagship destinations
Shifting the mix, leasing to winners See appendices slide 75
Category Current Future New Rent/ Near-term mix(1) mix(1) leasing(1) sq ft rental levels
Department stores 39% c.28% nil c.£10/sq ft
High street fashion (traditional) 15% c.10% nil c.£30/sq ft
F&B 9% c.12% 31% c.£40/sq ft
High street fashion (contemporary) 8% c.12% nil c.£30/sq ft
Non-fashion and consumer brands 18% c.20% 60% >£50/sq ft
Leisure/events 7% c.10% 1% c.£15/sq ft
Fashion (aspirational) 4% c.8% 8% >£30/sq ft
100% 100% 100%
1 By area 23
UK flagship destinations Attracting winning brands
Principal leases - non fashion Principal leases – F&B Temporary leases Total rent - £1.6m(1) Total rent - £0.5m(1) Total rent - £1.1m(1)
The White Company, Westquay Stack & Still, Kitty Café, Silverburn Grand Central
Wagyu, Victoria Leeds
LEGO, Westquay and Bullring Tandem, Myga Yoga, Highcross Bullring
Lemoni, Waterstones, Rapha, The Oracle Brent Cross Victoria Leeds
1 Total rent for category, not for brands shown 24 UK flagship destinations Attracting an affluent audience looking for a ‘big day out’(1)
Growth Growth Dwell time (mins) 2016-2018 Party size 2016-2018 F&B 2017-2019 YTD
90 1.8 +7% Average spend +54% 85 1.7 80 +1% Dwell time +90% -6% 1.6 75 -4% Conversion +9ppts 1.5 70
65 1.4 2016 2017 2018 2016 2017 2018
Growth Drive time (mins) 2016-2018 Age Range 25% 30 25 +9% 20% 20 15% -1% 15 10% 10 5% 5 0 0% Slim Chickens, Grand Central 2016 2017 2018 18-24 25-34 35-44 45-54 55-64 >65
HMSO UK average
1 Hammerson’s exit survey data (c.5,000 respondents per year) 25
UK flagship destinations Footfall performance supported by operational excellence
Hammerson UK flagships footfall vs. national index three month moving average(1)
2%
1%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun -1% 2018 2019
-2%
-3%
-4%
-5%
Hammerson National Index
Super events Footfall Average New YoY drive time visitors
The Maze, Westquay +2.7% +14% 14%
Bullring, Westquay, Festival of Light, Bullring +9.8% +24% 31% Birmingham Southampton
1 Index source: Shoppertrak 26
UK flagship destinations Footfall in our centres supports retailers’ omni-channel propositions
1. Drives online presence 2. Drives omni-channel sales
Hammerson analysis shows typical post-opening Hammerson analysis June 2019 uplift in local web traffic(1) Customers online spending behaviour(2) +20-30% +103% Fashion additional clothing spend online with same brands purchased during a centre visit +60-90% >25% Health & Beauty of click and collect customers make additional purchases in store
1 Research carried out with Hitwise (based on 12 week period before and after store opening) 27 2 Permission based research carried out with Rippll (from a sample of circa 100 visitors to Cabot Circus over a 90 day period) Freeport Lisboa, Lisbon
Premium outlets Premium outlets
H1 2019 operational update See appendices slides 84-93
Value Retail(1) VIA Outlets(1)
H1 2019 H1 2018 H1 2019 H1 2018
GAV Hammerson share (£m) 1,931 1,762 659 620
Brand sales growth (%)(2) 11 6 10 6
Footfall growth (%)(2)(3) 7 2 8 0
Average sales density growth (%)(2) 8 3 7 5
Like-for-like net rental income growth (%)(4) 14 3 4 7
Occupancy (%) 95 94 93 91
1 With the exception of LfL net rental income growth, figures reflect overall portfolio performance, not Hammerson’s ownership share. 2018 figures have been restated at 30 June 2019 exchange rates 2 Figures include assets owned for 18 months 29 3 2018 VIA footfall metrics have been restated following the collection of more accurate footfall figures 4 2018 like-for-like NRI has been restated to exclude the impact of extensions and reconfigurations. VIA Outlets 2018 like-for-like NRI has been restated for a foreign exchange correction (-6% impact to 2018 like- for-like NRI) Premium outlets Premium outlets – the drivers of success
Premium outlets channel outperforms average Global tourism growth continues European sales growth during H1 2019(1)
(2) (3) 16% Tax free sales YoY growth
14% 19% +14%
12%
10%
8% 14% 6%
4% 6% 2%
0% VIA sales growth Reported sales growth in Europe for all channels
1 Data from VIA Outlets centres. Brands include Polo Ralph Lauren, Hugo Boss, Guess, Nike, Levis and Adidas 30 2 Tax free sales as a proportion of total premium outlets sales 3 Year-on-year growth for the five months to the end of May 2019
France flagship destinations
Les Terrasses du Port, Marseille France flagship destinations
H1 2019 operational update See appendices slides 77-79
France flagship destinations H1 2019 H1 2018 Occupancy (%) 97.0 97.1 Leasing activity (£m) 2.8 3.6 Leasing vs. ERV (%) +4 +2 Leasing vs. previous passing (%) +5 +4 In-store retail sales (%)(1) +1.3 +2.9 Footfall (%)(2) +0.5 +2.3
Les Terrasses du Port, Marseille
1 Sales: H1 2019 France benchmark +0.2% (Source: Banque de France, as at June 2019). Retail sales on same-centre basis 32 2 Footfall: H1 2019 France benchmark +0.3% (Source: CNCC) France flagship destinations On -site extensions update
Les 3 Fontaines
• Scheme revised to increase proportion of leisure and F&B
• Food hall opening spring 2020, 100% pre-let
• Opening of main phase Q2 2021
• Leisure phase opening mid 2023
• Good progress on pre-letting, now 39%(1) (Dec18: 23%)
• Cost to complete +£34m, annual income +£1m, YOC 5.0% Les 3 Fontaines, Cergy, Paris
Italik
• 41%(1) pre-let (Dec 18: 34%)
• Opening Q3 2020
• YOC 5.3%
Italik, Italie Deux, Paris
1 Let or in solicitors' hands by income at 26 July 2019 33
Summer Fest, Dundrum, Dublin
Ireland flagship destinations Ireland flagship destinations
H1 2019 operational update See appendices slides 81-82
Ireland flagship destinations H1 2019 H1 2018 Occupancy (%) 99.5 98.9 Leasing activity (£m) 1.2 1.5 Leasing vs. ERV (%)(1) +4 +6 Leasing vs previous passing (%)(1) +12 +23 Footfall (%) +0.6 -3.0
Five Guys, Swords Pavilions
1 Principal leases only 35 Ireland flagship destinations
Significant potential in Irish portfolio See appendices slide 95
Near term repurposing Future developments
Building 5
Cost €5m
Target YOC Phase 2 Pavilions Pembroke Square 6% Phase 3
Cost €5m Dundrum Dublin Central Target YOC Stella Bowl (ex Hamleys) 7%
36 Rooftop Beehives, Silverburn, Glasgow
Sustainability and City Quarters
37
The Goodsyard, London Sustainability Ambitious approach to sustainability underpins everything we do
We create destinations that deliver positive impacts economically, socially and environmentally Our target is to be net positive for carbon, resource use, water and waste by 2030
Significant reductions in resource usage during H1 2019
Electricity Gas Carbon Water
-12% -21% -13% -14%
38 City Quarters
Beyond retail See appendices slide 95
City Quarters potential Martineau Galleries, Birmingham 100,000m2 workspace 1,300 residential units 100 acres 200 hotel rooms Restaurants, cafés, shops and high quality public realm 6,600 residential units
1,600 hotel rooms
300,000m2 work space
9 parks and public spaces
39 Les Terrasses du Port, Marseille
Summary Summary Clear focus on near term challenges and longer term valuation creation
Debt reduction remains a key priority 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1) UK continues to be challenging Tenant restructuring a continuing theme Soft leasing metrics due to fashion renewals and temporary leases Actively managing the mix to attract visitors and optimise income profile 92%(2) of new UK flagship leasing in H1 to non-fashion brands Footfall up in all regions: UK and French flagships ahead of benchmarks(3) Attracting an affluent, younger crowd for a ‘big day out’ Flagship physical retail is integral to the omni-channel future Physical stores drive web traffic and online sales Diverse portfolio helps to offset UK weakness Strong performance from premium outlets continues France and Ireland provide stability with development potential City Quarters is the future of the portfolio Broad range of opportunities in thriving city centres Festival of Light, Dundrum, Dublin
1 43% fully proportionally consolidated 41 2 By area 3 Shoppertrak and CNCC
The Oracle, Reading
Questions Supplementary appendices
Bullring & Grand Central, Birmingham Contents
01 Group 02 UK flagship destinations 03 France flagship destinations 04 Ireland flagship destinations 05 Premium outlets 06 City Quarters 07 UK retail parks
44 01 Group
45
Festival of Light, Bullring & Grand Central, Birmingham Appendices: Group Average of £400m disposed per year over the last five years
Hammerson annual disposal proceeds (£m)
700
600
500
400
300
200
100
0 2014 2015 2016 2017 2018 2019 YTD
UK flagships UK retail parks UK other UK office France Ireland
46 £9.5 billion leading 53 pan-European retail European platform destinations 14 countries 8% 8% 29% Top 3 market position in all chosen sectors
27%
19% 49% 10% non-UK assets 2.2m UK flagship destinations - £2.7bn m2 retail space
France flagship destinations - £1.8bn
Ireland flagship destinations - £0.9bn 425m visitors Premium outlets - £2.6bn
Development & UK other - £0.8bn 11 - UK flagship destinations 4,700 7 - France flagship destinations 3 - Ireland flagship destinations UK retail parks - £0.7bn tenants 12 - UK retail parks 47 20 - Premium Outlets Appendices: Group Our Business Model
What we have What we do Who we deliver for
Product experience framework Shareholders
High-quality
property Iconic Brands in the right destinations places Our strategy
Consumers Retail A dynamic and specialism diverse team Capital Optimised Operational efficiency portfolio excellence Partners
Experience led Insight led Communities
Customer first Effective capital management Our people
Positive for the environment | Positive for the community
48 Appendices: Group H1 2019 Group leasing cumulative activity
H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m)(1) Flagship leasing H1 19 H1 18 volumes £m £m
5 20 UK 4.4 6.8 4.5 18 France 4 16 2.8 3.6 3.5 14 Ireland 1.2 1.5 3 12 Total 2.5 10 8.4 11.9
2 8
1.5 6
1 4
0.5 2
0 0
June
May
April
March
January February
Monthly leasing 2019 (LHS) Cumulative leasing activity 2017 (RHS)
Cumulative leasing activity 2018 (RHS) Cumulative leasing activity 2019 (RHS)
1 Monthly leasing LHS axis, cumulative leasing RHS axis 49
Appendices: Group H1 2019 portfolio leasing key metrics
Leasing vs previous Leasing vs ERV Like-for-like ERV New rent secured passing (%)(1) (%)(1) growth from leasing (%) (£m)(2) UK flagship destinations -8 -4 -2.5 4.4
France flagship destinations +5 +4 -0.3 2.8
Ireland flagship destinations +12 +4 -0.1 1.2
UK retail parks +13 +1 -6.3 0.6
Group -1 — -2.3 9.2
1 Principal leases only 50 2 Total group leasing includes UK Other £0.2m Appendices: Group Tenant restructuring: 31 December 2017 – 30 June 2019
UK France Ireland UK UK Group flagship flagship flagship retail parks other destinations destinations destinations Number of units impacted 100 37 3 27 12 179
Passing rent pre restructuring (£m) 17.0 2.8 1.8 6.3 2.1 30.0
Current passing rent lost – 30 June 2019 (£m) 5.5 0.3 1.6 2.1 0.7 10.2
% of Group passing rent – 30 June 2019(1) 1.6% 0.1% 0.5% 0.6% 0.2% 3.0%
1 Group passing rent = £342.1m 51
Appendices: Group Run rate of tenant restructuring in the UK & Ireland
Units in CVA or administration by month, January 2018 – June 2019
25
20
15
10
5
0 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19
52 Appendices: Group Top 20 tenants(1)
Rental Exposure % of passing Rental Exposure % of passing Retailer Retailer (£m) rent (£m) rent
H&M 9.2 2.7% Debenhams 3.9 1.1%
Inditex 8.7 2.5% Arcadia 3.8 1.1%
B&Q (Kingfisher) 8.4 2.4% John Lewis PLC 3.8 1.1%
Next 7.7 2.2% New Look 3.7 1.1%
Marks & Spencer 5.7 1.7% J Sainsbury plc 3.7 1.1%
Boots 5.6 1.6% CK Hutchison Holdings 3.7 1.1%
TK Maxx 5.1 1.5% JD Sports 3.6 1.1%
SportsDirect 5.1 1.5% Superdry 2.9 0.8%
Dixons Carphone 4.8 1.4% Groupe Etam 2.6 0.8%
River Island Clothing Co 4.7 1.4% TOTAL 101 29.5%
France Printemps (Borletti) 4.7 1.4%
1 Ranked by passing rent as at 30 June 2019 53
Appendices: Group H1 2019 key operational statistics
Occupancy (%) UK flagships France Ireland UK other Group flagships flagships
30 June 2019 96.4 97.0 99.5 89.3 96.7 31 December 2018 97.6 97.1 99.0 96.9 97.2 30 June 2018 97.2 97.1 98.9 94.5 96.6
UK France Ireland Sales densities(4) UK France flagships flagships flagships £/ft2 €/ft2
Sales(1) -2.0 1.3 n/a 2019 240 - 580 425 - 880 Footfall(2) 0.5 0.5 +0.6 2018 245 - 525 565 - 680 Rent: sales(3) 12.9 10.5 n/a 2017 240 - 490 455 - 700 OCR(3) 22.2 13.5 n/a
1 Retail sales on same-centre basis. H1 2019 UK benchmark -1.7% (Source: Visa Face to Face index); H1 2019 France benchmark +0.2% (Source: Banque de France, at 30 June 2019) 54 2 H1 2019 UK benchmark -3.2% (Source: Shoppertrak); H1 2019 France benchmark +0.3% (Source: CNCC) 3 Sales / OCRs in France include VAT (the UK figures exclude VAT). Also French OCRs do not account for a wide range of taxes paid separately that are not covered by rates (e.g. city tax, refuse tax, local Eco tax). Therefore OCRs in the two countries are not directly comparable. Also away from property costs staffing costs are significantly higher in France than the UK c.30%+. 4 Excludes anchor stores. France data includes VAT Do we need data labels for the Appendices: Group numbers in the NAVPS walk middle? Are some numbers negative?
H1 2019 EPRA NAV movement (pence per share)
790
770 4 14
750 14
70 730 738
710
15 690
685 685 670 Dec 2018 Adjusted profit Premium outlets Fx and other Reval excl. outlets Dividends June 2019 reval
55 Appendices: Group H1 2019 valuation data
UK flagships France Ireland UK retail UK other Total flagships flagships parks
True equivalent yield (%)
30 Jun 2019 5.9 4.5 4.6 7.2 8.7 5.5 31 Dec 2018 5.5 4.2 4.5 6.8 8.0 5.3 Change 6 months 40bp 20bp 10bp 40bp 70bp 20bp Change 12 months 70bp 10bp 20bp 90bp 130bp 40bp
Net initial yield (%)
30 Jun 2019 5.2 3.8 4.0 6.8 6.0 4.8 31 Dec 2018 4.8 3.7 3.9 6.0 5.7 4.6 Change 6 months 40bp 10bp 10bp 80bp 30bp 20bp Change 12 months 80bp (10bp) 10bp 130bp 70bp 40bp
56 Appendices: Group H1 2019 valuation data
UK flagships France Ireland UK retail UK other Total flagships flagships parks
ERV (£m)
30 Jun 2019 164.0 89.9 45.3 59.7 12.9 366.1 31 Dec 2018 169.3 89.4 45.3 59.7 13.3 377.0 LfL change 6 months (%) -2.5% -0.3% -0.1% -6.3% -3.1% -2.3% LfL change 12 months (%) -4.4% +0.6% +0.8% -8.1% -3.0% -3.1%
57 Appendices: Group Key disposals achieved 2017 – 2019
Proceeds(1) Buyer £m
2017: average -3% below book value Westwood and Westwood Gateway Retail Parks, Thanet 80 BMO (private equity) Saint Sébastien, Nancy 140 AEW (private equity) Place des Halles, Strasbourg 167 Greenstone Oxford Limited
2018: average -7% below BV Battery Retail Park, Selly Oak 58 NFU Mutual Wrekin Retail Park, Telford 35 Ediston/Europa Imperial Retail Park, Bristol/Fife Central Retail Park, Kirkcaldy 164 Capreon (private equity) Highcross, Leicester (50%) 236 Asian investor, introduced by M&G Real Estate
2019: average -8% below BV Dallow Road RP, Luton 24 Private equity Italie Deux, Paris (75%) 423 AXA Total 2017 – 2019(2) 1,428
1 Gross proceeds 58 2 Total annual gross proceeds (includes ancillary disposals): 2017 - £402m; 2018 - £570m , 2019 - £456m
Appendices: Group Net debt analysis
Net debt analysis (£m)(1)
3500
3450 35 3,447 392
3400 22 3,406 95 3350 118
3300 5
3250
3200
3150
3100
3050 3,055
3000 Dec 2018 Disposal Net operating Other Dividend Capex Jun 2019 Future disposal Pro-forma proceeds cashflow proceeds(2)
1 On a proportionally consolidated basis, excluding premium outlets 59 2 Reflects gross proceeds from sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik Appendices: Group Debt maturity profile
Debt maturity profile 30 June 2019 (£m)(1)
1,000
900
800
700
Revolving credit facilities 600
Private placement 500 Sterling bonds 400 Euro bonds
Secured debt 300
200
100
0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
1 Proportionally consolidated, excluding premium outlets 60
Appendices: Group LTV methodology
30 June 2019 (pro forma)(1) 30 June 2019 31 December 2018 Headline Fully proportionally Headline Fully proportionally Headline Fully proportionally Net debt (£m) consolidated (£m) (£m) consolidated (£m) (£m) consolidated (£m) Group 3,055 3,055 3,447 3,447 3,406 3,406 VIA Outlets 234 234 - 242 Value Retail 667 667 - 658 Loan 3,055 3,956 3,447 4,348 3,406 4,306
Property values
Group 6,545 6,545 6,951 6,951 7,480 7,480 VIA Outlets 659 659 - 636 Value Retail 1,931 1,931 - 1,823 VIA Outlets net assets 352 - 352 - 326 - Value Retail net assets 1,309 - 1,309 - 1,211 - Value 8,206 9,135 8,612 9,541 9,017 9,939 LTV 37% 43% 40% 46% 38% 43%
1 Reflects gross proceeds from sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik 61
Appendices: Group Gearing sensitivity(1)
Disposals (£m)(3)
0 100 200 300 400 500 600 700 800 900 1000
0% 61% 59% 57% 55% 53% 51% 49% 47% 45% 43% 41%
(2) 5% 67% 65% 63% 61% 59% 56% 54% 52% 50% 48% 45%
10% 75% 73% 70% 68% 65% 63% 60% 58% 55% 53% 50% values 15% 85% 82% 79% 76% 73% 71% 68% 62% 62% 60% 57%
Reduction in Groupin Reduction 20% 97% 94% 90% 87% 84% 81% 78% 75% 71% 68% 65%
25% 113% 110% 106% 102% 98% 95% 91% 87% 84% 80% 76%
Gearing covenant 150%(4)
1 Pro forma - reflects sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik 62 2 Gearing sensitivity on changes in 30 June 19 values and future disposal proceeds. Values on a proportionally consolidated basis including premium outlets 3 Calculations assume disposals are achieved at 30 June19 book values 4 Group’s tightest gearing covenant on unsecured bank facilities and private placement senior notes Appendices: Group Reconciliation between Hammerson and Fitch Net Debt: EBITDA metrics
EBITDA (£m) Notes Net debt (£m) Notes Net debt/ EBITDA Hammerson basis 357.4 3,405.7 9.5 -8.6 Amortisation of tenant incentives -278.3 Dundrum JV secured debt -3.4 Share based remuneration -81.8 Highcross JV secured debt Operating profit from property Parinor JV secured debt -150.6 interests in JVs and Associates -49.2 *(a) (excl. Premium Outlets) Adjusted earnings from VIA Cash in JV *(a) -15.1 Outlets 70.0 Adjusted earnings from Value Unamortised fees *(a) -26.0 Retail 10.0 Rental-derived dividends from JVs *(b) 95.0 (incl. fees) Rental-derived dividends from *(b) 8.3 Associates Fitch basis 257.0 3,076.4 12.0
The difference between (a) the total of Operating profit from JVs and Associates and Adjusted earnings from Premium Outlets and (b) the total rental-derived dividends from JVs and 63 associates, predominantly relates to acquisitions and capital expenditure. This is because joint ventures only request partner contributions to fund capex and acquisitions for any additional cash required (i.e. net of undistributed cash available from operating cashflows at the time rather than distributing all operational cash and then requesting contributions for the full amounts. Appendices: Group Cost savings delivery on track to support reinvestment
Breakdown of annual cost savings (£m) 2019 reinvestment (£m)
£8m p.a.
£1.0m p.a. from future disposals Disposals £0.4m
Operational £4m p.a. £2.7m
£7m p.a. of Technology and cost savings innovation delivered £2m
Board and management £3.9m Super events £2m
64 Appendices: Group Flexibility over future capital expenditure
Capex 2018-2020
Committed 2018 2019 2020 Actual Forecast Forecast £m £m £m Defer start of On-site developments Brent Cross 95 70 80 development Other committed capex(1) 74 25 - 169 95 80
Discretionary
Flagship destination investment 43 38 40 City Quarters 2 7 20
45 45 60
Total 214 140 140
1 2018 includes £31 million held in escrow for future Croydon land acquisitions 65 Appendices: Group Capitalised Recoverable Direct/indirect Maintenance capex – FY 2018 from tenant return? Selection of examples
Capital expenditure – no additional area UK France Ireland Total Painting, flooring upkeep, M&E: CCTV, wifi , IT systems maintenance flagships flagships flagships Service charge (maintenance) B
Service charge income (£m) 45 25 12 82 Direct: Repurposing and reconfiguration, capital contributions,
Maintenance expenditure within service charge (£m) 7 4 2 13 Indirect: Examples: Wayfinding projects, WC upgrades, LED relamping, public seating upgrades, Painting, flooring upkeep, M&E: CCTV, wifi , IT systems maintenance family room implementation & upgrade, smart metering
A
3a + 3b Capital expenditure A/B Gross rental income (£m) 178 84 44 306
Capital expenditure – no additional area (£m) 28 25 - 53
Yield on cost from capital expenditure – no additional area (%) 9% 4% n/a 6% 3b
Capital expenditure – no additional area: gross rental income (%) 16% 30% n/a 17%
Examples: Income accretive: Repurposing and reconfiguration, capital contributions, digital screens
Other (partly recoverable from tenants): Wayfinding projects, WC upgrades, LED relamping, seating upgrades, family rooms, smart metering
66 Our progress against 2019 plans
2019 Target Progress
Reducing energy demand across the managed retail portfolio by -14.2% H1 2018 vs. H1 2019 Delivering a further 11% reduction achieved against our Installing additional renewable electricity capacity at three sites 1 complete, 2 programmed for Positive Places H2 2019 Strategy Reviewing our energy procurement model to leverage additional Market review of potential renewable capacity and offer grid balancing renewable capacity underway
Working with retailers to support efficiency improvements Joint retailer workshop held in through fit out January 2019 with collaborative outputs published Embedding Positive Places within City Quarters concept Sustainability a key USP for our City Quarters concept Working with our design teams to deliver best in class Building 5 on track to achieve sustainability in our Dublin developments BREEAM Excellent and NZEB requirements Working with regional water companies to support water Relationship with Thames Water reduction initiatives established Working with re-use partners to reduce waste Partnership with Globechain established to trial re-use concept Continuing our programme of portfolio-wide, locally focused Community activities run in each community engagement initiatives asset
67 Hammerson has set a target to be Net Positive for carbon, water, resource use and socio- Carbon Resource Use economic impacts by Net Positive for Net Positive for resource use 2030 carbon means means waste avoided, recycled carbon emissions or re-used exceeds materials used avoided exceed that are neither recycled, emissions generated. renewable nor sent to landfill.
“Hammerson was the first real estate company globally to set such comprehensive, challenging Net Positive targets and we are making good progress. Creating Positive Places underpins our delivery of best in class retail assets that Water Resource Use respond to the major challenge presented by climate change.” Net Positive for water means Net Positive for socio-economic water replenished by external impacts means making a David Atkins, CEO projects exceeds water measurable positive impact on consumed from mains supply. socio-economic issues relevant to our local communities beyond a measured baseline. 68 Steps to becoming Net Positive Our phase one target is to be Net Positive for landlord controlled carbon emissions, water demand, resource use and socio-economic impacts by the end of 2020
2015
27,000 tonnes CO2e 2016 539,082 m3 water
18,243 tonnes waste not 24,000 tonnes CO2e 2017 recycled or reused 511,888 m3 water
17,293 tonnes waste not Delivered carbon neutral 2018 recycled or reused development at Rugby 40,000 FTE jobs supported Installed 3 further solar PV 32% reduction in phase 1 across our assets arrays NP Carbon footprint 2019-2021
Reduce energy demand by 23 tonnes CO2e savings further 8% v 2015 baseline from EV charging Landlord CO2 e reductions optimised and offset Achieved 73% recycling Generated 450mWh clean opportunities in place for rate and reduced net power remainder operational resource use 4 additional PV arrays Energy procurement model from 3,000 tonnes to1,200 installed tonnes driving additional renewable 16% reduction in phase 1 capacity NP water demand Net positive approach 34% reduction in Phase 1 embedded in City Quarters NP resource use footprint Increase onsite renewable 150+ business start ups and EV capacity supported Improve energy efficiency of retail units
69 UK flagship 02 destinations
70
Westquay, Southampton Appendices: UK flagship destinations H1 2019 UK flagship leasing performance
H1 2019 UK flagship destinations leasing (£m) H1 2019 leasing 5 8 £m
4.5 7 Principal leasing 3.1 4 6 Reconfigurations 3.5 0.2 5 3 Temporary and 1.1 2.5 4 other
2 Total 3 4.4 1.5 2 1 1 0.5 UK flagship leasing key facts
0 0 Leasing vs. Dec 18 ERV -4%(1)
June
May April
March (1)
January Leasing vs. previous passing -8% February
Monthly leasing 2019 (LHS) Cumulative leasing activity 2017 (RHS) Average lease term: 9 years(2) Cumulative leasing activity 2018 (RHS) Cumulative leasing activity 2019 (RHS) Average incentive: 3 months(2)
1 Principal leases only 71 2 Excludes temporary leases (FY2018: average lease term 11 years, average incentive 8 months) Appendices: UK flagship destinations Profile of leasing at UK flagship destinations
UK flagship destinations leasing(1) vs previous passing rent – H1 2019 (£’000s)
200 Type No. £’000s % vs % vs previous ERV 150 passing
Principal 26 2,577 -8% -4% 100
50 Temporary 19 1,082 -26% -55%
Temporary/ vacant to 7 494 626% -2% principal -50 Total 52 4,152 -1% -25%
-100
-150
-200
1 All leasing, new and renewal, excluding storage and three reconfiguration lettings of £0.2m 72
Appendices: UK flagship destinations Differentiation between categories and brands in our UK portfolio
H1 2019 Sales Hammerson UK flagship destinations category sales and range Hammerson -2.0% Index -1.7%(1) 60%
H1 2019 Footfall Hammerson +0.5% Index -3.2%(2) 40%
H1 2019 price deflation(3) Non-food -0.6% 20% Clothing -7.2%
6.6% 3.4% 3.4% 2.2% 0% -0.2% -2.2% -3.6% -4.1% -5.9% -6.9% -8.3%
-20%
-40% Jewellery & Dept Store - F&B Sportswear Fashion - Health & Fashion - Home, Leisure Dept Store - Fashion - Personal Aspirational Aspirational Beauty Modern Consumer Mainstream Traditional Luxuries Brands & Gifts
1 Source: Visa F2F Index 73 2 Source: Shoppertrak 3 BRC Nielsen shop price index
Appendices: UK flagship destinations Exposure to department stores
Hammerson exposure to department stores in UK
Number of Floorspace Hammerson Bullring & Grand Central, Birmingham stores (‘000 m2) sales growth
Harvey Nichols 2 8 +ve
Selfridges 1 24
John Lewis 5 114
Marks & Spencer 4 28
Fenwick 1 16
Debenhams 5 75
House of Fraser 3 46 -ve Total 21 311
74 Appendices: UK flagship destinations Proactively reconfiguring department store space
House of Fraser Indicative plans for further repurposing Highcross, Leicester
Replaced with upsized Zara and JD Sports flagships, Adventure Golf, restaurants and additional car parking
Additional £1.5m of rental income
£17m project cost
Upsized Zara store
75 France flagship 03 destinations
76
Les Terrasses du Port, Marseille Appendices: France flagship destinations Portfolio remains weighted towards flagship assets
Focus on flagship destinations
89%
Les Terrasses du Port Italie Deux Les 3 Fontaines Other
Portfolio value: £2.0bn (1) 7 France flagship destinations Largest three assets 89% of portfolio
1 By value at 30 June 2019 including developments 77 Appendices: France flagship destinations H1 2019 leasing performance
H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m) H1 2019 leasing 1.6 7 £m
Principal leasing 1.4 6 1.7 Reconfigurations 1.2 0.8 5 Temporary and 0.3 1.0 other 4 Total 0.8 2.8 3 0.6 France flagship leasing key facts 2 0.4 Leasing vs. Dec 18 ERV +4%(1) 1 0.2 Leasing vs. previous passing +5%(1)
0.0 0 Average lease term: 10 years(2)
June
May April
March (2)
January Average incentive: 0 months February
Monthly leasing 2019 (LHS) Cumulative leasing activity 2017 (RHS) Cumulative leasing activity 2018 (RHS) Cumulative leasing activity 2019 (RHS)
1 Principal leases only 78 2 Excludes temporary leases (FY2018: average lease term 10 years, average incentive 3 months)
Appendices: France flagship destinations Differentiation between categories and brands in France
H1 2019 Sales Hammerson UK flagship destinations category sales and range
Hammerson +1.3% 60% Index +0.2%(1)
H1 2019 Footfall
Hammerson +0.5% 40%
Index +0.3%(2)
20%
9.5% 8.0% 3.1% 2.0% 1.3% 0.7% 0.0% 0% -0.2% -0.4% -0.5% -0.6%
-20%
-40% Fashion - Sportswear Health & Fashion - Dept Store - F&B Home, Dept Store - Jewellery & Leisure Fashion - Aspirational Beauty Modern Aspirational Consumer Mainstream Personal Traditional Brands & Luxuries Gifts
1 Source: Banque de France (YTD 30 June 2019) 79 2 Source: CNCC Ireland flagship 04 destinations
80
Dundrum, Dublin Appendices: Ireland flagship destinations 200,000m 2 of prime space plus sustainable development opportunities
Focus on flagship destinations Les Terrasses du Port, Marseille Consistently strong footfall growth +5% New brands including Boggi Milano, Polo Ralph Lauren
Italie Deux, Paris Transforming the centre into a cultural destination Italik extension launched in Jun-18
Les 3 Fontaines, Cergy Major 44,300m2 extension started in Jan-18 Dundrum Pavilions Ilac Developments 23% pre-let
Portfolio value: £1.1bn Dundrum 68% of portfolio(1)
1 By value at 30 June 2019 including developments 81 Appendices: Ireland flagship destinations Key retail centres map
82 Freeport Lisboa, Lisbon 05 Premium outlets Appendices: Premium outlets Overview of European outlet market
Number of outlets in Europe(1) Leading operators by GLA(2) McArthurGlen
Neinver
17% VIA 43
60 UK Value Retail Italy 41% 9% France Realm 213 circa Spain 2 outlets 30 3.5million m Landsec Germany 8% 13 Poland ROS Include Other – is Other 17 5% it 213 in total? 25 4% Multi 4% 4% Unable to find the 25 4% 4% total number Concepts & Distribution Other
Limited number of outlets in Europe with high High concentration – c. 60% of GLA managed barriers to entry by nine operators
1 Source: FSP’s European Outlet Industry Report March 2017 84 2 Source: Cushman & Wakefield. Market share by GLA. Total GLA – c. 3.5 million m2
Appendices: Premium outlets Tiered European outlet market
Sales densities €/m2
€30,000+ International fashion and luxury brands
€2,000–€10,000 Mainstream fashion brand outlets
<€2,000 Low-end discount outlets
85 Premium outlets portfolio
Value Retail Villages VIA Outlets centres Bicester Village, Oxford Batavia Stad Amsterdam Fashion Outlet GLA: 28,000m2 GLA: 30,800m2 Boutiques: 163 Units: 124 La Roca Village, Barcelona Fashion Arena Prague Outlet GLA: 22,800m2 GLA: 24,600m2 Boutiques: 131 Units: 101 Las Rozas Village, Madrid Freeport Lisboa Fashion Outlet GLA: 16,500m2 GLA: 36,700m2 Boutiques: 95 Units: 126 La Vallée Village, Paris Hede Fashion Outlet, Gothenburg GLA: 21,900m2 GLA: 16,700m2 Boutiques: 106 Units: 53 Maasmechelen Village, Brussels Landquart Fashion Outlet, Zürich GLA: 20,000m2 GLA: 21,200m2 Boutiques: 102 Units: 78 Fidenza Village, Milan Mallorca Fashion Outlet GLA: 20,900m2 GLA: 32,600m2 Boutiques: 119 Units: 77 Wertheim Village, Frankfurt Wroclaw Fashion Outlet, Poland GLA: 21,200m2 GLA: 13,700m2 Boutiques: 118 Units: 88 Ingolstadt Village, Munich Seville Fashion Outlet GLA: 21,100m2 GLA: 15,900m2 Boutiques: 115 Units: 65 Kildare Village, Dublin Zweibrücken Fashion Outlet, Germany GLA: 16,700m2 GLA: 29,100m2 Boutiques: 97 Units: 114 Vila do Conde Porto Fashion Outlet GLA: 28,100m2 Units: 121 Oslo Fashion Outlet 2 GLA: 13,400m 86 Units: 95 Appendices: Premium outlets Hammerson’s total investment in Value Retail
Holding companies 25% equity
Las Rozas La Vallée Maasmechelen Wertheim Ingolstadt Kildare Bicester Village La Roca Village Fidenza Village Village Village Village Village Village Village
37 29 25 14 14 22 33 2 29
50 41 38 26 27 34 45 15 41
Village ownership via LPs (%)
Total Village ownership (%)(1)
1 Total Village ownership calculated as economic entitlement of directly held and indirectly held interests 87
Appendices: Premium outlets Significant contribution to Group performance
Premium outlets value creation (£m)(1)
7.5 year IRR - 24% 1,800
1,600
1,400
1,200
1,000 1,220
800 (132) 1,641
600 653 (313) 400
200 214 0 Premium Capital Distributions Distributions Valuation Premium outlets NAV invested - operating - refinancing uplift outlets NAV (2) Jan-12 Jun-19 La Roca Village, Barcelona
1 IFRS NAV of Value Retail and VIA Outlets 1 January 2012 to 30 June 2019. Capital invested includes acquisition of VR investment stakes and VIA Outlet acquisitions. 88 2 Premium outlets NAV as at 30 June 2019 includes liabilities in respect of distributions received in advance of £20m which will be repayable upon disposal of stakes in Value Retail. Appendices: Premium outlets Absolute sales growth delivered through active management, acquisitions and extensions
VR and VIA Sales and Sales Growth 2012 - 2018 (€m)(1)
3,500 14% 13% 12% 3,000 12% 11% 11%
2,500 10% 10% 9%
2,000 8% 8% 8%
8%
m 7% € 1,500 6%
1,000 4%
500 2%
0 0% 2012 2013 2014 2015 2016 2017 2018
VR Sales (LHS) VIA Sales (LHS) VIA Sales Growth (RHS) VR Sales Growth (RHS)
1 Figures have been restated at constant FX rates. 89 Sales growth include assets owned for 24 months. Sales include assets acquired from the date of acquisition.
Appendices: Premium outlets Sales densities growth demonstrates underlying sales performance
VR and VIA Average Sales Densities (€/m2) and Average sales Density Growth 2012 – 2018(1)
18,000 20%
18% 16,000 18%
16% 14,000 14% 12,000 13% 12% 10,000 10% 10% 8,000 8% 9% 8% 6,000 7% 6% 5% 5% 4% 4,000 5% 4%
2,000 2%
0 0% 2012 2013 2014 2015 2016 2017 2018
VR Average Sales Densities (LHS) VIA Average Sales Densities (LHS) VIA Average Sales Density Growth (RHS) VR Averge Sales Density Growth (RHS)
1 Figures have been restated at constant FX rates. 90 Sales densities include assets owned for 24 months. Sales density growths have been calculated as the weighted average of entities owned for 12 months.
Appendices: Premium outlets Luxury outlets incur higher costs to generate outperformance
Value Retail – H1 2019 earnings walk (£m)
GRI: 70% fixed, remainder turnover; includes GRI 59.7 118 brand inducement amortisation
Property outgoings (18.1) Property outgoings: includes significant marketing costs, as well as other property outgoings, e.g. leasing and car park costs, net of service charge NRI 41.6 income
Administration costs: roughly one-third local; two- Administration Costs (21.2) thirds group
EBIT 20.4 34.2% EBIT margin(2)
Interest & other: secured debt structure; weighted Interest & other (8.0) average cost of debt of 2.7%; net of participative loan earnings from investments in LP stakes in the Tax (1.3) Spanish villages
Tax: corporation tax ranges from 19% in the UK to EPRA Earnings 11.1 18.6% EPRA Earnings margin(3) 31% in France
0 10 20 30 40 50 60 70
£m
1 All figures at Hammerson share 91 2 FY 2018: EBIT margin 36.9% 3 FY 2018: EPRA Earnings margin 22.1%
Appendices: Premium outlets Lower cost model operated below luxury end of premium outlets market
VIA Outlets – H1 2019 earnings walk (£m)
GRI: >80% fixed, remainder turnover; includes car GRI 20.5 43 park income and inducement amortisation
Property outgoings (4.7) (11) Property outgoings: includes local marketing costs and leasing costs, net of service charge
NRI 15.8 32 Administration costs: include Value Retail advisory fees, internal staff costs and group marketing costs
Administration costs (3.7) (7)
EBIT 12.1 59.0% EBIT margin(2)
Interest: secured debt structure; weighted average Interest (4.0) (7) cost of debt of 2.1%
Tax: corporation tax ranges from 15.8% in Tax (1.4) (2) Germany to 25% in Spain and the Netherlands
EPRA Earnings 6.7 15 32.7% EPRA Earnings margin(3)
- 5.0 10.0 15.0 20.0 25.0 £m
1 All figures at Hammerson share 92 2 FY 2018: EBIT margin 58.1% 3 FY 2018: EPRA Earnings margin 32.7%
Appendices: Premium outlets Multi -phase extensions – a source of significant growth
Completed Future
5,800m2 2,500m2 33 units 21 units
TDC TDC £100m €50-60m YOC Opening +15% Q4 2020 Bicester Village, Oxfordshire Q4 2017 La Roca Village, Barcelona
5,500m2 2,500m2 45 units 15 units
TDC TDC €26m €11m YOC Opening +11% Q4 2019 Batavia Stad, Amsterdam Q2 2017 Hede Fashion Outlet, Gothenburg
93 06 City Quarters
Martineau Galleries, Birmingham Appendices: City Quarters The City Quarters opportunity
Retail F&B Residential Workspace Leisure Education Culture Hotel Public spaces Next Start on Key schemes Area planning site submission
Les 3 Fontaines, Cergy 8,400m2 n/a On site
Citywall House, Southampton 2,800m2 2019 Q2 2020
Dundrum Building 5, Dublin 10,000m2 2019 Q3 2020
Victoria Hotel, 2
Nearterm 8,400m 2019 Q3 2020 Leeds Ladywood House, Birmingham 9,300m2 2020 Q4 2020
Martineau Galleries, Birmingham 7 acres 2019
Callowhill Court, Bristol 9 acres 2020
Dublin Central 6 acres 2021
Dundrum Phase 2 6 acres 2021 Strategic Pavilions Phase 3, Swords 18 acres 2021
Victoria Phase 2, Leeds 10 acres 2021
Brent Cross 15 acres n/a
Croydon 22 acres n/a Major The Goodsyard, London 10 acres 2019
TOTAL 103 acres
95 07 UK Retail Parks
The Orchard Centre, Didcot Appendices: UK retail parks H1 2019 operational update
UK retail parks
H1 2019 H1 2018
LfL NRI (%) 1.0 -3.4 Occupancy (%) 96.7 94.5 Leasing activity (£m) 0.6 1.3 Leasing vs. ERV (%)(1) +1 +4 Leasing vs previous passing (%)(1) +13 +2 Footfall (%)(2) +0.6 -1.9
1 Principal leases only 97 2 H1 2019 UK benchmark +0.3% (Source: Springboard Retail Parks Index) Appendices: UK retail parks Key retail park disposals 2016 to 2019
Proceeds(1) Buyer £m
2016: average 7% below BV Thurrock Shopping Park, Thurrock 100 TH Real Estate Cramlington Retail Park, Cramlington 78 Arch (local authority) Westmorland Retail Park, Cramlington 36 Arch (local authority)
2017: average -3% below BV Thanet Retail Parks, Kent 80 BMO (private equity)
2018: average -7% below BV Battery Retail Park, Selly Oak 58 NFU Mutual
Wrekin Retail Park, Telford 35 Ediston/Europa
Imperial Retail Park, Bristol/Fife Central Retail Park, Kirkcaldy 164 Capreon (private equity)
2019: average -6% below BV Dallow Road RP, Luton 24 Private equity Total 2016 – 2019(2) 571
1 Gross proceeds 98 2 Total annual gross proceeds: 2016 - £221m; 2017 - £86m; 2018 - £257m , 2019 - £33m