Hammerson Full Year Results 2013

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MAXIMISING INCOME THROUGH ACTIVE MANAGEMENT Growth of 2.1% in like-for-like net rental income demonstrating continued tenant demand for our properties and the success of asset management initiatives Strong demand for high-quality retail property, with new rents secured of £24m (2012: £19m) for 154,000m² (2012: 123,000m²) Occupancy of 97.7% reflecting attractive venues. Occupancy exceeds our benchmark of 97% and is up since the half year Leases signed overall at 2% above ERV, providing confidence in future income growth Final dividend increased by 8%.Total dividend for the year of 19.1 pence per share (2012: 17.7 pence) CREATING HIGH-QUALITY RETAIL DESTINATIONS Les Terrasses du Port, Marseille now 93% let and on schedule to open May 3rd Construction started at Le Jeu de Paume, Beauvais; Silverburn extension, Glasgow; and Cyfarftha, Merthyr Tydfil Commenced enabling works at Victoria Gate, Leeds. Main contract scheduled to start on site this spring Planning approval received for major retail developments at Croydon and Brent Cross in London Investments in Bullring, Saint Sébastien and Value Retail improve quality of portfolio and provide opportunities to create value ENHANCING CAPITAL STRENGTH Reduction in cost:income ratio of 240 basis points Liability management initiatives reduced weighted average interest rate to 4.8% Year end loan to value of 38% and liquidity of £716 million provide flexibility for future investment David Atkins, Chief Executive of Hammerson, said: “We have reported a good set of results in a year when we saw the beginning of economic and consumer recovery in the UK. In France the economic picture is less clear cut, although personal debt levels remain low, providing the opportunity for a rebound in consumer spending when growth returns. We are seeing improving demand from retailers, and Hammerson is creating the right product to meet their future requirements, which provides the conditions for selected growth in rental values. We have clear visibility on a number of major development projects which will create the destination venues of the future, and drive returns to our shareholders. The first of these, Les Terrasses du Port in Marseille, will open in May this year. We remain on course to deliver strong growth in earnings and dividends over the medium term.”

Transcript of Hammerson Full Year Results 2013

2013 Half-year results

Results2013 Full-year

Monday 17 February 2014

ResultsMonday 17 February 2014

2013 Full-year

1Section

Introduction and market overview David Atkins, CEO

Financial results Timon Drakesmith, CFO

Today’s presentation

2Section

2013 half year results 2

Financial results Timon Drakesmith, CFO

Performance drivers David Atkins, CEO

2013 Full-year results

2

3Section

4Section

Conclusion David Atkins, CEO

Vision

Our vision is to be the best owner-manager and developer of retail property within Europe

2013 half year results 3

By capitalising on our strengths we aim to provide industry-leading shareholder returns

LfL NRI+2.1%

NAV/share+5.7%

32013 Full-year results

Dividend+7.9%

EPS+10.5%

2013 highlights

Occupancy 97.7%

Leasing +2% vs ERV

7% tenant rotation rate

Les Terrasses du Port 93% let

Commenced on site at Leeds and

Beauvais

Planning consent at Croydon and

Best in class retail portfolio Advancing developments

2013 half year results 42013 Half-year results 42013 Full-year results

rate at Croydon and Brent Cross

WAIR reduced to 4.8%

Reduction in cost ratio of 240bps

Over £700m liquidity

Queensgate disposal

Leisure extensions on site

Acquisition of Value Retail stakes,

Bullring and Nancy

Active financial management Capital recycling to enhance growth

Market indicators

Structural attractiveness of indexation

Low personal debt levels

Business confidence steady throughout 2013

Household disposable income increased

French business confidence (Source: INSEE, France)

Securing retail demand in France despite cyclical weakness

85

90

95

100

105

Index

90

85

95

100

105

2013 half year results 5

Household disposable income increased throughout 2013 80

Jul 12 Jan 13 Jul 13 Jan 14

Total disposable income (Source: INSEE, France)

2013 Full-year results

80

€bn

310000

315000

320000

325000

330000

335000

340000

Jan 08 Jan 10 Jan 1231

32

33

34Portfolio initiatives

Leasing progress at Les Terrasses du Port, Marseille and Jeu de Paume, Beauvais

Repositioning existing assets through extensions and refurbishments

Selective acquisitions

Jan 14

Stronger Christmas trading in the UK

Robert DyasCarphone Warehouse

ArgosThorntons

GreggsRyman

SuperdrugMothercare

WH Smith

Topps TilesHalfords

DixonsMaplin

Dunelm

WaitroseM&S FoodSainsbury

TescoMorrison

Foodstores

OOT retailers

Non fashion retailers

2013 half year results 6

Source: PMA (from company statements)% p.a. like-for-like sales change, Christmas trading period 2013 vs 2012

2013 Full-year results

-10 -5 0 5 10 15 20 25

SelfridgesLiberty

John LewisHouse of FraserM&S Gen merch

Debenhams

Boux AvenueMoss Bross

Mountain WarehouseJaeger

Karen MillenNext

Ted BakerWhite Stuff

JD SportsBon Marche

Blue IncNew Look

LushThe Works

Fragrance ShopRobert Dyas

Carphone Warehouse retailers

Fashion retailers

Departmentstores

Moss BrosBoux Avenue

UK GDP growth (Source: ONS)

%

Positive outlook driven by improving fundamentals

0.8

1.0

Falling UK unemployment (Source: ONS)

8

8.5

%

2013 half year results 72013 Full-year results

-0.2

0.0

0.2

0.4

0.6

2012 -

Q1

2012 -

Q2

2012 -

Q3

2012 -

Q4

2013 -

Q1

2013 -

Q2

2013 -

Q3

2013 -

Q4

6

6.5

7

7.5

Jan-1

2

Apr-

12

Jul-

12

Oct

-12

Jan-1

3

Apr-

13

Jul-

13

Oct

-13

Deep investor demand and firming yields

%

Shopping centre investment in Europe (Source: DTZ research)

€bn

250

30020

Volume Number of dealsNumber of deals

Net initial yield (Source: PMA)

6.0

6.5Prime Shopping centres Retail WarehousingPrime shopping centres Retail warehousing

LHS RHS

2013 half year results 82013 Full-year results

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50

100

150

200

0

5

10

15

1999

2001

2003

2005

2007

2009

2011

2013

4.0

4.5

5.0

5.5

2010

2011

2012

2013

2014

20

25

Shopping Centre / Unit Shop Retail Warehouse

Combined with limited supply

Retail completions expected to remain modest (Source: PMA)

Mil ft2 p.a. net

Shopping centres Retail warehouses

2013 half year results 9

0

5

10

15

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2013 Full-year results

Increased space requirements in selected locations

International retailers

Fashion multiples

Leisure and catering

Aspirational brands

Homeware and furnishings

Discounters

London

Regional shopping centres

Out of town retail parks

2013 half year results 10

Prime towns

Secondary towns

Tertiary

2013 Full-year results

Forecast UK retail ERV growth per annum (Source: PMA)

Leading to market ERV growth

%

2.0

2.5

2.9

1.9

2.0

2.5

3.0 Prime shopping centres Retail warehouses

2013 half year results 112013 Full-year results

-1.2

-0.9

-0.1-0.1

1.1

2.0

-0.2

0.8

-0.2-0.8

1.3

1.9 1.81.6

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2010 2011 2012 2013 2014 2015 2016 2017

Hammerson positioned to support multichannel retail

Click and collect sales not recordedHammerson 2013 tenants’ sales

UK France

-0.4% -2.7%

Reported sales do not capture the whole picture

2013 half year results 122013 Full-year results

Overall estimated benefit to reported sales of 1-2% increase

Online purchases returned to store reduce recorded sales

Adjusted sales capture underlying picture

Adjusted sales Reported store sales

Retailer 1

Retailer 2

-0.7%

+4.7%

+1.7%

+5.7%

12 months to 31 December 2013 vs ERV vs previous rents

UK retail +4% +1%

France +0% +6%

Group +2% +2%

Leasing ahead of both ERV and previous rents

2013 half year results 132013 Half-year results2013 Full-year results

UK shopping centres UK retail parks French retail

Five Guys at The Oracle, Reading

Homebase at Battery Retail Park, Selly Oak

Eram at Place des Halles, Strasbourg

Summary

Improving economic fundamentals

Growing consumer confidence

Increasing tenant demand

2013 half year results 142013 Full-year results

Increasing tenant demand

Limited supply pipeline

Hammerson positioned to outperform

Conditions for selected ERV growth

2Section

2013 Half-year results

Financialresults

Timon Drakesmith

Growth in NRI of 2.1%Marseille opening May 2014On track to meet our £320m NRI forecast for 2015

Drive top line growth

Finance agenda and progress

Focus area Progress in 2013

Control operating costsCost income ratio declined by 240 bps to 24.6%Operating costs reduced by 1.5% in 2013

2013 half year results 162013 Half-year results 16

Control operating costs Operating costs reduced by 1.5% in 2013Further actions announced today to reduce cost income ratio

Manage interest expenseWAIR falls by 20bps to 4.8%Increased % of fixed debt for protection as rates rise

Optimise capital structure

Over £500m of new debt financingLTV below 40% targetWell funded to support development schemes

2013 Full-year results

Income statement

2013 2012 % change

Net rental income(1) (£m) 290.2 282.9 +2.1%(2)

Adjusted profit before tax(3) (£m) 168.9 152.5 +10.8%

EPRA EPS (p) 23.1 20.9 +10.5%

Final dividend (p) 10.8 10.0 +8.0%

Headline results

2013 half year results 172013 Half-year results

Final dividend (p) 10.8 10.0 +8.0%

Balance sheet

31 Dec 2013 31 Dec 2012 % change

Portfolio value (£m) 5,931 5,653(4) +2.0%(5)

EPRA NAV (pence per share) 573 542 +5.7%

LTV (%) 38 36 -

17

(1) Continuing and discontinued operations(2) On a like-for-like basis for continuing operations (3) Continuing and discontinued operations (4) Includes £195m for discontinued operations(5) Underlying capital growth for total portfolio excluding Value Retail

2013 Full-year results

Solid uplifts in like-for-like NRI

YoY

change (

LfL

)

3.2%2.6%

2.1%(1)

0.2%

UK shopping centres UK retail parks France retail Total

2013 Half-year results 182013 Half-year results 18

Union Square

Brent Cross

Silverburn

GRI up 2.2% LfL

Cleveland

Thanet

2012 administrations

Cergy

O’Parinor

Indexation

In line with previous guidance

Key

dri

vers

2013 Full-year results

2013 total(2) £124.7m £82.1m £62.7m £282.8m(3)

(1) Includes other interests LfL of £7.2m which declined YoY by 4.0%(2) Total NRI for continuing portfolio (not LfL) (3) Continuing operations, including other interests total of £13.3m

22.5

24.0

Net investment

LfL NRI Value Retail Administration costs

Net financing Exchange and other

1.0

0.6

0.2

(0.5) 0.2

23.1

0.7

EPRA EPS vs 2012

+10.5%

2013 half year results

18.0

19.5

21.0

192013 Half-year results 19

EPRA EPS (pence)

20.9

1.0

2013

2013 Full-year results

2012

Earnings +20% since 2011

Cost management delivering results

26

27

28

29

84

86

88

Operating costs(1)

£m

EPRA Cost/incomeratio(1)(2) %

28.3%

27.0%86.1

EPRA cost/income

2013 half year results 20

79.8

20

21

22

23

24

25

74

76

78

80

82

2011 2012 Year 2013

78.6

24.6%

79.8

2013 Full-year results

EPRA cost/income target for 2016

21-22%

(1) Continuing operations

(2) Cost ratio is defined as: (net service charge expense + property outgoings + administration expenses – management fees receivable)/Gross rental income

2013

New resource management measures

Efficiency improvements

Target savings - £6m p.a. from 2016

Senior management reorganisation

London office relocation in 2015

Share incentive plans and pension benefits

Additional investments to grow business

Expected incremental costs - £5m p.a. from 2015

Expanded development programme

- Headcount increases

- Mobilisation of project teams

2013 half year results 21

Resources redeployed to growth areas

Expense reductions push cost income ratio down to 21-22%

2013 Full-year results

Share incentive plans and pension benefits

London/Paris integration

Implementation costs of £5m in 2014

- Mobilisation of project teams

Digital marketing and multichannel

FY 2013 %

H2 2013 %

H1 2013%

Value at 31 Dec 2013 (£m)

UK shopping centres +2.4 +1.7 +0.7 2,524

UK retail parks +1.7 +3.2 -1.5 1,471

France retail -0.3 +0.8 -1.1 1,240

Current developments +10.4 +6.8 +3.4 497

Portfolio valuation change

2013 half year results 222013 Half-year results

Current developments +10.4 +6.8 +3.4 497

Other UK interests(1) -6.5 -1.6 -5.0 199

Discontinued operations +3.7 -1.2 +5.0 -

Total +2.0 +2.2 -0.2 5,931

Value Retail(2) +12.6 +6.8 +5.4 788(3)

2013 Full-year results

(1) Principally assets held for redevelopment(2) Underlying overall portfolio valuation change for Hammerson interests(3) Hammerson’s share of portfolio valuation at 31 Dec 2013

2013 Full-year results

DividendsDevelopments revaluation

Adjusted profit

573

560

570

580

590

Value Retail revaluation

Profit on disposals

Investment portfolio

revaluation2323

EPRA NAV per share vs 2012

+5.7%

2

(18)

11

573573

2013 half year results 232013 Half-year results 23

EPRA NAV per share (pence)

542

4

520

530

540

550

560

2012

2013

2013 Full-year results

9

4

Financing policies

31 Dec 2013 31 Dec 2012

Net debt - £2,252m £2,036m

Gearing <85% 56% 53%

Loan to value <40% 38% 36%

Cash/undrawn facilities - £716m £696m

Healthy financing ratios

2013 half year results 242013 Half-year results 24

Cash/undrawn facilities - £716m £696m

Weighted average cost of finance - 4.8% 5.0%

Interest cover >2.0x 2.8x 2.8x

Net debt/EBITDA <10x 8.2x 7.9x

Fixed rate debt >50% 82%(1) 80%

2013 Full-year results

(1) Fixed rate debt percentage at 31 December 2013 was 70% but is shown on a pro forma basis for £275m US private placement issue arranged in November 2013

350

400

450

500

Bank drawn debt Secured debt Euro bonds Sterling bonds USPP£m

Maturity profile of debt

Credit markets attractive

Weighted average coupon of 2015/2016 bonds 5.0%

USPP will refinance 2014 bank debt

(1)

2013 half year results 2525

0

50

100

150

200

250

300

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

2013 Half-year results2013 Full-year results

(1) Undrawn committed US private placement due to fund February and June 14

Forecast development expenditure

On site developments

Les Terrasses du Port, Marseille

Victoria Gate, Leeds

Jeu de Paume, Beauvais

Other on site developments

200

250

300

£m

2013 half year results 26

Note: Croydon expenditure in 2013 and 2014 reflects property acquisitionsOther on site developments: Abbotsinch Retail Park, Paisley; Cyfarthfa Retail Park, Merthyr Tydfil; Silverburn, Glasgow; O’Parinor, ParisNew extensions/redevelopments: Elliott’s Field Retail Park, Rugby; Watermark WestQuay, Southampton; Brent Cross leisure extension

2013 Full-year results

New extensions/redevelopments

Whitgift, Croydon

Brent Cross extension

Future developments

0

50

100

150

2013 2014 2015 2016 2017 2018

Focus on Value Retail

Value Retail Villages 2013 YoY change

Brand sales €1.9bn +13%

EBITDA €111m +12%

Total portfolio value €3.1bn +12%

Future growth drivers

Forecast 72% growth in Chinese visits to Europe by 2018(2)

Village remerchandising with more premium brand stores

More flagship stores

Extensions at Barcelona and Dublin

Hammerson investment plans

Hammerson share of(1)

EPRA net income £19m +51%

2013 half year results 272013 Full-year results

EPRA net income £19m +51%

EPRA net assets £634m +29%

(1) Including benefit of new investments, interest receivable and loans(2) Source: European Travel Commission

3Section

2013 Half-year results

Performancedrivers

David Atkins

Performance drivers

Contribution from extensions and refurbishments

Growth from existing portfolio

Major developmentsValue Retail

2013 half year results 29292013 Half-year results2013 Full-year results

Selected examples

Capital deployment

Prime Shopping Centres

Convenient Retail Parks

Premium Designer Outlets

Extension and

refurbishmentSilverburn

Silverburn AbbotsinchRetail Park

La Roca Village

2013 Half-year results 30

Development

Acquisition

2013 Full-year results

Kildare Village

Les Terrasses du Port

Bullring Junction Fund

Cyfarthfa Retail Park

La ValléeVillage

Kildare Village

Acquisition of a further stake in Bullring

Acquired additional 33% stake in 2013 in 50/50 JV with CPPIB, taking ownership to 50%

9% total property return

Recent lease renewals +10% above previous rent

Continues to attract new brands

2013 Half-year results 31

Bullring opens, with 1.5 million visitors

in first week

New £100 million John Lewis store opens for

trade in city

2011

Spiceal Street opens, a 1,900m2 leisure and

catering development

2003 2013 2014

Bullring celebrates 10

years of trading

2013 Full-year results

Explore opportunity to increase leisure offering

and add a cinema

2015

Saint Sébastien, Nancy

105shops and

restaurants

£7mannual rents

99%let

24,000m2

centre

%%%%6%

initial yield

Development potential

2013 Half-year results 322013 Full-year results

Nearing completion at Les Terrasses du Port

Countdown to launch

Opening 3 May 2014

93% pre-let and 95% construction complete

£28 million annual rents

£460 million total development cost

2013 Half-year results 33

7.3% yield on cost

Anchor store Printemps and MSUs have commenced fitting out of units

2013 Full-year results

Transforming Marseille’s retail offer

190 units

53 43 222281

1

30

2013 Half-year results 342013 Full-year results

53fashion brands

43international

brands

22brands taking 1st

store in a French shopping centre

22catering units

81brands new to the portfolio

Brands recently signed include

30brands new to

Marseille

Construction commenced at Leeds and Beauvais

Victoria Gate, Leeds Jeu de Paume, Beauvais

2013 Half-year results 352013 Full-year results

Out-turn financials

Total development cost

£150m

Annual income £10m

Yield on cost 6.7%

34,300m2 luxury retail venue

John Lewis anchor store

28% pre-let

Completion Q3 2016

Out-turn financials

Total development cost

£70m

Annual income £5m

Yield on cost 7.1%

23,800m2 retail and leisure venue

80km north west of Paris

Large catchment and poor retail provision

42% pre-let

Completion Q3 2015

Advancing the development pipeline

Silverburn, Glasgow O’Parinor, ParisCyfarthfa Retail Park, Merthyr Tydfil

Abbotsinch Retail Park, Paisley

2013 Half-year results 362013 Full-year results

10,900m2 extension

14 screen cinema

84% pre-let

Total development cost £13m

Completion Q1 2015

Yield on cost 7%

7,200m2 extension

14 screen cinema

100% pre-let

Total development cost £4m

Completion Q4 2014

Yield on cost 5%

14,500m2 extension

4,300m2 Marks and Spencer anchor store

46% pre-let

Total development cost £23m

Completion Q1 2015

Yield on cost 10%

5,000m2 extension

5 retail units in adjacent existing retail park

87% pre-let

Total development cost £9m

Completion Q2 2014

Yield on cost 13%

Key milestones at Brent Cross and Croydon

Brent Cross Whitgift, Croydon

2013 Half-year results 3737

Agree masterplanBrent

Cross/Cricklewoodphasing

Submit planning

Complete S106

2013 Half-year results

2013

Establish JV

2014

Acquire RLAM stake

Secure planning resolution

Conclude land

assembly

Conclude anchor

negotiations

Complete design

2013

2014

2013 Full-year results

S73 approval Complete S106

Submit leisure

planning application

Secure CPO resolution

Attractive future pipeline: The Goodsyard

£6m per acre valuation

Spring 2014Planning submission

Total development area 260,000m2

1,400residential

units

60,000m2

office space19,000m2

Retail space(90 shops)

50/50joint venture with

Ballymore Properties

10 acresite in heart of

Shoreditch

2013 Half-year results 382013 Full-year results

90

120

£m

annual

rents

Additional income from developments

£15m

£56m £63m

2013 half year results 3939

Notes: Annualised passing rents assuming 100% occupancy in year of project completion, post any rent free periodsAssumes completion of all medium-term developments and extensions2014 Les Terrasses du Port, O’Parinor, Abbotsinch Retail Park; 2015 Silverburn, Jeu de Paume Beauvais, Elliott’s Field Rugby, Cyfarthfa Retail Park Merthyr Tydfil 2016 Watermark WestQuay, Victoria Gate2017-2019 Croydon, Brent Cross Leisure, Brent Cross extension

2014 2015 2016 2017-2019

30

60

£m

annual

rents

2013 Half-year results2013 Full-year results

£11m

£30m

2014 2015 2016 2017-2019

2013 Half-year results

Conclusion

Key messages

ERV growth returning to our markets

On track with previous income growth guidance

Major development activity amplifies returns

2013 half year results 41

Conclusion

ERV growth from existing portfolio

Contribution from extensions and refurbishments

Overhead cost control

2013 half year results 42422013 Half-year results2013 Full-year results

refurbishments

Major developments

Value Retail

Liability management

Strong returns

Confident outlook

2013 Half-year results

Questions

This presentation contains certain statements that are neither financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements.

Many of these risks and uncertainties relate to factors that are beyond Hammerson’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as the Company’s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer

Disclaimer

2013 half year results 4444

Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Hammerson does not undertake any obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of these materials. Information contained in this presentation relating to the company or its share price, or the yield on its shares, should not be relied upon as a guide to future performance.

2013 Half-year results

2013 Half-year results

Appendices

£5.9bn property portfolio

Assets in UK and France

21 shopping centres

Our assets

2013 half year results 4646

22 retail parks

Investment in Value Retail

250m annual visitors

2013 Half-year results2013 Full-year results

Developments and extensions

SchemeOwnership

%Lettable area

m2 Earliest startPotential

completion

Value at 31/12/13

£m

Estimated cost to complete (1)

£m

Estimated annual income (2)

£m

Let (3)

%

ON SITE

Les Terrasses du Port, Marseille 100% 61,000 Commenced Q2 2014 386 80 28 93

Abbotsinch, Paisley 100% 5,000 Commenced Q2 2014 n/a 7 1 87

O’Parinor, Aulnay-sous-bois 25% 7,200 Commenced Q4 2014 n/a 2 1 100

Cyfarthfa, Merthyr Tydfil 100% 14,500 Commenced Q1 2015 n/a 19 2 46

Silverburn extension, Glasgow 50% 10,900 Commenced Q1 2015 n/a 8 1 84

Jeu de Paume, Beauvais 100% 23,800 Commenced Q3 2015 9 60 5 42

Victoria Gate, Leeds (Phase 1) 100% 34,300 Commenced Q3 2016 10 135 10 28

TOTAL 156,700 311 48

MAJOR DEVELOPMENTS (>30,000M2)

Croydon Town Centre 50% 200,000 2015 2018 500 35

The Goodsyard, London E1 (4) 50% 260,000 2016 Phased 140 -

Brent Cross Extension, London 41% 90,000 2016 2019 350 26

2013 half year results 47472013 Half-year results

Brent Cross Extension, London 41% 90,000 2016 2019 350 26

TOTAL 550,000 990 61

EXTENSIONS/REDEVELOPMENTS (<30,000M2)

Elliott’s Field, Rugby 100% 16,000 2014 2015 36 3 13

Watermark WestQuay, Southampton 100% 18,000 2014 2016 70 5 29

Brent Cross Leisure 41% 9,000 2016 2018 20 2

TOTAL 43,000 126 10

PIPELINE

SQY Ouest, Saint Quentin-en-Yvelines 50% 31,700 2014 2015 11 2

Halle en Ville, Mantes 100% 32,000 2015 2017 120 9 30

Italie Deux, Paris 100% 4,800 2015 2017 25 2

Victoria Gate, Leeds (Phase 2) 100% 73,000 2018 2021 480 40

TOTAL 141,500 636 53

891,200 2,063 172(1) Incremental capital cost including capitalised interest(2) Incremental income net of head rents and after expiry rent-free periods(3) Let or in solicitors’ hands by income at 31 January 2014(4) Area and cost reflects phase 1 of the scheme only. Income not applicable due to residential component of the scheme (5) € converted at £1 = €1.202

Hammerson’s investment in Value Retail

Holding Companies22% equity

Hammerson€58m

shareholder loan

2013 Half-year results 48

Note: Hammerson also provided a €25million loan to Fidenza Village in July 2013

2013 Half-year results2013 Full-year results

BicesterVillage

La Roca Village

Las RozasVillage

La ValléeVillage

FidenzaVillage

Wertheim Village

Ingolstadt Village

Kildare Village

Total Village ownership (%)

Village Ownership via LP’s (%)

MaasmechelenVillage

33 23 19 11 13 20 31 0 3

45 35 31 22 24 32 43 11 14

Value Retail share of results

Income statementYear ended 31

December 2013£m

Year ended 31 December 2012

£m

Share of results of associate 101.5 47.5

Less: EPRA adjustments (88.1) (43.2)

EPRA adjusted earnings of associate 13.4 4.3

Distributions received - 4.9

Interest receivable 5.6 3.4

2013 Half-year results 492013 Half-year results2013 Full-year results

Interest receivable 5.6 3.4

Total impact of Value Retail on income statement – EPRA basis 19.0 12.6

Balance sheet 31 Dec 2013 31 Dec 2012

Investment in associate 545.4 428.4

Add: EPRA adjustments 19.7 16.2

EPRA adjusted investment in associate 565.1 444.6

Loan to Value Retail 68.7 47.0

Total impact of VR on balance sheet – ERPA basis 633.8 491.6

Rents passing that expire/break in

ERV of leases that expire/break in

Weighted average unexpired lease term

2014 2015 2016 2014 2015 2016 to break years

to expiry years£m £m £m £m £m £m

Notes (1) (1) (1) (2) (2) (2)

United Kingdom

Retail Shopping Centres 17.9 12.4 8.5 23.6 12.6 8.2 6.6 8.2

Retail Parks 8.0 4.7 2.3 9.2 4.4 2.2 8.9 9.8

25.9 17.1 10.8 32.8 17.0 10.4 7.6 8.9

Lease expiries and breaks as at 31 December 2013

2013 Half-year results 5050

25.9 17.1 10.8 32.8 17.0 10.4 7.6 8.9

Other UK 3.5 2.7 0.7 3.7 3.3 0.6 7.2 8.9

Total United Kingdom 29.4 19.8 11.5 36.5 20.3 11.0 7.5 8.9

France retail 16.4 3.6 3.9 17.4 3.8 4.0 1.3 5.0

Group

Retail 42.3 20.7 14.7 50.2 20.8 14.4 6.0 7.9

Other UK 3.5 2.7 0.7 3.7 3.3 0.6 7.2 8.9

Total Group 45.8 23.4 15.4 53.9 24.1 15.0 6.1 8.0

2013 Half-year results(1) The amount by which rental income, based on rents passing at 31 December 2013, could fall in the event that occupational leases due to expire are not renewed or replaced by new leases. For the UK, it includes tenants’ break options. For France, it is based on the date of lease expiry.(2) The ERV at 31 December 2013 for leases that expire or break in each year and ignoring the impact of rental growth and any rent-free periods.

Rents passing subject to review inProjected rents at current ERV of leasessubject to review in

Outstanding 2014 2015 2016 Outstanding 2014 2015 2016

£m £m £m £m £m £m £m £m

Notes 1 1 1 1 2 2 2 2

United Kingdom

Rent reviews as at 31 December 2013

2013 Half-year results 5151

RetailShopping Centres

40.8 15.8 9.3 9.9 43.7 17.1 10.4 10.8

Retail Parks 19.5 9.4 24.5 15.9 20.2 9.8 25.1 16.2

60.3 25.2 33.8 25.8 63.9 26.9 35.5 27.0

Other UK 4.1 1.9 3.3 0.9 4.2 2.1 3.7 0.9

Total United Kingdom 64.4 27.1 37.1 26.7 68.1 29.0 39.2 27. 9

(1) Rents passing at 31 December 2013, after deducting head and equity rents, which are subject to review in each year.(2) Projected rents for space that are subject to review in each year, based on the higher of the current rental income and the ERV as at 31 December 2013 and ignoring the impact of changes in rental valuesbefore the review date.

2013 Half-year results2013 Full-year results

60

80

100

Yield Income Development and other Total

52.054.5

92.088.7

£m

2013 components of valuation change

2013 Half-year results 5252

-40

-20

0

20

40

UK Shopping centres France retail UK retail parks UK other Total continuing

portfolio

11.3

(8.8)

8.513.1 12.4

34.0 32.8

(2.7) (9.1)

26.0

(1.3) (0.5)

(23.9) (25.7)

21.2

(24.4)

2013 Half-year results2013 Full-year results

UK Shopping centres

France retail UK Retail parks Other UKTotal continuing

portfolio

True equivalent yield (%)

31 December 2013 5.8 5.5 6.1 7.4 5.9

31 December 2012 6.0 5.6 6.3 6.6 6.0

Change (bps) -20 -10 -20 +80 -10

Valuation data

2013 Half-year results 53532013 Half-year results

ERV (£m)(1)

31 December 2013 152.9 75.1 89.5 15.8 333.3

31 December 2012 150.4 73.4 88.7 12.6 325.1

Change (%) +1.7 +2.3 +0.9 +25.4 +2.5

2013 Full-year results

(1) Total ERV for continuing portfolio on a non LfL basis

2013 leasing activity

20

25New rent from units leased (£m)

23.9

18.7

20132012180

Area of new lettings (000m2)

20132012

153.9

2013 Half-year results 54542013 Half-year results2013 Full-year results

0

5

10

15

UK shopping

centres

UK retail parks France retail Group

10.1

8.2

4.9

2.1

8.38.1

18.7

0

60

120

UK shopping

centres

UK retail parks France retail Group

43.352.0

30.536.2

48.7

123.3

42.8

Tenants in administration as at 31 December 2013

31 December 201370 units in administration (1.2% passing rents)22 units unoccupied (0.5% passing rents)

30 June 201363 units in administration (1.6% passing rents)

2013 Half-year results 55552013 Half-year results2013 Full-year results

63 units in administration (1.6% passing rents)25 units unoccupied (0.6% passing rents)

31 Dec 201263 units in administration (1.2% passing rents)25 units unoccupied (0.5% passing rents)