I d A l T fInvestor and Analyst Tour ofSilverburn and Union Square

23 S t b 201023 September 2010

AgendaAgenda

o Introduction – David Atkins

UK R t il E i t L H t hio UK Retail Environment – Lawrence Hutchings

o Silverburn – Renee Moran and David Pierotti

o Tour of Silverburn

o Customer Strategy – Janette Bello Customer Strategy – Janette Bell

o Union Square – Jonathan Brooks and Ryan Manson

o Tour of Union Square

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The TeamThe Team

David Atkins

Chief Executive

Simon Melliss

Chief Financial Officer

Lawrence Hutchings

Managing Director

Janette Bell

Director

Morgan Bone

Director

Agatha Donnelly

ManagerChief Executive Chief Financial Officer Managing DirectorUK Retail

DirectorSales & Marketing

DirectorCorporate Comms

ManagerInvestor Relations

Jonathan Brooks

Retail Asset Manager(Union Square)

Renee Moran

Retail Asset Manager (Silverburn)

David Pierotti

Centre Director(Silverburn)

Ryan Manson

Centre Manager(Union Square)

3

Our ApproachOur Approach

Actions Outcome

Asset Management:Focus on income growthCreation of customer teamsAdding new skills

Best owner-manager and developer of retail and office properties

Portfolio Management:Capital recyclingDevelopment

of retail and office properties

Asset outperformancep

Innovative transactions

Capital Structure:

Attractive shareholder returns

pDebt: EquityEfficient, flexible fundingJoint ventures

4

Recent ActivityRecent Activity

Acquisitions Disposalsq p

Silverburn Espace Saint QuentinSilverburn Espace Saint Quentin

Les Terrasses du Port Exchange Towerg

5 O’ParinorLeadenhall Court

Hammerson Retail Portfolio OverviewHammerson Retail Portfolio Overview

16 Shopping Centres

• Over 1 million m2

• Value: £3.7 billion*

• Footfall 220 million per annum (2009)

16 Retail Parks

• About 400,000 m2

• Value: £1.0 billion*

• Majority have open A1 consent

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*Hammerson share as at 30 June 2010

UK Retail EnvironmentLawrence Hutchings

UK Retail ClimateUK Retail Climate

o Consumer increasingly sophisticated

o Retail sales held up over past 18 months

o Increasing international retailer interest

o Retailer base well capitalised and expansionary

o Investor demando Investor demand

- prime shopping centres

- retail parks

o Development pipeline in focus

- retailers

- investors

o Increased polarisation in shopping centre typology

o Multi-channel retailingo Multi channel retailing

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Retail StrategyRetail Strategy

o Objective: The best owner-manager and developer

o Strategy:

• Life cycle management

• Customer intimacy

I l t tio Implementation:

• Focus on driving retail sales

• Invest in existing portfolio

• Progress development pipeline

• Improve customer insight

• Benefits of scale: management expertise and specialisation Benefits of scale: management expertise and specialisation

o Measurement:

• Top quartile shopping centre performance

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• Judge our success by our retailers’ success

Hammerson Retail StructureHammerson Retail Structure

Retail DivisionLawrence Hutchings

Project M t S l &R t ilManagement

& Construction

Sales & Marketing Portfolio OperationsRetail

Development Sustainability

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Strategy At WorkStrategy At Work

o Retail sales growth 2.5% LFL (0.9% BRC)

o Footfall 2% (0.4% Benchmark)

o Vacancy reducingo Vacancy reducing

• 6.4% June 2009

• 5.5% December 2009

• 4.4% June 2010

o Value add projects

o Development pipeline – schemes redesignedo Development pipeline schemes redesigned

o Increased operational expertise

o Procurement and portfolio leverage

o Income growth and unlocking efficiencies

o Portfolio total return performance

• income focusincome focus

o Capitalise on multi-channel

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Silverburn, GlasgowRenee Moran and David Pierotti

AgendaAgenda

o Key facts

o Location

o Competition and catchment

o Footfall and trading performance

o Asset st atego Asset strategy

o Summary

13

Key Facts - SilverburnKey Facts Silverburn

o Acquired ownership

o Size

h

- 50% Hammerson / 50% CPPIB

- 93,000 m2

*o Purchase price

o Valuation

o Scheme opened

- £297 million*

- £319 million*(as at 30/06/10)

- October 2007o Scheme opened

o Anchor stores

o Unit shops

October 2007

- M&S, Debenhams, Tesco Extra, Next

- 94 retail units, 13 restaurants/cafes

o Car parks

o ERV

F tf ll

- 4,500 free parking spaces

- £173 Zone A (UK); £150 Zone A (Scottish)

Ci 14 illio Footfall

o Catchment

- Circa 14 million

- Primary: 470,112; Secondary: 557,632; Tertiary: 526,203; Total: 1.55 million

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*Purchase price and valuation is for a 100% share

LocationLocation

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Silverburn Shopping CentreSilverburn Shopping Centre

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CompetitionCompetition

Glasgow City Centre

o Buchanan Galleries – John Lewis, Sainsbury’s, Next

o St Enoch Centre Debenhams BHS Bootso St Enoch Centre – Debenhams, BHS, Boots

o Princes Square – Kurt Geiger, Reiss, Vivienne Westwood, Lacoste

Out of Town

o Braehead Shopping Centre – M&S, Sainsbury’s, BHS, Primark, Leisure Centre

o The Forge Shopping Centre – Asda, Primark

o East Kilbride Shopping Centre

o The Fort Fashion Park

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Competitor LocationsCompetitor Locations

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Catchment and MarketCatchment and Market

Silverburn currently has a catchment population of 1.5 millionTotal

PopulationTotal Market

Potential (£m)Centre’s Current

Market Share (£m)

Secondary 557,632 1,369.0 106.3

Tertiary 526,203 1,267.7 63.7

Catchment

Primary 470,112 1,184.3 212.9

Silverburn’s market share in comparison to competitors:

TOTAL 1,553,947 3,821.0 382.9

Core Share(Primary + Secondary) %

Total Share(Total Catchment)

Catchment

Glasgow 42.3 32.4

Silverburn 12.5 6.9

Braehead 9.8 6.8

19Source: CACI February 2009

Footfall and Trading PerformanceFootfall and Trading Performance

2009 Footfall:

• Silverburn +7.4%

• Scotland -5.8%

• UK –2.0%

Footfall to 30 June 2010 +4.7%

Strong performers:

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Asset StrategyAsset Strategy

20102010

o Current vacancy rate 2.6%

o Determined tenant mix strategy

o Obtain consent for additional 7,700 m2 of retail space

o Enhanced commercialisation income

o Collection of sales datao Collection of sales data

2011

o Implement marketing strategy to increase salesp g gy

o Introduce aspirational retailers

o Progress pre-lettings for additional 7,700 m2 of retail space

o Review options for adjacent 17 acre Silverburn East siteo Review options for adjacent 17 acre Silverburn East site

2012/13

o Implement and complete rent reviews

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o Implement and complete rent reviews

SummarySummary

Modern, regional shopping centre

Strong anchor tenantsg

Strongest out of town retail destination

Opportunity to grow market share

Continued sales and footfall growth

Opportunity for future income and capital growth

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Customer StrategyJanette BellJanette Bell

A Common FoundationA Common Foundation

FutureInvestment

FutureInvestment

FutureInvestment

Hammerson RetailersMaximise

AssetGrowRetailGrowRetail

MaximiseP fit

MaximiseP fitHammerson RetailersAsset

Value

Optimal

RetailSalesRetailSales

ProfitProfit

AffordableAffordableOptimalRentalIncome

Value forValue for

OccupancyCost

OccupancyCost

o Better understanding

Value forMoney

Value forMoney

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o Better understanding

o Better relationships

Building A Better UnderstandingBuilding A Better Understanding

Sales and marketing organised to drive growthSales and marketing organised to drive growth

Leasing Plan

Resu

Generate Insight Develop Marketing

lts

BusinessT t & Generate Insight Proposition Plan

Market understanding Consumer proposition

Target &Goal

Commercialisation Plan

• catchment• retail categories• competitors

Customer understanding

• Who is our target?• What is our offer?• How is it differentiated?

Customer proposition

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g• account plans

p p• tailored offer• commercial strategy

A Clear Strategy to Deliver ChangeA Clear Strategy to Deliver Change

Focus on better, simpler and cheaper processesAnticipate customers requirementsImprove communication and responsiveness

Be Best at BasicsBe Best at Basicsp p

Deliver consistency of service

Build customer knowledge and understandingBuild customer knowledge and understanding

Develop more flexible solutions for our customers

Focus on driving salesDrive PerformanceDrive Performance

Quicker decision making

Take our people with us Align our OrganisationAlign our Organisation Take our people with us Align our OrganisationAlign our Organisation

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“Measure success by our customer’s success”

An Example of Our New ApproachAn Example of Our New Approach

A case study from BullringA case study from Bullring• Continued strong LFL sales

growth

C t i d i i th • Catering driving growth across the portfolio

• Bullring has a limited catering offer – focused on the express category

• Birmingham emerging as the Midlands culinary capital

- Brindley PlaceBrindley Place- Mail Box

• St Martin’s Square identified as a potential development area

How can we optimise

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income from this opportunity

Generate InsightGenerate Insight

What is the size of the opportunity?What is the size of the opportunity?“Ladies who lunch”• Spend average of £113 per visit• 88% eat at Bullring already• Currently lunch at Selfridges food court

“Ladies who lunch”

• Park at Bullring for easy reach of the theatres

“Brand indulgers”• Live locally to the Bullring and love it

The spend a o nd £113 pe isit “Brand indulgers”

• They spend around £113 per visit • They are brand aware and want to be seen in

the best restaurant• Currently don’t have the restaurant brands in

Bullring to make them want to eat there

“Mission shoppers”• Work in the business district a short walk

away• Visit Bullring at least 4 times a month

“Mission shoppers”

• They spend £70 per visit• Eat out 2-3 times per week

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£15 million casual dining opportunity

Proposition DevelopmentProposition Development

How to unlock the opportunity?How to unlock the opportunity?

Meeting the target consumer needs:

• High end casual dining offer

• Lunch and dinner menu

• New to Birmingham market

• Aspirational but not niche and not • Aspirational, but not niche, and not

a mainstream chain or unknown

independent

• Featuring a destination bar

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Leasing StrategyLeasing Strategy

How to optimise income?How to optimise income?A new approach to B to B marketing:

• Tailored multi-media presentation for

our target retailers

– personalising the opportunityp g pp y

• Bespoke on line portal to improve

communication

• Multi step sales campaign to follow • Multi-step sales campaign to follow

through to deal closure

Optimise rental income

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SummarySummary

New approach combining insight and relationships

to drive growth

Approach is being used in the business today

Scalable across the portfolio

Opportunity to further differentiate Hammerson

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Union Square, AberdeenJonathan Brooks and Ryan Manson

AgendaAgenda

Key facts

LocationLocation

Catchment and competition

Leasing progress

Footfall and trading performance

Asset strategygy

Summary

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Key Facts – Union SquareKey Facts Union Square

O hi 100% HOwnership

Size

Capital value

- 100% Hammerson

- 49,600 m2

£187 million (as at 30 June 2010)Capital value

Total development cost

Scheme opened

- £187 million (as at 30 June 2010)

- £268 million (as at 30 June 2010)

- October 2009Scheme opened

Anchor stores

Unit shops

October 2009

- M&S, Apple and CineUK

- 54 retail units/12 shopping park units, 18

Car parks

ERV

restaurants, cinema and hotel

- 2 car parks with 1,700 spaces

£183 Z A (UK) £125 Z A (S tti h)ERV

Footfall

- £183 Zone A (UK); £125 Zone A (Scottish)

- Shopping park £25-30/ft2

Average 215 000 per week circa 11 million Footfall - Average 215,000 per week, circa 11 million per annum

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Pre-Construction – February 2007Pre Construction February 2007

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Post-Opening – February 2010Post Opening February 2010

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Aberdeen Catchment AreaAberdeen Catchment Area

Total catchment population is 418,000 (37% live within 6km of City Centre)

Affl M i filAffluent Mosaic profile

Oil and gas capital of Europe

Continued population growth

Low unemployment of 2.3%

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CompetitorsCompetitors

Aberdeen City Centre

Bon Accord – John Lewis, Karen Millen, Warehouse

St Nicholas – M&S (fashion), Sainsbury’s Local, The Body Shop

Trinity – Debenhams Superdrug ArgosTrinity Debenhams, Superdrug, Argos

Out of Town

Kittybrewster Retail Park – TK Maxx, Sports World, Currys, Comet

Berryden Retail Park – Next, Argos, JJB Sports, Mothercare

The Beach / Queens Links – Retail Park / Leisure Park

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Leasing ProgressLeasing Progress

90

100 31 July 201089%

31 December 2009

60

70

8030 June 2009

67%

31 December 200973%

40

50

20

30

0

10

Let or in solicitors' hands

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Footfall and TradingFootfall and Trading

Footfall

Annualised footfall – circa 11 million

Car park revenue above target

SalesSales

Current trading – Restaurants strong, fashion area positive, shopping

park lower densities

Top 5: Next, Boots, Frankie & Benny’s, Hobbycraft and Rox

H&M has increased its sales target by 35%

USC has exceeded target in all but three weeks this year

Yo! Sushi running 1st/2nd in chain (UK) on sales per square foot

basis

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basis

SWOT AnalysisSWOT Analysis

Strengths ThreatsOpportunitiesWeaknessesg pp

Attractive shopping environment

Resurgence of St Nicholas / Bon Accord centres

Exploit catchment

Complete the tenant

Current vacancy

Navigational signageStrong branded line up – Apple, Hollister and Cult

Opening hours and

centres

Reliance on oil and gas

pmix

Increase sales -> rental income

B ild ll t ili

g g g

Shopping Park and mall integration

p gevening trade

Cinema and strongest restaurant offer in the City

Build on mall retailing

Introduce gift card

Expand retail on first floor

Number of car park spaces

Proximity to transport linkslinks

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Asset StrategyAsset Strategy

20102010

Drive sales

- Refresh research

- Focus on marketing campaigns

Reduce vacancy

- Let remaining voidsLet remaining voids

- Supported by leasing strategy

Improve customer proposition

Install further signage- Install further signage

- Introduce gift cards

20112011

o Build brand profile and identity

o Grown non-retail revenue

f ll d h k

42

o Improve integration of mall and shopping park

o Establish and drive rental tone

SummarySummary

Affluent local population with high spending power

St l i d t i ffStrong leisure and catering offer

Positive leasing progress led by new key retailersg p g y y

Clear asset strategy to drive future performance

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DisclaimerDisclaimer

Thi t ti t i t i t t t th t ith t d fi i l lt th hi t i l This presentation contains certain statements that are neither reported 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 confidence on a global regional or national basisconsumer 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 revisions 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.

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