A presentation at

Hammerson& Value Retail

Premium Outlet Retail

02.06.15 Kempen & Co’s 13th European Property Seminar

Today’s visit

2

Kempen & Co’s 13th European Property Seminar2 June 2015

Agenda

Presenting today

11.15 Presentation and Q+A

12.00 Tour of Batavia Stad

12.45 Buffet lunch

13.15 Depart

Duncan AgarCOO, Value Retail

Timon DrakesmithCFO and Managing Director Premium Outlets, Hammerson

Octavia OverholserBusiness Director, Value Retail

Value Retail: Europe’s leading luxury outlet operatorDuncan Agar

COO, Value Retail

Premium Outlet Retail 3

01

Why do outlets exist?

4

Brands have surplus stock and need an efficient means to deal with it that does not compromise their integrity or image

5

• Authentic surplus stock

• At least one year old

• Same season

• Sold at a 33% - 70% discount

to full price

How does Value Retail service this need?The Value Retail Villages provide a high quality sales environment for goods that are:

Value Retail is Europe’s leading luxury outlet operator

6

Portfolio

9 Villages

€3.75 bn value

Locations

Proximity to Europe’s wealthiest cities

Close to major tourist attractions

Total Catchment

163m residents within 120 minutes drive

100m tourists p.a. to cities served by Villages

The Collection

172,000m2 of gross lettable area

Over 1,000 boutiques

Source: Value Retail

Value Retail was one of the first operators in the European market. Its first centre, Bicester Village, near Oxford, England, opened in 1995

Evolution of luxury outlets

7

Luxury outlet villages follow a pattern of evolution before reaching full maturity and achieving their highest potential sales densities

Village leased up with International and local brands.

Attractively designed Village opens in superior location.

Village becomes established in local markets.

Village remerchandised to bring in fashion brands. Brand selection increases. Units are split and average unit size decreases.

Village becomes established with international tourists and local opinion formers.

Village remerchandised to bring in luxury brands. Price points and selection increase.

Village sales density

Turnover / Royalty percentage

Time

Shopping Tourism

8

Growth in sales at luxury outlets is driven primarily by overseas shoppers

What do we mean by ‘Shopping Tourism’ ?

Customers at Value Retail’s European Villages include a large number of tourists

• Europeans on holiday

• Non-EU long-haul tourists from China, the Gulf, Russia, Latin America, India

• Three out of four Chinese tourists to the UK visit Bicester Village

• Chinese tourists at Bicester Village spend an average of £1,000 - £1,500 each (roughly 10

times the average for all visitors)

Ingredients for success in attracting tourists

• Location – close to major cities and complementary tourist attractions

• The right line-up of brands

• Marketing – websites, airlines, MICE, social media, tour organisers

• Services – foreign language signage, hands-free shopping, multilingual shop assistants, prayer rooms, VIP rooms, VAT cash refund booths

9

The ‘Travelling Luxury Consumer’ (Angela Ahrendts)

International tourism spend trends

10Source: Global Blue research on London tourist market

Chinese spend has grown rapidly

Trends in the London tourist market show Chinese visitors are a key source of growth and spending by Middle Eastern tourists has been resilient

International split of duty free sales, London

Global spending patterns in London vary - Middle Eastern spend resilient despite oil price, Russia recently impacted by currency

Average spend (2014)

Total spend, YoYgrowth (2014)

Qatar £1,479 +16%

UAE £1,145 -7%

Saudi Arabia £886 +8%

China £739 +6%

Russian Fed £668 -28%

Kuwait £588 +7%

Nigeria £586 -8%

USA £575 -8%

2009

2014

China

Middle East

Nigeria

Russian Fed

Other

China

Middle East

Nigeria

Russian Fed

Other

Highest sales densities (Bicester) £3,000/sq ft

Value Retail total brand sales growth +11% (2014)

Value Retail brand sales CAGR since 2006 +17%

2014 gross rental income +12%

2014 EBITDA +13%

2014 net assets +25%

Extensions to Villages will

drive further growth

11Source: Value Retail

Performance of Value RetailValue Retail has delivered consistent double-digit sales/NOI growth over nearly a decade

Hammerson: The only European listed REIT with exposure to Premium Outlets

Timon Drakesmith

CFO and Managing Director Premium Outlets, Hammerson

Premium Outlet Retail 12

02

Overview of European outlet market

13

The European outlet market has differentiating characteristics from other ‘traditional’ retail real estate markets

(1) Source: CBRE(2) Source: C&W

Total size c.150 outlets

Key players Value Retail; McArthur Glen; Neinver

Valuation yields (1) 6 - 8%

Sales/NOI growth (2) 7 - 9%

Lease structure High portion (50% - 80%) turnover linked

Ownership/management model Operationally intensiveHigh tenant rotationNot many operators with equity ownership

Overview of European outlet market

14(1) Source: ecostra; number in brackets indicates number of outlets(2) Source: ecostra (2013); see appendix for further information on the European country markets

0

5

10

15

20

25

30

35

40

UK has a large number of small outlets

The largest three players manage c.45% of the market and UK, Italy, France and Spain have the highest number of outlets

Total sales area (m2) (1)

McArthur Glen (20) Value Retail/VIA (15)

Neinver (15) Realm (10)

Concepts & Distribution (8) Other (c.100)

Market ownership is fragmented below the top players

Location of outlets (no. of outlets) (2)

Categorisation of European outlet market

15

The market can be broadly categorised by the customers it serves

Luxury Fashion

Mainstream fashion

High-street discounters <€3,000

€3,000

€30,000+ Increasing

sales d

ensities €/sq

m

VIA Outlets

Value Retail

Hammerson’s exposure to Premium Outlets

Invested since 1998

Hammerson exposure(1) : 38%

Leading operator of luxury Villages across Europe

9 Villages

172,000m2

16(1) Investment in associate, excluding goodwill

Value Retail : GAV £885 million

New in 2014

Hammerson exposure : 47%

Partnership between Hammerson, APG, Value Retail and Meyer Bergman

6 outlet centres

164,000m2

VIA Outlets : GAV £143 million

In order to grow our exposure to the outlets market we joined the VIA Partnership last year to acquire and improve existing European outlets

Growth through extensions to existing Villages Acquisition/turnaround strategy

Over £1bn now invested in Premium Outlets (13% Hammerson portfolio)

17

Hammerson portfolio by GAV Hammerson LfL NRI growth (2014)

Rental growth from Premium Outlets is over 3x the rest of Hammerson’s portfolio, significantly accelerating our rental income versus the rest of the European retail market

Source: Hammerson

Premium Outlets UK Shopping Centres

France Retail UK Retail Parks

7%

2%

Premium Outlets Rest of retail portfolio

VIA Outlets business strategy

18

Acquisition/roll-up of existing European outlets centre with growth potential

Acquisition focus Asset management opportunities

Strong tourist appeal/destinations Upgrade tenant mix

Major city catchments Rightsizing of units; more flagship spaces

Consumer appreciation of outlet shopping Extend centres where appropriate

Expand portfolio to around 15 centres Drive tourist traffic via global marketing and strategic travel partnerships

Target €1bn GAV (HMSO incremental c.£200m) Enhance 5* hospitality services and amenities

Retailer engagement before acquisition Re-engage with local catchment

Meyer Bergman evaluating pipeline Utilise VR digital platform

Batavia StadAmsterdam25,500m2 • 107 unitsAsset management:Upgrade tenant mix Extension

LandquartZurich21,000m2 • 90 unitsAsset management:Re-engage local catchmentIncrease luxury offer forinternational tourists

AlcocheteLisbon 55,700m2 • 170 unitsAsset management: Introduce higher qualityfashion retailers

VIA Outlets acquisitions to date

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The partnership has acquired six outlets around Europe

1

4

3

5

2

6

3

4

2

1 KungsbackaGothenburg16,000m2 • 56 unitsAsset management:Higher quality fashion retailers

Fashion ArenaPrague25,000m2 •100 unitsAsset management:Upgrade tenant mix

ExcaliburChvalovice21,000m2 • 80 unitsAsset management:Reconfigure larger units to introduce more brands

5

6

VIA Outlets performance

20Source: VIA Outlets

KPIs as at March 2015

Year to date as at March 2015

Brand sales(YoY %)

Sales densities (YoY %)

Occupancy (%)

Alcochete 14% 16% 81%

Batavia Stad 7% 14% 92%

Excalibur 17% 20% 93%

Fashion Arena 10% 9% 96%

Kungsbacka 20% 21% 97%

Landquart 8% 5% 79%

TOTAL 11% 12% avg. 90%

VIA Outlets partnership

Hammerson APG Value Retail Meyer Bergman

Experience and focus area Pan-European retail

portfolio strategy

Investment management

Organisationalframework and governance

Long history of investing in outlets

Insight into pan-European retail property

Pipeline evaluation

World-leading outlet operator

Luxury retail relationships

Remerchandising and tenant rotation

Tourism marketing

Depth of acquisition experience

Retail property focused

Acquisition / disposal execution

21

Contribution of the VIA Outlets partners

Case study: Batavia Stad

Octavia Overholser

Business Director, Value Retail

Premium Outlet Retail 22

03

Batavia Stad

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45 mins Schiphol airport (2014: 55m passengers)

60 mins Amsterdam and Utrecht by motorway

40 mins direct train from Amsterdam

Shuttle bus every 20 minsfrom train station

Markermeer public jetties walking distance

Strategic location

Catchment area:60 mins: 4.8m residents90 mins: 11.5m residents

Batavia Stad

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Plan of Batavia Stad village

Total GLA 25,500m2

107 units

Key dates:• Opened 2001

• 2007 extend 5,500m2

• 2009 extend 5,500m2

• 2014 VIA acquisition

Extension scheduled to open Q3 2016• 5,500m2

• 45 new units

Batavia Stad

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Over 200 of the latest brands

Adidas • Asics • Calvin Klein• Cavallaro • Converse • Denham • Desigual •

Gaastra • Gant • G-Star footwear • Guess • Helly Hansen • Hugo Boss • Lacoste

• Le Creuset • Levi’s • Lindt • Marc O’Polo • McGregor • Michael Kors •

Napapijri • Nike • O’Neil • Pepe Jeans • PME Legend • Protest • Puma • Polo

Ralph Lauren • Suit Supply • Superdry • The Society Shop • Tommy Hilfiger • Van

Bommel • Van Gils • Van Lier • Villeroy & Boch • Vingino

Batavia Stad

26(1) Source: Global Blue research

2014 highlights

Brand sales growth +12%

Sales density +13%

Footfall 2.3m (+4%)

Occupancy 97%

New highway signage

Façade changes to improve circulation

Three major hires• Tourism manager• Retail manager• Retail development

manager

Tax free sales growth +30%

Top three markets(1): China (+22%); Russia (+11%); Israel (+10%)

VIP programme launched

China Union Pay Card: 85% store acceptance

Batavia Stad

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New brands in 2014

New Brands

Upcoming remerchandising (38 projects for 2015)

Leasing highlights in 2014 and 2015

Upsize:

Downsize:

Major façade changes and start phase 4 and 5 extensions

Landscaping and welcome roundabout signage

New logo, new website, interactive screens in mall

Shopping Express bus trial during July and August

New Information Centre

Electronic gift card and new marketing partnerships

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Batavia StadKey initiatives 2015

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Before

After

Before

After

Batavia StadFaçade changes

Batavia Stad

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Plan of expansion

IIII

IVIVIVIV

VVVV

IIIIIIII

IIIIIIIIIIII

Batavia Stad

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Renderings of expansion

Outlet market offers exceptional rental growth, 3x average Hammerson retail

Operating Premium Outlets successfully requires experience, skill and

relationships

Hammerson, Value Retail and the other VIA partners are combining skills and working closely together to build market share

Hammerson is the only European-listed REIT to give investors exposure to this opportunity

Our focus on being a pan-European retail specialist is enhanced by our

Premium Outlets portfolio

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Conclusion and Q+A

Appendix

33

04

Value Retail European Villages

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Bicester Village, LondonYear opened 1995GLA 22,700m2

Boutiques 136Catchment 30m

Kildare Village, DublinYear opened 2006GLA 10,900m2

Boutiques 65Catchment 4m

La Vallee Village, ParisYear opened 2000GLA 21,000m2

Boutiques 120Catchment 18m

La Roca Village, Barcelona Year opened 1998GLA 23,130m2

Boutiques 146Catchment 6m

Las Rozas Village, Madrid Year opened 2000GLA 16,500m2

Boutiques 146Catchment 6m

Maasmechelen Village, Brussels Year opened 2001GLA 19,400m2

Boutiques 109Catchment 41m

Wertheim Village, FrankfurtYear opened 2003GLA 20,900m2

Boutiques 120Catchment 21m

Ingolstadt Village, MunichYear opened 2006GLA 20,500m2

Boutiques 119Catchment 14m

Fidenza Village, MilanYear opened 2003GLA 17,400m2

Boutiques 103Catchment 21m

Hammerson’s investment in Value Retail

Holding companies 22% equity

Bicester Village

33

45

La Roca Village

23

35

Las RozasVillage

19

31

La Vallée Village

11

22

MaasmechelenVillage

13

24

FidenzaVillage

20

32

Wertheim Village

31

43

Ingolstadt Village

0

11

Kildare Village

3

14

50%

35

Village ownership via LPs (%)

Total Village ownership (%)

Hammerson €58m shareholder loan

Key to Hammerson ownership:

European outlet market location data

36Source: ecostra (data for the largest 15 markets in European area)

No of sites Retail sales area m2

Retail sales per 1,000 inhabitants (m2)

2013 2003

UK 35 36 515,000 8.4

Italy 23 4 492,000 8.2

France 17 12 256,000 4.1

Spain 16 9 207,000 4.4

Germany 9 3 127,000 1.5

Poland 9 1 134,000 3.5

Switzerland 6 4 88,000 11.4

Russia 3 - 70,000 0.7

Greece 3 - 46,000 4.0

Ireland 3 - 23,000 5.4

Netherlands 3 2 69,000 4.2

Portugal 3 1 82,000 7.8

Austria 3 1 75,000 8.9

Sweden 3 3 37,000 4.0

Czech Republic 2 - 39,000 3.7