Investor & Analyst Event 18 SEPTEMBER 2019

BRITISH LAND PLC

WelcomeTim Score, Chairman

Introduction Chris Grigg, CEO

Places PeoplePrefer

Our Purpose

12.45: Welcome & Introduction

13.00: Delivering a Mixed Use Business

• Mixed use at British Land – Darren Richards

• Evolving our customer offer – Mike Wiseman

• Delivering on the ground: Claire Barber, Emma Cariaga, James Lowery, Tim Haddon

13:45: Q&A

14:15: Responding to Long Term Market Trends

• Technology – Sally Jones, Ben Dimson, Jules Barker

• Sustainability – Cressida Curtis, Juliette Morgan

14:45: Break, including BL application demos

15:00: Capital Allocation & Retail

• Capital allocation & retail operational update – Simon Carter

• CVA approach – Brona McKeown

• Long term view on retail – Simon Carter

15:30 Break outs: Storey, Canada Water, London Leasing, Retail market update

17:00: Q&A and Wrap up, followed by drinks

Agenda

Building a London focused, increasingly mixed use business

March 2010 Current Indicative business split 5+ years

66% 45% 30-35%

Retail Campus-focused Offices

Storey Residential

33% 51%5%

10%

50-55%

• London focused: over 70% of group

• Smaller, more focused Retail

• Meaningful Residential exposure

• Right balance of flexible and core workspace

Our strategy is delivering- Mixed use is a competitive advantage

- Our strategy is aligned with what our customers need

- The right retail can succeed long term within our business

- We have a structured plan to reshape our business

- We are delivering on the ground in a tough retail market

Our objectives for today are to demonstrate…

1

Our response to long term trends2

We have the depth and breadth of talent to deliver

- Our capabilities have broadened

3

How we deliver value through development

- What we have achieved and how - Further value to come: significant

opportunities and optionality built in

4

Our focus on capital efficiency

- Strong track record of managing capital- Sales, buybacks and developments

5

Delivering Mixed UseDarren Richards, Head of Real Estate

£12.3bn(BL share)

A diverse, high quality portfolio

Image to come

Solus Retail (7%)

London Campuses (41%)

Residential & Canada Water (3%)

Regional Retail (19%) incl. Meadowhall (7%)

Local Retail (9%)

Standalone offices (10%)

Retail – London & SE (11%)

68%London & South

East

Flexible AffordableAttractive to skilled employees

Well connected

Aligned to their brand

Tech enabled Close to complementary

businesses

Well connected Safe and promotes wellbeing

Located in vibrant neighbourhoods

Sustainable and eco friendly

Close to retail, leisure and

dining options

Supported by excellent facilities

and services

Has a range of workspace including collaborative

and quiet

Why mixed use?Occupiers

want space which is…Employees

want space which is…

World class, sustainable and smart buildings Attractive, vibrant and safe public space+

Long term development potential at our campuses

Eataly – 135 Bishopsgate

Exchange Park – Broadgate

Amphitheatre – Paddington Amphitheatre – Paddington Central

We have created a distinctive advantage in mixed use • Mixed use campus development

– 1-2 Broadgate, 2-3 Finsbury Avenue, 5 Kingdom Street near & medium term

– 1.3m sq ft committed developments

– Further opportunities Norton Folgate, Ealing, Kingston, Woolwich, Canada Water

• Scale– Control of groundscape eg. Eataly,

Exchange Park

• Operational platform – Expertise across development, planning,

marketing, data and tech, sustainability

– Combined asset management team with dedicated retail and offices function

• Natural partner for complex schemes – SWFs, property specialists, Government Broadgate

• Taking market share – 1.1m sq ft office leasing in FY19

– Accounting for 8% of the central London leasing market with 2.5% of the stock

• Delivering higher rents– Most recent lettings over £80psf at Broadgate

– vs £72psf for City prime rents and £49psf at Broadgate in 2015

– Attracting a wider mix of occupier

• Improving leasing velocity – Development pipeline 85% pre let or under

offer

– Includes smartly repurposing space (eg. 1 Finsbury Avenue and 135 Bishopsgate)

Significant office leasing success

Attracting a broader range of occupier

1

2

3

Storey roll out

Current Locations

Forthcoming Locations

An increasingly diverse range of office occupiersSept 2010 March 2019

£176m rent £237m rent

Banks & Financial Services

Professional & Corporate

TMT

Government

Resources & Manufacturing

Food / Leisure

Retail

Flexible Workspace

Other

Based on gross contracted rent

A nimble & commercial approach across the business

Image to come

Solus Retail (7%)

London Campuses (41%)

Residential & Canada Water (3%)

Regional Retail (19%) incl. Meadowhall (7%)

Local Retail (9%)

Standalone offices (10%)

Retail – London & SE (11%)

68%London & South

East

Driving outperformance at Meadowhall

13Consecutive

months

Footfall growth

Q1 LFL sales

+2.6%

22m footfall

Fort Kinnaird, Edinburgh • 14 deals in 2 years

• Thoughtful approach including cut and carve of larger units – Protects income

– Retailers get smaller, more affordable units

– Recently achieved rents of £70psf on smaller units, double a 10,000 sq ft unit

• Delivering positive footfall & sales growth

Fort Kinnaird: 15m footfall

Inverness• 50,000 sq ft Homebase returned

– Decision not to split unit – Protects supply & demand tension – Re-let space to The Range at a lower level; reflected in

March valuation

• 99% let inc. deals under offer

• Strong sales growth since Range opened

Inverness: 5m footfall

Orbital, Swindon• 40,000 sq ft Homebase returned

– Different demand supply dynamic – unit split – Lidl signed and two deals close to exchange – Transacting in line with March ERV

• 100% let inc. deals under offer

• Positive LFL sales and footfall for the year to Mar 19

Orbital, Swindon: 5m footfall

100 Liverpool Street

Evolving our customer offer

Mike Wiseman, Head of Office Leasing

Leasing success at our developments

85%Pre-let or under

offer

14.7Average lease

length

<32mthsAverage rent free

1 Finsbury Avenue287,000 sq ftPC’d Q1 2019

135 Bishopsgate335,000 sq ft

Completion Q3 2019

100 Liverpool Sreet521,000 sq ft

Completion Q1 2020

1 Triton Square366,000 sq ft

Completion Q4 2020

97% pre-let / under offer77% pre-let / under offer 75% pre-let / under offer Office space fully let

The occupational market remains supportive

Supply remains relatively

constrained

Much of the development

pipeline is already committed

Strong demand from occupiers

An unconventional London Office market

Delivering the best quality buildings

Committed to great design

Focused on product

differentiation

Demonstrating creative re-use

1 Finsbury Avenue, Broadgate

The office is more than just a place to work

Focus on people,

customers & productivity

Moves between submarkets

more common

Delivered through our

campus strategy

Exchange Park, Broadgate

Integrating flexibility

Creating spaces at

different price points

Enabling customers to

use space efficiently

Core and flex approach

resonating

4 Kingdom Street, Paddington

Increasing focus on service as a differentiator

We design, deliver and manage our

spaces

Leveraging our operational

expertise

Integrating technology to

enhance experience

135 Bishopsgate, Broadgate

Our Customer Commitments

• You can choose from our networkof locations

• You will be in a great place, both inside and out

• You can rely on us to be an active partner, working closely with you to achieve your goals

• You will have the services you need to help your business be successful

• You will be part of a vibrantcommunity

Delivering Mixed Use Panel Discussion

Delivering Mixed Use: Panellists

Emma CariagaJoint Head of Canada Water Development

Claire Barber Head of Retail Development

James Lowery Co-Lead of Storey

Tim Haddon Head of Asset Management,

Ealing Broadway & Standalone Portfolio

David WalkerHead of Investor Relations

Introduction Sally Jones, Head of Strategy & Investments

Long-term trends driving our strategy

Sustainability (Climate change +

social responsibility)

TechnologyRising consumer expectations

BREXITLow interest rates

Globalisation Global Cities -London

Urbanisation

Thoughtful approach to technology-led change

Power has shifted to the consumer

Intermediaries have been disrupted

Winners have used tech to deliver great customer experiences

Strengthen the relationship with our customers and consumers

Own and control our data

Leverage significant proptech investment and build partnerships

What we’ve learnt from the tech-led revolution Our three core guiding principles

Thoughtful approach to technology-led change

Understanding our customers better

Providing our customers with a better experience

Making our buildings more efficient

Campus benefits amplified by technology

Data & InsightsBen Dimson, Head of Business Development

Insight at British Land

Be customer oriented, innovating

to understand the needs of our

stakeholders

We create insights from research and data to:

Generate incremental value, for our customers and shareholders

Strengthen decision making, supplementing and

challenging our current approach

Supporting the leasing lifecycle at Meadowhall

4

Identify optimum centre locations with WiFi data

8

Review performance vs strategy

5

Share catchment knowledge to support marketing activity

2

Data driven targeting

3Model turnover, potential cannibalisation, online sales

7

Provide footfall and sales data to occupiers

Understand catchment and positioning

1

1

ROTHERHAM

£120mTurnover

£34mPotential turnover

Key Opportunity Acorn GroupsSteady NeighbourhoodsModest Means

SHEFFIELD

£219mTurnover

£41mPotential turnover

Key Opportunity Acorn GroupsStudent Life

Mature Money

6Collect sales data through BL:comm

6

Meadowhall performance

Meadowhall

Footfall growth

Over thirteen consecutive months

Q1 LFL sales

+2.6%

Supporting development decisions at Canada WaterOptimal space allocation modelling

3

Community and user surveys4

Focus groups to test brand proposition

5

Movement studies

6

Model range of development scenarios

1

1

90%

85%

85%

81%

80%

80%

79%

79%

78%

73%

73%

Business Services

Media/Creative

Technology

Banking/Financial Services

Professional/Corporate Services

Other

Life sciences

Retail & Leisure

Construction/Property

Government

Public Administration/Education

Proportion of workers who use their local F&B services weekly by industry sector:

92%

90%

83%

74%

77%

78%

CXO/ Partner/ Founder

Senior Executive

Management

Experienced (non-manager)

Assistant / Support Staff

Entry Level/ Graduate

Proportion of workers who use their local F&B services weekly by Position:

London office worker benchmarking survey2

2

Future workers based on London worker survey data. Future residents based on price projections and affordability. Future visitors based on CACI gravity model.

Canada Water: Phase 1A

Smart: Digital PlacemakingJulian Barker, Head of Smart Places

The HumanSpaces in which vibrant communities can thrive,

with a focus on wellbeing and

connection

The PhysicalGreat places inside

and out, in great locations

The DigitalUsing technology to

enable people to engage seamlessly and optimise their

space

Smart: Digital PlacemakingUsing technology in the built environment to make our places outstanding

Customer relationships

Strategic differentiator

Financial benefit

British Land

How does digital placemaking support British Land?

Our occupiers

Cost

Brand

Talent

Sustainability

Community

Our society

Wellbeing

Productivity

Our customers

Home…

…work

The physical

The hardware

The data environment

The user experience

What do we need to do to become ‘Smart’?

The physical

The

hard

war

e

The

data

en

viro

nmen

t

The

user

ex

perie

nce

Case study: 100 Liverpool Street

7:30

Community, desk booking and building access• Check out daily events on campus app• Post message to community group,

e.g. running club, professional network• Reserve space, e.g. hot-desk, cycle

rack, parking space• Scan app to access building

Visitor management• Guest arrives using digital

access and wayfinding• Front of house prompted by app to

greet by name• Host receives arrival notification

Control the meeting room• Meeting room temperature

adjusts automatically based on number of attendees, and can be adjusted using app

• AI voice assistant sets up AV, reorders refreshments, and can order a taxi

Environment control• Desk / office automatically detects

you and adjusts to your preferred settings, e.g. temperature, light control, desk height

Order lunch• Order lunch for delivery,

paying through the app, earning campus loyalty points

Review sensor dataon workspace utilisation• Use real-time dashboard to find

a free desk or breakout space• Review workspace usage to

identify more productive and cost effective layouts

Meet up with campus running club• Meet campus running club on the

campus square, update and share your ETA through the app

Benefit from automaticbuilding adjustments• Building identifies high meeting room

occupancy• Increases HVAC before CO2 and

temperature rise

8:158:55

9:00

12:00 13:00

15:00 18:00

All day: Building AI automatically adjusts itself to optimise energy performance, comfort etc based on sensor data and analytics

All day: British Land aggregates information from various sources, synthesizes data and insights for commercial decisions and value-add services for customers

All day: Occupiers can view live space utilisation and energy dashboard, to optimise space allocation

A Day in the life of a Smart British Land CampusUse the Smart app, Smart building or Smart campus to…

Leveraging Smart at British Land

Introduction to Sustainability Simon Carter, CFO

SustainabilityCressida Curtis, Head of Corporate Affairs and Sustainability

54

Major stakeholders

Customers Employees Communities Investors

55

Current programme: 2019 Performance

FutureproofingCapital efficiency

54% 64% 55% improvement in carbon efficiency vs 200940% 44% 55% improvement in energy efficiency vs 200997% 96% 100% of electricity to come from renewable sources92% 92% 100% new developments on track to achieve BREEAM Excellent / Very Good- 10% 15% reduction capital carbon emissions vs concept (embodied carbon)New target In progress Trial 3 visible interventions to improve local air quality1% 0.4% Zero waste to landfill

Skills and opportunityExpert people

839 1,232 1,700 people supported into employment1.2% 2.4% 3% of BL workforce and priority tier 1 and 2 suppliers to be apprentices Code launched 53% 100% strategic suppliers signed up to new code of conductNew target In progress Pilot a Living Wage Zone at a London campus 100% / 70% 100% / 66% 100% BL and supplier workforce at managed assets paid Living Wage

WellbeingCustomer orientation

On track On track Achieve WELL Certification on 100 Liverpool StreetIn progress In progress Establish and pilot wellbeing specification for retail developments 84% 84% Improve satisfaction scoresAchieved Achieved Define and trial a measurement of office productivityOn track Achieved Research & publish on how development design impacts public health

CommunityRight places

Charter estab. 92% Fully implement Local Charter at staffed assets and major developments16% 17% 20% employee skills-based volunteering79% 81% 90% employee volunteering

FY18 FY19 2020 Target

44%improvement inenergy intensity

(operational)

64%Improvement in carbon intensity

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1880

1883

1886

1889

1892

1895

1898

1901

1904

1907

1910

1913

1916

1919

1922

1925

1928

1931

1934

1937

1940

1943

1946

1949

1952

1955

1958

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

2018

Year

Global temperature, January – December vs 20th century average

56

Anom

aly

°C

2019 Performance Highlights: environment

1,232people intoemployment

2019 Performance Highlights: society

40,000Children supported

to read

57

Brief for DevelopmentMinimising embodied carbon

Maximising community impact

58

How sustainability creates value

WellbeingImproving resilienceBuilding community

CommunitiesPowering the local economy

Increasing opportunity

Energy AuditsMinimising operational carbon

Reducing cost

Reduced carbon exposure

Reduced BL and customer energy costs

Stronger support from local authorities

and consumers

Customer and consumer loyalty

59

Forward thinking

Evolving our approach

Building on areas ofgreatest expertise

Weaving intocustomer offer

Leveraging reach of supply chain

Aligning to UN SDGs

Incorporating science-based accredited targets

Increasing focus on impact

Supporting fulfilmentof societal ambitions

Sustainability in the built environmentJuliette Morgan, Head of Sustainable Development

Source: Project Drawdown

Solution Total atmospheric Co2 reductions (GT)

1 Refrigerant management 89.7

2 Wind turbines 84.6

3 Reduced food waste 70.5

4 Plant-rich diet 66.1

5 Tropical Forests 61.2

6 Educating girls 51.5

7 Family planning 51.5

8 Solar farms 36.9

9 Silvopasture 31.2

10 Rooftop solar 24.6

Project Drawdown: CO2 reductions by sector, top 10

Source: Project Drawdown

54.5 GT potential CO2 reduction from the Cities & Buildings sector by 2050 from these initiatives…

Project Drawdown: CO2 reductions by cities & buildings

DISTRICT HEATING

INSULATION

LED LIGHTING (HOUSEHOLD) HEAT

PUMPS LED LIGHTING (COMMERCIAL)SMART GLASS

WALKABLE CITIES

BUILDING AUTOMATION

SMART THERMOSTATS

LANDFILL METHANE

BIKE INFRASTRUCTURE

WATER DISTRIBUTION

GREEN ROOFS

Decarbonising materials

• Key benefits of building with wood – Trees absorb and sequester carbon; dry wood is

50% carbon which remains stored in timber construction materials

– Producing these materials generates fewer greenhouse gas emissions than alternatives like cement or steel

• Today’s high performance products are highly fire resistant

• Timber products can be prefabricated, reducing construction costs

• Building with wood could reduce annual global Co2 emissions by 14% to 31%

Orsman Road, Haggerston

Sustainability at our Campuses – Broadgate

tonnes recycled10,000

Zero waste to landfill since 2013

renewable electricity sourced from renewable sources certified

through REGO certificates

100%M&E monitoring and support minimises downtime, leaks and risk of contamination

24/7

of green roofs, supporting nature in the city

17,500sq ftof rainwater harvested, saving mains water, cutting bills and

reducing urban flood risks

2.8m litresof BREEAM certified green

buildings

1.6m sq ft

Reuse of structure + façade elements

Emissions avoided equivalent to gas & electricity emission free operation for

26 years

Vital Statistics

BREEAM outstanding

20,000 tons carbon offset

50% reduction in embodied carbon

35% reduction in operational energy

65% reduction inwater use

80% responsiblysourced materials

All timber FSC certified

98% build waste diversion

In buildings: reduce, reuse and recycle – 1 Triton Square

• All new stone sourced from Europe rather than China

• As much existing stone retained as possible

• Decisions to reduce water use in planting

• Retaining trees even where inconvenient

• Lower carbon materials selected

• Edible planting to include local community

Regent’s Place

Public realm: Regent’s Place landscaping & air quality

Circular fit out – Storey fitted space

• Furniture contributes 30% of a building’s GHG emissions over its life – Because furniture is replaced multiple times

• “Circular” office furniture can save almost 25% of a building’s GHG emissions

• 338 Euston Road trial – 246 items from the previous tenant were

remanufactured and incorporated into the new offices

– 2,980 kg of waste avoided

– 12,145 kg Co2 GHG emissions saved

– £72,000 saved

338 Euston Road, Regent’s Place

• Our café and event space at 17-19 Triton St will use low impact materials– Natural and recycled wood products

– Vintage furniture

– Plants and natural light

– Sustainable and upcycled kitchen and tableware

– Recycled paint, crushed glass and recycled yoghurt pot materials.

• Local community resource – Lending library with books and publications from

Knowledge Quarter partners

– Community wall to display work from visitors and share information about Regent’s Place Community Fund and partners

– Flexible space for yoga, fitness, talks, exhibitions or pop ups

Eden Space, 338 Euston Road

Sustainable fit out: Eden space

2

Already at Storey Club…

In summary

Neighbourhood, asset and interiors level

Reducing carbon footprint and delivering social benefits

An approach not a department

It drives us and our customers

Commitment and curiosity to keep impacting in this area

123

45

Capital Allocation

Simon Carter, CFO

(1,600)

(1,200)

(800)

(400)

-

400

FY16 FY17

£m

Sales Purchases

FY18 FY19

Net disposals of over £3bn of assets since 2015

39 Victoria Street- Sale price

£139m- 4.3% NIY- IRR 22%

Debenhams, Oxford St.- Sale price

£400m- 2.9% NIY- IRR 13%

Leadenhall- Sale price

£1.15bn (£575m at share)

- 3.4% NIY- IRR 25%

5 Broadgate- Sale price £1bn

(£500m at share)

- 4.0% NIY- IRR 18%

Clarges Residential - Total sold

£383m over 2 years

- Delivered £200m profits to date

Retail sales totalling £2.2bn• 50 superstores ~ £730m• 7 department stores ~ £610m• 13 multi-let centres ~ £440m• 61 other assets (including gyms & pubs) ~ £370m

1 Sheldon Square- Purchase price

£210m

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

20

22

24

26

28

30

32

34

36

FY15 FY16 FY17 FY18 FY19LTV Debt to Net Rents

£4.9bn £4.8bn

£4.2bn£4.0bn

£3.5bn

Net Debt

LTV

(%)

Debt to N

et Rents (x)

Sales proceeds used to de-lever…

1 Calculated as the ratio of net debt to net rents (proportionally consolidated)

1

…and recycled into value accretive developments…

1 Finsbury Avenue 287,000 sq ftPC’d Q1 2019

Recently Completed & Committed Developments

100 Liverpool Street 521,000 sq ft

Completion Q1 20201-2 Broadgate531,000 sq ft

135 Bishopsgate335,000 sq ft

Completion Q3 2019

1 Triton Square366,000 sq ft

Completion Q4 2020

Near term pipeline

Norton Folgate335,000 sq ft

• ERV of £63m• 85% pre-let or under offer • 6% yield on cost

• ERV of £39m• Both schemes consented• 6% yield on cost

Delivered £1.7bn profits since 2010, c.£300m to come

7.4m sq ftMedium term pipeline

opportunities

Located at mixed use assets: - 2-3 Finsbury Avenue, 5 Kingdom Street,

Gateway Building, Ealing, Eden Walk- £263m book value- £5m current rent roll- c.£75m potential ERV - 3 out of 5 schemes already consented

Standalone:- Meadowhall Leisure, Aldgate Place- £26m book value- Flexibility over progression options- Both schemes consented

Canada Water- Masterplan and detailed planning on first three

buildings submitted; decision expected 30th September 2019

- £303m book value- £8m current rent roll

…with further medium-term opportunities

Proceeds also recycled into value accretive buybacks

Compelling arbitrageLocked in 33p NAV uplift

Attractive Income Return6% implied look through yield

Execute on a leverage neutral basis

Potential diseconomies of scale

Portfolio weightings unchangedOpportunity cost

Considerations

Retail Operational Update

Retailers are experiencing a perfect storm

Business Rates Brexit uncertainty Winners and Losers

Rising wage costs

Devaluation of currency

Growth of online

Store Closure Programmes,

CVAs/Administrations

Valuation declines

Rentalpressures

Landlord Impacts

+2%vs previous passing

rent1

Assets to be developed80k sq ft£0.7m headline rent25% below passing rent2.4 years average lease length7 mth average incentive

Rates mitigation75k sq ft£0.2m headline rent9 mths average lease length

Temporary lettings90k sq ft£1.6m headline rent23% below passing rent1 year average lease lengthNo incentive given

97%Retail occupancy

Commercialisation & car park income45k sq ft£0.6m headline rent 3 years average lease length4 mths average incentive

Retail leasing overview (5 months to August-19)

Long term new lettings210k sq ft£4.0m headline rent18% ahead of passing rent3% ahead of ERVs7.4 years average lease length7 mths average incentive

1 Excludes assets to be developed, rates mitigation and commercialisation & car park income

3.2 0.3 -0.9-0.2

-1.4

-2.4-3.1 -3.2

-4.4

Q1 FY20FY16 FY18FY17 FY19

0.0

British Land Footfall movement vs Benchmark1

% YoY

Continuing to outperform key operational metrics…

BL Footfall Benchmark Outperformance

420 bps230 bps340 bps240 bps

460 bps

1 ShopperTrak UK National Index

2.4

-1.6 -1.5

1.1

-0.2

-2.2-2.9 -3.1

British Land LFL sales movement vs Benchmark1

% YoY BL LFL Sales Benchmark Outperformance

0.0

520 bps

160 bps130 bps220 bps

260 bps

Q1 FY20FY16 FY18FY17 FY19

Continuing to outperform key operational metrics…

-4.1

1 BRC KPMG In-Store LFL Non-Food Index

CVA Approach

Brona McKeown, General Counsel and Company Secretary

1986

Insolvency Act introduces CVAs

A history of CVAs

2009

JJB “Landlord” CVA• reduces lease payments but leaves

other creditors unaffected• discounts Landlord vote by 75%

3-4 Retailer “Landlord CVAs” per year

2013-2017 March 2018

CVAs which affect more than rent appear

Seek legal advice as more adverse terms

emerge

June 2018

House of Fraser

BL CVA cross business committee forms and determines strategy

July 2018September 2018

BL engages with insolvency practitioners

Red Flags launched via BPF

November 2018

BL and group of landlords launch legal challenge of

Regis CVA

February 2019

Technical structure of

Landlord Steering

Committee takes shape

On Arcadia, SteerCo of Landlords via Advisor got:• access to better financial

business information• concessions and 20% upside on

sale for all landlords

May 2019

Arcadia CVA

June 2019

Monsoon CVA

September 2019

Debenhams CVA challenged in CourtOutcome awaited

December 2019

Regis challenge in court

Key: Macro events BL actions

Red Flags (November 2018) Effect Of Landlord Pushback Over Last 12 Months

1 Moritorium against landlords enforcing all tenant covenants

Now generally limited to pre-CVA breach or non-payment of contracted rent

2 Very short time for landlord break rights Some improvement but still a challenge on every CVA to extend time to break and get recurring right

3 Tenant break rights Still far too extensive on a “just in case” basis

4 Tenant removing obligation to give guarantee on assignment Now usually dropped or limited to rent concession period

5 Removing upwards only rent reviewsNow usually reverts to CVA rent or ERV if higher. Have recently seen rent revert to pre-CVA levels at end of a CVA but too early to see if others follow

6 Dilapidations compromised across all unitsfor a flat rate regardless of condition

Recent CVA did not compromise dilapidations on occupied stores at all.Have recently seen dilapidations only compromised when landlord serves a break

7 Landlords’ claims against compensation fund discounted by 75% Largely gone

8 Compensation fund limited to the first 3 years’ profit (or less)

Most recent CVAs have shown more meaningful share of future upside but more to do

9 CVA rental discounts for whole term of leases Recent CVAs have generally not attempted this

10 Rental discounts survive termination of the CVA Now usually not attempted

11 Landlord votes on CVA discounted by 75% Precedent broken recently by discount of 25% but still should not be discounted at all

Now generally not attempted or usually conceded

Improves on negotiation but still always attempted

Insisted on by tenants every time

Improving trend

The Changing CVA Landscape

Longer Term View

Simon Carter, CFO

Occupancy Cost Ratio

0%2%4%6%8%

10%12%14%16%18%20%

BL UK Peers

Occupancy cost ratio defined as the sum of total rent, service charge, rates, insurance as a proportion of retailer sales (net of VAT). Peers include Landsec, Hammerson and intu.Rent to sales ratio defined as total rent as a proportion of retailer sales (net of VAT). Peers include Landsec and Hammerson. Both metrics based on all stores, including MSUs and anchors.

Rent to Sales Ratio

0%

5%

10%

15%

BL UK Peers

Our portfolio is relatively affordable to our occupiers

Long term drivers of trading densities

TotalRetail sales

growth

Online penetration

PhysicalRetail salestrajectory

+ Shrinkage of floorspace = Sales per sq ft

growth

10yr view

Total Retail Sales growth (pa)

Online penetration

Implied long run physical sales growth (pa)

Optimistic

4.5%

50% 35%

Current

3.3%10yr historic

CAGR

19%

2.5%10yr historic

CAGR

-2% 2%

Pessimistic

2.5%3.3%

Historic growth

4.3%

CACI

2.6%

Euromonitor Passport

4.2%

Oxford Economics

35% 32%

Extrapolated Historic growth

CACI

We expect online to absorb the majority of retail sales growth…

Sources: ONS (historic), Euromonitor Passport (data to 2023), Oxford Economics (data to 2029), CACI (data to 2026). Figures all nominal and represent total retail sales (includes food and groceries, excludes fuel)

10yr view

…however with shrinking floorspace, industry trading densities likely to grow

Pessimistic Optimistic

10yr view

Source: JLL (data to 2026). Figures all nominal and represent total retail sales (includes food and groceries, excludes fuel)

Implied long run physical sales growth (pa)

-2% 2%

Shrinkage of Floorspace (pa)

Industry sales per sq. ft growth (pa)

-2%

-1% +4%

-1%-1%

JLL store closures prediction

-1.5%

JLL floorspace decrease prediction

Industry sales per sq. ft growth (pa)

British Land historic LfLsales outperformance (pa)

-1% +4%

+190bpsFY16-FY19

outperformance

…and we expect to continue to outperform

Pessimistic Optimistic

Implied British Land portfolio sales per sq. ft (pa) +1% +6%

10yr view

Expect physical sales

per store to grow in our

portfolio

Short term outlook remains tough, but we are positioned to outperform over the longer term

Value of fulfilment

Value of Click & Collect/returns

2/3rds of click and collect customers go on to make a

purchase in store

BL’s affordable position

Occupancy cost 14%

Careful asset selection

Reduce Retail to third of portfolio

Shares are trading at c.40% discount to NNNAV1

Discount applied pro-rata to Offices and Retail

Offices trade at NNNAV; discount attributed to Retail

Discount to GAV 26% 58%

Implied Retail net initial yield 7.0% 12.2%

Implied Retail capital value (psf) £310 £180

1 EPRA NNNAV is the EPRA Net Asset Value adjusted to reflect the fair value of debt and derivatives and to include deferred tax on revaluations. Analysis based on 3 mth VWAP of 518p as at 12th September 2019

Retail capital values

Replacement cost psf

£200

March ‘09 capital value psf

£265

Wrap up Chris Grigg, CEO

Our strategy is delivering- Mixed use space attracting a broader mix of

occupier…

- …achieving higher rents and faster leasing velocity

- Success across new and refurbished space

- Outperformance in a tough retail market:

driving 190 bps sales and 320 bps footfall

- Clear long term plan to refocus the business

Today we have demonstrated…

1

Our response to long term trends

- Clarity of purpose- Leading in smart buildings- Thoughtful in sustainability

2

Our depth and breadth of talent to deliver

- Depth of property expertise- Breadth of other skill sets

3

How we deliver value through development

- £1.7bn profit delivered to date; c.£300m profits to come

- Developments 85% pre let or under offer- 7.4m sq ft further opportunities

4

Our focus on capital efficiency

- Locked in significant returns via sales- Strong balance sheet, to exploit

opportunities

5

Break outs

Break out 1:Retail marketupdate

A few of the winners…

Online pure player with a slick platform

Fast, value or aspirational fashion with point of difference

Aspirational brand aggregators

Differentiators in growth sectors

Convenience value players with good networks

Companies with strong omnichannel offer & quality stores benefiting from consolidation

The retail landscape

Robust demand from successful leisure and F&B operators

Our key selection criteria

Rental growth potential

The right characteristics to drive income from rents and commercialisation

Development potential

Potential to grow and/or reconfigure the asset to meet future requirements

Mixed-use potential

Potential to create a true mixed-use community including retail, leisure, office and residential uses

Fulfilment potential

Potential to become a last-mile fulfilment hub, considering potential to develop and quality of local infrastructure

Population trends

Large population in catchment, with growth potential

Quality of demographics

The right number of the right type of demographic groups

Economic health Above average income and employment levels in the catchment

CompetitionQuantum of retail space in the local area; strong competitive position relative to potential competitors

Critical MassRight size scheme – large enough for draw, but small enough to drive demand:supply tension

Our structured approach: retail portfolio scorecard

ValuationOperational

outperformance to June 19

Key Scorecard Attributes

As at March 2019

Footfall vs Benchmark1 LfL Sales2 Occupancy Catchment &

DemographicCompetitive

PositionAppropriate

SizeDevelopment

PotentialAlignment to

strategy

Retail –London & SE

£1.3bn +300bps +190bps 97%

Regional Retail £2.3bn +260bps +180bps 97%

Local Retail £1.1bn +260bps +260bps 97%

Solus Retail £0.8bn n/a n/a 100% n/a n/a

1 Footfall based on a 2yr average versus ShopperTrak UK National Index2 LfL Sales based on 2yr average versus BRC KPMG In-Store LFL Non-Food Index

Break out 2:London leasing

Driving value through developments

1 Finsbury Avenue287,000 sq ftPC’d Q1 2019

135 Bishopsgate335,000 sq ft

Completion Q3 2019

100 Liverpool Street521,000 sq ft

Completion Q1 2020

1 Triton Square366,000 sq ft

Completion Q4 202097% pre-let / under offer77% pre-let / under offer 75% pre-let / under offer Office space fully let

Office space fully let34,000 sq ft retail, leisure and

affordable workspace available

2019

Committed Pipeline – £63m ERV

Driving value through developments2020 onwards

Norton Folgate335,000 sq ft

£206m cost to comeEnabling / demolition

Underway

1-2 Broadgate531,000 sq ft

£198m cost to comeExpected start Q2 2020

5 Kingdom Street429,000 sq ft

2-3 Finsbury Avenue563,000 sq ft

Gateway Building

105,000 sq ft

Near term pipeline – £39m ERV Medium term pipeline – excl. Canada Water

Break out 3:Storey

Building out Storey167,000 sq ft across 8 buildingsOperational at Broadgate, Paddington Central and Regent’s Place as well as standalone buildings

Appold Studios, Broadgate7,000 sq ft

“We had outgrown the co-working space stage, but we realised finding space for a scale-up was not going to be easy. Working with Storey was the perfect solution for us”

CEO and Co-Founder, Rotageek

338 Euston Road, Regent’s Place23,000 sq ft

2 Kingdom Street, Paddington Central26,000 sq ft

Building out Storey135,000 sq ft committed pipelineIncludes space at our recently completed 1FA development demonstrating the key role of Storey at our campuses

1FA, 73,000 sq ftLaunching October 2019

19 Wells Street, Fitzrovia 21,000 sq ftLaunching September 2019

6 Orsman, Road, Haggerston40,000 sq ftLaunching early 2020

Building out StoreyHow British Land supports Storey’s operating platform

Leasing and Asset Management

Finance and Legal

Development

HR and Other Support Services

Group Technology

Proposition & Operating Model

Landlord Services

Select and plan space

Fit out and Furnish

Channel and pricing strategy

Marketing & leasing

Technology

Account management

Storey and FM services

Customer onboarding

Personalisation

Technology installation

Operational stats

• c.30% premium to traditional lettings

• Stabilised portfolio 81%let or under offer

• 24 months average lease length

Break out 4:Canada Water

Canada WaterAcquisition of 50% of Surrey Quays Shopping Centre ~ 23 acres

Conditional agreement to acquire the Printworks – 14.5 acres

Acquisition of remaining 50% of Surrey Quays Shopping Centre

2010 2011 2012 2013 2014

The Masterplan

53 acres

5mDevelopable area

3k homes

2m sq ft Workspace

1m sq ft Retail & leisure

Workspace2 million sq ft

Residential3,000 homes 35% affordable (70% social rent; 30% intermediate)

Retail & Leisure1 million sq ft

Canada WaterAcquisition of Surrey Quays Leisure Park ~ 8.5 acres Acquisition of the Dock Offices

2014 2015 2016 2017 2018

A transformational first phase

1200homes

1.5m sq ft Offices & Educational

150k sq ft Retail & leisure

First Developments• Public realm:

Dockfront West, Dock, Office Courtyard, Retail village

• Plots: A1, A2, K1, leisure centre, modular campus

Canada WaterMDA signed with Southwark Council; Masterplan and detailed planning on first three buildings submitted

Earliest start on site

2018 2019 2020 2021 2021

A rich history

Acquisition of Rotherhithe Police Station

A healthy place of green and blue Plans shaped by the community

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