British Land: Retail Perspective July 2016
British Land: Retail Perspective
July 2016
Overview
3
Our purpose and strategy is aligned around Places People Prefer
Strategic focus
Customer Orientation
Right Places
Capital Efficiency
Expert People
Placemaking
We Connect
We Design
We Enhance
We Enliven
Values
Places People Prefer Places where people want to work, shop and live
4
Placemaking lies at the heart of our business
Offices Retail
Lifestyle orientated mixed use offices Multi-let lifestyle centres
Regional
Attracting visitors from a wide catchment for a planned trip
Local
Fitting into the daily life of local communities
Campuses
Large, office-led mixed use lifestyle campuses
Campus-lite
Smaller clusters
5
How Britain shops today
c.90% of shopping spend touches
the physical store
Source: Verdict
<20 mins average customer drive time
to BL assets
Source: Kantar Source: British Land surveys
Convenience ranked
#1 importance for a shopping trip
70% more click and collect than
national average
39% of food eaten out of home in the UK
28% of BL visitors use F&B/leisure
Source: ONS/British Land surveys
6
Data informs our strategy and benefits our occupiers Our superior insight into consumer behaviour helps make decisions
2
3 Placemaking lies at the heart of what we do We create Places People Prefer via our placemaking framework
1 Our focus is on our customers We listen to our consumers and occupiers and respond to their needs
4 Our core regional and local products can both succeed We meet a range of consumer lifestyle missions
Outstanding places for modern consumer lifestyles Places to shop, eat and be entertained
7
We deliver this through two core products, orientated to how Britain shops today
Regional
Attracting visitors from a wide catchment for planned trips
Local
Fitting into the daily life of local communities
1 2
Glasgow Fort Wheatley, Doncaster
8
Our two core products each fulfil specific shopper missions
1 2 Regional Local
Missions include Leisure-dominated Trips, Family Day Out and The Big Ticket Shop
Typically >30 occupiers
Footfall >5m, spend >£100m p.a.
Drive-time >15 mins
Dwell >60 mins
Retail offer covers multiple categories with depth of choice in each
Significant leisure and F&B e.g. restaurants, cinema
Missions include Local Neighbourhood Shopper, Convenient Leisure and Single Item Pick-Up
Typically 10–30 occupiers
Footfall often <5m, spend <£100m p.a.
Drive-time <15 mins
Dwell <60 mins
Retail offer covers multiple categories & includes local amenities
Convenient leisure and F&B e.g. gym and coffee shops
9
Meadowhall Glasgow Fort Ealing Broadway Doncaster Wheatley
Role
Super-regional
shopping centre
Regional
Shopping &
leisure park
Regional
In-town
shopping centre
Local
Out-of-town
shopping park
Local
Size (k ft2) 1,500 510 470 232
Dwell time 118 min 78 min 69 min 55 min
Frequency of visit 33 pa 50 pa 70 pa 52 pa
Retail spend £113 £70 £50 £59
Retail conversion 86% 71% 85% 91%
Catering spend £11 £17 £8 £7
Catering conversion 61% 36% 20% 18%
Annualised spend £3,358 £2,751 £3,056 £2,798
Rent : sales 14% 9% 12% 10%
Our data shows both regional and local can succeed
10
45,000 shopper surveys pa, to understand
shopper missions
330m footfall on multi-let schemes;
over a third individually counted
10m website and
2m wi-fi sessions pa
Geographic & demographic
analytics, including online data
from 3m individuals
Data gives us superior understanding of consumer behaviour across regional and local centres
11
Physical store sales
£266 bn
True Value of Stores £278 bn
Total retail sales
£313 bn
£5 bn £8 bn £18 bn
£13 bn £4 bn
89% of retail sales touch a store
Source: Verdict / British Land
Boost +5%
89% of total retail sales in 2015
Click &
Collect
sales
Online sales
browsed
in store
Online sales
not browsed
in store
Online
pureplay
sales
Mail order &
TV shopping
Online sales of store operators
Total online sales
Online that touched the store
Retail sales by channel (UK, all sectors, 2015)
12
Online and offline is intrinsically linked – our data shows that store openings significantly drive up web-traffic
Postal area share of retailer website visits Indexed vs. store opening date
+55%
50
60
70
80
90
100
110
120
130
140
150
+20
weeks
15 10 5 Store Opening -5 -10 -15 -20
weeks
Note: Based on a sample of 18 retailers opening at British Land centres between April 2014 and December 2015
Source: Hitwise
13
Consumers are shopping more locally than ever before
Source: DfT National Travel Survey 2014 Source: Kantar survey for BL, Nov 2015
78%
Distance
4.2 miles Per shopping trip
on average
(vs. 5.2 in 1995)
Travel Times
18 mins Per shopping trip
on average
“Which of the different aspects of the shopping experience listed below are important to you?”
78%
74%
60%
50%
39%
35%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Convenience Retail Offer ParkingFacilities
Quality ofShopping
Environment
Servicesoffered
Food, drink& leisure
offer
14
Retailers are creating hub and spoke networks
To support fulfilment and maintain brand awareness
Source: CACI
15
Our portfolio is well positioned to meet both consumer and retailer demands
Source: CACI Retail Footprint 2015
BL regional
centres
BL local
centres
BL asset
catchments
Average rent
to sales ratio
10%
Annual footfall of
330m
90% of our car parking spaces are free
Potential to reach
60% of the population
16
We are expanding our addressable market
Source: Oxford Economics
Housing 25%
Education 2%
Other 11%
Grocery 12%
Fashion 6%
Home & Leisure
11%
Health & Beauty
4%
Food & Beverage
8%
Leisure 6%
Historical focus Recent additional focus
Not relevant to BL
Consumer spend (2015)
Transport &
Comms
15%
77% of F&B spenders in UK
centres also spend on Retail
38% of Leisure users also spend
on F&B
By expanding into new segments to enhance the retail experience
F&B and Leisure are often interlinked with Retail
17
32%
18% 16%
13%
9%
3% 9%
FY16 lettings and renewals by sector by rent
Fashion & Footwear
General Retail
Food & Leisure
Health & Beauty Electrical &
Mobile Phone
DIY
Other
We are expanding our addressable market
By attracting more aspirational occupiers
ahead of ERV
8.0%
Placemaking
19
We deliver this through our Placemaking framework, Creating Places People Prefer
Segment mix
We Connect
We Design
We Enhance
We Enliven
Function
Events
Authenticity
Accessibility
Community
Occupier mix
Memorable experience
Communication
Occupier service
Form
Customer service
20
Community
13,000 people benefited from
this year’s community programme
Tollgate, Colchester
Accessibility
8 recent car park upgrades, including
vehicle management system technology
Mayflower, Basildon
Communication
10m website sessions p.a.
Glasgow Fort
We connect
21
We design
Function Doddle providing Click & Collect
facilities at Ealing Broadway
Glasgow Fort
Ealing Broadway
Authenticity
£60m Meadowhall refurbishment currently underway and
£300m proposed Leisure Hall
Form
c.£300m invested in improving
the assets over the last 3 years
Meadowhall, Sheffield
22
We enhance
Occupier mix
15% space turned
over in last 4 years
Segment mix
8% F&B, up from 2%,
with a target to double this
Occupier Service Ability to assess peel-off
rates using unit counters
Old Market, Hereford
Meadowhall, Sheffield
Broughton, Chester
23
We enliven
Customer Service
100% property management of multi-let
portfolio now transferred to Broadgate Estates
Events
150 events across the
portfolio in the last year
Memorable Experience
4 centres benefited from
new play areas this year
Glasgow Fort
Broughton, Chester
Fort Kinnaird, Edinburgh
24
Where we invest in our assets, we see superior performance
An
nu
al
in
-sto
re
s
ale
s g
ro
wth
1 y
ea
r E
RV
g
ro
wth
Glasgow Fort
1 2 Regional Local
Giltbrook, Nottingham Ealing Broadway Whiteley, Fareham
+4.9% +3.8% +5.0% +9.6%
+4.7% +8.7% +8.1% +9.4%
All figures are year to March 16, sales are LFL.
25
Our approach is working – delivering strong results across the multi-let portfolio
+3.0%
+2.4%
Fo
otf
all
R
eta
iler
in
-sto
re s
ale
s Regional
+2.9% +3.2%
Total multi-let portfolio Local
+2.2% +3.2%
Ahead of market by
440 bps
Ahead of market by
200 bps
3.4% 3.5% 3.3%
Ahead of market by
200 bps
ER
V g
row
th
Benchmarks: Tyco FootFall, BRC-KPMG Retail Sales Monitor. All figures are year to March 16, sales are LFL.
26
Portfolio rental growth vs IPD 2001 - 2008
Until 2008, rental growth correlated closely with growth in retail sales
Index Jan 2001 = 100
Retail sales inc. online IPD all retail ERV BL all retail ERV
Note: Calendar year
Source: IPD, Oxford Economics
90
95
100
105
110
115
120
125
130
2006 2005 2004 2003 2002 2001 2008 2007
27
Portfolio rental growth vs IPD since March 2013
Now, rental growth tracks sales growth at only the best properties
Index Mar 2013 = 100
92
94
96
98
100
102
104
106
108
110
Retail sales inc. online IPD All Retail IPD Prime BL Multi-let IPD Secondary
Note: Calendar year
Source: IPD, Oxford Economics
2013 2014 2015 Q1 2016
Capex
£280 million
We have worked our capital hard, with £4.8bn of gross activity over the last 6 years
Extensions & developments
£180 million
Acquisitions
£2.0 billion
£2.3 billion asset disposals 58 superstores, 54 others
Average scheme size £31m
£2.5 billion investment
Note: Investment and disposal figures since March 2010
We aim to increase the proportion of multi-let assets from just over 70% to 85% of the retail portfolio
SouthGate, Bath Old Market, Hereford Mayflower, Basildon
29
Data informs our strategy and benefits our occupiers Our superior insight into consumer behaviour helps make decisions
2
3 Placemaking lies at the heart of what we do We create Places People Prefer via our placemaking framework
1 Our focus is on our customers We listen to our consumers and occupiers and respond to their needs
4 Our core regional and local products can both succeed We meet a range of consumer lifestyle missions
Outstanding places for modern consumer lifestyles Places to shop, eat and be entertained
British Land is proud to have been awarded
The 2016 Queen’s Award for Enterprise
Acknowledging our economic, social and environmental contribution