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VISIT TO LEICESTER & PETERBOROUGH Wednesday, 14 June 2006
VISIT TO LEICESTER & PETERBOROUGH
Wednesday, 14 June 2006
PROGRAMME
• Hammerson’s shopping centre strategy
• The Shires
• Development strategy and pipeline
• Queensgate
PORTFOLIO At 31 December 2005
Total: £5,732 million
UK Shopping Centres 38%
France 26%
Offices 28%
Germany 3%
UK 71%
Retail Parks 14%
Other Shopping Centres 20%
TOP TEN PROPERTIES
* Hammerson’s share in respect of joint ventures ** Passing rents are post rent free periods
76,300 75,900 81,600 124,900 71,100 56,600 48,600 29,900 84,100 49,200
m²
Area
% £m £m
Shopping centre Office/retail
Shopping centre Shopping centre Shopping centre Shopping centre Shopping centre Retail/offices
Shopping centre Shopping centre
Category
16.6 42.4 19.6 15.2 21.7 26.5 21.1 18.9 30.9 20.4
22.8 25.4* 16.2* 14.5* 13.2* 12.7 11.6 8.8 8.1 8.5*
520 401* 370* 297* 266* 242 229 195 178 173*
WestQuay, Southampton Bishops Square, London Brent Cross, London Bullring, Birmingham The Oracle, Reading Italie 2, Paris Liberty, Romford Les 3 Quartiers Parinor, Paris The Shires, Leicester
Total return 2005
Passing rent**
Valuation 12/31/05
SHOPPING CENTRE STRATEGY
David Atkins
STRATEGY
“To build Hammerson’s position as the leading
owner, developer and manager of Top 30 retail
destinations in the UK”
IMPLEMENTATION
• Value creation at existing schemes by active management
• Expansion and enhancement of existing schemes
• Development of major new shopping centres
“To build Hammerson’s position as the leading
owner, developer and manager of Top 30 retail
destinations in the UK”
CREATING VALUE
Performance Indicators
Retailer Relationships
Catchment Analysis
Operational Efficiencies
Brand Positioning
& Marketing
Business Plans
Value
CATCHMENT ANALYSIS
Demographic Profiling
Available Spend by Product Category
Retail Provision
Competing Venues
Tailored Offer
Higher Turnover and Rents
PERFORMANCE INDICATORS
• Monthly trading reports Sales turnover Rent to sales ratios Footfall and car park data
• Twice yearly exit surveys Average spend Mosaic profile Age
• Biannual telephone surveys Catchment penetration
RETAILER RELATIONSHIPS
• Dedicated retail management and leasing teams
• Understanding our customers
• Retailer mix
BRAND POSITIONING/MARKETING
Full Marketing Mix
Performance Driven
Market Share & Market Growth
Award Winning
Brand Marketing
Competitive Analysis
Strong Consumer Brands
STRONG CONSUMER BRANDS
FULL MARKETING MIX
OPERATIONAL EFFICIENCIES
• Hammerson Management Services
• Aggregated purchasing
• Service charge management
• Regulatory framework
• Common IT platforms
UK SHOPPING CENTRE PORTFOLIO
11.1 310 0.7 160 Queensgate
6.2 470 0.1 173 The Shires
11.0 260 0.9 229 Liberty
5.7 450 0.5 266 The Oracle
5.7 460 0.8 297 Bullring
10.2 1,020 nil 370 Brent Cross
22.8 480 0.8 520 WestQuay
Reversion 31 Dec 05
(%) Rent (£/m²)
Vacancy rate (%)
Value at 31 Dec 05 (£m)*
*Hammerson’s share in respect of joint ventures
OUTPERFORMANCE vs IPD
0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0
5 Years 3 Years 1 Year
%
THE SHIRES, LEICESTER
Jon Emery / Sheila King
THE SHIRES, LEICESTER
• Existing scheme of 49,200 m²
• 60% interest acquired in 2002 for for £110 million
• Annual rent roll of £8.5 million per annum
• Anchored by Debenhams and House of Fraser
LEICESTER CITY REGENERATION MASTERPLAN
• Improve city centre environment
• Major development along 11 miles of waterfront
• New residential community, business quarter and cultural facilities
• Science and technology park
RATE ‘GOOD RANGE OF SHOPS’
18%
31%
36%
73%
56%
80%
49% 13%
3%
9%
5%
3%
1%
3%
4%
16%
40% 20% 0% 20% 40% 60% 80% 100%
ALL: Importance for shopping choice
LEICESTER
Nottingham
Fosse Park
Strongly agree Agree Strongly disagree Disagree
RATE ‘GOOD DEPARTMENT STORE’
Strongly agree Agree Strongly disagree Disagree
29%
33%
18%
32%
59%
54%
75%
44%
8%
8%
5%
14%
4%
4%
2%
11%
40% 20% 0% 20% 40% 60% 80% 100%
ALL: Importance for shopping choice
LEICESTER
Nottingham
Fosse Park
THE OPPORTUNITY
• Increase Shires’ market share
• Increase penetration of top five Mosaic groups
• Increase average spend and dwell times
• Improve Experian ranking from 15th to top 10
• Change public perceptions of Leicester
OUR VISION FOR THE SHIRES
• Vibrant new area of the city centre
• Place for people to shop, eat, relax and live
• Regional destination
THE SITE
THE NEW SHIRES, LEICESTER
‘’’
Debenhams
House ofFraser
John Lewis
Vaugha
n Way
High Street
New 2000 space car park
EastBond St
Shires Lane
Sq 1
Sq
Free School Ln
‘’’
Sq 1
Sq 2
THE NEW SHIRES, LEICESTER
• A major 60,000 m² extension – £350 million
• Full refurbishment of existing 50,000 m² scheme – £19 million
• Three department stores including full line 22,000m² John Lewis
• Five MSU’s and 40 new retail units
• 12 screen multiplex cinema
• 20 restaurants
• 2,000 new shopper car parking spaces
• 140 residential units
• Two new public squares
JOHN LEWIS
SHIRES REFURBISHMENT
DESIGN AND BUILD
• Project leadership
• Project team
• Design
• Procurement/ contracts
• Sustainability
LEASING OBJECTIVES
• Create aspirational tenant mix
• Attract flagship retailers
• Integrate with existing Shires and city centre
• Achieve prime rents on both levels of centre
• Maximise Zone ‘A’ rents
• Create a destination for eating and drinking
ACHIEVED TO DATE
• Income exchanged 26% In solicitors’ hands 9% In negotiation 7%
• Lettings exchanged £300k ahead of target
• Flagship lettings John Lewis 20,900 m² 225,000 ft² Next 4,500 m² 48,000 ft² River Island 1,100 m² 12,000 ft² New Look 2,300 m² 25,000 ft² Zara 2,200 m² 24,000 ft²
• Cinema de Luxe 9,300 m² 100,000 ft²
LETTING PROGRESS
0
10
20
30
40
50
60
70
80
90
100
39 36 33 30 27 24 21 18 15 12 9 6 3 Months Until Centre Opening
%
Bull Ring, Birmingham Exchanged Exchanged
Broadmead, Bristol
Centre Opening
Exchanged The Shires, Leicester
SUMMARY
• Strong returns since purchase
• Development to enhance future returns
• Create a leading UK regional shopping destination
UK CITY CENTRE RETAIL DEVELOPMENT
Peter Cole / Bruce Isles
COMPLETED SCHEMES The Oracle, Reading WestQuay, Southampton
Bullring, Birmingham
BROADMEAD, BRISTOL
BROADMEAD, BRISTOL
BROADMEAD, BRISTOL • 90,000 m² retail and leisure
element of 140,000 m² scheme
• 50:50 JV with Land Securities
• Started on site Sept 2005
• Completion Sept 2008
• Anchored by House of Fraser and Harvey Nichols
• 39% let or under offer
• Estimated total cost £460 million
FUTURE DEVELOPMENT PIPELINE
Major retailled schemes • New Retail Quarter, Sheffield
• Eastgate & Harewood Quarters, Leeds
• Eden Quarter, KingstonuponThames
• Brent Cross/Cricklewood, London NW2
• Martineau Galleries, Birmingham
Retail extensions • North Westgate, Peterborough
• WestQuay III, Southampton
• Parinor, Paris
• Espace St Quentin, St QenYvelines
• Italie 2, Paris
• Les 3 Fontaines, Cergy Pontoise
Retail parks • Fife Central Retail Park, Kirkaldy
• West Berkshire Retail Park, Theale
• Union Square, Aberdeen
• Cleveland Retail Park, Middlesbrough
• St Oswald’s Park, Phase 2, Gloucester
• Nice Lingostière, Nice
Offices • 60 Threadneedle Street, London EC2
• Northgate, London E1
• Shoreditch High Street, London E1
• Bishopsgate Goods Yard, London E1
• Paddington Triangle, London W2
UK SHOPPING CENTRE DEVELOPMENT PROGRAMME
Variable 2 – 5 years + Variable 3 years + “Fixed” 3 years +
Early Planning Project “Vision” Concept / viability Planning policy
Market positioning
Predevelopment Planning application CPO / Land Assembly
Infrastructure Anchoring
Legal agreements
Construction Process and delivery Leasing
Cost control
UK SHOPPING CENTRE DEVELOPMENT PROGRAMME
£500m £20m £50m
Variable 2 – 5 years + Variable 3 years + “Fixed” 3 years +
Early Planning Project “Vision” Concept / viability Planning policy
Market positioning
Predevelopment Planning application CPO / Land Assembly
Infrastructure Anchoring
Legal agreements
Construction Process and delivery Leasing
Cost control
UK SHOPPING CENTRE DEVELOPMENT PROGRAMME
Kingston West Quay III
Sheffield Leeds
Peterborough Brent Cross
Martineau Galleries
Bristol Leicester
Variable 2 – 5 years + Variable 3 years + “Fixed” 3 years +
Early Planning Project “Vision” Concept / viability Planning policy
Market positioning
Predevelopment Planning application CPO / Land Assembly
Infrastructure Anchoring
Legal agreements
Construction Process and delivery Leasing
Cost control
£500m £20m £50m
NEW RETAIL QUARTER, SHEFFIELD
• John Lewis confirmed as anchor
• EP early funding of enabling works
• Control over 50% of development site
• Planning decision imminent
NEW RETAIL QUARTER, SHEFFIELD
• Scheme of 100,000 m²
• 22,000 m² anchor store and 120 units
• 200 residential units
• Over 2,000 car spaces
• Total development cost £475 million
• Start on site 2008
• Phased completion to 2012
• John Lewis confirmed as anchor
• Development Agreement terms in discussion with Council
• Planning application submitted
• 90/10 JV with Town Centre Securities
EASTGATE, LEEDS
EASTGATE, LEEDS • 110,000 m² scheme
• 22,000 m² anchor store and 130 units
• Up to 600 residential units
• 2,500 car parking spaces
• Total development cost £650 million
• Possible start on site 2009
BRENT CROSS/ CRICKLEWOOD
• Supportive regional, local and supplementary planning policy
• Cooperation with Barnet Council and GLA
• Partnership with Cricklewood Regeneration Limited (CRL)
• Planning application early 2007
BRENT CROSS • Joint venture with Standard Life Investments
(Hammerson share 40.6%)
• Existing scheme of 81,600 m²;
• Proposed expansion to provide additional:
55,000 m² retail
20,000 m² leisure
850 residential units
• Total development cost – £650 million
• Possible start on site 2009
CRICKLEWOOD
• 50:50 joint venture with Multiplex
• 970,000 m² scheme comprising:
6,700 residential units
390,000 m² of business accommodation
Hotel, community, leisure and neighbourhood retail facilities
WEST QUAY III, SOUTHAMPTON
• Leisure and retail
• Selected by Council as preferred partner
• Masterplan adopted as planning policy
• Cooperation with Council on adjoining Arena site development
• Planning application 2007
WEST QUAY III, SOUTHAMPTON
• 20,000 m² retail and leisure scheme
• Up to 200 residential units
• Total development cost £75 million
EDEN QUARTER, KINGSTON UPON THAMES
• Cooperation Agreement with Council
• Partnering relationship with Coal Pensions on Eden Walk
• Planning policy “20/20 Vision”
• Planning application 2007
EDEN QUARTER, KINGSTON UPON THAMES
• 70,000 m² retail
• Major new anchor
• 250 residential units
• Total development cost £700 million
HAMMERSON UK SHOPPING CENTRES 2006
100 Eden Quarter KingstonuponThames 81,100 50 Queensgate Peterborough
90 Eastgate Leeds
100 New Retail Quarter Sheffield
50 Union Square Aberdeen
50 Broadmead Bristol
49,200 60 The Shires Leicester
124,900 33.3 Bullring Birmingham 76,300 100 WestQuay Southampton
71,100 50 The Oracle Reading
33.3 Martineau Galleries Birmingham
100
40.6
Hammerson Share (%)
532,800 TOTAL
48,600 The Liberty Romford
81,600 Brent Cross London
Size (m²) Scheme Location
FUTURE SHAPE OF THE SHOPPING CENTRE PORTFOLIO
80,000 100 Eden Quarter KingstonuponThames
130,000 81,100 50 Queensgate Peterborough
110,000 90 Eastgate Leeds
80,000 100 New Retail Quarter Sheffield
50,000 50 Union Square Aberdeen
90,000 50 Broadmead Bristol
110,000 49,200 60 The Shires Leicester
124,900 124,900 33.3 Bullring Birmingham 96,300 76,300 100 WestQuay Southampton
71,100 71,100 50 The Oracle Reading
33.3 Martineau Galleries Birmingham
100
40.6
Hammerson Share (%)
1,126,900
48,600
136,000
Size (m²)
532,800 TOTAL
48,600 The Liberty Romford
81,600 Brent Cross London
Size (m²) Scheme Location
2006 2012+
QUEENSGATE, PETERBOROUGH
Peter Cole
QUEENSGATE, PETERBOROUGH
• Existing scheme of 81,100 m²
• 50% interest acquired in 2005 for for £156 million
• Anchored by John Lewis and Marks & Spencer
• Initial yield 5.1%
• Hammerson asset and development manager
QUEENSGATE CATCHMENT
015min: 125,000
1530min: 105,000
3045min: 303,000
Total adult population 532,000
Source: Experian Micromarketer
THE OPPORTUNITY
• Active management of existing centre
• Expansion and refurbishment potential
• Create dominant regional centre
QUEENSGATE, PETERBOROUGH
• Completed scheme of 130,000 m² including 50,000 m² extension
• A new department store
• Five new MSUs and 55 new retail units
• 12 screen multiplex cinema
• 20 restaurants
• 3,200 new shopper car parking spaces
• Two public squares
• 60 residential units
• Refurbishment of existing centre
• Estimated total development cost £335 million
THE SITE
QUEENSGATE CENTRE, PETERBOROUGH
QUEENSGATE, PETERBOROUGH
REFURBISHED QUEENSGATE
Central Space John Lewis Mall
PROJECT PROGRESS
• Development Agreement completed
• Public consultation completed
• Planning application autumn 2006
• Initial leasing discussions underway
• Potential start on site 2008
SUMMARY
• Vision …Enhance position in top 30 retail destinations
• Key aspect of Hammerson’s overall strategy
• Drive performance of existing retail assets
• Exploit future development pipeline
• Capitalise on group’s reputation amongst city councils
DISCLAIMER This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forwardlooking 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 basis.
Readers are cautioned not to place undue reliance on these forwardlooking statements, which speak only as of the date of this document. Hammerson does not undertake any obligation to publicly release any revisions to these forwardlooking 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.
