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