SRI INVESTOR TOUR 29 May 2008
PORTFOLIO As at 31 December 2007 Total portfolio: 7.3 billion UK Offices 22% UK Shopping Centres 32% France Offices 5% France Retail 23% UK Retail Parks 17% Germany Retail 1% Total portfolio: 6.7 billion Average unexpired lease term 10.5 years Occupancy rate 98.2% Investment portfolio 6.6% reversionary 2
PROPERTIES DEVELOPED BY HAMMERSON The Oracle, Reading WestQuay, Southampton Total portfolio: 7.5 billion Bullring, Birmingham Bishops Square, London E1 3
CURRENT DEVELOPMENTS Parinor, Aulnay-sous-Bois 60 Threadneedle Street, London EC2 125 Old Broad Street, London EC2 4 Cabot Circus, Bristol
FUTURE DEVELOPMENTS Sevenstone, Sheffield Bishops Place, London E1 Les 3 Fontaines, Cergy - Pontoise Cricklewood, North London 5
THE HAMMERSON CYCLE Active Portfolio Management Design Design & & Planning Planning Asset Asset Management Hammerson Corporate Construction Construction Letting 6
CR MANAGEMENT Development Operations Corporate CR GROUP Development CR GROUP Operations Corporate 7
MATERIAL CR ISSUES Development Operations Corporate Climate change and energy Resource use Community regeneration Supply chain Customers 8
DEVELOPMENT ACTIVITIES Major development programme and pipeline All development on brownfield land Typical 450 million annual project spend Working with councils on major development projects in 12 cities Cabot Circus, Bristol 9
DEVELOPMENT KEY CONSIDERATIONS Climate change and energy Resource use Community regeneration Supply chain Customers Design and Planning Aspirations of city councils Community consultation Design and connectivity Construction Contractor engagement Energy, water, waste efficiency Recycling of materials on-site Letting Meeting occupier requirements Improving occupier performance (financial and CR) 10
DEVELOPMENT - INITIATIVES INITIATIVE Audit of all projects under construction BENEFIT TO HAMMERSON Recognition by City Councils of good environmental management leads to access to future projects RESULT (EXAMPLE) BREEAM Excellent (Cabot Circus) BREEAM Very Good (Highcross Leicester) Waste, water & energy monitoring and reporting by contractors Lower construction costs 54% on-site recycling during Highcross construction Sustainability workshops held with councils and anchor retailers for future retail developments Enhanced reputation with Councils and with anchor retailers Objectives set to feed into sustainability implementation plans for developments Pre-employment training for jobs created in retail developments Provision of skilled local workforce provides incentive to retailers to lease stores 1 million government funding accessed for 6,000 jobs in Bristol and Leicester 11
OPERATIONS: IMPACTS 55,000 tonnes of CO 2 emitted across UK portfolio 408,000 m 3 of water used across UK portfolio 14,800 tonnes of waste across UK portfolio 1,300 retail occupiers 130 office occupiers Bullring, Birmingham 200 million visits to shopping centres each year 12
OPERATIONS KEY CONSIDERATIONS Climate change and energy Resource use Community regeneration Asset management Customer relationships Improve environmental performance of buildings Measurement, monitoring and reporting Positive contribution to local communities Supply chain Customers 13
OPERATIONS - INITIATIVES Initiative Benefit to Hammerson Result (example) Reduce energy use in managed portfolio Lower carbon emissions from managed portfolio in line with future legislation Shopping centre energy reductions 2007: 12% ( UK) 11% (France) Green leases Lower energy costs result in lower service charges for retailers 27 tenants signed up to green lease since October 2007 Increase recycling Reduce costs by combating yearly increases in landfill tax set by legislation 50% of waste diverted from landfill in 2007 14
CORPORATE KEY CONSIDERATIONS Climate change and energy Resource use Community regeneration Supply chain Active portfolio management Sustainability considerations included in acquisitions criteria Management Board responsibility for CR and corporate governance Benchmarking Staff training and development Stakeholder communications Customers 15
CORPORATE - INITIATIVES Initiative Community investment programmes Benefit to Hammerson Goodwill supports shopping centre footfall Support from local communities facilitates planning process Result (example) 700,000 invested in communities in locality of UK offices, shopping centres & retail parks Best practice community consultation Thorough consultation results in higher success rate in planning applications Consultations carried out in Sheffield, Leeds, London Supplier engagement Manage reputational risk Responsible procurement policy in development Staff training and development Staff retention and broader skills base Diversity training for all UK staff in 2007; internal redeployment programme in France 16
LEGISLATIVE CONTEXT Energy Buildings Performance Directive 2008 Code for Non-Domestic Buildings 2008 Code for Sustainable Homes 2007 Carbon Reduction Commitments 2010 Climate Change Bill 2008 Climate Change Levy 2000 Supplements to the London Plan 2008 Landfill Regulations 2002, 2004, 2005 17
CR SUMMARY Focus on material issues Emphasis on environmental planning Monitoring and measuring Targets established Leader in economic and social regeneration Developer of choice for local authorities, occupiers, suppliers 18
HIGHCROSS LEICESTER
THE SHIRES Existing scheme of 46,000 m², built 1991 Anchored by Debenhams and House of Fraser 60% interest acquired 2002 for 110 million from Hermes Opportunity to grow retail turnover and rents 20
THE OPPORTUNITY Matlock Matlock Matlock Matlock Alfreton Alfreton LLL eic es atc hhm m es id ent opulation Alfreton Alfreton eic ester hhm ment ent id entttp opulation eices ter C atc en R es iden P opu Newark-on-Trent Newark-on-Trent eices terc C atc entt R R es iden P opulation lation Newark-on-Trent Newark-on-Trent Leek Leek Leek Leek Stoke-on-Trent Stoke-on-Trent (Hanley) Ashbourne Stoke-on-Trent(Hanley) (Hanley) Ashbourne Stoke-on-Trent (Hanley) Ashbourne Ashbourne Add value through active asset management Sleaford Sleaford Sleaford Sleaford Nottingham Nottingham Nottingham Nottingham Stone Stone Stone Stone Derby Derby Derby Derby Uttoxeter Uttoxeter Uttoxeter Uttoxeter Grantham Grantham Grantham Grantham Burton Burton upon Trent Burton upon Trent Burtonupon upontrent Trent Stafford Stafford Stafford Stafford Tertia ry Tertia ry Tertia ry Tertia ry 765,800 765,800 765,800 765,800 Cannock Cannock Cannock Cannock Loughborough Loughborough Loughborough Loughborough Ashby-de-la-Zouch Ashby-de-la-Zouch Ashby-de-la-Zouch Ashby-de-la-Zouch Melton Melton Mowbray Melton MeltonMowbray Mowbray Mowbray Lichfield Lichfield Lichfield Lichfield Brownhills Brownhills Brownhills Brownhills Tamworth Tamworth Tamworth Tamworth SS eeconda conda ry ry S e conda ry S econda ry 359,900 359,900 359,900 359,900 Oakham Oakham Oakham Oakham Leicester Leicester Leicester Leicester Uppingham Uppingham Uppingham Uppingham Wolverhampton Wolverhampton Walsall Walsall Wolverhampton Wolverhampton Walsall Walsall Core Core Core Core 371,400 371,400 371,400 371,400 Hinckley Hinckley Hinckley Hinckley Nuneaton Nuneaton Nuneaton Nuneaton Dudley Dudley Dudley Dudley Market Market Harborough Harborough Market Market Harborough Harborough Birmingham Birmingham Birmingham Birmingham Bourne Bourne Bourne Bourne Spalding Spalding Spalding Spalding Higher mix of affluent ABs than most other provincial cities in UK. Stamford Stamford Stamford Stamford Peterborough Peterborough Peterborough Peterborough Change public perception of Leicester Corby Corby Corby Corby Stourbridge Stourbridge Stourbridge Stourbridge Total Total Total C atc hhm en ttt Bromsgrove Bromsgrove atc Bromsgrove Bromsgrove C atch m en Catch m en Redditch Redditch Redditch Redditch P oopu pu oopu pulation PP lation lation Droitwich Droitwich Droitwich Droitwich 1.5 nn Millio 1.5 Million 1.5Millio Million Coventry Coventry Coventry Coventry Exploit potential for expansion and refurbishment Catchment of 1.5 million people Kettering Kettering Kettering Kettering Rugby Rugby Rugby Rugby Huntingdon Huntingdon Huntingdon Huntingdon Warwick Warwick Leamington Spa Warwick Warwick Leamington Leamington LeamingtonSpa Spa Spa Daventry Daventry Daventry Daventry Northampton Northampton Northampton Northampton St St Neots St StNeots Neots Neots 21
CITY CENTRE MASTERPLAN Extended retail Science and technology park Enhanced business quarter Residential community Waterside regeneration (11 miles of waterfront) Improved city centre environment 22
OVERVIEW 350 million total spend (60:40 joint venture with Hermes) Anchored by John Lewis and 12-screen Cinema de Lux (new development); Debenhams and House of Fraser (existing asset) 30,000 m² additional shop units; 6,000 m² cafés and restaurants; 140 residential units Two new public squares 120 fashion retailers; 15 restaurants and cafés 2000 retail and leisure jobs created in city centre 23
PROJECT OBJECTIVES Restore commercial and civic heart to Leicester Create a vibrant evening economy Enhance quality of built environment Set new standards in environmental sustainability Increase consumer spend and dwell time in existing centre Drive rents and other income 24
MASTERPLANNING AND DESIGN Upgrading of existing centre Connectivity Mix of uses Diverse architecture 25
ENVIRONMENTAL PROFILE Environmental ratings include BREEAM Very Good; Ecohomes Very Good; Code for Sustainable Homes Level 3 Upgrading of old: Decommissioning of air-conditioning units in existing centre; maximised daylight Occupiers: Green lease and Tenants Sustainability Guide Transport: new transport hub to promote public transport use and connectivity Energy: Installation of energy efficient lighting and sub-metering in shopping centres; solar and gas heating in residential Water: Incorporation of low-flow fittings, dual-flush WCs and sensor controlled taps to improve water efficiency Waste: 24-37% recycled content in projects under construction 26
SOCIAL PROFILE: WORK HIGHCROSS Charter for employment and training Work Highcross initiative set up to fill 2,000 retail and leisure jobs 5,000 jobseekers now registered on database Intention to fill 65% of vacancies from local unemployment pool Guaranteed interviews for 250 John Lewis jobs for Work Highcross participants Follows similar Hammerson initiatives in Reading, Southampton and Birmingham 27
HIGHCROSS SUMMARY Major element of Leicester city centre regeneration Improvements to public realm Upgrading of existing centre enhances attractiveness to retailers and efficiency of resource use Focus on environmental considerations in design and construction Implementation of Hammerson pre-employment training programme Completion scheduled for September 2008 28