British Land Company PLC

Retail warehouse portfolio

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British Land's share

£2.3 billion

Total value £3.7 billion

Tenants include:

Arcadia, Argos, Asda/Asda Living, B&Q, Bhs, Blacks, Boots, Borders, Carpetright, Comet, Currys, DFS, Gap, Halfords, Homebase, Instore, JJB Sports, Mamas & Papas, Marks & Spencer, Matalan, Morrisons, Mothercare, New Look, Next, PC World, Pets at Home, River Island, Sainsbury's, Sports World, Tesco, TK Maxx, Toys R Us, Virgin, WH Smith, Zara

• Predominantly freehold
• Rent passing, British Land's share £156 million pa
• Average rent £22.20 per sq ft
• Weighted average lease term including breaks 11.6 years

British Land's retail warehouse park investments represent 26% of the portfolio. Included in these investments are:

Teesside Shopping Park, Stockton-on-Tees

This freehold property is located at the intersection of the A66 and A19 trunk roads between Stockton-on-Tees and Middlesbrough and comprises:

• Phase 1: 342,000 sq ft of open A1 retail space arranged in 33 units, on a site of 47 acres;
• Phase 2: an 8.1 acre site located on the park's principal access comprises two retail units totalling 42,000 sq ft and five restaurant units totalling 18,000 sq ft; and
• Phase 3: an 8,000 sq ft retail unit and the reversionary interest in the adjoining unit, plus a 27 acre site which may be considered for future development.

Top rents at the park are now £47.50 per sq ft.

Giltbrook Retail Park, Nottingham
A mixed use freehold park with 187,000 sq ft of retail space subject to open restricted planning consent and 72,000 sq ft of industrial space. Following completion of the recent development of the scheme, the retail element comprises 15 units including the pre-existing 60,000 sq ft Decathlon unit. Other key tenants include Bhs, Boots, Carpetright, Comet and Next.

The Kingston Centre, Kingston, Milton Keynes
(50% owned in Tesco BL Holdings joint venture)

The Kingston Centre occupies a freehold 35 acre site, close to junctions 13 and 14 of the M1 motorway and provides a total of 247,000 sq ft of open A1 retail space.

The Centre includes: a 140,600 sq ft Tesco Extra superstore; eight retail warehouses totalling 92,900 sq ft let to tenants including Boots, Mamas & Papas, Marks & Spencer, Mothercare and Next; a covered shopping mall with 12 units totalling a further 9,200 sq ft; a drive-thru McDonald's; a pub; a car showroom; and stand-alone units let to Domino's Pizza and Carphone Warehouse.

New Mersey Shopping Park, Speke (HUT)
A freehold part open A1/part restricted planning consent shopping park of 473,000 sq ft in 32 units and two restaurants. Key tenants: Boots, Borders, B&Q, Gap, Marks & Spencer, Next and River Island.

Glasgow Fort, Glasgow (HUT)
A long leasehold open A1 park of 392,000 sq ft in 66 units (plus kiosks). Key tenants: Argos, Boots, H Samuel, Mamas & Papas, New Look, Next, Oasis, River Island, Starbucks, TK Maxx, Topshop, Virgin and Zara.

Parkgate Shopping Park, Rotherham (HUT)
A freehold open A1 park of 561,000 sq ft. There are a total of 38 retail units, a 95,000 sq ft Morrisons foodstore and three stand-alone food outlets. Key tenants: Bhs, Boots, Marks & Spencer, Matalan, New Look, Next and TK Maxx.

Fort Kinnaird Shopping Park, Edinburgh (HUT)
A long leasehold open A1 shopping park of 474,000 sq ft in 54 units, a stand-alone food outlet and office space of 21,500 sq ft. Key tenants: Borders, H&M, HMV, Marks & Spencer, Monsoon, New Look, Next and Thorntons.

Homebase DIY Stores
The portfolio of stand-alone Homebase stores comprises 10 properties. Located mainly in the South East of England, annual rents total £7.8 million, averaging £21.20 per sq ft. The majority are let on 20 year leases from December 2000. Total floor area is 369,000 sq ft.

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Superstores portfolio

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British Land's share

£1.1 billion

Total value £2.0 billion

Tenants:

Marks & Spencer (1 store), Sainsbury's (41 stores), Somerfield (25 stores), Tesco (35 stores), Waitrose (1 store)

• 29 stores 100% owned
• 74 stores owned 50% in joint ventures
• Rent passing, British Land's share £69 million pa
• Average rent £21.10 per sq ft
• Weighted average lease term to break (and expiry) 18.1 years

British Land's investment in superstores represents 12% of the total portfolio.

We are the largest owner of UK superstores, other than the operators themselves.

The increasingly restrictive regulatory and planning environment, coupled with a highly competitive occupational market maintains occupier preference for long term secure leases and supports demand tension leading to rental growth.

British Land has formed two strategic joint ventures with Tesco and Sainsbury's; working with the operators themselves helps align our business strategies to maximise the value of our assets.

During the year we have funded four further extensions to properties in our Tesco joint ventures totalling 50,300 sq ft producing an additional income of £1.1 million pa. In total we have enlarged our superstore portfolio by 802,000 sq ft over the period of our ownership.

As operators are expanding into smaller formats we are now including foodstores under 25,000 sq ft in this category which were previously included in the in-town portfolio.

Additionally British Land owns 22 units let to food retailers on retail parks and shopping centres, totalling some 1.2 million sq ft. These are included in the valuations of our retail warehouse and shopping centre portfolios.

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Meadowhall, Sheffield

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British Land's share

£573 million

Total value £1,145 million

Anchor stores:

Bhs, Boots, Debenhams, H&M, House of Fraser, Marks & Spencer, New Look, Next, Primark, Topshop/Topman, WH Smith

• Freehold
• 50% owned
• Rent passing, British Land's share £36 million pa
• Average rent £56.90 per sq ft
• Weighted average lease term including breaks 12.0 years

Meadowhall continues to be one of the largest and most successful shopping centres in the UK - a prime super-regional centre in a densely populated catchment area.

The two level, fully enclosed mall with excellent transport links is attractive to both retailers and customers, with 19 retailers new to Meadowhall having taken space over the last year.

Existing retailers are also performing strongly with New Look joining Next and Topshop in relocating their stores to double their space to 34,000 sq ft. Elsewhere in the scheme Abercrombie and Fitch (trading as Hollister), Yo! Sushi and Kurt Geiger have taken new leases further enhancing the retail mix.

The redevelopment of the upper level food court is also now complete with the addition of five new full service restaurants all of which are let or under offer. This has enabled Meadowhall to improve its quality catering offer with the addition of the likes of Zizzi and Coal.

In keeping with the new retailers, the Centre has completed a comprehensive re-branding process to inject a fresh, contemporary and more aspirational creative identity, giving Meadowhall even more customer appeal.

Working with other landlords and retailers, Meadowhall has also pioneered a service charge saving initiative to deliver budgeted savings of some 20% per annum, reducing service charge operational costs by over £2 million per annum.

Meadowhall continues to build on its range of environmental initiatives; following on from the installation of rainwater harvesting tanks, a bore hole has now been established to replenish the tanks during periods of low rainfall. It is estimated that this will result in a saving in water consumption of 75%.

Building on the success of the centre, a number of awards have been won this year:

• The Sheffield Telegraph Environment Awards 2008 - in recognition of the energy and waste management systems;
• Business in the Community Big Tick Awards 2008 - for energy efficiency and waste management;
• Business in the Community Awards 2008 - for the employability programme run by The Source;
• Business in the Community Active Communities Award 2009 - for The Source;
• Business in the Community Education Award 2009 - for the schools programme at The Source;
• CIPD Learning and Development Award Finalist 2008 - for The Source;
• BCSC Purple Apple Marketing Award 2008 - for the 'Wow campaign'; and
• Act Travelwise 'Commuter Friendly Workplace of the Year 2008'.

Meadowhall has also been put forward for a Pan-European award for workplace mobility, recognising the unrivalled choice and commitment to public transport at the centre.

The multi award winning Source at Meadowhall (which provides training, developments and conference services) has now established itself as a regional Skills Academy for retail, linking up with a national network. The Source has also been recognised in the Sunday Times top 100 companies to work for, achieving 17th position in the rankings.

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