Our priorities
Over many years we have succeeded by being strong in managing day-to-day operations while maintaining a long-term perspective on value generation.
This approach guided our actions through a demanding 2008/09 and continues to be the key focus for the Group in the current financial year. In particular, we have kept a tight focus on three priorities – the need to act decisively and protect value today, while planning well ahead for tomorrow.
This page outlines our three priorities in more detail. And it discusses the actions we are taking to ensure that the Group can compete hard today while preparing for growth tomorrow.
Act decisively
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Target sales not sell, sell, sell
Investment portfolio sales
A key part of managing our balance sheet was continuing to sell assets. The proceeds of £765.5m helped fund our development programme and reduce our group Loan To Value, a key driver of delivering future value. The assets sold were on average, 0.3% below their March valuations, against a market that as a whole fell by 2.5% over the period. We sold well and importantly none of the assets sold have impacted the appeal of our portfolio to our major customers.
On track at Trinity Quarter
Trinity Quarter, Leeds
Our Trinity Leeds scheme will deliver a great shopping destination for Leeds. We’re excited by the effect it will have on the city, but changing market conditions meant we had to take the tough decision to re-schedule completion. We still plan to open for Christmas 2012, and we’re making good progress on the pre-lettings needed before we can restart construction.
It's all about timing
Development timing
The timing of new developments is critical now the market cycle is beginning to move into a new phase. In London, we think rental growth will return first in the West End, and we’re now out to tender on three development projects Park House, W1; Selborne House, SW1 and Wellington House, SW1. Our plan is to start all three projects in 2010 (645,600 sq ft) with completions scheduled for late 2012 or early 2013, when we expect to see stronger occupational demand and rising rents.
Protect value
Good news at Thomas More Square
News International letting
Thomas More Square is a business village on the edge of the City of London. With co-owners Cadillac Fairview, we took the decision to make the asset more attractive so it could compete harder for the right tenants. We refurbished reception areas and office accommodation, modernised piazzas and courtyards and created energy saving initiatives. News International has now made the decision to move into 192,000 sq ft of the site for a term of up to 10 years and a total rent of £4.2m per annum. This is the largest letting of secondhand office space in London for some time.
Saving for the future
The Ten Point Plan
During very demanding economic conditions we all need to support each other. That’s the thinking behind The Ten Point Plan, an initiative supported by us to help landlords and tenants develop new ways to reduce service charges and lower other costs. Following publication of the plan, we created a dedicated team of employees and retailer employees that visited all of our centres and helped turn good ideas into tangible savings.
All change in the City
One New Change tops out
Our landmark City of London development, One New Change, has reached its highest point, with the last piece of cement placed at the top of the building in October. It is set to open in time for Christmas 2010 and will lead the transformation of the City into a seven-day shopping and leisure destination with a difference. Around half of the 65 shops and restaurants have already been let or reserved, and with already 33% of office space pre-let we are preparing for strong demand from office occupiers as we move towards opening.
Plan well ahead
Financial firepower
Debt repayment
During the Half Year we repaid £1.5 billion of debt. Our improved financial position helped us to maintain an AA credit rating, which in turn will help lower the cost of finance in the medium term, giving us considerable competitive advantage as we move into the next cycle. Meanwhile, the proceeds of recent asset sales and our Rights Issue means we have the resources needed to start developments and make acquisitions. Our financial flexibility should prove invaluable as a changing market generates attractive opportunities.
Reality TV
Energy screens at New Street Square
Our New Street Square, London EC4, development was built with the environment in mind. Now we’ve added new energy screens in the lift lobbies to ensure environmental performance stays top of mind for tenants. The screens provide a real-time picture of energy and water use within the building, with icons, graphs, words and images conveying what’s going on. Early signs suggest better information really can influence behaviour and reduce waste.
Planning success
City Forum
We have received planning consent for our proposed City Forum scheme, a major mixed-use development in Islington, London. The application, submitted jointly with Frogmore and Galliard Homes, sets out plans for a residential-led development that will make a major contribution to the regeneration of this part of the capital, just north of the City. It will include 720 homes; office, retail and restaurants; a new hotel; and student accommodation, together with community areas and more than 1,000 bike spaces.
