RNS Number : 3501F
British Land Co PLC
17 May 2017

THE BRITISH LAND COMPANY PLC

Consolidated income statement

For the year ended 31 march 2017


Note


2017


2016


Underlying 1

m

Capital
and other
m

Total
m


Underlying1

m

Capital
and other
m

Total
m

Revenue

3


556

33

589


569

21

590

Costs

3


(122)

(26)

(148)


(128)

(11)

(139)


3


434

7

441


441

10

451

Joint ventures and funds (see also below)

8


132

(80)

52


135

262

397

Administrative expenses



(84)

-

(84)


(93)

-

(93)

Valuation movement

4


-

(144)

(144)


-

616

616

(Loss) profit on disposal of investment properties and investments



-

(5)

(5)


-

35

35

Net financing costs










- financing income

5


2

42

44


5

65

70

- financing charges

5


(80)

(29)

(109)


(111)

(34)

(145)




(78)

13

(65)


(106)

31

(75)

Profit on ordinary activities before taxation



404

(209)

195


377

954

1,331

Taxation

6



1

1



33

33

Profit for the year after taxation





196




1,364

Attributable to non-controlling interests



14

(11)

3


14

5

19

Attributable to shareholders of the Company



390

(197)

193


363

982

1,345

Earnings per share:










- basic

2




18.8p




131.2p

- diluted2

2




14.7p




119.7p

All results derive from continuing operations.


Note


2017


2016


Underlying 1

m

Capital

and other
m

Total
m


Underlying1

m

Capital

and other
m

Total
m

Results of joint ventures and funds accounted for using the equity method










Underlying Profit



132

-

132


135

-

135

Valuation movement

4


-

(93)

(93)


-

245

245

Capital financing costs



-

(6)

(6)


-

-

-

Profit on disposal of investment properties, trading properties and investments



-

18

18


-

18

18

Taxation



-

1

1


-

(1)

(1)


8


132

(80)

52


135

262

397

1 See definition in glossary.

2 Prior year diluted EPS has been restated. See note 1.

Consolidated statement OF COMPREHENSIVE INCOME

For the year ended 31 march 2017


2017

m

2016

m

Profit for the year after taxation

196

1,364

Other comprehensive (loss) income:



Items that will not be reclassified subsequently to profit or loss:



Net actuarial loss on pension schemes

(12)

(1)

Valuation movements on owner-occupied properties

-

19


(12)

18

Items that may be reclassified subsequently to profit or loss:



(Losses) gains on cash flow hedges



- Group

(21)

(24)

- Joint ventures and funds

1

(3)


(20)

(27)

Transferred to the income statement (cash flow hedges)



- Foreign currency derivatives

-

2

- Interest rate derivatives

16

10


16

12

Exchange differences on translation of foreign operations



- Hedging and translation

-

(3)

- Other

-

3


-

-




Deferred tax on items of other comprehensive income

-

(15)




Other comprehensive loss for the year

(16)

(12)

Total comprehensive income for the year

180

1,352

Attributable to non-controlling interests

3

19

Attributable to shareholders of the Company

177

1,333

Consolidated BALANCE SHEET

AS AT 31 march 2017


Note


2017

m

2016

m

ASSETS





Non-current assets





Investment and development properties

7


9,073

9,643

Owner-occupied properties

7


94

95




9,167

9,738

Other non-current assets





Investments in joint ventures and funds

8


2,766

3,353

Other investments

9


154

142

Deferred tax assets

13


4

3

Interest rate and currency derivative assets

14


217

167




12,308

13,403

Current assets





Joint venture held for sale

8


540

-

Trading properties

7


334

325

Debtors

10


171

33

Cash and short term deposits

14


114

114




1,159

472

Total assets



13,467

13,875

LIABILITIES





Current liabilities





Short term borrowings and overdrafts

14


(464)

(74)

Creditors

11


(458)

(218)

Corporation tax



(30)

(18)




(952)

(310)

Non-current liabilities





Debentures and loans

14


(2,817)

(3,687)

Other non-current liabilities

12


(78)

(122)

Interest rate and currency derivative liabilities

14


(144)

(137)




(3,039)

(3,946)

Total liabilities



(3,991)

(4,256)

Net assets



9,476

9,619

EQUITY





Share capital



260

260

Share premium



1,298

1,295

Merger reserve



213

213

Other reserves



(97)

(93)

Retained earnings



7,547

7,667

Equity attributable to shareholders of the Company



9,221

9,342

Non-controlling interests



255

277

Total equity



9,476

9,619

EPRA NAV per share*

2


915p

919p

* As defined in glossary.

Consolidated statement OF CASH FLOWS

For the year ended 31 march 2017


Note


2017

m

2016

m

Rental income received from tenants



464

435

Fees and other income received



64

58

Operating expenses paid to suppliers and employees



(149)

(152)

Cash generated from operations



379

341






Interest paid



(92)

(124)

Interest received



8

11

Corporation taxation repayments received



9

8

Distributions and other receivables from joint ventures and funds

8


59

58

Net cash inflow from operating activities



363

294






Cash flows from investing activities





Development and other capital expenditure



(225)

(256)

Purchase of investment properties



(87)

(243)

Sale of investment and trading properties



761

564

Payments received in respect of future trading property sales



8

40

Purchase of investments



(19)

-

Indirect taxes paid in respect of investing activities



(1)

-

Investment in and loans to joint ventures and funds



(50)

(241)

Capital distributions and loan repayments from joint ventures and funds



83

366

Net cash inflow from investing activities



470

230






Cash flows from financing activities





Issue of ordinary shares



3

5

Purchase of own shares



(8)

-

Dividends paid

15


(295)

(235)

Dividends paid to non-controlling interests



(14)

(16)

Acquisition of units in Hercules Unit Trust



(11)

(61)

Closeout of interest rate derivatives



(13)

15

Cash collateral transactions



-

(24)

Decrease in bank and other borrowings



(526)

(919)

Drawdowns on bank and other borrowings



31

373

Drawdown of zero coupon 2015 convertible bond



-

344

Net cash outflow from financing activities



(833)

(518)






Net increase in cash and cash equivalents



-

6

Cash and cash equivalents at 1 April



114

108

Cash and cash equivalents at 31 March



114

114






Cash and cash equivalents consists of:





Cash and short term deposits

14


114

114

Consolidated statement OF CHANGES IN EQUITY

For the year ended 31 march 2017


Share

capital

m

Share

premium

m

Hedging

and

translation

reserve1

m

Re-

valuation

reserve

m

Merger

reserve

m

Retained

earnings

m

Total

m

Non-controlling

interests

m

Total

equity

m

Balance at 1 April 2016

260

1,295

(107)

14

213

7,667

9,342

277

9,619

Profit for the year after taxation

-

-

-

-

-

193

193

3

196

Losses on cash flow hedges

-

-

(21)

-

-

-

(21)

-

(21)

Exchange and hedging movements in joint ventures
and funds

-

-

-

1

-

-

1

-

1

Reclassification of gains on cash flow hedges










Foreign currency derivatives

-

-

-

-

-

-

-

-

-

Interest rate derivatives

-

-

16

-

-

-

16

-

16

Net actuarial loss on pension schemes

-

-

-

-

-

(12)

(12)

-

(12)

Other comprehensive (loss) income

-

-

(5)

1

-

(12)

(16)

-

(16)

Total comprehensive income for the year

-

-

(5)

1

-

181

177

3

180

Share issues

-

3

-

-

-

-

3

-

3

Fair value of share and share option awards

-

-

-

-

-

2

2

-

2

Purchase of own shares

-

-

-

-

-

(8)

(8)

-

(8)

Purchase of units from non-controlling interests

-

-

-

-

-

-

-

(11)

(11)

Gain on purchase of units from non-controlling interests

-

-

-

-

-

1

1

-

1

Dividends payable in year (28.8p per share)

-

-

-

-

-

(296)

(296)

-

(296)

Dividends payable by subsidiaries

-

-

-

-

-

-

-

(14)

(14)

Balance at 31 March 2017

260

1,298

(112)

15

213

7,547

9,221

255

9,476











Balance at 1 April 2015

258

1,280

(76)

(6)

213

6,563

8,232

333

8,565

Profit for the year after taxation

-

-

-

-

-

1,345

1,345

19

1,364

Losses on cash flow hedges

-

-

(24)

-

-

-

(24)

-

(24)

Revaluation of owner-occupied property

-

-

-

19

-

-

19

-

19

Exchange and hedging movements in joint ventures
and funds

-

-

-

(3)

-

-

(3)

-

(3)

Reclassification of (losses) gains on cash flow hedges










Foreign currency derivatives

-

-

2

-

-

-

2

-

2

Interest rate derivatives

-

-

10

-

-

-

10

-

10

Exchange differences on translation of foreign operations

-

-

(3)

3

-

-

-

-

-

Net actuarial loss on pension schemes

-

-

-

-

-

(1)

(1)

-

(1)

Deferred tax on items of other comprehensive income

-

-

(16)

1

-

-

(15)

-

(15)

Other comprehensive (loss) income

-

-

(31)

20

-

(1)

(12)

-

(12)

Total comprehensive income for the year

-

-

(31)

20

-

1,344

1,333

19

1,352

Share issues

2

15

-

-

-

(12)

5

-

5

Fair value of share and share option awards

-

-

-

-

-

8

8

-

8

Purchase of units from non-controlling interests

-

-

-

-

-

-

-

(59)

(59)

-

-

-

-

-

(1)

(1)

-

(1)

Dividends payable in year (28.0p per share)

-

-

-

-

-

(287)

(287)

-

(287)

Dividends payable by subsidiaries

-

-

-

-

-

-

-

(16)

(16)

Adjustment for scrip dividend element

-

-

-

-

-

52

52

-

52

Balance at 31 March 2016

260

1,295

(107)

14

213

7,667

9,342

277

9,619

1 The balance at the beginning of the current year includes 9m in relation to translation and (116m) in relation to hedging (2015/16: 10m and (86m)).

Notes to the accounts

1 Basis of preparation, significant accounting policies and accounting judgements

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2017 or 2016, but is derived from those accounts. Statutory accounts for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of Companies Act 2006 or equivalent preceding legislation.

The financial statements for the year ended 31 March 2017 have been prepared on a historical cost basis, except for the revaluation of properties, investments held for trading and derivatives. The financial statements have also been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and therefore comply with Article 4 of the EU IAS Regulation.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in June 2017.

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective for the current accounting period. None of these are expected to have a material impact on the consolidated financial statements of the Group.

Certain standards which could be expected to have an impact on the consolidated financial statements are discussed in further detail below.

IFRS 9 - Financial Instruments (effective year ending 31 March 2019). The new standard addresses the classification, measurement and recognition of financial assets and financial liabilities. It simplifies the existing categories of financial instruments, introduces an expected credit loss model and redefines the criteria required for hedge effectiveness. On adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group. There will however be limited changes to presentation and disclosure.

IFRS 15 - Revenue from contracts with customers (effective year ending 31 March 2019). The new standard combines a number of previous standards, setting out a five step model for the recognition of revenue and establishing principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The new standard does not apply to gross rental income, but does apply to service charge income, management and performance fees and trading property disposals. The impact of the new standard on these items of revenue is not expected to have a material impact on the consolidated financial statements of the Group.

IFRS 16 - Leases (effective year ending 31 March 2020). For lessees, it will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases will be removed. The accounting for lessors will however not significantly change. As a result on adoption of the new standard, these changes are not expected to have a material impact on the consolidated financial statements of the Group.

The Group conducted an impact assessment of the above new standards in the year, and concluded that whilst adoption of these new standards based on the Group's current activities would lead to some limited changes to presentation and disclosure, they are not expected to have a material impact on the consolidated financial statements.

Restatement

The IFRS diluted earnings per share for the year ended 31 March 2016 has been restated to reflect the full dilutive impact of the 1.5% 2012 convertible bond. This restatement reduces the diluted earnings per share measure from 124.1 pence to 119.7 pence shown on the Consolidated Income Statement and within the associated notes. This is the only financial measure within these financial statements impacted by this restatement.

Accounting judgements and estimates

In applying the Group's accounting policies, the Directors are requiredto make judgements and estimates that affect the financial statements.

Significant areas of estimation are:

Valuation of properties and investments held for trading: The Groupuses external professional valuers to determine the relevant amounts. The primary source of evidence for property valuations should be recent, comparable market transactions on an arms-length basis. However, the valuation of the Group's property portfolio and investments held for trading are inherently subjective, as they are made on the basis of assumptions made by the valuers which may not prove to be accurate.

Other less significant areas of estimation include the valuation of fixed rate debt and interest rate derivatives, the determination of share-based payment expense, and the actuarial assumptions used in calculating the Group's retirement benefit obligations.

The key areas of accounting judgement are:

REIT status: British Land is a Real Estate Investment Trust (REIT)
and does not pay tax on its property income or gains on property sales, provided that at least 90% of the Group's property income is distributed as a dividend to shareholders, which becomes taxable in their hands. In addition, the Group has to meet certain conditions such as ensuring the property rental business represents more than 75% of total profits and assets. Any potential or proposed changes to the REIT legislation are monitored and discussed with HMRC. It is Management's intention that the Group will continue as a REIT for the foreseeable future.

Accounting for joint ventures and funds: In accordance with IFRS 10 'Consolidated financial statements', IFRS 11 'Joint arrangements', and IFRS 12 'Disclosures of interests in other entities' an assessment is required to determine the degree of control or influence the Group exercises and the form of any control to ensure that the financial statement treatment is appropriate.

Interest in the Group's joint ventures is commonly driven by the terms of the partnership agreements which ensure that control is shared between the partners. These are accounted for under the equity method, whereby the consolidated balance sheet incorporates the Group's share of the net assets of its joint ventures and associates. The consolidated income statement incorporates the Group's share of joint venture and associate profits after tax.

Accounting for transactions: Property transactions are complex in nature and can be material to the financial statements. Assessment is required to determine the most appropriate accounting treatment of assets acquired and of potential contractual arrangements in the legal documents for both acquisitions and disposals. Management consider each transaction separately and, when considered appropriate, seek independent accounting advice.

Held for sale asset: On 1 March 2017 the Group exchanged conditional contracts on an agreement to sell its interest in Leadenhall Holding Co (Jersey) Limited, a joint venture with Oxford Properties. The net investment in the joint venture has been reclassified as a held for sale asset within current assets on the Group balance sheet, and the carrying amount is disclosed separately from the investment in joint ventures and funds within note 8.

Prior to exchange, held for sale criteria were not deemed to be met since the transaction relates to an illiquid asset and is subject to significant uncertainty prior to agreement of terms. However, upon exchange the sale is deemed highly probable as detailed terms have been agreed upon by relevant parties. At this point management expect the carrying amount of the Group's investment in the venture to be recovered principally through a sale transaction rather than continuing operations.

2 Performance measures

Earnings per share

The Group measures financial performance with reference to underlying earnings per share, the European Public Real Estate Association (EPRA) earnings per share and IFRS earnings per share. The relevant earnings and weighted average number of shares (including dilution adjustments) for each performance measure are shown below, and a reconciliation between these is shown within the supplementary disclosures (Table B).

EPRA earnings per share is calculated using EPRA earnings, which is the IFRS profit after taxation attributable to shareholders of the Company excluding investment and development property revaluations, gains/losses on investing and trading property disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation. In the current year, diluted EPRA earnings per share did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS diluted earnings per share includes the dilutive impact as IAS 33 ignores this hurdle to conversion. In the prior year, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.

Underlying earnings per share is calculated using Underlying Profit adjusted for underlying taxation (see note 6). Underlying Profit is the pre-tax EPRA earnings measure, with additional Company adjustments. No Company adjustments were made in either the current or prior year.

Earnings per share

2017


2016

Relevant
earnings
m

Relevant
number
of shares
million

Earnings

per share pence


Relevant
earnings
m

Relevant
number
of shares
million

Earnings

per share
pence

Underlying








Underlying basic

390

1,029

37.9


365

1,025

35.6

Underlying diluted

390

1,033

37.8


371

1,089

34.1

EPRA








EPRA basic

390

1,029

37.9


365

1,025

35.6

EPRA diluted

390

1,033

37.8


371

1,089

34.1

IFRS








Basic

193

1,029

18.8


1,345

1,025

131.2

Diluted1

160

1,091

14.7


1,303

1,089

119.7

1 Prior year diluted EPS has been restated. See note 1.

Net asset value

The Group measures financial position with reference to EPRA net asset value (NAV) per share and EPRA triple net asset value (NNNAV) per share. The net asset value and number of shares for each performance measure is shown below. A reconciliation between IFRS net assets and EPRA net assets, and the relevant number of shares for each performance measure, is shown within the supplementary disclosures (Table B). EPRA net assets is a proportionally consolidated measure that is based on IFRS net assets excluding the mark-to-market on effective cash flow hedges and related debt adjustments, the mark-to-market on the convertible bonds as well as deferred taxation on property and derivative valuations. They include the valuation surplus on trading properties and are adjusted for the dilutive impact of share options.

As at 31 March 2017, EPRA NAV and EPRA NNNAV did not include the dilutive impact of the 2012 convertible bond, as the Group's share price was below the exchange price of 693 pence. IFRS net assets includes the dilutive impact following the treatment of IFRS earnings per share. In the prior year period, both measures included the dilutive impact of the 2012 convertible bond, as the Group's share price was above the exchange price.

Net asset value per share

2017


2016

Relevant
net assets
m

Relevant
number
of shares
million

Net asset
value per
share
pence


Relevant
net assets
m

Relevant
number
of shares
million

Net asset
value per
share
pence

EPRA








EPRA NAV

9,498

1,038

915


10,074

1,096

919

EPRA NNNAV

8,938

1,038

861


9,640

1,096

880

IFRS








Basic

9,476

1,029

921


9,619

1,029

935

Diluted

9,876

1,096

901


10,019

1,096

914

Total accounting return

The Group also measures financial performance with reference to total accounting return. This is calculated as the increase in EPRA net asset value per share and dividend paid in the year as a percentage of the EPRA net asset value per share at the start of the year.


2017


2016

Decrease in NAV per share

pence

Dividend per share paid

pence

Total
accounting
return


Increase in NAV per share

pence

Dividend per

share paid

pence

Total
accounting
return

Total accounting return

(4)

28.78

2.7%


90

28.02

14.2%

3 Revenue and costs


2017


2016


Underlying
m

Capital
and other
m

Total
m


Underlying
m

Capital
and other
m

Total
m

Rent receivable

449

-

449


437

-

437

Spreading of tenant incentives and guaranteed rent increases

(9)

-

(9)


12

-

12

Surrender premia

2

-

2


2

-

2

Gross rental income

442

-

442


451

-

451

Trading property sales proceeds

-

33

33


-

21

21

Service charge income

62

-

62


72

-

72

Management and performance fees (from joint ventures and funds)

9

-

9


8

-

8

Other fees and commissions

43

-

43


38

-

38

Revenue

556

33

589


569

21

590









Trading property cost of sales

-

(26)

(26)


-

(11)

(11)

Service charge expenses

(62)

-

(62)


(72)

-

(72)

Property operating expenses

(25)

-

(25)


(26)

-

(26)

Other fees and commissions expenses

(35)

-

(35)


(30)

-

(30)

Costs

(122)

(26)

(148)


(128)

(11)

(139)


434

7

441


441

10

451

The cash element of net rental income recognised during the year ended 31 March 2017 from properties which were not subject to a security interest was 276m (2015/16: 229m). Property operating expenses relating to investment properties that did not generate any rental income were 2m (2015/16: 1m). Contingent rents of 2m (2015/16: 3m) were recognised in the year.

4 Valuation movements on property


2017

m

2016

m

Consolidated income statement



Revaluation of properties

(144)

616

Revaluation of properties held by joint ventures and funds accounted for using the equity method

(93)

245


(237)

861

Consolidated statement of comprehensive income



Revaluation of owner-occupied properties

-

19


(237)

880



5 Net financing costs

2017

m

2016

m

Underlying






Financing charges



Bank loans, overdrafts and derivatives

(3)

(30)

Other loans

(83)

(88)

Obligations under head leases

(2)

(2)


(88)

(120)

Development interest capitalised

8

9


(80)

(111)

Financing income



Deposits, securities and liquid investments

2

3

Loans to joint ventures

-

2


2

5

Net financing charges - underlying

(78)

(106)




Capital and other






Financing charges



Valuation movements on translation of foreign currency debt

-

2

Hedging reserve recycling

-

(2)

Valuation movements on fair value derivatives

51

54

Valuation movements on fair value debt

(48)

(53)

Recycling of fair value movement on close-out of derivatives

(10)

(6)

Capital financing costs1

(15)

(29)

Fair value movement on non-hedge accounted derivatives

(7)

-


(29)

(34)

Financing income



Fair value movement on convertible bonds

42

64

Fair value movement on non-hedge accounted derivatives

-

1


42

65

Net financing income - capital

13

31







Net financing costs



Total financing income

44

70

Total financing charges

(109)

(145)

Net financing costs

(65)

(75)

1 Primarily debenture bonds redemption and tender offer and purchase costs.

Interest payable on unsecured bank loans and related interest rate derivatives was 13m (2015/16: 19m). Interest on development expenditure is capitalised at the Group's weighted average interest rate of 2.4% (2015/16: 2.6%). The weighted average interest rate on a proportionately consolidated basis at 31 March 2017 was 3.1% (2015/16: 3.3%).

6 Taxation


2017
m

2016
m

Taxation income (expense)



Current taxation:



UK corporation taxation: 20% (2015/16: 20%)

(3)

(15)

Adjustments in respect of prior years

4

17

Total current taxation income

1

2

Deferred taxation on revaluations and derivatives

-

31

Group total taxation

1

33

Attributable to joint ventures and funds

1

(1)

Total taxation income

2

32




Taxation reconciliation



Profit on ordinary activities before taxation

195

1,331

Less: profit attributable to joint ventures and funds1

(52)

(397)

Group profit on ordinary activities before taxation

143

934

Taxation on profit on ordinary activities at UK corporation taxation rate of 20% (2015/16: 20%)

(29)

(187)

Effects of:



REIT exempt income and gains

28

161

Taxation losses

(2)

11

Deferred taxation on revaluations and derivatives

-

31

Adjustments in respect of prior years

4

17

Group total taxation income

1

33

1 A current taxation expense of nil (2015/16: charge of 1m) and a deferred taxation credit of 1m (2015/16: expense of nil) arose on profits attributable to joint ventures and funds. The low tax charges reflects the Group's REIT status.

Taxation expense attributable to Underlying Profit for the year ended 31 March 2017 was a nil (2015/16: 2m). Corporation taxation payable at
31 March 2017 was 30m (2015/16: 18m) as shown on the balance sheet.

7 Property

Property reconciliation for the year ended 31 March 2017


Investment


Retail

Level 3
m

Offices & residential
Level 3
m

Canada

Water

Level 3

m

Developments
Level 3
m

Investment
and
development properties
Level 3
m

Trading properties
m

Owner-
occupied
Level 3
m

Total
m

Carrying value at 1 April 2016

5,617

3,436

256

334

9,643

325

95

10,063

Additions









- property purchases

80

-

8

-

88

-

-

88

- development expenditure

12

4

10

55

81

56

-

137

- capitalised interest and staff costs

-

-

2

3

5

5

-

10

- capital expenditure on asset
management initiatives

82

9

1

-

92

-

-

92


174

13

21

58

266

61

-

327

Depreciation

-

-

-

-

-

-

(1)

(1)

Disposals

(624)

(39)

-

(7)

(670)

(26)

-

(696)

Reclassifications

-

271

27

(271)

27

(27)

-

-

Revaluations included in income statement

(105)

(57)

(18)

36

(144)

-

-

(144)

Movement in tenant incentives and contracted rent uplift balances

(41)

(8)

-

-

(49)

1

-

(48)

Carrying value at 31 March 2017

5,021

3,616

286

150

9,073

334

94

9,501

Head lease liabilities (note 12)








(64)

Valuation surplus on trading properties







83

Group property portfolio valuation at 31 March 2017







9,520

Non-controlling interests








(310)

Group property portfolio valuation at 31 March 2017 attributable to shareholders


9,210

Property valuation

The different valuation method levels are defined below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

These levels are specified in accordance with IFRS 13 'Fair Value Measurement'. Property valuations are inherently subjective as they are made on the basis of assumptions made by the valuer which may not prove to be accurate. For these reasons, and consistent with EPRA's guidance, we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. The inputs to the valuations are defined as 'unobservable' by IFRS 13 and these are analysed in a table on the following page. There were no transfers between levels in the period.

The Group's total property portfolio was valued by external valuers on the basis of fair value, in accordance with the RICS Valuation - Professional Standards 2014, ninth edition, published by The Royal Institution of Chartered Surveyors.

The information provided to the valuers, and the assumptions and valuations models used by the valuers are reviewed by the property portfolio team, the Head of Offices, the Head of Retail and the Chief Financial Officer. The valuers meet with the external auditors and also present directly to the Audit Committee at the interim and year end review of results.

Investment properties, excluding properties held for development, are valued by adopting the 'investment method' of valuation. This approach involves applying capitalisation yields to current and future rental streams net of income voids arising from vacancies or rent-free periods and associated running costs. These capitalisation yields and future rental values are based on comparable property and leasing transactions in the market using the valuers' professional judgement and market observation. Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and structural conditions.

In the case of ongoing developments, the approach applied is the 'residual method' of valuation, which is the investment method of valuation as described above, with a deduction for all costs necessary to complete the development, including a notional finance cost, together with a further allowance for remaining risk. Properties held for development are generally valued by adopting the higher of the residual method of valuation, allowing for all associated risks, or the investment method of valuation for the existing asset.

Copies of the valuation certificates of Knight Frank LLP, CBRE and Jones Lang LaSalle can be found at www.britishland.com/reports

A breakdown of valuations split between the Group and its share of joint ventures and funds is shown below:


2017


2016

Group
m

Joint
ventures

and funds
m

Total
m


Group
m

Joint
ventures

and funds
m

Total
m

Knight Frank LLP

7,031

2,883

9,914


7,529

3,576

11,105

CBRE

2,489

1,380

3,869


2,582

1,361

3,943

Jones Lang LaSalle

-

538

538


-

-

-

Total property portfolio valuation

9,520

4,801

14,321


10,111

4,937

15,048

Non-controlling interests

(310)

(71)

(381)


(324)

(76)

(400)

Total property portfolio valuation
attributable to shareholders

9,210

4,730

13,940


9,787

4,861

14,648

Information about fair value measurements using unobservable inputs (Level 3) for the year ended 31 March 2017

Investment

Fair value at
31 March 2017
m

Valuation
technique

ERV per sq ft


Equivalent Yield


Costs to complete per sq ft

Min

Max

Average


Min
%

Max
%

Average

%


Min

Max

Average

Retail

4,987

Investment methodology

2

77

22


4

11

5


-

48

6

Offices 1,2

3,695

Investment methodology

7

117

54


4

7

5


-

150

20

Canada Water

271

Investment methodology

15

25

22


2

5

3


-

18

10

Developments 2

150

Residual methodology

18

72

54


2

6

4


-

616

508

Total

9,103













Trading properties
at fair value

417













Group property portfolio valuation

9,520













1 Includes owner-occupied.

2 Includes Residential with an average capital value per sq ft of 981 including developments at end value and mixed use.

All other factors being equal:

- a higher equivalent yield or discount rate would lead to a decrease in the valuation of an asset;

- an increase in the current or estimated future rental stream would have the effect of increasing the capital value; and

- an increase in the costs to complete would lead to a decrease in the valuation of an asset.

However, there are interrelationships between the unobservable inputs which are partially determined by market conditions, which would impact on these changes. There were no transfers between valuation levels in the period.

8 Joint ventures and funds

Summary movement for the year of the investments in joint ventures and funds


Joint ventures
m

Funds
m

Total
m


Equity
m

Loans
m

Total
m

At 1 April 2016

3,109

244

3,353


2,833

520

3,353

Additions

59

3

62


13

49

62

Disposals

(30)

-

(30)


-

(30)

(30)

Share of profit on ordinary activities after taxation

44

8

52


52

-

52

Distributions and dividends:








Capital

(73)

-

(73)


(73)

-

(73)

Revenue

(45)

(14)

(59)


(59)

-

(59)

Hedging and exchange movements

1

-

1


1

-

1

Reclassification of venture as held for sale asset (see page 8)

(540)

-

(540)


(355)

(185)

(540)

At 31 March 2017

2,525

241

2,766


2,412

354

2,766

Additional investments in joint ventures and funds covenant information

At 31 March 2017 the investments in joint ventures included within the total investments in joint ventures and funds and joint venture held for sale was 3,299m (2015/16: 3,348m), being the 2,766m total investment shown above, plus the 540m joint venture held for sale, less the net investment of 7m (2015/16: 5m) in PREF, a property fund in Continental Europe.

The summarised income statements and balance sheets below and on the following page show 100% of the results, assets and liabilities of joint ventures and funds. Where necessary these have been restated to the Group's accounting policies.

Joint ventures' and funds' summary financial statements for the year ended 31 March 2017


Broadgate
REIT

Ltd1

MSC Property

Intermediate

Holdings Ltd

BL Sainsbury

Superstores

Ltd

Tesco Joint

Ventures2

The SouthGate Limited Partnership

USS

Joint

Ventures3

Leadenhall

Holding Co

(Jersey) Ltd4

Hercules Unit Trust

joint ventures

and sub-funds5

Other

joint ventures

and funds6

Total

2017

Total

Group share

2017

Partners

Euro Bluebell LLP

(GIC)

Norges Bank Investment

Management

J Sainsbury plc

Tesco PLC

Aviva
Investors

Universities Superannuation Scheme Group
PLC

Oxford
Properties





Property sector

City Offices

Broadgate

Shopping Centres

Meadowhall

Superstores

Superstores

Shopping
Centres

Shopping
Centres

City Offices

Leadenhall

Retail

Parks




Group share

50%

50%

50%

50%

50%

50%

50%

Various
















Summarised income statements

m

m

m

m

m

m

m

m

m

m

m

Revenue7

245

99

49

19

17

14

43

35

1

522

260

Costs

(52)

(23)

-

-

(5)

(5)

(10)

(4)

(1)

(100)

(50)


193

76

49

19

12

9

33

31

-

422

210

Administrative expenses

-

-

-

(2)

(1)

-

-

-

(1)

(4)

(2)

Net interest payable

(82)

(35)

(21)

(9)

(1)

-

-

(4)

-

(152)

(76)

Underlying profit

111

41

28

8

10

9

33

27

(1)

266

132

Net valuation movement

(185)

(1)

(46)

(29)

(6)

(7)

107

(16)

-

(183)

(93)

Capital financing costs

-

-

(12)

-

-

-

-

-

-

(12)

(6)

Profit on disposal of investment properties and investments

-

-

3

(3)

-

-

-

-

34

34

18

(Loss) profit on ordinary activities before taxation

(74)

40

(27)

(24)

4

2

140

11

33

105

51

Taxation

-

-

-

2

-

-

-

-

-

2

1

(Loss) profit on ordinary activities after taxation

(74)

40

(27)

(22)

4

2

140

11

33

107

52

Other comprehensive income

1

-

-

1

-

-

-

-

-

2

1

Total comprehensive income

(73)

40

(27)

(21)

4

2

140

11

33

109

53

British Land share of total comprehensive (expense) income

(37)

20

(15)

(10)

2

1

70

5

17

53


British Land share of distributions payable

32

17

55

4

1

-

5

14

4

132














Summarised balance sheets

m

m

m

m

m

m

m

m

m

m

m

Investment and trading properties

4,478

1,842

769

325

264

247

-

603

1

8,529

4,265

Current assets

2

5

-

-

1

1


3

52

64

32

Cash and deposits

290

37

17

2

8

7

-

10

28

399

200

Gross assets

4,770

1,884

786

327

273

255

-

616

81

8,992

4,497

Current liabilities

(88)

(41)

(22)

(2)

(4)

(6)

-

(10)

(19)

(192)

(96)

Bank and securitised debt

(1,794)

(668)

(367)

(185)

-

-

-

(139)

-

(3,153)

(1,577)

Loans from joint venture partners

(357)

(317)

-

-

-

(22)

-

-

(12)

(708)

(354)

Other non-current liabilities

(56)

(23)

-

(4)

(28)

-

-

(4)

-

(115)

(58)

Gross liabilities

(2,295)

(1,049)

(389)

(191)

(32)

(28)

-

(153)

(31)

(4,168)

(2,085)

Net assets

2,475

835

397

136

241

227

-

463

50

4,824

2,412

British Land share of net assets less shareholder loans

1,237

417

199

68

121

114

-

231

25

2,412


1 Included within the Broadgate REIT net valuation movement is a 20m payment received in December 2016 from UBS A.G. in relation to the development and occupation of 5 Broadgate, and subsequent vacation of 100 Liverpool Street, including 8-10 Broadgate.

2 Tesco joint ventures include BLT Holdings (2010) Limited as at 31 March 2017.

3 USS joint ventures include the Eden Walk Shopping Centre Unit Trust and the Fareham Property Partnership.

4 The Leadenhall column shows the equity accounted profit and loss for the period. Due to the transaction which exchanged in March 2017, the net investment in this venture was reclassified as a held for sale asset.

5 Hercules Unit Trust joint ventures and sub-funds includes 50% of the results of Deepdale Co-Ownership Trust, Gibraltar Limited Partnership and Valentine Co-Ownership Trust and 41.25% of Birstall Co-Ownership Trust. The balance sheet shows 50% of the assets of these joint ventures and sub-funds.

6 Included in the column headed 'Other joint ventures and funds' are contributions from the following: BL Goodman Limited Partnership, The Aldgate Place Limited Partnership, Bluebutton Property Management UK Limited, City of London Office Unit Trust and Pillar Retail Europark Fund (PREF). The Group's ownership share of PREF is 65%, however as the Group is not able to exercise control over significant decisions of the fund, the Group equity accounts for its interest in PREF.

7 Revenue includes gross rental income at 100% share of 437m (2015/16: 451m).


The borrowings of joint ventures and funds and their subsidiaries are non-recourse to the Group. All joint ventures are incorporated in the United Kingdom, with
the exception of Broadgate REIT Limited, the Eden Walk Shopping Centre Unit Trust and Leadenhall Holding Co (Jersey) Limited which are incorporated in Jersey.
Of the funds, the Hercules Unit Trust (HUT) joint ventures and sub-funds are incorporated in Jersey and PREF in Luxembourg.

These financial statements include the results and financial position of the Group's interest in the Fareham Property Partnership, the Aldgate Place Limited Partnership, the BL Goodman Limited Partnership, the Auchinlea Partnership and the Gibraltar Limited Partnership. Accordingly, advantage has been taken of the exemptions provided by Regulation 7 of the Partnership (Accounts) Regulations 2008, not to attach the partnership accounts to these financial statements.

Joint venture held for sale

On 1 March 2017 the Group exchanged conditional contracts on an agreement to sell its interest in Leadenhall Holding Co (Jersey) Limited, a joint venture with Oxford Properties. The transaction is expected to complete in the first half of the next financial year, and therefore the net investment in the joint venture has been recognised as a held-for-sale asset from the date of exchange. The net investment as at 31 March 2017 is summarised below.

Joint venture held for sale - summarised balance sheet for the year ended 31 March


Leadenhall Holding Co (Jersey) Limited

2017

m

2016

m

Investment property

1,075

-

Current assets

17

-

Current liabilities

(13)

-

Loans from joint venture partners

(371)

-

Net assets

708

-

British Land share of net assets less shareholder loans

355

-

Operating cash flows of joint ventures and funds (Group share)


2017
m

2016
m

Rental income received from tenants

207

208

Fees and other income received

-

1

Operating expenses paid to suppliers and employees

(20)

(18)

Cash generated from operations

187

191

Interest paid

(84)

(86)

Interest received

1

1

UK corporation tax paid

(2)

(3)

Foreign tax paid

-

(1)

Cash inflow from operating activities

102

102

Cash inflow from operating activities deployed as:



Surplus cash retained within joint ventures and funds

43

44

Revenue distributions per consolidated statement of cash flows

59

58

Revenue distributions split between controlling and non-controlling interests



Attributable to non-controlling interests

4

4

Attributable to shareholders of the Company

55

54



9 Other investments


2017


2016

Investment
held for
trading
m

Loans, receivables
and other
m

Total
m


Investment
held for
trading
m

Loans,
receivables
and other
m

Total
m

At 1 April

101

41

142


99

280

379

Additions

-

25

25


-

35

35

Disposals

-

(2)

(2)


-

(272)

(272)

Revaluation

(8)

-

(8)


2

-

2

Depreciation

-

(3)

(3)


-

(2)

(2)

At 31 March

93

61

154


101

41

142

The investment held for trading comprises interests as a trust beneficiary. The trust's assets comprise freehold reversions in a pool of commercial properties, comprising Sainsbury's superstores. The interest was categorised as Level 3 in the fair value hierarchy, is subject to the same inputs as those disclosed in note 7, and its fair value was determined by the Directors, supported by an external valuation.

10 Debtors


2017
m

2016
m

Trade and other debtors

22

24

Deposits received relating to held for sale asset1

144

-

Prepayments and accrued income

5

9


171

33

1 Relates to deposit received on held for sale joint venture transaction (see note 8) recognised as a financial asset, the realisation of which is conditional and not guaranteed as at the balance sheet date.

Trade and other debtors are shown after deducting a provision for bad and doubtful debts of 14m (2015/16: 16m). The charge to the income statement in relation to bad and doubtful debts was 1m (2015/16: 1m).

The Directors consider that the carrying amount of trade and other debtors is approximate to their fair value. There is no concentration of credit
risk with respect to trade debtors as the Group has a large number of customers who are paying their rent in advance.

As at 31 March, trade and other debtors outside their payment terms yet not provided for are as follows:


Total

m

Within

credit terms
m

Outside credit terms but not impaired

0-1

month
m

1-2

months
m

More than
2 months
m

2017

22

7

9

4

2

2016

24

12

11

1

-

11 Creditors


2017
m

2016
m

Trade creditors

127

39

Deposits received relating to held for sale asset1

144

-

Other taxation and social security

32

34

Accruals

83

72

Deferred income

72

73


458

218

1 Relates to deposit received on held for sale joint venture transaction (see note 8) recognised as a financial lability, the realisation of which is conditional and not guaranteed as at the balance sheet date.

Trade creditors are interest-free and have settlement dates within one year. The Directors consider that the carrying amount of trade and other creditors is approximate to their fair value.

12 Other non-current liabilities


2017
m

2016
m

Other creditors

1

70

Head leases1

64

46

Net pension liabilities

13

6


78

122

1 Includes nil in relation to head lease liabilities on trading properties held at cost (2015/16: 9m).

13 Deferred tax

The movement on deferred tax is as shown below:

Deferred tax assets year ended 31 March 2017


1 April
2016
m

Credited to income

m

Credited (debited) to equity

m

Transferred to corporation tax

m

31 March
2017

m

Interest rate and currency derivative revaluations

5

(1)

-

-

4

Other timing differences

6

1

-

-

7


11

-

-

-

11

Deferred tax liabilities year ended 31 March 2017


m

m

m

m

m

Property and investment revaluations

(7)

-

-

-

(7)

Interest rate and currency derivative revaluations

-

-

-

-

-

Other timing differences

(1)

-

-

1

-


(8)

-

-

1

(7)







Net deferred tax assets

3

-

-

1

4

Deferred tax assets year ended 31 March 2016


1 April
2015
m

Credited to income

m

Credited (debited) to equity

m

Transferred to joint ventures

m

31 March
2016

m

Interest rate and currency derivative revaluations

-

-

5

-

5

Other timing differences

-

6

-

-

6


-

6

5

-

11

Deferred tax liabilities year ended 31 March 2016


m

m

m

m

m

Property and investment revaluations

(5)

-

(2)

-

(7)

Interest rate and currency derivative revaluations

(4)

25

(21)

-

-

Other timing differences

(3)

-

-

2

(1)


(12)

25

(23)

2

(8)







Net deferred tax (liability) assets

(12)

31

(18)

2

3

The following corporation tax rates have been substantively enacted; 19% effective from 1 April 2017 reducing to 17% effective from 1 April 2020. The deferred tax assets and liabilities have been calculated at the tax rate effective in the period that the tax is expected to crystallise.

The Group has recognised a deferred tax asset calculated at 17% (2015/2016: 18%) of 5m (2015/2016: 6m) in respect of capital losses from previous years available for offset against future capital profit. Further unrecognised deferred tax assets in respect of capital losses of 129m (2015/2016: 60m) exist at 31 March 2017.

The Group has recognised deferred tax assets on derivative revaluations to the extent that future matching taxable profits are expected to arise.

At 31 March 2017, the Group had an unrecognised deferred tax asset calculated at 17% (2015/2016: 18%) of 50m (2015/2016: 51m) in respect
of UK revenue tax losses from previous years.

Under the REIT regime, development properties which are sold within three years of completion do not benefit from tax exemption. At 31 March 2017, the value of such properties is 176m (2015/2016: 967m) and if these properties were to be sold and no tax exemption was available, the tax arising would be 13m (2015/16: 56m).

14 Net debt


Footnote

2017
m

2016
m

Secured on the assets of the Group




9.125% First Mortgage Debenture Stock 2020

1.1

34

34

5.264% First Mortgage Debenture Bonds 2035


377

371

5.0055% First Mortgage Amortising Debentures 2035


99

100

5.357% First Mortgage Debenture Bonds 2028


348

349

6.75% First Mortgage Debenture Stock 2020


-

62

Bank loans

1.2, 1.3

475

733

Loan notes


2

2



1,335

1,651

Unsecured




5.50% Senior Notes 2027


102

101

3.895% Senior US Dollar Notes 2018

2

32

28

4.635% Senior US Dollar Notes 2021

2

181

165

4.766% Senior US Dollar Notes 2023

2

113

105

5.003% Senior US Dollar Notes 2026

2

73

69

3.81% Senior Notes 2026


114

113

3.97% Senior Notes 2026


117

116

1.5% Convertible Bond 2017


406

445

0% Convertible Bond 2020


331

334

Bank loans and overdrafts


477

634



1,946

2,110

Gross debt

3

3,281

3,761

Interest rate and currency derivative liabilities


144

137

Interest rate and currency derivative assets


(217)

(167)

Cash and short term deposits

4,5

(114)

(114)

Total net debt


3,094

3,617

Net debt attributable to non-controlling interests


(103)

(104)

Net debt attributable to shareholders of the Company


2,991

3,513

1 These are non-recourse borrowings with no recourse for repayment to other companies or assets in the Group:


2017
m

2016
m

1.1 BLD Property Holdings Ltd

34

34

1.2 Hercules Unit Trust

475

443

1.3 TBL Properties Limited and subsidiaries

-

290


509

767

2 Principal and interest on these borrowing were fully hedged into Sterling at a floating rate at the time of issue.

3 The principal amount of gross debt at 31 March 2017 was 3,069m (2015/16: 3,552m). Included in this is the principal amount of secured borrowings and other borrowings of non-recourse companies of 1,238m of which the borrowings of the partly-owned subsidiary, Hercules Unit Trust, not beneficially owned by the Group is 112m.

4 Included within cash and short term deposits is the cash and short term deposits of Hercules Unit Trust, of which 9m is the proportion not beneficially owned by the Group.

5 Cash and deposits not subject to a security interest amount to 99m (2015/16: 93m).

Maturity analysis of net debt


2017
m

2016
m

Repayable: within one year and on demand

464

74

Between: one and two years

31

504

two and five years

1,283

1,491

five and ten years

783

807

ten and fifteen years

332

500

fifteen and twenty years

388

385

twenty and twenty five years

-

-


2,817

3,687

Gross debt

3,281

3,761

Interest rate and currency derivatives

(73)

(30)

Cash and short term deposits

(114)

(114)

Net debt

3,094

3,617

1.5% Convertible bond 2012 (maturity 2017)

On 10 September 2012, British Land (Jersey) Limited (the 2012 Issuer), a wholly-owned subsidiary of the Group, issued 400 million 1.5% guaranteed convertible bonds due 2017 (the 2012 bonds) at par. The 2012 Issuer is fully guaranteed by the Company in respect of the 2012 bonds.

Subject to their terms, the 2012 bonds are convertible into preference shares of the 2012 Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. Bondholders may exercise their conversion right at any time up to (but excluding) the 20th dealing day before 10 September 2017 (the maturity date).

The initial exchange price was 693.07 pence per ordinary share. The exchange price is adjusted based on certain events.

From 25 September 2015, the Company has the option to redeem the 2012 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2012 bonds have been converted, redeemed, or purchased and cancelled. The 2012 bonds will be redeemed at par on 10 September 2017 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled. No redemption of the bonds occurred in the year.

0% Convertible bond 2015 (maturity 2020)

On 9 June 2015, British Land (White) 2015 Limited (the 2015 Issuer), a wholly owned subsidiary of the Group, issued 350 million zero coupon guaranteed convertible bonds due 2020 (the 2015 bonds) at par. The 2015 Issuer is fully guaranteed by the Company in respect of the 2015 bonds.

Subject to their terms, the 2015 bonds are convertible into preference shares of the 2015 Issuer which are automatically transferred to the Company in exchange for ordinary shares in the Company or, at the Company's election, any combination of ordinary shares and cash. From 20 July 2015 up to and including 29 June 2018, a bondholder may exercise its conversion right if the share price has traded at a level exceeding 130% of the exchange price for a specified period. Thereafter, and up to but excluding the 7th dealing day before 9 June 2020 (the maturity date), a bondholder may convert at any time.

The initial exchange price was 1103.32 pence per ordinary share. The exchange price is adjusted based on certain events (such as the Company paying dividends in any quarter above 3.418 pence per ordinary share). As at 31 March 2017 the exchange price was 1063.79 pence per ordinary share.

From 30 June 2018, the Company has the option to redeem the 2015 bonds at par if the Company's share price has traded above 130% of the exchange price for a specified period, or at any time once 85% by nominal value of the 2015 bonds have been converted, redeemed, or purchased and cancelled. The 2015 bonds will be redeemed at par on 9 June 2020 (the maturity date) if they have not already been converted, redeemed or purchased and cancelled.

Fair value and book value of net debt


2017


2016

Fair value
m

Book value
m

Difference
m


Fair value
m

Book value
m

Difference
m

Debentures and unsecured bonds

1,682

1,590

92


1,637

1,613

24

Convertible bonds

737

737

-


779

779

-

Bank debt and other floating rate debt

963

954

9


1,384

1,369

15

Gross debt

3,382

3,281

101


3,800

3,761

39

Interest rate and currency derivative liabilities

144

144

-


137

137

-

Interest rate and currency derivative assets

(217)

(217)

-


(167)

(167)

-

Cash and short term deposits

(114)

(114)

-


(114)

(114)

-

Net debt

3,195

3,094

101


3,656

3,617

39

Net debt attributable to non-controlling interests

(105)

(103)

(2)


(106)

(104)

(2)

Net debt attributable to shareholders of the Company

3,090

2,991

99


3,550

3,513

37

The fair values of debentures, unsecured bonds and the convertible bonds have been established by obtaining quoted market prices from brokers. The bank debt and other floating rate debt has been valued assuming it could be renegotiated at contracted margins. The derivatives have been valued by calculating the present value of expected future cash flows, using appropriate market discount rates, by an independent treasury advisor.

Short term debtors and creditors and other investments have been excluded from the disclosures on the basis that the fair value is equivalent to the book value. The fair value hierarchy level (as defined in note 7) of debt held at amortised cost whose fair value is disclosed is level 2.

Group loan to value (LTV)


2017
m

2016
m

Group loan to value (LTV)

22.6%

25.2%




Principal amount of gross debt

3,069

3,552

Less debt attributable to non-controlling interests

(112)

(109)

Less cash and short term deposits (balance sheet)

(114)

(114)

Plus cash attributable to non-controlling interests

9

8

Total net debt for LTV calculation

2,852

3,337

Group property portfolio valuation (note 7)

9,520

10,111

Investments in joint ventures and funds (note 8)

2,766

3,353

Joint venture held for sale (note 8)

540

-

Other investments (note 9)

154

142

Less property and investments attributable to non-controlling interests

(364)

(384)

Total assets for LTV calculation

12,616

13,222

Proportionally consolidated loan to value (LTV)


2017
m

2016
m

Proportionally consolidated loan to value (LTV)

29.9%

32.1%




Principal amount of gross debt

4,649

5,217

Less debt attributable to non-controlling interests

(128)

(128)

Less cash and short term deposits

(323)

(353)

Plus cash attributable to non-controlling interests

9

9

Total net debt for proportional LTV calculation

4,207

4,745

Group property portfolio valuation (note 7)

9,520

10,111

Share of property of joint ventures and funds (note 7)

4,801

4,937

Other investments (note 9)

154

142

Less other investments attributable to joint ventures and funds

(3)

(4)

Less property attributable to non-controlling interests

(381)

(400)

Total assets for proportional LTV calculation

14,091

14,786

British Land Unsecured Financial Covenants

The two financial covenants applicable to the Group unsecured debt including convertible bonds are shown below:


2017
m

2016
m

Net Borrowings not to exceed 175% of Adjusted Capital and Reserves

29%

34%




Principal amount of gross debt

3,069

3,552

Less the relevant proportion of borrowings of the partly-owned subsidiary/non-controlling interests

(112)

(109)

Less cash and deposits (balance sheet)

(114)

(114)

Plus the relevant proportion of cash and deposits of the partly-owned subsidiary/non-controlling interests

9

8

Net Borrowings

2,852

3,337

Share capital and reserves (balance sheet)

9,476

9,619

EPRA deferred tax adjustment (EPRA Table A)

3

5

Trading property surpluses (EPRA Table A)

83

93

Exceptional refinancing charges (see below)

274

287

Fair value adjustments of financial instruments (EPRA Table A)

155

198

Less reserves attributable to non-controlling interests (balance sheet)

(255)

(277)

Adjusted Capital and Reserves

9,736

9,925

In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of 274m (2015/16: 287m) to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.


2017
m

2016
m

Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets

26%

29%




Principal amount of gross debt

3,069

3,552

Less cash and deposits not subject to a security interest (being 99m less the relevant proportion of cash and deposits of the partly owned subsidiary/non-controlling interests of 3m)

(96)

(88)

Less principal amount of secured and non-recourse borrowings

(1,238)

(1,563)

Net Unsecured Borrowings

1,735

1,901

Group property portfolio valuation (note 7)

9,520

10,111

Investments in joint ventures and funds (note 8)

2,766

3,353

Joint venture held for sale (note 8)

540

-

Other investments (note 9)

154

142

Less investments in joint ventures and joint venture held for sale (note 8)

(3,299)

(3,348)

Less encumbered assets

(3,040)

(3,803)

Unencumbered Assets

6,641

6,455

Reconciliation of movement in Group net debt for the year ended 31 March 2017


2016

Cash flows

Transfers 3

Foreign exchange

Fair value

Arrangement
costs
amortisation

2017

Short term borrowings

74

(74)

464

-

-

-

464

Long term borrowings

3,687

(423)

(464)

49

(36)

4

2,817

Derivatives1

(30)

1

-

(48)

4

-

(73)

Total liabilities from financing activities

3,731

(496)

-

1

(32)

4

3,208

Cash and cash equivalents

(114)

-

-

-

-

-

(114)

Net debt

3,617

(496)

-

1

(32)

4

3,094

Reconciliation of movement in Group net debt for the year ended 31 March 2016


2015

Cash flows

Transfers3

Foreign exchange

Fair value

Arrangement
costs
amortisation

2016

Short term borrowings

102

(104)

74

2

-

-

74

Long term borrowings

3,847

(98)

(74)

14

(9)

7

3,687

Derivatives2

(13)

22

-

(13)

(26)

-

(30)

Total liabilities from financing activities

3,936

(180)

-

3

(35)

7

3,731

Cash and cash equivalents

(108)

(6)

-

-

-

-

(114)

Net debt

3,828

(186)

-

3

(35)

7

3,617

1 Cash flows on derivatives include 14m of net receipts on derivative interest.

2 Cash flows on derivatives include 7m of net receipts on derivative interest.

3 Transfers comprises debt maturing from long term to short term borrowings.

Fair value hierarchy

The table below provides an analysis of financial instruments carried at fair value, by the valuation method. The fair value hierarchy levels are defined in note 7.


2017


2016

Level 1
m

Level 2
m

Level 3
m

Total
m


Level 1
m

Level 2
m

Level 3
m

Total
m

Interest rate and currency derivative assets

-

(217)

-

(217)


-

(167)

-

(167)

Other investments - available for sale

(14)

-

-

(14)


-

-

-

-

Other investments - held for trading

-

-

(93)

(93)


-

-

(101)

(101)

Assets

(14)

(217)

(93)

(324)


-

(167)

(101)

(268)

Interest rate and currency derivative liabilities

-

144

-

144


-

137

-

137

Convertible bonds

737

-

-

737


779

-

-

779

Liabilities

737

144

-

881


779

137

-

916

Total

723

(73)

(93)

557


779

(30)

(101)

648

Categories of financial instruments


2017
m

2016
m

Financial assets



Fair value through income statement



Other investments - held for trading

93

101




Derivatives in designated hedge accounting relationships

215

164

Derivatives not in designated hedge accounting relationships

2

3




Loans and receivables



Debtors

166

24

Cash and short term deposits

114

114

Other investments - loans and receivables

61

41


651

447

Financial liabilities



Fair value through income statement



Convertible bonds

(737)

(779)




Derivatives in designated hedge accounting relationships

(143)

(137)

Derivatives not in designated accounting relationships

(1)

-

Amortised cost



Gross debt

(2,544)

(2,982)

Head leases payable

(64)

(46)




Creditors

(373)

(133)


(3,862)

(4,077)

Total

(3,211)

(3,630)

Gains and losses on financial instruments, as classed above, are disclosed in note 5 (net financing costs), note 10 (debtors), note 4 (valuation movements on property), the consolidated income statement and the consolidated statement of comprehensive income. The Directors consider that the carrying amounts of other investments and head leases payable are approximate to their fair value, and that the carrying amounts are recoverable.

Maturity of committed undrawn borrowing facilities


2017
m

2016
m

Maturity date: over five years

125

-

between four and five years

1,110

1,113

between three and four years

58

95

Total facilities available for more than three years

1,293

1,208




Between two and three years

149

85

Between one and two years

-

-

Within one year

2

60

Total

1,444

1,353

The above facilities are comprised of British Land undrawn facilities of 1,322m, plus undrawn facilities of Hercules Unit Trust totalling 122m.

15 Dividend

The fourth quarter interim dividend of 7.30 pence per share, totalling 75m (2015/16: 7.09 pence per share, totalling 73m) was approved by the Board on 16 May 2017 and is payable on 4 August 2017 to shareholders on the register at the close of business on 30 June 2017.

The Board will announce the availability of the Scrip Dividend Alternative, if available, via the Regulatory News Service and on its website ( www.britishland.com/dividends ), no later than four business days before the ex-dividend date of 30 June 2017. The Board expects to announce the split between Property Income Distributions (PID) and non-PID income at that time. Any Scrip Dividend Alternative will not be enhanced. PID dividends are paid, as required by REIT legislation, after deduction of withholding tax at the basic rate (currently 20%), where appropriate. Certain classes of shareholders may be able to elect to receive dividends gross. Please refer to our website www.britishland.com/dividends for details.

Payment date

Dividend

Pence per share

2017
m

2016
m

Current year dividends




05.08.2017

2017 4th interim

7.30



06.05.2017

2017 3rd interim

7.30



12.02.2017

2017 2nd interim

7.30

75


06.11.2016

2017 1st interim

7.30

75




29.20



Prior year dividends





05.08.2016

2016 4th interim

7.091

73


06.05.2016

2016 3rd interim

7.09

73


12.02.2016

2016 2nd interim

7.09


73

06 .11.2015

2016 1st interim

7.09


72



28.36








07.08.2015

2015 4th interim

6.922


71

06.05.2015

2015 3rd interim

6.92


71

Dividends in consolidated statement
of changes in equity


296

287

Dividends settled in shares


-

(52)

Dividends settled in cash


296

235

Timing difference relating to payment
of withholding tax


(1)

-

Dividends in cash flow statement


295

235

1 Dividend split half PID, half non-PID.

2 Scrip alternative treated as non-PID for this dividend.

16 Share capital and reserves


2017

2016

Number of ordinary shares in issue at 1 April

1,040,562,323

1,031,788,286

Share issues

472,735

8,774,037

At 31 March

1, 041,035,058

1,040,562,323

Of the issued 25p ordinary shares, 7,783 shares were held in the ESOP trust (2015/16: 627), 11,266,245 shares were held as treasury shares (2015/16: 11,266,245) and 1,029,761,030 shares were in free issue (2015/16: 1,029,295,541). No treasury shares were acquired by the ESOP trust during the year.
All issued shares are fully paid.

Hedging and translation reserve

The hedging and translation reserve comprises the effective portion of the cumulative net change in the fair value of cash flow and foreign currency hedging instruments, as well as all foreign exchange differences arising from the translation of the financial statements of foreign operations. The foreign exchange differences also include the translation of the liabilities that hedge the Company's net investment in a foreign subsidiary.

Revaluation reserve

The revaluation reserve relates to owner-occupied properties and investments in joint ventures and funds.

Merger reserve

This comprises the premium on the share placing in March 2013. No share premium is recorded in the Company's financial statements, through the operation of the merger relief provisions of the Companies Act 2006.

17 Segment information

The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its three principal sectors are Offices, Retail and Canada Water. The Office sector includes residential, as this is often incorporated into Office schemes. The Offices sector also includes the British Land share of the Leadenhall joint venture (see note 8). The Retail sector includes leisure, as this is often incorporated into Retail schemes.

The relevant gross rental income, net rental income, operating result and property assets, being the measures of segment revenue, segment result and segment assets used by the management of the business, are set out below. Management reviews the performance of the business principally on a proportionally consolidated basis, which includes the Group's share of joint ventures and funds on a line-by-line basis and excludes non-controlling interests in the Group's subsidiaries. The chief operating decision maker for the purpose of segment information is the Executive Committee.

Gross rental income is derived from the rental of buildings and the sale of trading properties. Operating result is the net of net rental income, fee income and administrative expenses. No customer exceeded 10% of the Group's revenues in either year.

Segment result


Offices


Retail


Canada Water


Other/unallocated


Total

2017

m

2016

m


2017

m

2016

m


2017

m

2016

m


2017

m

2016

m


2017

m

2016

m

Gross rental income















British Land Group

139

133


279

291


9

8


-

-


427

432

Share of joint ventures and funds

116

114


100

104


-

-


-

4


216

222

Total

255

247


379

395


9

8


-

4


643

654
















Net rental income















British Land Group

131

124


265

277


8

7


(1)

-


403

408

Share of joint ventures and funds

112

110


95

99


-

-


-

3


207

212

Total

243

234


360

376


8

7


(1)

3


610

620
















Operating result















British Land Group

127

112


255

260


5

7


(50)

(46)


337

333

Share of joint ventures and funds

109

109


96

102


-

-


(1)

(1)


204

210

Total

236

221


351

362


5

7


(51)

(47)


541

543
















Reconciliation to Underlying Profit

2017

m

2016

m

Operating result

541

543

Net financing costs

(151)

(180)

Underlying Profit

390

363

Reconciliation to profit on ordinary activities before taxation



Underlying Profit

390

363

Capital and other

(209)

954

Underlying Profit attributable to non-controlling interests

14

14

Total profit on ordinary activities before taxation

195

1,331

Of the total revenues above, nil (2015/16: 4m) was derived from outside the UK.

Segment assets


Offices


Retail


Canada Water


Other/unallocated


Total

2017

m

2016

m


2017

m

2016

m


2017

m

2016

m


2017

m

2016

m


2017

m

2016

m

Property assets















British Land Group

4,223

4,181


4,716

5,323


271

283


-

-


9,210

9,787

Share of joint ventures and funds

2,792

2,843


1,938

2,018


-

-


-

-


4,730

4,861

Total

7,015

7,024


6,654

7,341


271

283


-

-


13,940

14,648

Reconciliation to net assets

British Land Group

2017

m

2016

m

Property assets

13,940

14,648

Other non-current assets

156

138

Non-current assets

14,096

14,786




Other net current liabilities

(364)

(257)

Adjusted net debt

(4,223)

(4,765)

Other non-current liabilities

(11)

(90)

EPRA net assets (undiluted)

9,498

9,674

Convertible dilution

-

400

EPRA net assets (diluted)

9,498

10,074

Non-controlling interests

255

277

EPRA adjustments

(277)

(732)

Net assets

9,476

9,619

SUPPLEMENTARY DISCLOSURES

UNAUDITED

Table A:?Summary income statement and balance sheet

Summary income statement based on proportional consolidation for the year ended 31 March 2017

The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the results of the Group, with its share of the results of joint ventures and funds included on a line-by-line basis and excluding non-controlling interests.


Year ended 31 March 2017


Year ended 31 March 2016


Group

m

Joint

ventures

and funds

m

Less
non-controlling interests

m

Proportionally consolidated

m


Group

m

Joint ventures

and funds

m

Less
non-controlling interests

m

Proportionally consolidated

m

Gross rental income

442

220

(19)

643


451

231

(28)

654

Property operating expenses

(25)

(10)

2

(33)


(26)

(9)

1

(34)

Net rental income

417

210

(17)

610


425

222

(27)

620











Administrative expenses

(84)

(2)

-

(86)


(93)

(5)

4

(94)

Net fees and other income

17

-

-

17


16

-

1

17

Ungeared Income Return

350

208

(17)

541


348

217

(22)

543











Net financing costs

(78)

(76)

3

(151)


(106)

(82)

8

(180)

Underlying Profit

272

132

(14)

390


242

135

(14)

363

Underlying taxation

-

-

-

-


2

-

-

2

Underlying Profit after taxation

272

132

(14)

390


244

135

(14)

365

Valuation movement




(237)





861

Other capital and taxation (net)1




(433)





48

Capital and other




(670)





909

Total return




(280)





1,274

1 Includes other comprehensive income, movement in dilution of share options and the movement in items excluded for EPRA NAV.

Summary balance sheet based on proportional consolidation as at 31 March 2017

The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto. It presents the composition of the EPRA net assets of the Group, with its share of the net assets of the joint venture and fund assets and liabilities included on a line-by-line basis, and excluding non-controlling interests, and assuming full dilution.


Group

m

Share of joint ventures
& funds

m

Less non-controlling interests

m

Share
options

m

Deferred
tax

m

Mark-to-market on effective cash flow hedges and related debt adjustments

m

Head
leases

m

Valuation surplus on trading properties

m

EPRA Net assets

31 March 2017

m

EPRA Net assets

31 March

2016

m

Retail properties

5,066

2,021

(381)

-

-

-

(52)

-

6,654

7,341

Office properties

4,155

2,792

-

-

-

-

(15)

83

7,015

7,024

Canada Water properties

280

-

-

-

-

-

(9)

-

271

283

Other properties

-

-

-

-

-

-

-

-

-

-

Total properties

9,501

4,813

(381)

-

-

-

(76)

83

13,940

14,648

Investments in joint ventures and funds

2,766

(2,766)

-

-

-

-

-

-

-

-

Joint venture held for sale

540

(540)

-

-

-

-

-

-

-

-

Other investments

154

(3)

-

-

-

-

-

-

151

138

Other net (liabilities) assets

(391)

(101)

7

36

3

-

76

-

(370)

(347)

Net debt

(3,094)

(1,403)

119

-

-

155

-

-

(4,223)

(4,765)

Dilution due to convertible bond

-

-

-

-

-

-

-

-

-

400

Net assets

9,476

-

(255)

36

3

155

-

83

9,498

10,074

EPRA NAV per share (note 2)









915p

919p

EPRA Net Assets Movement


Year ended
31 March 2017


Year ended
31 March 2016

m

Pence per share


m

Pence per share

Opening EPRA NAV

10,074

919


9,035

829

Income return

390

36


365

34

Capital return

(670)

(13)


909

77

Dividend paid

(296)

(27)


(235)

(21)

Closing EPRA NAV

9,498

915


10,074

919

Table B:?EPRA Performance measures

EPRA Performance measures summary table


2017


2016

m

Pence per share


m

Pence per share

EPRA Earnings

- basic

390

37.9


365

35.6


- diluted

390

37.8


371

34.1

EPRA Net Initial Yield


4.3%



4.1%

EPRA 'topped-up' Net Initial Yield


4.5%



4.5%

EPRA Vacancy Rate


4.8%



2.0%


2017


2016

Net assets

Net asset
value per share pence


Net assets

Net asset
value per share pence

EPRA NAV

9,498

915


10,074

919

EPRA NNNAV

8,938

861


9,640

880

Calculation and reconciliation of EPRA/IFRS earnings and EPRA/IFRS earnings per share


2017

m

2016

m

Profit attributable to the shareholders of the Company

193

1,345

Exclude:



Group - current taxation

(1)

(2)

Group - deferred taxation

-

(31)

Joint ventures and funds - current taxation

-

1

Joint ventures and funds - deferred taxation

(1)

-

Group - valuation movement

144

(616)

Group - loss (profit) on disposal of investment properties and investments

5

(35)

Group - profit on disposal of trading properties

(7)

(10)

Joint ventures and funds - net valuation movement (including result on disposals)

75

(263)

Joint ventures and funds - capital financing costs

6

-

Changes in fair value of financial instruments and associated close-out costs

(13)

(31)

Non-controlling interests in respect of the above

(11)

5

Underlying Profit

390

363

Group - underlying current taxation

-

2

EPRA earnings - basic

390

365

Dilutive effect of 2012 convertible bond

-

6

EPRA earnings - diluted

390

371




Profit attributable to the shareholders of the Company

193

1,345

Dilutive effect of 2012 convertible bond1

(33)

(42)

IFRS earnings - diluted 1

160

1,303

1 The 2016 comparative figures for the dilutive effect of the 2012 convertible bond and IFRS diluted earnings have been restated - see Note 1.


2017

Number

million

2016

Number

million

Weighted average number of shares

1,040

1,036

Adjustment for Treasury shares

(11)

(11)

IFRS/EPRA Weighted average number of shares (basic)

1,029

1,025

Dilutive effect of share options

1

2

Dilutive effect of ESOP shares

3

4

Dilutive effect of 2012 convertible bond

58

58

IFRS Weighted average number of shares (diluted)

1,091

1,089

Dilutive effect of 2012 convertible bond

(58)

-

EPRA Weighted average number of shares (diluted)

1,033

1,089

Net assets per share


2017


2016

m

Pence
per share


m

Pence
per share

Balance sheet net assets

9,476



9,619


Deferred tax arising on revaluation movements

3



5


Mark-to-market on effective cash flow hedges and related debt adjustments

155



198


Dilution effect of share options

36



36


Surplus on trading properties

83



93


Convertible bond adjustment

-



400


Less non-controlling interests

(255)



(277)


EPRA NAV

9,498

915


10,074

919

Deferred tax arising on revaluation movements

(19)



(24)


Mark-to-market on effective cash flow hedges and related debt adjustments

(155)



(153)


Mark-to-market on debt

(386)



(257)


EPRA NNNAV

8,938

861


9,640

880

EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of the debt and derivatives and to include the deferred taxation on revaluations and derivatives.


2017

Number

million

2016

Number

million

Number of shares at year end

1,040

1,040

Adjustment for treasury shares

(11)

(11)

IFRS/EPRA number of shares (basic)

1,029

1,029

Dilutive effect of share options

3

2

Dilutive effect of ESOP shares

6

7

Dilutive effect of 2012 convertible bond

58

58

IFRS number of shares (diluted)

1,096

1,096

Dilutive effect of 2012 convertible bond

(58)

-

EPRA number of shares (diluted)

1,038

1,096

EPRA Net Initial Yield and 'topped-up' Net Initial Yield


2017
m

2016
m

Investment property - wholly-owned

9,210

9,787

Investment property - share of joint ventures and funds

4,730

4,861

Less developments, residential and land

(798)

(894)

Completed property portfolio

13,142

13,754

Allowance for estimated purchasers' costs

897

985

Gross up completed property portfolio valuation (A)

14,039

14,739

Annualised cash passing rental income

607

607

Property outgoings

(9)

(8)

Annualised net rents (B)

598

599

Rent expiration of rent-free periods and fixed uplifts1

30

63

'Topped-up' net annualised rent (C)

628

662

EPRA Net Initial Yield (B/A)

4.3%

4.1%

EPRA 'topped-up' Net Initial Yield (C/A)

4.5%

4.5%

Including fixed/minimum uplifts received in lieu of rental growth

11

24

Total 'topped-up' net rents (D)

639

686

Overall 'topped-up' Net Initial Yield (D/A)

4.6%

4.7%

'Topped-up' net annualised rent

628

662

ERV vacant space

34

14

Reversions

38

42

Total ERV (E)

700

718

Net Reversionary Yield (E/A)

5.0%

4.9%

1 The weighted average period over which rent-free periods expire is 1 year (2015/16: 1 year).

The above is stated for the UK portfolio only.

EPRA Net Initial Yield (NIY) basis of calculation

EPRA NIY is calculated as the annualised net rent (on a cash flow basis), divided by the gross value of the completed property portfolio. The valuation of our completed property portfolio is determined by our external valuers as at 31 March 2017, plus an allowance for estimated purchaser's costs. Estimated purchaser's costs are determined by the relevant stamp duty liability, plus an estimate by our valuers of agent and legal fees on notional acquisition. The net rent deduction allowed for property outgoings is based on our valuers' assumptions on future recurring non-recoverable revenue expenditure.

In calculating the EPRA 'topped-up' NIY, the annualised net rent is increased by the total contracted rent from expiry of rent-free periods and future contracted rental uplifts where defined as not in lieu of growth. Overall 'topped-up' NIY is calculated by adding any other contracted future uplift to the 'topped-up' net annualised rent.

The net reversionary yield is calculated by dividing the total estimated rental value (ERV) for the completed property portfolio, as determined by our external valuers, by the gross completed property portfolio valuation.

The EPRA vacancy rate is calculated as the ERV of the unrented, lettable space as a proportion of the total rental value of the completed property portfolio.

EPRA Vacancy Rate


2017

m

2016

m

Annualised potential rental value of vacant premises

34

14

Annualised potential rental value for the completed property portfolio

710

728

EPRA Vacancy Rate

4.8%

2.0%

The above is stated for the UK portfolio only. A discussion of significant factors affecting vacancy rates is included within the Strategic Report within the British Land Annual Report and Accounts.

EPRA Cost Ratios


2017

m

2016

m

Property operating expenses

23

25

Administrative expenses

84

90

Share of joint ventures and funds expenses

12

13

Less:

Performance and management fees (from joint ventures and funds)

(9)

(9)


Net other fees and commissions

(8)

(8)


Ground rent costs

(2)

(3)

EPRA Costs (including direct vacancy costs) (A)

100

108

Direct vacancy costs

(12)

(11)

EPRA Costs (excluding direct vacancy costs) (B)

88

97

Gross Rental Income less ground rent costs

412

429

Share of joint ventures and funds (GRI less ground rent costs)

229

222

Total Gross Rental Income less ground rent costs (C)

641

651




EPRA Cost Ratio (including direct vacancy costs) (A/C)

15.6%

16.6%

EPRA Cost Ratio (excluding direct vacancy costs) (B/C)

13.7%

14.9%




Overhead and operating expenses capitalised (including share of joint ventures and funds)

5

4

In the current year, employee costs in relation to staff time on development projects have been capitalised into the base cost of relevant development assets.

Table C:?Gross rental income


2017

m

2016

m

Rent receivable

633

615

Spreading of tenant incentives and guaranteed rent increases

8

36

Surrender premia

2

3

Gross rental income

643

654

The current and prior year information is presented on a proportionally consolidated basis, excluding non-controlling interests.

Table D:?Property related capital expenditure


2017


2016


Group

Joint
ventures
and funds

Total


Group

Joint
ventures
and funds

Total

Acquisitions

88

-

88


238

-

238

Development

131

14

145


104

58

162

Like-for-like portfolio

67

47

114


99

6

105

Other

20

2

22


25

15

40

Total property related capex

306

63

369


466

79

545

The above is presented on a proportionally consolidated basis, excluding non-controlling interests and business combinations. The 'Other' category contains amounts owing to tenant incentives of 10m (2015/16: 27m), capitalised staff costs of 5m (2015/16: 4m) and capitalised interest of 7m (2015/16: 9m).


This information is provided by RNS
The company news service from the London Stock Exchange
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