RNS Number : 2701X

British Land Co PLC

18 November 2014



INDEPENDENT REVIEW REPORT TO THE BRITISH LAND COMPANY PLC

Report on the condensed set of financial statements in the half-yearly financial report

Our conclusion

We have reviewed the condensed set of financial statements, defined below, in the half-yearly financial report of The British Land Company PLC ("the Company") for the six months ended 30 September 2014. Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

What we have reviewed

The condensed set of financial statements, which are prepared by the Company, comprise:

• the consolidated balance sheet as at 30 September 2014;

• the consolidated income statement and consolidated statement of comprehensive income for the period then ended;

• the consolidated statement of cash flows for the period then ended;

• the consolidated statement of changes in equity for the period then ended; and

• the explanatory notes to the condensed consolidated interim financial statements.

As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The condensed set of financial statements in the half-yearly report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of condensed set of financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Responsibilities for the condensed set of financial statements and the review

Our responsibilities and those of the Directors

The half-yearly financial report, including the condensed set of financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

17 November 2014

London

The maintenance and integrity of The British Land Company PLC's website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Consolidated Income Statement
for the period ended 30 September 2014
Year ended 31 March 2014																	Six months ended 30 September 2014															Six months ended 30 September 2013
Audited																		Unaudited														Unaudited
Underlying pre tax*		Capital and other					Total										Underlying pre tax*					Capital and other					Total					Underlying pre tax*		Capital and other	Total
£m		£m					£m							Note				£m				£m					£m					£m		£m	£m
384		-					384					Gross rental and related income					3	232				-					232					179		-	179
313			-				313					Net rental and related income				3		185				-					185					148		-	148
15			-				15					Fees and other income				3		7				-					7					7		-	7
124			253				377					Joint ventures and funds (see also below)						64				340					404					63		89	152
(72)			-				(72)					Administrative expenses						(39)				-					(39)					(36)		-	(36)
-			615				615					Net valuation movement (includes result on disposals)				3		-				519					519					-		204	204
												Financing costs
9			3				12					- financing income						4				25					29					5		3	8
(90)			(60)				(150)					- financing charges						(58)				(4)					(62)					(41)		(20)	(61)
(81)			(57)				(138)											(54)				21					(33)					(36)		(17)	(53)
299			811				1,110					Profit on ordinary activities before taxation						163				880				1,043						146		276	422
												Taxation
			3				3					- current tax (expense) income				3					(2)					(2)								4	4
			3				3					- deferred tax (expense) income				3					-					-								1	1
			6				6														(2)				(2)									5	5
							1,116					Profit for the period after taxation									1,041														427
2				8			10					Attributable to non-controlling interests						8			35				43						-			-	-
297				809			1,106					Attributable to shareholders of the Company						155			843				998						146			281	427
							110.7				p	Earnings per share:			basic		2	98.5p																	43.0p
							110.2				p				diluted		2								97.9p								42.8p
												Share of results of joint ventures and funds
124				-			124					Underlying profit before taxation							64				-			64				63				-	63
-				258			258					Net valuation movement (includes result on disposals)							-				342			342				-				83	83
-				-			-					Financing break costs on property disposals							-				(1)			(1)				-				-	-
-				(5)			(5)					Current tax (expense) income							-				-			-				-				(1)	(1)
-				-			-					Deferred tax (expense) income							-				(1)			(1)				-				7	7
124				253			377												64				340			404				63				89	152
*As defined in note 2

Consolidated Statement of Comprehensive Income
for the period ended 30 September 2014
	Year ended 31 March 2014			Six months ended 30 September 2014	Six months ended 30 September 2013
	Audited			Unaudited	Unaudited
	£m			£m	£m
	1,116	Profit for the period after taxation		1,041	427
		Other comprehensive income:
		Items that will not be reclassified subsequently to profit or loss:
	(2)	Net actuarial gain (loss) on pension scheme		1	(2)
	-	Revaluation of owner occupied properties		8	-
	(2)			9	(2)
		Items that may be reclassified subsequently to profit or loss:
		(Losses) gains on cash flow hedges
	14	- Group		(23)	11
	48	- Joint ventures and funds		6	35
	62			(17)	46
		Transferred (from) to the income statement (cash flow hedges)
	8	- foreign currency derivatives		(3)	6
	15	- interest rate derivatives		5	7
	23			2	13
		Exchange differences on translation of foreign operations
	2	- hedging and translation		2	(1)
	1	- other		(1)	1
	3			1	-
	5	Deferred tax taken to equity		-	-
	5			-	-
	91	Other comprehensive (loss) income for the period		(5)	57
	1,207	Total comprehensive income for the period		1,036	484
	10	Attributable to non-controlling interests		43	-
	1,197	Attributable to shareholders of the Company		993	484

Consolidated Balance Sheet at 30 September 2014
31 March 2014				30 September 2014			30 September 2013
Audited				Unaudited			Unaudited
£m			Note	£m			£m
		Assets
		Non-current assets
7,272		Investment and development properties	4	7,752			5,950
47		Owner-occupied property	4	57			45
7,319				7,809			5,995
		Other non-current assets
2,712		Investments in joint ventures and funds	5	3,008			2,676
262		Other investments	6	330			124
32		Interest rate derivative assets	7	53			35
10,325				11,200			8,830
		Current assets
271		Trading properties	4	258			242
41		Debtors		43			41
142		Cash and short-term deposits	7	92			112
454				393			395
10,779		Total assets		11,593			9,225
		Liabilities
		Current liabilities
(495)		Short-term borrowings and overdrafts	7	(202)			(772)
(263)		Creditors		(298)			(241)
(8)		Corporation tax		(10)			(8)
(766)				(510)			(1,021)
		Non-current liabilities
(2,803)		Debentures and loans	7	(2,955)			(1,989)
(32)		Other non-current liabilities		(32)			(30)
(4)		Deferred tax liabilities		(4)			(15)
(57)		Interest rate derivative liabilities	7	(68)			(64)
(2,896)				(3,059)			(2,098)
(3,662)		Total liabilities		(3,569)			(3,119)
7,117		Net assets		8,024			6,106
		Equity
255		Share capital		257			252
1,257		Share premium		1,272			1,250
213		Merger reserve		213			213
(70)		Other reserves		(76)			(104)
5,091		Retained earnings		5,990			4,495
		Equity attributable to shareholders
6,746		of the Company		7,656			6,106
371		Non-controlling interests		368			-
7,117		Total equity		8,024			6,106
688	p	EPRA NAV per share*	2	769		p	626		p
* As defined in note 2
Consolidated Statement of Cash Flows
for the period ended 30 September 2014
Year ended 31 March 2014						Six months ended 30 September 2014		Six months ended 30 September 2013
Audited						Unaudited		Unaudited
£m				Note		£m		£m
312	Rental income received from tenants					194		145
19	Fees and other income received					9		10
(88)	Operating expenses paid to suppliers and employees					(60)		(48)
243	Cash generated from operations					143		107
(116)	Interest paid					(62)		(64)
29	Interest received					10		13
63	Distributions received from joint ventures and funds			5		40		31
219	Net cash inflow from operating activities					131		87
	Cash flows from investing activities
(175)	Development and other capital expenditure					(73)		(94)
(569)	Purchase of investment properties					-		(586)
352	Sale of investment and trading properties					137		125
-	Payments received in respect of trading properties					24		-
(84)	Purchase of investments					-		(6)
8	Sale of investments					-		-
5	Deferred consideration received					-		-
(145)	Acquisition of units in Hercules Unit Trust					(27)		(19)
18	Cash acquired on acquisition of subsidiary					-		-
(113)	Purchase of joint ventures and funds					-		-
179	Sale of joint ventures and funds					-		-
(162)	Investment in and loans to joint ventures and funds					(96)		(80)
28	Capital distributions and loan repayments from joint ventures and funds					101		9
(2)	Indirect taxes received (paid) in respect of investing activities					3		(3)
(660)	Net cash inflow (outflow) from investing activities					69		(654)
	Cash flows from financing activities
11	Issue of ordinary shares					5		4
(159)	Dividends paid					(95)		(74)
-	Dividends paid by subsidiaries to non-controlling interests					(11)		-
(16)	Close out of interest rate derivatives					(2)		-
(8)	Movement in other financial liabilities					(2)		(10)
(49)	Decrease in bank and other borrowings					(313)		(49)
669	Drawdowns on bank and other borrowings					168		673
448	Net cash (outflow) inflow from financing activities					(250)		544
7	Net (decrease) increase in cash and cash equivalents					(50)		(23)
135	Opening cash and cash equivalents					142		135
142	Closing cash and cash equivalents					92		112
	Cash and cash equivalents consists of:
142	Cash and short-term deposits					92		112

Consolidated Statement of Changes in Equity
for the period ended 30 September 2014
				Hedging &					Non-
	Share		Share	translation	Revaluation	Merger	Retained		controlling	Total
	capital	*	premium	reserve	reserve	reserve	earnings	Total	interests	Equity
	£m		£m	£m	£m	£m	£m	£m	£m	£m
Six month movements in equity
Balance at 1 April 2014	255		1,257	(32)	(38)	213	5,091	6,746	371	7,117
Total comprehensive income for the period	-		-	(19)	13	-	999	993	43	1,036
Share issues	2		15	-	-	-	(12)	5	-	5
Purchase of units from non-controlling interest	-		-	-	-	-	-	-	(35)	(35)
Adjustment for share and share option awards	-		-	-	-	-	4	4	-	4
Dividends payable	-		-	-	-	-	(136)	(136)	-	(136)
Dividends payable by subsidiaries	-		-	-	-	-	-	-	(11)	(11)
Adjustment for scrip dividend element	-		-	-	-	-	44	44	-	44
Balance at 30 September 2014	257		1,272	(51)	(25)	213	5,990	7,656	368	8,024
Balance at 1 April 2013	249		1,242	(71)	(92)	213	4,146	5,687	-	5,687
Total comprehensive income for the period	-		-	23	36	-	425	484	-	484
Share issues	3		8	-	-	-	-	11	-	11
De-designation of cash flow hedges	-		-	-	-	-	-	-	-	-
Adjustment for share and share option awards	-		-	-	-	-	(3)	(3)	-	(3)
Dividends payable in the six month period	-		-	-	-	-	(130)	(130)	-	(130)
Adjustment for scrip dividend element	-		-	-	-	-	57	57	-	57
Balance at 30 September 2013	252		1,250	(48)	(56)	213	4,495	6,106	-	6,106
Prior year movements in equity
Balance at 1 April 2013	249		1,242	(71)	(92)	213	4,146	5,687	-	5,687
Total comprehensive income for the period	-		-	39	54	-	1,104	1,197	10	1,207
Share issues	6		15	-	-	-	(8)	13	-	13
Non-controlling interest on acquisition of a subsidiary	-		-	-	-	-	-	-	374	374
Purchase of units from non-controlling interest	-		-	-	-	-	-	-	(13)	(13)
Adjustment for share and share option awards	-		-	-	-	-	10	10	-	10
Dividends payable in the year	-		-	-	-	-	(266)	(266)	-	(266)
Transfer	-		-	-	-	-	-	-	-	-
Adjustment for scrip dividend element	-		-	-	-	-	105	105	-	105
Balance at 31 March 2014	255		1,257	(32)	(38)	213	5,091	6,746	371	7,117
* See note 12 for a summary of the number of shares in issue

Notes to the accounts (unaudited)

1.     Basis of preparation

The financial information for the period ended 30 September 2014 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 March 2014 has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The financial information included in this announcement has been prepared on a going concern basis using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with IAS 34 'Interim Financial Reporting'. The current period financial information presented in this document has been reviewed, not audited.

The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2014, which have been prepared in accordance with IFRS as adopted by the European Union.

In the current financial year the Group has adopted the amendments to IAS 32 "Financial instruments: presentation", IAS 36 "Impairment of assets",  IAS 27 (revised) "Separate financial statements", IAS 28 (revised) "Associates and joint ventures", IFRS 10 "Consolidated financial statements", IFRS 11 "Joint arrangements", and IFRS 12 "Disclosure of interests in other entities". Otherwise the same accounting policies, estimates, presentation and methods of computation are followed in the half year report as applied in the Group's latest annual audited financial statements.

Adoption of the standards listed above did not have a material impact on the financial statements of the Group.

IFRS 9 "Financial Instruments" was the only standard or interpretation issued but not effective for the current accounting period. IFRS 9 will impact both the measurement and disclosures of financial instruments and is effective for the Group's year ending 31 March 2018. The Group has not yet completed its evaluation of the effect of adoption.

The Group's business activities, financial position, cash flows, liquidity position and financing structure are discussed in the first half of this report. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements. The Group's business is not seasonal.

The accounting judgements and estimates are discussed in the Financial Review.

The interim financial information was approved by the Board on 17 November 2014.

2.     Performance measures
Year ended 31 March 2014						Six months ended 30 September 2014		Six months ended 30 September 20131
Earnings		Pence per share	Earnings per share			Earnings	Pence per share	Earnings		Pence per share
£m						£m		£m
297		-	Underlying pre-tax profit attributable to shareholders of the company - income statement			155	-	146		-
(2)		-	Tax charge relating to underlying profit			-	-	(1)		-
295		29.4	Underlying earnings			155	15.3	145		14.5
-		-	Dilution due to convertible bond			-	(0.6)	-		-
295		29.4	EPRA earnings per share (diluted)				14.7			14.5
		0.1	Remove dilution due to share options and convertible bond				0.6			0.1
		29.5	EPRA earnings per share (basic)				15.3			14.6
1,106		110.2	Profit for the period after taxation (diluted)			998	97.9	427		42.8
The European Public Real Estate Association (EPRA) has issued Best Practices Recommendations, the latest update of which was issued in January 2014, which give guidelines for performance measures.  EPRA earnings is the profit after tax excluding property revaluations and gains or losses on disposals, changes in the fair value of financial instruments and associated close-out costs and their related taxation.  A summary of the EPRA Performance Measures is provided in Table B within the Supplementary Disclosures.            The EPRA earnings per share (diluted) also takes into account dilution due to the Convertible Bond issued on 10 September 2012.  The Company's share price reached the conversion price of the convertible bond for the first time in the period to 30 September 2014 and therefore it was dilutive for the first time in the period.              Underlying earnings consists of the EPRA earnings (diluted) measure excluding the dilutive impact of the convertible bond.
												The weighted average number of shares in issue for the six month period was: basic: 1,013m (Year ended 31 March 2014: 999m; six months ended 30 September 2013: 993m); diluted for the effect of share options and the convertible bond: 1,077m (Year ended 31 March 2014: 1,004m; six months ended 30 September 2013: 997m).  Basic undiluted earnings per share for the six month period was 98.5p (Year ended 31 March 2014: 110.7p; six months ended 30 September 2013: 43.0p).
																								31 March 2014								30 September 2014		30 September 20131
																								£m			Net asset value (NAV) (diluted)					£m		£m
																								7,117			Balance sheet net assets					8,024		6,106
																								(371)			Less non-controlling interests					(368)		-
6			Deferred tax arising on revaluation movements					5		5
173			Mark to market on effective cash flow hedges and related debt adjustments					170		164
63			Surplus on trading properties					93		12
39			Dilution due to share options					45		37
-			Dilution due to convertible bond					400		-
7,027			EPRA NAV					8,369		6,324
688	p		EPRA NAV per share					769	p	626	p
The EPRA NAV per share excludes the mark to market on effective cash flow hedges and related debt adjustments, and the convertible bond, deferred taxation on revaluations, and includes the surplus on trading properties and is calculated on a fully diluted basis. The EPRA NAV per share calculation also takes into account dilution for the Convertible Bond issued on 10 September 2012. The Company's share price exceeded the conversion price of the convertible bond for the first time as at 30 September 2014 and therefore it was dilutive for the first time at the period end. 1 EPRA earnings per share and EPRA NAV per share at 30 September 2013 have been re-presented to exclude the mark to market movements in the convertible bond in line with the EPRA Best Practices Recommendations additional guidance, issued in January 2014.  This update increased EPRA Earnings per share by 1.9p and EPRA NAV per share by 3p in the comparative period. At 30 September 2014, the number of shares in issue was: basic: 1,018m (31 March 2014: 1,008m; 30 September 2013: 999m); diluted for the effect of share options and the convertible bond: 1,089m (31 March 2014: 1,021m; 30 September 2013: 1,011m). Total accounting return per share for the six months ended 30 September 2014 of 13.7% includes dividends paid of 13.5p (see note 8) in addition to the increase in EPRA NAV 81p. Total accounting return per share for the six months ended 30 September 2013 was 6.8% and the year ended 31 March 2014 was 20.0%.

3.     Income statement notes
Year ended 31 March 2014				Six months ended 30 September 2014	Six months ended 30 September 2013
£m				£m	£m
	Gross and net rental income
310	Rent receivable			181	149
20	Spreading of tenant incentives and guaranteed rent increases			14	6
4	Surrender premia			3	2
334	Gross rental income			198	157
50	Service charge income			34	22
384	Gross rental and related income			232	179
(50)	Service charge expenses			(34)	(22)
(21)	Property operating expenses			(13)	(9)
313	Net rental and related income			185	148
	Fees and other income
10	Performance & management fees (from joint ventures & funds)			5	5
5	Other fees and commission			2	2
15				7	7
	Net valuation movements on property and investments (including result on disposals)
580	Revaluation of properties			512	191
17	Result on property and investment disposals (excluding trading property disposals)			7	13
14	Result on trading property disposals			1	-
4	Revaluation of investments			(1)	-
615				519	204
258	Share of valuation movements of joint ventures and funds (note 5)			342	83
873				861	287
	Consolidated statement of comprehensive income
-	Revaluation of owner occupied properties			8	-
873				869	287
	Result on trading property disposals
109	Sale proceeds			38	-
(95)	Cost of sales			(37)	-
14	Result on trading property disposals			1	-
Included in the £21m of net financing costs in the Capital and other column are a £17m fair value gain on the convertible bond, plus a £4m net foreign exchange gain on foreign currency denominated debt and investments in foreign operations.
	Tax (expense) income
2	Current tax:	UK corporation tax (30 September 2014: 21%; 31 March 2014: 23%; 30 September 2013: 23%)		(2)	(1)
2						(2)	(1)
(5)	Adjustments in respect of prior periods			-	5
(3)	Total current tax (expense) income			(2)	4
(3)	Deferred tax on revaluations			-	1
(6)	Group total taxation			(2)	5
5	Attributable to joint ventures and funds			(1)	6
(1)	Total taxation			(3)	11
Tax expense attributable to underlying profits for the six months ended 30 September 2014 was £nil (six months ended 30 September 2013: £1m; Year ended 31 March 2014: £2m). The deferred tax charge for the six months ended 30 September 2014 has been calculated using the substantively enacted UK corporation tax rate at the reporting date of 20% (effective from 1 April 2015).

4.     Property
Total property interests at fair value are £13,425m at 30 September 2014, comprising properties held by the Group of £8,119m, share of properties held by funds of £499m and share of properties held by joint ventures of £4,807m. Properties were valued on the basis of fair value, supported by market evidence, in accordance with the Appraisal and Valuation Standards published by The Royal Institution of Chartered Surveyors.
						31 March 2014				30 September 2014	30 September 2013
						£m				£m	£m
						7,272	Investment properties			7,752	5,950
47	Owner-occupied property			57	45
7,319	Carrying value of properties on balance sheet			7,809	5,995
271	Trading properties			258	242
(32)	Head lease liabilities			(32)	(30)
58	Surplus on trading properties			84	12
7,616	Total Group property portfolio valuation			8,119	6,219
(422)	Non-controlling interests			(411)	-
7,194	Total Group property portfolio valuation attributable to shareholders			7,708	6,219
At 30 September 2014 Group properties valued at £1,756m were subject to a security interest (31 March 2014: £1,741m; 30 September 2013: £1,695m) and other properties of non-recourse companies amounted to £1,125m (31 March 2014: £1,066m; 30 September 2013: £42m), totalling £2,881m (31 March 2014: £2,807m; 30 September 2013: £1,737m). Interest capitalised on properties under development for the six months ended 30 September 2014 was £5m (31 March 2014: £17m; 30 September 2013: £11m).
						Fair value hierarchy
						The table below analyses investment property by the valuation method. The different levels are defined as follows:
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).
31 March 2014				30 September 2014	30 September 2013
Level 3				Level 3	Level 3
£m				£m	£m
4,443		UK Retail		4,767	3,400
2,546		Offices and Residential		2,727	2,204
251		Developments		226	316
47		Owner-Occupied		57	45
7,287		Total		7,777	5,965
329		Trading properties and surplus on trading properties		342	254
7,616		Total Group property portfolio valuation		8,119	6,219

5.     Joint ventures and funds
Summary of British Land's share of investments in joint ventures and funds at 30 September 2014
		Underlying Profit (six months)	Net Investment	Property assets	Other assets	Gross liabilities*
		£m	£m	£m	£m	£m
Share of funds		8	425	499	25	(99)
Share of joint ventures		52	2,583	4,800	216	(2,433)
Total		60	3,008	5,299	241	(2,532)
* Liabilities include secured bank loans. The borrowings of joint ventures and funds and their subsidiaries are non-recourse to the Group PREF, a fund owning a portfolio of retail property in Europe (in which British Land has a net investment of £29m), has its properties externally valued by CBRE. CBRE have included a market uncertainty clause in the valuation report of the Portuguese properties, due to a lack of transactional evidence and uncertainty over the economic situation in that market. In September 2014, following the sale of its Spanish assets, €42m of debt was repaid including all of its remaining bank debt. At 30 September 2014 the investment in joint ventures included within the total investment in joint ventures and funds was £2,979m (31 March 2014: £2,658m; 30 September 2013: £2,219m). Amounts owed to joint ventures on a proportional basis at 30 September 2014 were £4m (31 March 2014: £4m; 30 September 2013: £4m). Amounts owed from joint ventures on a proportional basis at 30 September 2014 were £nil (31 March 2014: £nil; 30 September 2013: £nil).

British Land's share of the results of joint ventures and funds
Year ended 31 March 2014					Six months ended 30 September 2014	Six months ended 30 September 2013
£m					£m	£m
307	Gross rental income				125	134
253	Net rental and related income				121	127
(6)	Other income and expenditure				(2)	(2)
(123)	Net financing costs				(55)	(62)
124	Underlying profit before taxation				64	63
258	Net valuation and disposal movements Non-recurring items				342	83
-					(1)	-
382	Profit on ordinary activities before taxation				405	146
(5)	Current tax expense				-	(1)
-	Deferred tax income (expense)				(1)	7
377	Profit on ordinary activities after taxation				404	152
	Profit distributions split between controlling and non-controlling interests
-	Attributable to non-controlling interests				15	-
377	Attributable to shareholders of the Company				389	152
British Land's share of the operating cash flows of joint ventures and funds
Year ended 31 March 2014					Six months ended 30 September 2014	Six months ended 30 September 2013
£m					£m	£m
274	Rental income received from tenants				122	124
(33)	Operating expenses paid to suppliers and employees				(11)	(15)
241	Cash generated from operations				111	109
(135)	Interest paid				(65)	(66)
1	Interest received				2	-
(6)	UK corporation tax paid				(4)	(3)
(3)	Foreign tax paid				-	-
98	Cash inflow from operating activities				44	40
	Cash inflow from operating activities deployed as:
35	Surplus cash retained within joint ventures and funds				4	9
63	Revenue distributions per Consolidated Statement of Cash Flows				40	31
	Revenue distributions split between controlling and non-controlling interests
-	Attributable to non-controlling interests				4	-
63	Attributable to shareholders of the Company				36	31
6.     Other investments
92	Investment held for trading				97	-
170	Loans and receivables				233	124
262	Other investments				330	124
The investment held for trading has been categorised as level 3 in the fair value hierarchy.  Fair value of the interest has been determined by the Directors, supported by an external valuation from CBRE. The fair value of loans and receivables are equivalent to their book value. Included within loans and receivables is £208m (31 March 2014: £145m; 30 September 2013: £92m) in relation to a loan to Bluebutton Properties Limited, a joint venture company.

7.     Net Debt
Year ended													30 September			30 September
31 March 2014													2014			2013
£m													£m			£m
1,714	Debentures and unsecured bonds												1,698			1,528
458	Convertible bond												440			426
1,126	Bank debt and other floating rate debt												1,019			807
3,298	Gross debt												3,157			2,761
57	Interest rate and currency derivative liabilities												68			64
(32)	Interest rate and currency derivative assets												(53)			(35)
3,323													3,172			2,790
(142)	Cash and short-term deposits												(92)			(112)
3,181	Total net debt												3,080			2,678
(204)	Net debt attributable to non-controlling interests												(186)			-
2,977	Net debt attributable to shareholders of the Company												2,894			2,678
Gross debt includes £202m due within one year at 30 September 2014 (31 March 2014: £495m; 30 September 2013: £772m).
Undrawn committed bank facilities at 30 September 2014 amounted to £2,204m, of which £171m relates to partly-owned subsidiaries.
The Group loan to value (LTV) ratio at 30 September 2014 was 26%, being the principal value of gross debt of £3,061m, less the relevant portion of borrowings of the partly-owned subsidiary of £199m, less cash and short-term deposits of £80m (being £92m less the relevant proportion of cash and deposits of the partly-owned subsidiary of £12m), divided by total Group property of £8,119m (note 4), plus investments in joint ventures and funds of £3,008m (note 5) and other investments of £330m (note 6), less the relevant portion of property and investments of the partly-owned subsidiary of £560m.
																								British Land Unsecured Financial Covenants
																								The two financial covenants applicable to the Group unsecured debt including convertible debt are:
Net Borrowings not to exceed 175% of Adjusted Capital and Reserves.
At 30 September 2014, the ratio was 34%: • net borrowings were £2,816m, being the principal amount of gross debt of £3,061m, less the relevant proportion of borrowings of the partly-owned subsidiary of £199m, plus amounts owed to joint ventures of £4m (see note 5), plus TPP Investments Ltd of £30m (see note 10), less the beneficially owned cash and deposits of £80m (being £92m less the relevant proportion of cash and deposits of the partly-owned subsidiary of £12m); and • adjusted capital and reserves were £8,231m, being share capital and reserves of £7,656m (see balance sheet), adjusted for £5m of deferred tax (see note 2), £93m trading property surpluses, £307m exceptional refinancing charges (see below), £170m fair value adjustments on financial assets and liabilities (being £130m mark-to-market on interest rate derivatives and £40m adjustment on the convertible bond).
Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets.
At 30 September 2014 the ratio is 27%
i. Net Unsecured Borrowings are £1,533m, being the principal amount of gross debt of £3,061m plus amounts owed to joint ventures of £4m less cash and deposits not subject to a security interest of £70m less the principal amount of secured and non-recourse borrowings of £1,462m; and
																								ii. Unencumbered Assets are £5,597m being properties of £8,119m (see note 4) plus investments in joint ventures and funds of £3,008m (see note 5) and other investments of £330m (see balance sheet) less investments in joint ventures of £2,979m (see note 5) and encumbered assets of £2,881m (see note 4).
																																																In calculating Adjusted Capital and Reserves for the purpose of the unsecured debt financial covenants, there is an adjustment of £307m to reflect the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007.
Comparison of fair values and book values
			30 September 2014								30 September 2013
			Fair		Book					Fair	Book
			Value		Value		Difference			Value	Value			Difference
			£m		£m		£m			£m	£m			£m
Debentures and unsecured bonds			1,751		1,698		53			1,546	1,528			18
Convertible bond			440		440		-			426	426			-
Bank debt and other floating rate debt			1,034		1,019		15			815	807			8
Cash and short-term deposits			(92)		(92)		-			(112)	(112)			-
			3,133		3,065		68			2,675	2,649			26
Other financial (assets) liabilities:
- interest rate derivative assets			(53)		(53)		-			(35)	(35)			-
- interest rate derivative liabilities			68		68		-			64	64			-
			15		15		-			29	29			-
Total			3,148		3,080		68			2,704	2,678			26
Short-term debtors and creditors have been excluded from the disclosures on the basis that the fair value is equivalent to the book value. The fair values of debt, debentures and the convertible bond have been established by obtaining quoted market prices from brokers. The bank debt and loan notes have been valued assuming they 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.

7.     Net Debt (continued)
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by the valuation method. The different levels are defined as follows:
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).
		30 September 2014
		Level 1	Level 2	Level 3	Total
		£m	£m	£m	£m
Interest rate and currency		-	(53)	-	(53)
	derivative assets
Assets		-	(53)	-	(53)
Interest rate and currency		-	68	-	68
	derivative liabilities
Convertible bond		440	-	-	440
Liabilities		440	68	-	508
Total		440	15	-	455
8.     Dividends
The 2015 second quarter dividend of 6.92 pence per share, totalling £71m, is payable on 13 February 2015 to shareholders on the register at close of business on 9 January 2015. The Board will announce the availability of the Scrip Dividend Alternative via the Regulatory News Service and on its website (www.britishland.com), no later than 4 business days before the ex-dividend date of 8 January 2015.  The Board expects to announce the split between PID and non-PID income at that time. A 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) for details.          The 2015 first quarter dividend of 6.92 pence per share, totalling £70m, was paid on 7 November 2014. 9% of shareholders opted for the Scrip Dividend Alternative.  Both the cash dividend and Scrip Dividend Alternative were treated as PIDs. The total cash paid by the Group was £64m, being £54m paid to shareholders and £10m of withholding tax. The Consolidated Statement of Changes in Equity shows total dividends in the six months to 30 September of £136m, £68m being the third quarter 2014 dividend of 6.75 pence per share paid on 10 May 2014, and the 2014 fourth quarter PID dividend of 6.75 pence per share, paid on 9 August 2014, totalling £68m. A scrip alternative was offered in lieu of cash for both dividends.

9. Segment Information
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its two principal sectors are currently Offices and Retail. The Offices sector includes residential, as this is often incorporated into office schemes, and Retail includes leisure, for a similar rationale. The relevant revenue, net rental income, operating result, assets and capital expenditure, being the measures of segment revenue, segment result and segment assets used by the management of the business, are set out below. Revenue is derived from the rental of buildings. Operating result is the net of net rental income, fee income and administration expenses. No customer exceeds 10% of the Group's revenues.
Segment result		Offices		Retail		Other/unallocated		Total
		2014	2013	2014	2013	2014	2013	2014	2013
		£m	£m	£m	£m	£m	£m	£m	£m
Revenue
British Land Group		59	43	139	114	-	-	198	157
Share of funds and joint ventures		43	42	77	83	5	9	125	134
Total		102	85	216	197	5	9	323	291
Net rental income
British Land Group		55	40	130	108	-	-	185	148
Share of funds and joint ventures		41	40	76	80	4	7	121	127
Total		96	80	206	188	4	7	306	275
Operating Result
British Land Group		49	33	125	104	(21)	(18)	153	119
Share of funds and joint ventures		41	40	75	78	3	7	119	125
Total		90	73	200	182	(18)	(11)	272	244
Reconciliation to total profit before taxation
British Land Group
Total Operating Result								272	244
British Land Group net financing costs								(54)	(36)
Share of funds and joint ventures net financing costs								(55)	(62)
Capital and other								880	276
Total profit on ordinary activities before taxation								1,043	422
Segment assets		Offices		Retail		Other/unallocated		Total
		2014	2013	2014	2013	2014	2013	2014	2013
		£m	£m	£m	£m	£m	£m	£m	£m
Property assets (includes head leases liabilities)
British Land Group		3,317	2,770	4,802	3,449	-	-	8,119	6,219
Share of funds and joint ventures		2,252	1,791	3,013	3,187	41	241	5,306	5,219
Total		5,569	4,561	7,815	6,636	41	241	13,425	11,438
Segment assets
British Land Group		3,245	2,779	4,822	3,470	518	300	8,585	6,549
Share of funds and joint ventures		2,397	1,953	3,097	3,263	46	272	5,540	5,488
Total		5,642	4,732	7,919	6,733	564	572	14,125	12,037
Other assets
British Land Group		-	-	-	-	518	312	518	312
Share of funds and joint ventures		154	162	82	72	5	31	241	265
Total		154	162	82	72	523	343	759	577
Capital expenditure
British Land Group		94	553	35	33	-	-	129	586
Share of funds and joint ventures		86	45	17	9	29	1	132	55
Total		180	598	52	42	29	1	261	641
Reconciliation to net assets								2014	2013
								£m	£m
British Land Group
Segment Assets
British Land Group								8,585	6,549
Share of funds and joint ventures								5,540	5,488
Total								14,125	12,037
Share of funds and joint ventures liabilities								(2,532)	(2,812)
Current liabilities								(510)	(1,021)
Non-current liabilities								(3,059)	(2,098)
Net Assets								8,024	6,106
Other assets include other investments of £330m (31 March 2014: £262m; 30 September 2013: £124m), debtors of £43m (31 March 2014: £41m; 30 September 2013: £41m), cash and short-term deposits of £92m (31 March 2014: £142m; 30 September 2013: £112m) and derivatives of £53m (31 March 2014: £32m; 30 September 2013: £35m).
10.     Contingent liabilities The Group has contingent liabilities in respect of legal claims, guarantees and warranties arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities. TPP Investments Limited, a wholly owned ring-fenced special purpose subsidiary, is a partner in The Tesco British Land Property Partnership and, in that capacity, has entered into a secured bank loan under which its liability is limited to £30m (31 March 2014: £30m, 30 September 2014: £30m) and recourse is only to the partnership assets. 11.     Related party transactions There have been no material changes in the related party transactions described in the last annual report. Details of transactions with joint ventures and funds are given in notes 3, 6 and 10. Amounts owed to joint ventures are detailed in note 5. 12.     Share capital At 30 September 2014, of the issued 25p ordinary shares, 1m were held in the ESOP Trust (31 March 2014: 1m; 30 September 2013: 1m), 11m were held as Treasury shares (31 March 2014: 11m; 30 September 2013: 11m) and 1,018m shares were in free issue (31 March 2014: 1,008m; 30 September 2013: 999m). All shares are fully paid. 13.     Post balance sheet events Subsequent to the period end, two steel bolts were found to have broken on The Leadenhall Building, in which the Group has a 50 per cent share. A full investigation is being conducted by both the contractor and structural engineers who will be leading on taking the appropriate remedial action. No injuries arose as a result of either fracture and the building is structurally sound.

Supplementary Disclosures
Table A: SUMMARY INCOME STATEMENT AND BALANCE SHEET
Summary income statement based on proportional consolidation for the period ended 30 September 2014
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, i.e. proportional basis.  The underlying profit before taxation and underlying profit after taxation are the same as presented in the consolidated income statement.
														Year ended 31 March 2014							Six months ended 30 September 2014				Six months ended 30 September 2013
																		Group	JVs & funds	Less non-controlling interests			Prop Consol						Group	JVs & funds	Less non-controlling interests	Prop Consol		Group	JVs & funds	Prop Consol
														£m	£m	£m	£m			£m	£m	£m	£m		£m	£m	£m
334	267	(4)	597		Gross rental income	198	125	(14)	309		157	134	291
(21)	(14)	-	(35)		Property operating expenses	(13)	(4)	-	(17)		(9)	(7)	(16)
313	253	(4)	562		Net rental income	185	121	(14)	292		148	127	275
(72)	(6)	-	(78)		Administrative expenses	(39)	(2)	-	(41)		(36)	(2)	(38)
15	-	-	15		Fees & other income	7	-	-	7		7	-	7
256	247	(4)	499		Ungeared Income Return	153	119	(14)	258		119	125	244
(81)	(123)	2	(202)		Net interest	(54)	(55)	6	(103)		(36)	(62)	(98)
175	124	(2)	297		Underlying profit before tax	99	64	(8)	155		83	63	146
(2)	-	-	(2)		Underlying tax				-				(1)
173	124	(2)	295		Underlying profit after taxation				155				145
			29.4p		Underlying earnings per share - diluted basis				15.3p				14.5p
			873		Valuation movement				826				287
			53		Other capital and tax (net)*				17				(28)
			926		Capital and other				843				259
			1,221		Total return				998				404
The underlying earnings per share is calculated on underlying profit before taxation of £155m, tax attributable to underlying profits of £nil and 1,019m shares on a diluted basis, for the six months ended 30 September 2014.
														*includes other comprehensive income, movement in dilution due to share options and the movement in items excluded for EPRA NAV.

Supplementary Disclosures (continued)
Table A (continued):
Summary balance sheet based on proportional consolidation as at 30 September 2014
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, i.e. proportional basis and assuming full dilution.
																								EPRA Net assets 31 March 2014				Group		Share of joint ventures & funds		Less non-controlling interest		Dilution due to share options and convertible bond	Deferred tax		Mark to market on effective cash flow hedges and related debt adjs			Head Leases	Valuation surplus on trading properties		EPRA Net assets 30 Sep 2014		EPRA Net assets 30 Sep 2013
																								£m				£m		£m		£m		£m	£m		£m			£m	£m		£m		£m
	6,852		Retail properties		4,822		3,015		(583)		-	-		-			(22)	-		7,232		6,636
	5,099		Office properties		3,245		2,243		-		-	-		-			(12)	93		5,569		4,561
	89		Other properties		-		41		-		-	-		-			-	-		41		241
	12,040		Total properties		8,067		5,299		(583)		-	-		-			(34)	93		12,842		11,438
	-		Investments in joint		3,008		(3,008)		-		-	-		-			-	-		-		-
			ventures and funds
	194		Other investments		330		(106)		-		-	-		-			-	-		224		81
	(317)		Other net (liabilities)		(301)		(139)		7		45	5		-			34	-		(349)		(301)
			assets
	(4,890)		Adjusted Net debt		(3,080)		(2,046)		208		-	-		170			-	-		(4,748)		(4,894)
	-		Dilution due to convertible bond		-		-		-		400	-		-			-	-		400		-
	7,027		Net assets		8,024		-		(368)		445	5		170			-	93		8,369		6,324
	688p		EPRA NAV per share (note 2)																	769p		626p

EPRA Net Assets Movement
Year ended 31 March 2014												Six months ended 30 September 2014			Six months ended 30 September 20131
£m		Pence per share									£m	Pence per share	£m		Pence per share
5,967		596		Opening EPRA NAV							7,027	688	5,967		596
295		29		Income return							155	15	145		14
926		90		Capital return							879	84	259		26
(161)		(27)		Dividends							(92)	(14)	(73)		(13)
-		-		Dilution due to convertible bond							400	(4)	-		-
-		-		Re-presentation of mark-to-market valuation on convertible bond (see note 2)							-	-	26		3
7,027		688		Closing EPRA NAV							8,369	769	6,324		626
1 Re-presented in line with EPRA Best Practices Recommendations additional guidance, issued January 2014 (see note 2).

Supplementary Disclosures (continued)
Table B: EPRA Performance Measures
EPRA Performance measures summary table
Year ended 31 March 2014						Six months ended 30 September 2014					Six months ended 30 September 20131
£m	Pence per share					£m	Pence per share				£m	Pence per share
295	29.5		EPRA Earnings	-basic		155	15.3				145	14.6
295	29.4			-diluted                  158			14.7				145	14.5
7,027	688		EPRA NAV			8,369	769				6,324	626
6,700	656		EPRA NNNAV			7,962	731				6,016	595
	4.8	%	EPRA Net Initial Yield					4.5	%				5.0	%
	5.3	%	EPRA 'topped-up' Net Initial Yield					5.0	%				5.5	%
	5.2	%	EPRA Vacancy Rate					4.4	%				4.6	%
Calculation of EPRA earnings and EPRA earnings per share
Year ended 31 March 2014											Six months ended 30 September 2014	Six months ended 30 September 20131
£m											£m	£m
1,106			Profit attributable to shareholders of the Company						998			427
			Exclude:
(5)			Group - non-underlying current tax								2	(5)
(3)			Group - deferred tax								-	(1)
5			Joint Ventures and Funds - non-underlying current tax						-			1
-			Joint Ventures and Funds - deferred tax								1	(7)
(615)			Group - net valuation movement (including result on disposals)						(519)			(204)
(258)			Joint ventures and funds - net valuation movement (including result on disposals)						(342)			(83)
57			Changes in fair value of financial instruments and associated close-out costs						(21)			17
-			Financing break costs on property disposals								1	-
8			Non-controlling interest in respect of the above						35			-
295			EPRA Earnings								155	145
Year ended 31 March 2014											Six months ended 30 September 2014	Six months ended 30 September 20131
Number											Number	Number
million											million	million
1,010			Weighted average number of shares								1,024	1,004
(11)			Adjustment for Treasury shares								(11)	(11)
999			Weighted average number of shares (basic)								1,013	993
2			Dilutive effect of share options								2	1
3			Dilutive effect of ESOP shares								4	3
-			Dilutive effect of convertible bond								58	-
1,004			Weighted average number of shares (diluted)						1,077			997
											2014	2013
											Pence	Pence
110.7			Earnings per share (basic)								98.5	43.0
110.2			Earnings per share (diluted)								97.9	42.8
29.4			Underlying earnings per share (diluted)								15.3	14.5
29.5			EPRA earnings per share		-basic						15.3	14.6
29.4					-diluted						14.7	14.5
1 Re-presented in line with EPRA Best Practices Recommendations additional guidance, issued January 2014 (see note 2).

Supplementary Disclosures (continued)
Table B (continued):
Net assets per share
Year ended 31 March 2014				Pence per share								Six months ended 30 September 2014			Pence per share		Six months ended 30 September 20131					Pence per share
£m												£m					£m
7,117						Balance sheet net assets						8,024					6,106
6						Deferred tax arising on revaluation movement						5					5
173						Mark to market on effective cash flow hedges and related debt adjustments						170					164
39						Dilution due to share options						45					37
63						Surplus on trading properties						93					12
(371)						Less non-controlling interests						(368)					-
-						Dilution due to convertible bond						400					-
7,027				688		EPRA NAV						8,369			769		6,324					626
(6)						Deferred tax arising on revaluation movements						(5)					(5)
(173)						Mark to market on cash flow hedges and related debt adjustments						(170)					(164)
(148)						Mark to market on debt						(232)					(139)
6,700				656		EPRA NNNAV						7,962			731		6,016					595
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. 1 Re-presented in line with EPRA Best Practices Recommendations additional guidance, issued January 2014 (see note 2).
																											EPRA Net Initial Yield and 'topped-up' Net Initial Yield
																											Year ended 31 March 2014										Six months ended 30 September 2014						Six months ended 30 September 2013
	£m										£m						£m
	7,194					Investment property - wholly owned					8,119						6,219
	4,757					Investment property - share of joint ventures and funds					5,265						4,978
	(1,192)					Less developments					(1,011)						(1,008)
	10,759					Completed property portfolio					12,373						10,189
	639					Allowance for estimated purchasers' costs					(542)						572
	11,398					Gross up completed property portfolio valuation					11,831						10,761
	554					Annualised cash passing rental income					568						545
	(8)					Property outgoings					(9)						(10)
	546					Annualised net rents					559						535
	53					Rent expiration of rent free periods and fixed uplifts*					68						60
	599					'Topped-up' net annualised rent					627						595
	4.8				%	EPRA Net Initial Yield					4.7					%	5.0				%
	5.3				%	EPRA 'topped-up' Net Initial Yield					5.3					%	5.5				%
	26					Including fixed/minimum uplifts received in lieu of rental growth					27						26
	625					Total 'topped-up' net rents					654						621
	5.5				%	Overall 'topped-up' Net Initial Yield					5.5					%	5.8				%
	599					'Topped-up' net annualised rent					627						595
	33					ERV vacant space					29						28
	(9)					Reversions					2						(15)
	623					Total Net ERV					658						608
	5.5				%	Net Reversionary Yield					5.6					%	5.7				%
* The period over which rent free periods expire is 4 years (31 March 2014: 2 years; 30 September 2013: 4 years)
The current period 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 30 September 2014, 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 un-rented, lettable space as a proportion of the total rental value of the completed property portfolio.
		EPRA Vacancy Rate
		Year ended 31 March 2014											Six months ended 30 September 2014					Six months ended 30 September 2013
		£m											£m					£m
		33					Annualised potential gross rental value of vacant premises						29					28
		623					Annualised potential gross rental value for the completed property portfolio						662					617
		5.2				%	EPRA Vacancy Rate						4.4			%		4.6				%
		The current period above is stated for the UK portfolio only.

Supplementary Disclosures (continued)
Table B (continued):
EPRA Cost Ratios
Year ended 31 March 2014				Six months ended 30 September 2014		Six months ended 30 September 2013
£m				£m		£m
21			Property outgoings	13		9
72			Administrative expenses	39		36
20			Share of joint ventures and funds expenses	6		9
			Less:
(10)			Performance & management fees (from joint ventures & funds)	(5)		(5)
(5)			Other fees and commission	(2)		(2)
(2)			Ground rent costs	(2)		-
96			EPRA Costs (including direct vacancy costs) (A)	49		47
(13)			Direct vacancy costs	(7)		(6)
83			EPRA Costs (excluding direct vacancy costs) (B)	42		41
330			Gross Rental Income less ground rent costs	170		157
265			Share of joint ventures and funds (GRI less ground rent costs)	137		134
595			Total Gross Rental Income (C)	307		291
16.2 %			EPRA Cost Ratio (including direct vacancy costs) (A/C)	16.0	%	16.0 %
13.9 %			EPRA Cost Ratio (excluding direct vacancy costs) (B/C)	13.7	%	14.1 %
			Overhead and operating expenses capitalised (incl. share of joint ventures and funds)
-				-		-
No overhead or operating expenses, including employee costs, are capitalised.
Table C:  GROSS RENTAL INCOME AND ACCOUNTING RETURN
Calculation of gross rental income
Year ended				Six months ended		Six months ended
31 March 2014				30 September 2014		30 September 2013
£m				£m		£m
574			Rent receivable	306		281
23			Spreading of tenant incentives and guaranteed rent increases	13		8
4			Surrender premia	4		2
601			Gross rental income	323		291
Year ended				Six months ended		Six months ended
31 March 2014				30 September 2014		30 September 2013
20.0	%		Total accounting return	13.7	%	6.8%

SUPPLEMENTARY TABLES

(Data includes Group's share of Joint Ventures and Funds)

	Portfolio Valuation
At 30 September 2014		Group	JVs & Funds1	Total	Change²
		£m	£m	£m	%
Shopping parks		1,828	1,156	2,984	7.2
Shopping centres		803	1,185	1,988	5.8
Superstores		117	1,180	1,297	3.1
Department stores		600	1	601	6.5
Leisure		359	3	362	7.1
Retail & Leisure3		3,707	3,525	7,232	6.0
West End		2,953	-	2,953	9.0
City		68	2,209	2,277	9.0
Provincial		96	-	96	6.5
Offices		3,117	2,209	5,326	8.9
Residential4		200	43	243	4.9
Offices & Residential3		3,317	2,252	5,569	8.7
Total		7,024	5,777	12,801	7.2
Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of £12.8bn at year end, +7.1% valuation movement.
	1 Group's share of properties in joint ventures and funds including HUT at share
	2 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales
	³ Including committed developments
	4 Stand-alone residential

Portfolio Yield & ERV Movements

At 30 September 2014	EPRA Net initial yield %1	EPRA topped up net initial yield %1, 2	Overall topped up net initial yield %1, 3		Net equivalent yield %1		Net reversionary yield %1		Net equivalent yield compression1		ERV Growth %4
Shopping parks	5.0	5.2	5.3		5.2		5.2		(45)		0.9
Shopping centres	4.6	4.9	5.0		5.2		5.2		(38)		0.3
Superstores	4.8	5.0	5.0		4.9		4.9		(12)		0.1
Department stores	4.7	4.7	6.7		5.2		4.1		(19)		8.6
Leisure	6.6	6.6	8.5		7.2		5.3		(57)		0.7
Retail & Leisure	4.9	5.1	5.4		5.3		5.1		(35)		1.1
West End	3.2	4.5	4.6		4.9		5.1		(21)		2.6
City	4.2	5.1	5.1		5.0		6.1		(34)		5.95
Provincial	6.7	6.7	6.7		5.9		5.4		(22)		0.0
Offices	3.7	4.8	4.9		4.9		5.5		(26)		3.9
Total	4.4	5.0	5.2		5.1		5.2		(32)		2.1
Table shows UK total, excluding assets held in Europe.
1 Including notional purchaser's costs
2 Including Rent contracted from expiry of rent-free periods and contracted uplifts not in lieu of growth
3 Including fixed/minimum uplifts (excluded from EPRA definition)
4 As calculated  by IPD 5 City up 2.2% on a like-for-like basis

Total Property Return (as calculated by IPD excluding Europe)
6 mths to 30 September 2014	Retail		Offices		Total
%	British Land	IPD	British Land	IPD	British Land	IPD
Capital Return	6.1	5.5	9.2	8.1	7.3	6.6
- ERV Growth	1.1	0.5	3.9	3.2	2.1	1.5
- Yield Compression1	35 bps	34 bps	26 bps	34 bps	32 bps	36 bps
Income Return	2.7	2.7	1.7	2.2	2.3	2.6
Total Property Return	9.0	8.3	11.0	10.5	9.8	9.3
1 Net equivalent yield movement

Portfolio Weighting
At 30 September 2014	2013	2014	2014	2014
		(current)	(current)	(pro-forma1)
	%	%	£m	%
Shopping parks	22.9	23.4	2,984	22.2
Shopping centres	17.3	15.5	1,988	14.9
Superstores	11.7	10.1	1,297	9.6
Department stores	4.6	4.7	601	4.5
Leisure	2.8	2.8	362	2.7
Retail & Leisure	59.3	56.5	7,232	53.9
West End	22.0	23.1	2,953	25.4
City	16.5	17.8	2,277	17.4
Provincial	0.8	0.7	96	0.7
Offices	39.3	41.6	5,326	43.5
Residential2	1.4	1.9	243	2.6
Offices & Residential	40.7	43.5	5,569	46.1
Total	100.0	100.0	12,801	100.0
Table shows UK total, excluding assets held in Europe.
1 Pro forma for committed developments at estimated end value (as determined by the Group's external valuers)
2 Stand-alone residential

Annualised Rent & Estimated Rental Value (ERV)
At 30 September 2014 (excluding developments)	Annualised rent (valuation basis) £m1			ERV £m	Average rent £psf
	Group	JVs & Funds	Total	Total	Contracted2, 3	ERV2
Shopping parks	97	62	159	166	25.1	25.1
Shopping centres	44	59	103	116	28.6	30.5
Superstores	7	59	66	67	22.1	21.7
Department stores	30	-	30	26	13.6	11.8
Leisure	25	-	25	21	14.2	11.7
Retail & Leisure	203	180	383	396	22.7	22.6
West End	89	-	89	140	49.8	53.4
City	4	82	86	122	48.2	53.5
Provincial	6	-	6	5	27.1	21.9
Offices	99	82	181	267	48.0	52.1
Residential4	3	-	3	4
Offices & Residential	102	82	184	271
Total	305	262	567	667	27.3	28.7
Table shows UK total, excluding assets held in Europe.
1 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group's external valuers), less any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift
2 Office average rent & ERV £psf is based on office space only
3 Annualised rent, plus rent subject to rent free
4 Stand-alone residential

Gross Rental Income1
Accounting Basis £m	6 mths to 30 September 2014			Annualised as at 30 September 2014
	Group	JVs & Funds2	Total	Group	JVs & Funds2	Total
Shopping parks	48	29	77	97	61	158
Shopping centres	28	30	58	47	57	104
Superstores	4	31	35	7	61	68
Department stores	17	-	17	33	-	33
Leisure	15	-	15	29	-	29
Retail & Leisure	112	90	202	213	179	392
West End	51	-	51	107	-	107
City	3	43	46	4	92	96
Provincial	3	-	3	6	-	6
Offices	57	43	100	117	92	209
Residential3	2	-	2	3	-	3
Offices & Residential	59	43	102	120	92	212
Total	171	133	304	333	271	604
Table shows UK total, excluding assets held in Europe.
1 Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives
2 Group's share of properties in joint ventures and funds including HUT at share
3 Stand-alone residential

	Lease Length & Occupancy
At 30 September 2014		Average lease length yrs		Occupancy rate %
(excluding developments)		To expiry	To break	Occupancy	Occupancy (underlying)1
Shopping parks		8.8	7.8	97.3	98.5
Shopping centres		9.2	8.1	95.5	97.4
Superstores		14.6	14.4	100.0	100.0
Department stores		26.1	22.8	100.0	100.0
Leisure		20.2	20.2	100.0	100.0
Retail & Leisure		12.0	11.0	97.6	98.6
West End		11.0	9.0	96.2	97.0
City		9.9	8.0	90.3	92.6
Provincial		7.8	7.4	100.0	100.0
Offices		10.4	8.5	93.6	95.0
Total		11.4	10.1	95.7	97.1
Table shows UK total, excluding assets held in Europe.
	1 Including accommodation under offer or subject to asset management

Rent Subject to Lease Break or Expiry
At 30 September 2014	2015	2016	2017	2018	2019	2015-17	2015-19
For period to 31 March	£m	£m	£m	£m	£m	£m	£m
Shopping parks	5	8	6	11	12	19	42
Shopping centres	4	8	8	9	5	20	34
Superstores	-	-	-	-	-	-	-
Department stores	-	-	-	-	-	-	-
Leisure	-	-	-	-	-	-	-
Retail & Leisure	9	16	14	20	17	39	76
West End	-	4	8	8	9	12	29
City	-	-	19	-	18	19	37
Provincial	-	-	-	-	-	-	-
Offices1	-	4	27	8	27	31	66
Total	9	20	41	28	44	70	142
% of contracted rent	1.6%	3.1%	6.3%	4.5%	6.9%	11.0%	22.4%
Potential uplift at current ERV	1	3	5	(1)	2	9	10

Table shows UK total, excluding assets held in Europe.

 ¹ Based on office space only

Rent Subject to Open Market Rent Review
At 30 September 2014	2015	2016	2017	2018	2019	2015-17	2015-19
For period to 31 March	£m	£m	£m	£m	£m	£m	£m
Shopping parks	11	18	16	21	25	45	91
Shopping centres	3	14	13	15	13	30	58
Superstores	11	17	6	4	8	34	46
Department stores	2	5	-	-	-	7	7
Leisure	-	-	-	-	-	-	-
Retail & Leisure	27	54	35	40	46	116	202
West End	4	17	13	13	20	34	67
City	1	14	2	15	14	17	46
Provincial	-	6	-	-	-	6	6
Offices	5	37	15	28	34	57	119
Total	32	91	50	68	80	173	321
Potential uplift at current ERV	1	3	-	-	1	4	5

Table shows UK total, excluding assets held in Europe.

Major Holdings
At 30 September 2014		BL Share	Sq ft	Rent	Occupancy	Lease
(excl. developments under construction)		%	'000	£m pa1	rate %2	length yrs3
Broadgate, London EC2		50	3,970	180	99.9	7.0
Regent's Place, London NW1		100	1,586	71	100.0	8.8
Meadowhall Shopping Centre, Sheffield		50	1,448	80	98.2	7.5
Sainsbury's Superstores		52	2,715	64	100.0	14.9
Tesco Superstores		51	2,684	62	100.0	14.1
Paddington Central		100	638	23	94.0	9.6
The Leadenhall Building		50	601	19	57.6	16.3
Teesside Shopping Park, Stockton-on-Tees		100	417	15	96.9	6.6
Drake Circus Shopping Centre, Plymouth		100	414	16	97.0	6.1
Debenhams, Oxford Street		100	363	11	100.0	24.5
1 Annualised contracted rent, topped up for rent free, including 100% of Joint Ventures & Funds
2 Includes accommodation under offer or subject to asset management
3 Weighted average to first break

Occupiers Representing over 0.5% of Total Contracted Rent
At 30 September 2014	% of total rent			% of total rent
Tesco plc	7.4		Facebook	0.9
Debenhams	5.7		Asda Group	0.9
J Sainsbury plc	5.4		SportsDirect	0.9
HM Government	3.4		JPMorgan	0.8
UBS AG	3.0		JD Sports	0.8
Kingfisher (B&Q)	2.6		Reed Smith	0.8
Home Retail Group	2.6		Cable & Wireless plc	0.8
Next plc	2.3		Deutsche Bank AG	0.7
Arcadia Group	2.0		Gazprom	0.7
Virgin Active	1.9		Mayer Brown	0.7
Spirit Group	1.6		Hennes	0.7
Alliance Boots	1.5		Mothercare	0.6
Herbert Smith	1.3		ICAP plc	0.6
Marks & Spencer plc	1.2		Carlson (TGI Friday's)	0.6
DSG International	1.2		Credit Agricole	0.6
Royal Bank of Scotland plc	1.2		Pets at Home	0.6
Aegis Group	1.1		AstraZeneca	0.5
Hutchison Whampoa	1.1		Nokia	0.5
TJX Cos Inc (TK Maxx)	1.1		Lewis Trust (River Island)	0.5
House of Fraser	1.0		Henderson	0.5
New Look	0.9		Santander	0.5
Aon plc	0.9		Steinhoff	0.5

INVESTMENT ACTIVITY

Acquisitions and Disposals

From 1 April 2014					Price (gross)	BL Share	Annual Passing
Acquisitions				Area	£m	£m	Rent £m2
Completed
Hercules Unit Trust unit purchase1		Retail		Various	74	74	4
Total					74	74	4
1 Units purchased over the course of the half 2 BL share of net rent topped up for rent frees where applicable
From 1 April 2014					Price (gross)	BL Share	Annual Passing
Disposals			Area		£m	£m	Rent £m1
Completed
Leamington Shopping Park	Retail		West Midlands		72	22	1
Nassica & Vista Alegre Retail Parks	Europe		Spain		70	46	4
Sainsburys, Cambridge	Retail		East Anglia		50	25	1
Sainsburys, Cardiff (Thornhill)	Retail		Wales		35	17	1
Cwmbran Retail Park	Retail		Wales		32	32	2
Tesco, Ferndown	Retail		South West		29	15	1
52 Poland Street, W1	Offices		London		26	26	1
Springfield Retail Park, Elgin	Retail		Scotland		23	23	1
Hounslow West, Morrisons	Retail		London		9	9	1
Residential Units	Residential		London		51	51	-
Other					17	10	-
Exchanged
Clarges Mayfair Residential	Residential		London		227	227	-
Aldgate Residential2	Residential		London		60	30	-
Colmore Row, Birmingham	Offices		West Midlands		15	15	-
Nottingham, Sainsburys	Retail		Midlands		50	25	1
Rugby, Sainsburys	Retail		Midlands		59	30	2
Other					10	10	-
Total					835	613	16
1 BL share of net rent topped up for rent frees where applicable 2 Including £15m (BL share) of affordable units

Recently Completed & Committed Developments
At 30 September 2014		Sector	BL Share	Sq ft	PC Calendar Year	Current Value	Cost to Complete	ERV	Pre-let9	Resi End Value3
			%	'000		£m	£m1	£m2	£m	£m
2010 Programme
10 - 30 Brock Street4		Mixed Use	100	503	Completed	423	1	20.6	20.5	118
10 Portman Square		Offices	100	134	Completed	205	3	9.9	9.4	-
Marble Arch House5		Mixed Use	100	87	Completed	82	3	4.6	1.7	19
39 Victoria Street		Offices	100	97	Completed	116	-	6.0	6.0	-
199 Bishopsgate		Offices	50	144	Completed	63	1	3.5	2.0	-
Whiteley Shopping, Fareham		Retail	50	321	Completed	62	-	3.1	3.0	-
Bedford Street		Residential	100	24	Completed	10	1	-	-	28
Glasgow Fort (Leisure)		Retail	62	46	Completed	12	-	0.7	0.7	-
The Leadenhall Building		Offices	50	601	Completed	318	19	19.1	9.8	-
5 Broadgate		Offices	50	710	2015	327	34	19.2	19.2	-
Total 2010 Programme				2,667		1,618	62	86.7	72.3	165
Recently Committed
Milton Keynes, Kingston Centre		Retail	50	21	Completed	5	-	0.3	0.3	-
Old Market, Hereford		Retail	100	305	Completed	83	3	4.9	4.4	-
Meadowhall Surrounding Land		Retail	50	22	Completed	6	-	0.4	0.4	-
Fort Kinnaird, Edinburgh		Retail	31	57	2014	7	1	0.5	0.5	-
Deepdale, Preston		Retail	31	64	2014	3	2	0.4	0.4	-
The Hempel Phase 16		Residential	100	25	2014	48	3	-	-	53
Broadgate Circle		Offices	50	41	2014	16	4	1.2	0.7	-
Whiteley Leisure, Fareham		Retail	50	58	2014	4	4	0.6	0.5	-
Broughton Park, Chester		Retail	62	54	2014	9	3	0.7	0.7	-
Glasgow Fort, M&S & Retail Terrace		Retail	62	112	2015	11	14	1.6	0.7	-
Yalding House		Offices	100	29	2015	18	9	1.7	-	-
The Hempel Phase 2		Residential	100	40	2016	48	22	-	-	90
Aldgate Place, Phase 17		Residential	50	221	2016	23	43	-	-	77
Clarges Mayfair8		Mixed Use	100	192	2017	260	188	5.7	-	462
Total Recently Committed				1,241		541	296	18.0	8.6	682
Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%)
1 From 1 October 2014 to practical completion (PC)
2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)
3 Residential development of which £431m completed or exchanged and a further £10m under offer
4 Includes 126,000 sq ft of residential of which £117m has now sold and completed
5 Includes 10,000 sq ft of residential of which £19m has now sold and completed
6 Previously Craven Hill Gardens
7 End value excludes sale of hotel site, receipts of £6m (BL Share) estimated
8 Includes 103,000 sq ft of residential 9 Excludes deals under offer

Near-Term Pipeline
At 30 September 2014	Sector	BL Share	Sq ft	Current Value	Cost to Complete2	Status
			'000	£m	£m
4 Kingdom Street	Offices	100	145	29	71	Consented
5 Kingdom Street1	Offices	100	240	58	113	Consented
Blossom Street, Shoreditch3	Mixed Use	100	347	6	226	Pre-submission
Glasgow Fort (Restaurants & Additional Retail Unit)	Retail	62	42	-	11	Consented
Fort Kinnaird, Edinburgh (Debenhams)	Retail	31	30	-	2	Pre-submission
Plymouth Leisure	Retail	100	100	-	36	Pre-submission
Aldgate Place, Phase 2	Residential	50	145	20	31	Consented
Total Near-Term			1,049	113	490

¹ 210,000 sq ft of which is consented

² Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate

³ £6m in Current Value column represents cost of option agreement with the Corporation of London

Medium-Term Pipeline
At 30 September 2014	Sector	BL Share	Sq ft	Status
			'000
100 Liverpool Street	Offices	50	530	Pre-submission
Eden Walk Shopping Centre, Kingston	Mixed Use	50	545	Pre-submission
Canada Water Masterplan	Mixed Use	100	3,000	Pre-submission
Ealing, Residential Conversion	Residential	100	110	Pre-submission
Meadowhall Land	Retail	50	350	Pre-submission
Total Medium-Term			4,535

This information is provided by RNS

The company news service from the London Stock Exchange

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