Slide1: 23 March 2006 Preliminary Results Presentation 2005


Preliminary Results Presentation: Preliminary Results Presentation Overview Martin Barber Financials William Sunnucks Divisional reports Shopping Centres Ken Ford Retail Parks Andy Lewis-Pratt Leisure PY Gerbeau Germany Xavier Pullen Questions


Period to 30 December 2005 - Highlights: Period to 30 December 2005 - Highlights 36.6% total return on equity before exceptional items £5.6 bn* of property assets (2004 £4 bn); 37.4% increase in NAV per share to 976p on a fully diluted basis 29% increase in dividend to 18p per share; * At 28th Feb 2006 – increased from £5.1bn in Dec 2005 following acquisition of shopping centres at Luton & Uxbridge


Financial results – agenda : Financial results – agenda Total returns + yield shift Profit and loss account + CULS + dividend + property management 3. Balance sheet + debt + tax efficiency 4. IFRS


Total Returns : Total Returns


Drivers of total return: Drivers of total return Notes: Yield shift affects revaluation surplus (£109m) and performance fees (£9m) SDLT relief removed in disadvantaged areas. C&R funds disproportionately affected: Mall 49% of portfolio affected against 12% in IPD index Junction 49% of portfolio affected against 21% in IPD index


Market yield shift in 2005: Market yield shift in 2005 Source: IPD except for leisure, where we use the X-Leisure portfolio adjusted to a like for like basis as a proxy.


Revaluation Uplifts – C&R share: Revaluation Uplifts – C&R share


Profit and loss account - highlights: Profit and loss account - highlights


£46.9m exceptional item – CULS buyback: £46.9m exceptional item – CULS buyback Is a £46.9m loss really “good news”? A reduction in capital employed Works on a pre-tax basis £15.5m tax saving BUT profit and loss account suffers !


Recurring profits and dividends: Recurring profits and dividends 2005 2004 £m £m Net rental income – our share 55.4 47.1 Management fees 22.8 19.3 Snozone profit 1.8 1.4 Fixed management expense (17.1) (14.9) Interest expense (42.7) (34.5) Recurring profit before tax 20.2 16.4 Dividend 12.5m 9.0m Coverage by recurring profit before tax 1.6x 1.8x Coverage by profit after tax (before exceptionals) 2.5x 3.4x


Slide12: Earnings businesses Assets business Snozone (Ski slope) CRPM (Property Management) Fund Co-investment JVs Wholly owned


Property Management Business - CRPM: Property Management Business - CRPM 2005 2004 £m £m Property management fees 22.8 19.3 Fixed management expense* (13.7) (10.6) Ongoing cash flow 9.1 8.7 Performance fees 51.0 31.2 Variable overhead (18.9) (11.8) Performance related cash flow 32.1 19.4 Total profit 41.2 28.1 Notes: *Includes £1.151m for amortisation of goodwill *excludes 20% of cost allocated to the property ownership business


Performance Fee Summary 2005: Mall Junction X-Leisure Pre-performance fee return 25.2% 38.1% 28.3% IPD or benchmark 16.3% 22.1% 12.0% Performance fee £29.6m £17.3m £4.1m Total £51.0m Performance Fee Summary 2005


Three balance sheet presentations: Three balance sheet presentations * Debt net of cash held


C&R property exposure by segment - % of £1.58 billion: C&R property exposure by segment - % of £1.58 billion


Bank Debt – profile at 30/12/2005: Bank Debt – profile at 30/12/2005


Standard Jersey holding structure at 30 Dec 2005Used for our investment in the 3 funds and 2 Xscape partnerships: Standard Jersey holding structure at 30 Dec 2005 Used for our investment in the 3 funds and 2 Xscape partnerships Increased liquidity because JPUT units can be sold without incurring SDLT No capital gains tax for Jersey companies Partnership(s) C&R plc JPUT UK Co Jersey Co


Capital Gains Tax efficiencyProperty exposure by holding structure (% of see through portfolio): Capital Gains Tax efficiency Property exposure by holding structure (% of see through portfolio)


IFRS – estimated Balance Sheet Impact: IFRS – estimated Balance Sheet Impact + 1.4% increase


IFRS – Profit and loss account impact – rough estimates: IFRS – Profit and loss account impact – rough estimates


Conclusion – Financials: Conclusion – Financials Three key messages: It’s not just yield shift……. Valuable earnings businesses Increasingly tax efficient


The Mall - Fund Statistics: The Mall - Fund Statistics


The Mall – Highlights: The Mall – Highlights £1bn investment activity Mall Bonds


The Mall: Growth LFL: 15 Mall Comparison: The Mall: Growth LFL: 15 Mall Comparison ERV +4.9% Mall Income: £120.5m (+0.4%) Ancillary revenue £4.73m (+9.5%) Car Parking £6.3m (+13%)


The Mall - Investor Performance: The Mall - Investor Performance 2005 2004 Property Level 16.5% 19.6% IPD Benchmark 16.3% 17.1% Fund Level 22.8% 26% Since inception 18.2% p.a. Property Level 25.7% p.a. Fund Level *Comparable DAR adjustment Relative to IPD Benchmark ÷ 17.6%


The Mall - The Retail Climate: The Mall - The Retail Climate Lettings: 192 Rent Reviews Settled: 179 (+2% to target) Lease Expiries: 63 (84% renewal rate) Average void during 2005 4.2% (2004: 4.0%) Less strategic vacancies -1.3% Available to let 2.9% Failures:


The Mall - Operational Performance: The Mall - Operational Performance “Upstream” Benchmark Upper Quartile Consumption Reductions Upper Quartile Cardboard Recycling JLL Oscar 2005 Actual service charge: for 21 malls. £4 per sq ft 6% less than benchmark 46% more marketing spend than benchmark: 72p per sq. ft Footfall 2004 174.3m 2005 203.8m (+16.9%) LFL +0.6%


The Mall - Pipeline: The Mall - Pipeline


Retail Park and Trade Park Activities: Retail Park and Trade Park Activities The Junction Fund Morfa Shopping Park, Swansea Capital Retail Park, Cardiff Trade Parks Portfolio


The Junction Fund Statistics: The Junction Fund Statistics


Junction Fund – Highlights: Junction Fund – Highlights Top performing specialist fund – all sectors – HSBC survey £180m new acquisitions Rental Growth - 6% like for like Void rate - 4.9% (available to let) Prime portfolio assembled – Open A1 40% Continued Performance through: - New Developments - Refurbishments - Reconfigurations and Extensions - Asset Management


Slide33: The Junction Investor Performance


Other Retail Park Activities: Other Retail Park Activities Morfa Shopping Park, Swansea Final open A1 unit under offer setting new ERV. Project cost £65m, value now c. £100m. Capital Retail Park, Cardiff Anchored by Asda and Costco Joint venture with local developer Further pre-lets being sought.


Trade Park Portfolio: Trade Park Portfolio So Why Trade Parks? Not industrial sheds but a retailing based operation. Tenants – supply builders, tradesmen and ancillary sales to public. Estimated 1000 trade parks across UK with a value of circa £5bn. Rapidly expanding unsophisticated and fragmented market. Over 100 national and regional occupiers of stature.


Trade Park Portfolio - Highlights: Trade Park Portfolio - Highlights Creation of a core portfolio of 20 properties – 800,000 sq ft. 4 further properties acquired or under offer. Low base rent – c.£5.10 per sq ft. Initial yield 5.5% - equivalent yield 6.4%. Previously managed by industrial specialists. Prime Trade Parks rents circa £15 per sq ft. Capital & Regional is already the largest owner of trade parks.


Trade Park Portfolio: Trade Park Portfolio Objectives Grow the portfolio to £150-£200m within 12-18 months. We bring more specialised management to the sector. To create a branded portfolio Outperformance through: Development Refurbishment/Reconfiguration Portfolio transactions Increase un-expired terms .


The Leisure Market: Significant growth, 4% increase of leisure spending in 2005. Investors, operators and consumers are increasingly sophisticated. Investment in leisure more attractive: sustainable performance and long term income guaranteed. Leisure property, still great value for money as an asset class. The Leisure Market


Leisure Activities: Leisure Activities X-Leisure Fund Xscape Other activities: Snozone Holdings Gt Northern Hemel Hempstead


X-Leisure fund performance: X-Leisure fund performance 2005 2004 9 months only Property Level 15.3% 11.4% Fund Level 28.3% 18.0%


X-Leisure fund strengths: X-Leisure fund strengths Strong covenants Upward only rent reviews (+40% of portfolio fixed or minimum uplifts) 4% increase in UK leisure spending, 7% footfall increase for XL Minimal vacancies (1.4%) Recognised demand by investors for specialised and experienced management


X-Leisure Fund Statistics: X-Leisure Fund Statistics


Xscape: Xscape Xscape MK 39% return. Rent reviews ahead of budget 6m visitors in 05 - huge popular success as one of the largest visitor attractions in the UK Excellent investment for C&R, for all its operators/tenants   Xscape Castleford/Leeds Continuing to mature Excellent increase in footfall and in dwell time in 05 (3.2m visitors, +23% on 04). As for the UK retail market, niche retail was a challenge, whereas F&B and leisure performed very well Xscape Braehead/Glasgow Opening April 6th 2006 90% pre let (March 06) Huge enthusiasm in Scotland  


Other Leisure Activities: Other Leisure Activities SNOZONE  Holdings Record profit year for C&R operating snowslope business, despite increased utility costs (gas, electricity) £1.85m profit through 2 operating units in MK and Castleford/Leeds Experienced and dedicated management team Solid business model & strategy - no capital employed and significant expansion opportunities 3rd unit opening April 06 Xscape Glasgow Great Northern Warehouse C&R bought the remaining 50% from AWG in 05, and now owns 100% of the scheme. Very active asset management initiatives in 05, numerous lettings, and completion of the lease with London Clubs International Significant capital uplift from £72.5m to £93m in 05, of which £10m held back as “negative goodwill”


German Portfolio: 90/10% J.V. with Hahn Focus big box retail (mostly supermarket anchored) German Portfolio


German Portfolio Statistics: German Portfolio Statistics


Germany – Total Returns for 2005: Germany – Total Returns for 2005 Net income on present portfolio running at the rate of €5m p.a. (after property costs, interest and Jersey costs). Cash return on our equity after debt and management costs of a minimum of 12% and rising with indexation and asset management. Germany – Total Returns for 2005


Slide48: Sinzheim and Brühl


German retail warehouse market: Severe restrictions on further out of town development Good tenant covenants and long leases Index linked rents High yield off low rental value base No security of tenure after lease expiry Many asset management opportunities German retail warehouse market


The Future: Opportunities to add value to existing portfolio Good pipeline of additional properties to buy Yield compression under way (both good and bad news) Early signs of consumer confidence returning The Future


Summary: Summary Great year Tenant market tough but not as hard as we expected last September Good expansion of funds from £4bn to £5.6bn now


Outlook: Outlook We expect further yield shift this year We hope to see further expansion of all three funds. Also additions to our trade park and German assets Our business model is working well


Slide53: NAV per share Dividend per share Dec 1996 223p + 20% 3.0p + 20% Dec 1997 272p + 28% 3.5p + 17% Dec 1998 321p + 18% 4.25p + 21% Dec 1999 376p + 17% 5.0p + 18% Dec 2000 360p - 4% 5.5p + 10% Dec 2001 343p - 5% 6.0p + 11% Dec 2002 388p + 15% 7.0p + 17% Dec 2003 521p* + 33% 9.0p + 28% Dec 2004 710p + 36% 14.0p + 56% Dec 2005 976p + 37% 18.0p + 29% Track Record