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2019 half-year results 29 July 2019

Bullring & Grand Central, Birmingham

Agenda

01

Half-year overview

02

Half-year financial results

03

Portfolio overview

04

Summary and Q+A Appendices 2

Half-year overview

Facing up to the challenges Debt reduction remains a key priority 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1)

The Oracle, Reading

Earnings drag from disposals, dividend unchanged EPS 14.0p (-7.3%), DPS 11.1p (no change) Valuations under pressure UK flagship capital return -9.1%, France -3.9%, Ireland -3.2% NAVPS 685p (-7.2%) UK continues to be challenging UK flagship LfL NRI -6.8%, Leasing -1% below previous passing rent, volumes 35% below record 2018

Actively managing the mix to attract visitors 92%(2) of new UK flagship leasing in H1 to non-fashion brands Footfall up in all regions: UK flagships +0.5%; France +0.5%; Ireland +0.6% Diverse portfolio helps to offset UK weakness Premium outlets brand sales +10%, LfL NRI +11.1%, capital return +4.5% Stronger leasing trends in France and Ireland

1 2

43% fully proportionally consolidated By area

3

Half-year overview

Continued focus on debt reduction, active portfolio management and multi-use development Capital efficiency

Optimised portfolio

Operational excellence

Reduce debt

Exit Retail Parks and pursue portfolio-wide disposals

Manage the structural shift in retail

Establish City Quarters

4

Half-year overview

Debt reduction remains a key priority

Reduce debt and portfolio-wide disposals

Capital efficiency

• Contracts exchanged with AXA for 75% of Italie Deux and the forward sale of the Italik extension for €473m (£423m), representing 8.5% discount to December 2018 book value, NIY 4.1% • Total disposals of £456m YTD, pro forma net debt of £3.1bn • Transactions taking longer • Pursuing further disposals into 2020

Optimised portfolio

Commitment to exit retail parks over the medium term • £33m of disposals from retail parks completed year to date

5

Half-year overview

Manage the structural shift in retail – actively repurposing space, maintaining vibrancy

Softer UK leasing metrics, stronger in France and Ireland UK flagships over last 18 months: • Passing rents -6.2%

Operational excellence

UK flagships H1 2019: • Tenant restructuring a continuing theme; 45 units affected in H1 2019 • High street fashion under pressure, increased temporary leasing (3 years) to target categories more resilient

6

2019 half-year financial results

Victoria, Leeds

2019 half-year results

H1 headline results Income statement

30 June 2019

30 June 2018

Change

Net rental income (£m)

156.6

178.5

(12.3%)

Adjusted profit (£m)

107.4

120.0

(10.5%)

Adjusted EPS (p)

14.0

15.1

(7.3%)

Interim dividend (p)

11.1

11.1

—

30 June 2019

31 December 2018

Change

9,542

9,938

(4.0%)

685

738

(7.2%)

Net debt (£m)

3,447

3,406

+1.2%

LTV - headline

40%

38%

+2 pp

LTV - fully proportionally consolidated

46%

43%

+3 pp

Balance sheet Portfolio value (£m) EPRA NAVPS (p)

8

2019 half-year results

Portfolio valuation summary Sector

See appendices slides 54-55

H1 2019 capital return(1)

H1 2019 revaluation change

Value at 30 June 2019(2)

Portfolio weighting(2)

%

£m

£m

%

UK

(9.1)

(266)

2,655

28

France

(3.9)

(71)

1,820

19

Ireland

(3.2)

(30)

948

10

4.5

111

2,590

27

(9.8)

(74)

776

8

(10.9)

(93)

753

8

(4.4)

(423)

9,542

100

Flagship destinations

Premium outlets Developments & UK other UK retail parks Total

1 2

At constant exchange rates Figures on a proportionally consolidated basis

9

2019 half-year results

H1 2019 components of valuation change Components of capital return in H1 2019, total portfolio (%)(1) 5%

4.2%

0.6%

0% -0.7%

4.5%

0.2%

-0.2%

-0.4% -0.5% -2.3% -2.5%

-2.4% -3.0%

-3.9%

-5%

-3.2%

-3.8%

-3.6%

-3.9%

-4.4%

-4.9% -6.0% -6.7%

-9.1%

-10%

-9.8% -10.9%

-15% UK flagship destinations

Yield

Income

France flagship destinations

Ireland flagship destinations

Development and other

1 2 3

(3)

Premium outlets

Developments and UK Other (2)

UK retail parks

Group

Total

On a proportionally consolidated basis Developments and UK Other includes the movement in the UK Other portfolio where valuations decreased by 12.0%. Developments decreased by 9.2% Development and other capital movements reflects the impact of changes in purchasers’ costs, development surpluses and capital expenditure

10

2019 half-year results

Credit ratios

See appendices slides 57-60 30 June 2019 (Pro forma)(1)

Internal 30 June 2019 guidelines

31 Dec 2018

£3,055m

—

£3,447m

£3,408m

Gearing

61%

£30/sq ft

100%

100%

100%

100%

Department stores

1

By area and excludes renewals

Near-term rental levels

23

UK flagship destinations

Attracting winning brands Principal leases - non fashion Total rent - £1.6m(1)

Principal leases – F&B Total rent - £0.5m(1)

Temporary leases Total rent - £1.1m(1)

The White Company, Westquay

LEGO, Westquay and Bullring

Stack & Still, Silverburn

Kitty Café, Grand Central

Tandem, Highcross

Myga Yoga, Bullring

Lemoni, The Oracle

Waterstones, Brent Cross

1

Total rent for category, not for brands shown

Rapha, Victoria Leeds

24

UK flagship destinations

Attracting an affluent audience looking for a ‘big day out’(1) Growth 2016-2018

Dwell time (mins) 90

Growth 2016-2018

Party size 1.8

+7%

85

80

-6%

75

F&B

2017-2019 YTD

Average spend

+54%

+1%

Dwell time

+90%

-4%

Conversion

+9ppts

1.7 1.6 1.5

70 65

1.4 2016

2017

2018

Drive time (mins)

2016

2017

2018

Age Range

Growth 2016-2018

25%

30

+9%

25 20

-1%

15

20% 15% 10%

10

5%

5

0%

0 2016

2017 HMSO

2018

18-24 25-34 35-44 45-54 55-64

>65

Slim Chickens, Grand Central

UK average 1

Hammerson’s exit survey data (c.5,000 respondents per year)

25

UK flagship destinations

Footfall performance supported by operational excellence Hammerson UK flagships footfall vs. national index three month moving average(1) 2% 1% -1%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2018

Jan

Feb

Mar

Apr

May

Jun

2019

-2% -3% -4% -5% Hammerson

National Index

Super events

Footfall Average YoY drive time

The Maze, Westquay

+2.7%

+14%

14%

Festival of Light, Bullring

+9.8%

+24%

31%

1

Index source: Shoppertrak

New visitors

Bullring, Birmingham

Westquay, Southampton

26

UK flagship destinations

Footfall in our centres supports retailers’ omni-channel propositions

1. Drives online presence

2. Drives omni-channel sales

Hammerson analysis shows typical post-opening uplift in local web traffic(1)

Hammerson analysis June 2019 Customers online spending behaviour(2)

+20-30%

+103%

Fashion

additional clothing spend online with same brands purchased during a centre visit

+60-90%

>25%

Health & Beauty

1 2

of click and collect customers make additional purchases in store

Research carried out with Hitwise (based on 12 week period before and after store opening) Permission based research carried out with Rippll (from a sample of circa 100 visitors to Cabot Circus over a 90 day period)

27

Freeport Lisboa, Lisbon

Premium outlets

Premium outlets

H1 2019 operational update

See appendices slides 81-90 Value Retail(1)

VIA Outlets(1)

H1 2019

H1 2018

H1 2019

H1 2018

1,931

1,762

659

620

11

6

10

6

Footfall growth (%)(2)(3)

7

2

8

0

Average sales density growth (%)(2)

8

3

7

5

Like-for-like net rental income growth (%)(4)

14

3

4

7

Occupancy (%)

95

94

93

91

GAV Hammerson share (£m) Brand sales growth (%)(2)

1 2 3 4

With the exception of LfL net rental income growth, figures reflect overall portfolio performance, not Hammerson’s ownership share. 2018 figures have been restated at 30 June 2019 exchange rates Figures include assets owned for 18 months 2018 VIA footfall metrics have been restated following the collection of more accurate footfall figures 2018 like-for-like NRI has been restated to exclude the impact of extensions and reconfigurations. VIA Outlets 2018 like-for-like NRI has been restated for a foreign exchange correction (-6% impact to 2018 likefor-like NRI)

29

Premium outlets

Premium outlets – the drivers of success

Premium outlets channel outperforms average European sales growth during H1 2019(1)

Global tourism growth continues

16%

Tax free sales(2)

14%

19%

YoY growth(3)

+14%

12% 10% 8%

14% 6% 4%

6%

2% 0% VIA sales growth

Reported sales growth in Europe for all channels 1 2 3

Data from VIA Outlets centres. Brands include Polo Ralph Lauren, Hugo Boss, Guess, Nike, Levis and Adidas Tax free sales as a proportion of total premium outlets sales Year-on-year growth for the five months to the end of May 2019

30

France flagship destinations

Les Terrasses du Port, Marseille

France flagship destinations

H1 2019 operational update

See appendices slides 74-76

France flagship destinations H1 2019

H1 2018

97.0

97.1

2.8

3.6

Leasing vs. ERV (%)

+4

+2

Leasing vs. previous passing (%)

+5

+4

In-store retail sales (%)(1)

+1.3

+2.9

Footfall (%)(2)

+0.5

+2.3

Occupancy (%) Leasing activity (£m)

Les Terrasses du Port, Marseille

1 2

Sales: H1 2019 France benchmark +0.2% (Source: Banque de France, as at June 2019). Retail sales on same-centre basis Footfall: H1 2019 France benchmark +0.3% (Source: CNCC)

32

France flagship destinations

On-site extensions update Les 3 Fontaines • Scheme revised to increase proportion of leisure and F&B • Food hall opening spring 2020, 100% pre-let • Opening of main phase Q2 2021 • Leisure phase opening mid 2023 • Good progress on pre-letting, now 39%(1) (Dec18: 23%) • Cost to complete +£34m, annual income +£1m, YOC 5.0%

Les 3 Fontaines, Cergy, Paris

Italik • 41%(1) pre-let (Dec 18: 34%) • Opening Q3 2020 • YOC 5.3%

Italik, Italie Deux, Paris

1

Let or in solicitors' hands by income at 26 July 2019

33

Summer Fest, Dundrum, Dublin

Ireland flagship destinations

Ireland flagship destinations

H1 2019 operational update

See appendices slides 78-79

Ireland flagship destinations H1 2019 H1 2018 Occupancy (%)

99.5

98.9

Leasing activity (£m)

1.2

1.5

Leasing vs. ERV (%)(1)

+4

+6

+12

+23

+0.6

-3.0

Leasing vs previous passing (%)(1) Footfall (%)

Five Guys, Swords Pavilions

1

Principal leases only

35

Ireland flagship destinations

Significant potential in Irish portfolio Near term repurposing

See appendices slide 92

Future developments

Building 5

Cost

€5m Target YOC

Pembroke Square

6%

Phase 2

Pavilions Phase 3

Cost

€5m Target YOC

Stella Bowl (ex Hamleys)

Dundrum

Dublin Central

7%

36

Rooftop Beehives, Silverburn, Glasgow

Sustainability and City Quarters

37 The Goodsyard, London

Sustainability

Ambitious approach to sustainability underpins everything we do We create destinations that deliver positive impacts economically, socially and environmentally Our target is to be net positive for carbon, resource use, water and waste by 2030

Significant reductions in resource usage during H1 2019 Electricity

Gas

Carbon

Water

-12%

-21%

-13%

-14% 38

City Quarters

Beyond retail City Quarters potential

100 acres

See appendices slide 92 Martineau Galleries, Birmingham 100,000m2 workspace 1,300 residential units 200 hotel rooms Restaurants, cafés, shops and high quality public realm

6,600 residential units

1,600 hotel rooms

300,000m2 work space 9 parks and public spaces 39

Les Terrasses du Port, Marseille

Summary

Summary

Clear focus on near term challenges and longer term valuation creation Debt reduction remains a key priority 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1)

UK continues to be challenging Tenant restructuring a continuing theme Soft leasing metrics due to fashion renewals and temporary leases Actively managing the mix to attract visitors and optimise income profile 92%(2) of new UK flagship leasing in H1 to non-fashion brands Footfall up in all regions: UK and French flagships ahead of benchmarks(3) Attracting an affluent, younger crowd for a ‘big day out’ Flagship physical retail is integral to the omni-channel future Physical stores drive web traffic and online sales Diverse portfolio helps to offset UK weakness Strong performance from premium outlets continues France and Ireland provide stability with development potential City Quarters is the future of the portfolio Broad range of opportunities in thriving city centres Festival of Light, Dundrum, Dublin 1 2 3

43% fully proportionally consolidated By area Shoppertrak and CNCC

41

The Oracle, Reading

Questions

Bullring & Grand Central, Birmingham

Supplementary appendices

Contents

01 02 03 04 05 06 07

Group UK flagship destinations France flagship destinations Ireland flagship destinations Premium outlets

City Quarters UK retail parks 44

Festival of Light, Bullring & Grand Central, Birmingham

01

Group

45

£9.5 billion leading pan-European retail platform

53

European destinations

14

countries

8% 8%

29%

Top 3

market position in all chosen sectors 27%

19% 10%

UK flagship destinations - £2.7bn France flagship destinations - £1.8bn Ireland flagship destinations - £0.9bn Premium outlets - £2.6bn Development & UK other - £0.8bn UK retail parks - £0.7bn

49%

non-UK assets

2.2m

m2 retail space

425m visitors

4,700 tenants

11 - UK flagship destinations 7 - France flagship destinations 3 - Ireland flagship destinations 12 - UK retail parks 20 - Premium Outlets

46

Appendices: Group

Our Business Model

What we do

What we have

Who we deliver for Product experience framework

High-quality property in the right places A dynamic and diverse team Insight led Effective capital management

Iconic destinations

Our strategy

Retail specialism Capital efficiency

Optimised portfolio

Operational excellence

Shareholders Brands Consumers Partners

Experience led Communities Customer first Our people

Positive for the environment | Positive for the community

47

Appendices: Group

H1 2019 Group leasing cumulative activity H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m)(1)

Flagship leasing volumes

5

20

4.5

18

4

16

3.5

14

3

12

2.5

10

4

0.5

2

0

0 February

Monthly leasing 2019 (LHS)

Cumulative leasing activity 2017 (RHS)

Cumulative leasing activity 2018 (RHS)

Cumulative leasing activity 2019 (RHS)

1

Monthly leasing LHS axis, cumulative leasing RHS axis

H1 18 £m

UK

4.4

6.8

France

2.8

3.6

Ireland

1.2

1.5

Total

8.4

11.9

June

1

May

6

April

1.5

March

8

January

2

H1 19 £m

48

Appendices: Group

H1 2019 portfolio leasing key metrics Leasing vs previous passing (%)(1)

Leasing vs ERV (%)(1)

Like-for-like ERV growth (%)

New rent secured from leasing (£m)(2)

-8

-4

-2.5

4.4

+5

+4

-0.3

2.8

Ireland flagship destinations

+12

+4

-0.1

1.2

UK retail parks

+13

+1

-6.3

0.6

-1

—

-2.3

9.2

UK flagship destinations France flagship destinations

Group

1 2

Principal leases only Total group leasing includes UK Other £0.2m

49

Appendices: Group

Tenant restructuring: 31 December 2017 – 30 June 2019 UK flagship destinations

France flagship destinations

Ireland flagship destinations

UK retail parks

UK other

Group

Number of units impacted

100

37

3

27

12

179

Passing rent pre restructuring (£m)

17.0

2.8

1.8

6.3

2.1

30.0

5.5

0.3

1.6

2.1

0.7

10.2

1.6%

0.1%

0.5%

0.6%

0.2%

3.0%

Current passing rent lost – 30 June 2019 (£m) % of Group passing rent – 30 June 2019(1)

1

Group passing rent = £342.1m

50

Appendices: Group

Run rate of tenant restructuring in the UK & Ireland Units in CVA or administration by month, January 2018 – June 2019 25

20

15

10

5

0 Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Feb-19

Mar-19

Apr-19

May-19

Jun-19

51

Appendices: Group

H1 2019 key operational statistics Occupancy (%)

UK flagships

France flagships

Ireland flagships

UK other

Group

30 June 2019

96.4

97.0

99.5

89.3

96.7

31 December 2018

97.6

97.1

99.0

96.9

97.2

30 June 2018

97.2

97.1

98.9

94.5

96.6

UK France flagships flagships

Ireland flagships

Sales densities(4)

UK £/ft2

France €/ft2

Sales(1)

-2.0

1.3

n/a

2019

240 - 580

425 - 880

Footfall(2)

0.5

0.5

+0.6

2018

245 - 525

565 - 680

Rent: sales(3)

12.9

10.5

n/a

2017

240 - 490

455 - 700

OCR(3)

22.2

13.5

n/a

1 2 3 4

Retail sales on same-centre basis. H1 2019 UK benchmark -1.7% (Source: Visa Face to Face index); H1 2019 France benchmark +0.2% (Source: Banque de France, at 30 June 2019) H1 2019 UK benchmark -3.2% (Source: Shoppertrak); H1 2019 France benchmark +0.3% (Source: CNCC) Sales / OCRs in France include VAT (the UK figures exclude VAT). Also French OCRs do not account for a wide range of taxes paid separately that are not covered by rates (e.g. city tax, refuse tax, local Eco tax). Therefore OCRs in the two countries are not directly comparable. Also away from property costs staffing costs are significantly higher in France than the UK c.30%+. Excludes anchor stores. France data includes VAT

52

Appendices: Group

NAVPS walk

H1 2019 EPRA NAV movement (pence per share) 790

770

4 14

750

730

14 70

738

710

15

690

685

685

670 Dec 2018

Adjusted profit

Premium outlets reval

Fx and other

Reval excl. outlets

Dividends

June 2019

53

Appendices: Group

H1 2019 valuation data UK flagships

France flagships

Ireland flagships

UK retail parks

UK other

Total

30 Jun 2019

5.9

4.5

4.6

7.2

8.7

5.5

31 Dec 2018

5.5

4.2

4.5

6.8

8.0

5.3

Change 6 months

40bp

20bp

10bp

40bp

70bp

20bp

Change 12 months

70bp

10bp

20bp

90bp

130bp

40bp

30 Jun 2019

5.2

3.8

4.0

6.8

6.0

4.8

31 Dec 2018

4.8

3.7

3.9

6.0

5.7

4.6

True equivalent yield (%)

Net initial yield (%)

Change 6 months

40bp

10bp

10bp

80bp

30bp

20bp

Change 12 months

80bp

(10bp)

10bp

130bp

70bp

40bp 54

Appendices: Group

H1 2019 valuation data UK flagships

France flagships

Ireland flagships

UK retail parks

UK other

Total

30 Jun 2019

164.0

89.9

45.3

59.7

12.9

366.1

31 Dec 2018

169.3

89.4

45.3

59.7

13.3

377.0

LfL change 6 months (%)

-2.5%

-0.3%

-0.1%

-6.3%

-3.1%

-2.3%

LfL change 12 months (%)

-4.4%

+0.6%

+0.8%

-8.1%

-3.0%

-3.1%

ERV (£m)

55

Appendices: Group

Key disposals achieved 2017 – 2019 Proceeds(1) £m

2017:

Buyer

average -3% below book value

Westwood and Westwood Gateway Retail Parks, Thanet

80

BMO (private equity)

Saint Sébastien, Nancy

140

AEW (private equity)

Place des Halles, Strasbourg

167

Greenstone Oxford Limited

2018: average -7% below BV Battery Retail Park, Selly Oak

58

NFU Mutual

Wrekin Retail Park, Telford

35

Ediston/Europa

Imperial Retail Park, Bristol/Fife Central Retail Park, Kirkcaldy

164

Capreon (private equity)

Highcross, Leicester (50%)

236

Asian investor, introduced by M&G Real Estate

2019:

average -8% below BV

Dallow Road RP, Luton

24

Italie Deux, Paris (75%)

423

Total 2017 – 2019(2)

Private equity AXA

1,428

1 2

Gross proceeds Total annual gross proceeds (includes ancillary disposals): 2017 - £402m; 2018 - £570m , 2019 - £456m

56

Appendices: Group

Net debt analysis Net debt analysis (£m)(1) 3500 3450 35 3400

3,406

3,447

392

22 95

3350 3300

118 5

3250 3200 3150 3100 3050

3,055

3000 Dec 2018

Disposal proceeds

Net operating cashflow

1 2

Other

Dividend

Capex

On a proportionally consolidated basis, excluding premium outlets Reflects gross proceeds from sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik

Jun 2019

Future disposal proceeds (2)

Pro-forma

57

Appendices: Group

Debt maturity profile Debt maturity profile 30 June 2019 (£m)(1) 1,000 900 800 700

Revolving credit facilities

600

Private placement

500

Sterling bonds 400

Euro bonds

300

Secured debt

200 100 0 2019

1

2020

2021

2022

Proportionally consolidated, excluding premium outlets

2023

2024

2025

2026

2027

2028

2029

2030

2031

58

Appendices: Group

LTV methodology 30 June 2019 (pro forma)(1) Net debt Group

30 June 2019

31 December 2018

Headline (£m)

Fully proportionally consolidated (£m)

Headline (£m)

Fully proportionally consolidated (£m)

Headline (£m)

Fully proportionally consolidated (£m)

3,055

3,055

3,447

3,447

3,406

3,406

VIA Outlets

234

234

-

242

Value Retail

667

667

-

658

Loan

3,055

3,956

3,447

4,348

3,406

4,306

6,545

6,545

6,951

6,951

7,480

7,480

659

659

-

636

1,931

1,931

-

1,823

Property values Group VIA Outlets Value Retail

352

-

352

-

326

-

Value Retail net assets

1,309

-

1,309

-

1,211

-

Value

8,206

9,135

8,612

9,541

9,017

9,939

37%

43%

40%

46%

38%

43%

VIA Outlets net assets

LTV 1

Reflects gross proceeds from sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik

59

Appendices: Group

Gearing sensitivity(1)

Disposals (£m)(3)

Reduction in Group values(2)

0

100

200

300

400

500

600

700

800

900

1000

0%

61%

59%

57%

55%

53%

51%

49%

47%

45%

43%

41%

5%

67%

65%

63%

61%

59%

56%

54%

52%

50%

48%

45%

10%

75%

73%

70%

68%

65%

63%

60%

58%

55%

53%

50%

15%

85%

82%

79%

76%

73%

71%

68%

62%

62%

60%

57%

20%

97%

94%

90%

87%

84%

81%

78%

75%

71%

68%

65%

25%

113%

110%

106%

102%

98%

95%

91%

87%

84%

80%

76%

Gearing covenant 150%(4)

1 2

3 4

Pro forma - reflects sale of Italie Deux (75%) and Oldbury land, excluding forward sale of Italik Gearing sensitivity on changes in 30 June 19 values and future disposal proceeds. Values on a proportionally consolidated basis including premium outlets Calculations assume disposals are achieved at 30 June19 book values Group’s tightest gearing covenant on unsecured bank facilities and private placement senior notes

60

Appendices: Group

Cost savings delivery on track to support reinvestment Breakdown of annual cost savings (£m)

2019 reinvestment (£m)

£8m p.a. £1.0m p.a. from future disposals Disposals £0.4m Operational £2.7m £7m p.a. of cost savings delivered

£4m p.a. Technology and innovation £2m

Board and management £3.9m

Super events £2m

61

Appendices: Group

Flexibility over future capital expenditure Capex 2018-2020 Committed

2018

2019

2020

Actual

Forecast

Forecast

£m

£m

£m

On-site developments

95

70

80

Other committed capex(1)

74

25

-

169

95

80

43

38

40

2

7

20

45

45

60

214

140

140

Discretionary Flagship destination investment City Quarters

Total

1

2018 includes £31 million held in escrow for future Croydon land acquisitions

62

Appendices: Group

Maintenance capex – FY 2018 Service charge (maintenance) Service charge income (£m) Maintenance expenditure within service charge (£m)

UK flagships

France flagships

Ireland flagships

Total

45

25

12

82

7

4

2

13

Examples: Painting, flooring upkeep, M&E: CCTV, wifi , IT systems maintenance

Capital expenditure Gross rental income (£m)

178

84

44

306

28

25

-

53

Yield on cost from capital expenditure – no additional area (%)

9%

4%

n/a

6%

Capital expenditure – no additional area: gross rental income (%)

16%

30%

n/a

17%

Capital expenditure – no additional area (£m)

Examples:

Income accretive: Repurposing and reconfiguration, capital contributions, digital screens Other (partly recoverable from tenants): Wayfinding projects, WC upgrades, LED relamping, seating upgrades, family rooms, smart metering

63

Our progress against 2019 plans

Delivering against our Positive Places Strategy

2019 Target

Progress

Reducing energy demand across the managed retail portfolio by a further 11%

-14.2% H1 2018 vs. H1 2019 reduction achieved

Installing additional renewable electricity capacity at three sites

1 complete, 2 programmed for H2 2019

Reviewing our energy procurement model to leverage additional renewable capacity and offer grid balancing

Market review of potential renewable capacity underway

Working with retailers to support efficiency improvements through fit out

Joint retailer workshop held in January 2019 with collaborative outputs published

Embedding Positive Places within City Quarters concept

Sustainability a key USP for our City Quarters concept

Working with our design teams to deliver best in class sustainability in our Dublin developments

Building 5 on track to achieve BREEAM Excellent and NZEB requirements

Working with regional water companies to support water reduction initiatives

Relationship with Thames Water established

Working with re-use partners to reduce waste

Partnership with Globechain established to trial re-use concept

Continuing our programme of portfolio-wide, locally focused community engagement initiatives

Community activities run in each asset 64

Hammerson has set a target to be Net Positive for carbon, water, resource use and socioeconomic impacts by 2030

“Hammerson was the first real estate company globally to set such comprehensive, challenging Net Positive targets and we are making good progress. Creating Positive Places underpins our delivery of best in class retail assets that respond to the major challenge presented by climate change.”

David Atkins, CEO

Carbon

Resource Use

Net Positive for carbon means carbon emissions avoided exceed emissions generated.

Net Positive for resource use means waste avoided, recycled or re-used exceeds materials used that are neither recycled, renewable nor sent to landfill.

Water

Resource Use

Net Positive for water means water replenished by external projects exceeds water consumed from mains supply.

Net Positive for socio-economic impacts means making a measurable positive impact on socio-economic issues relevant to our local communities beyond a measured baseline. 65

Steps to becoming Net Positive Our phase one target is to be Net Positive for landlord controlled carbon emissions, water demand, resource use and socio-economic impacts by the end of 2020

2015 27,000 tonnes CO2e

2016

539,082 m3 water 18,243 tonnes waste not recycled or reused

24,000 tonnes CO2e 511,888

m3

2017

water

17,293 tonnes waste not recycled or reused

Delivered carbon neutral development at Rugby

40,000 FTE jobs supported Installed 3 further solar PV across our assets arrays

2018 32% reduction in phase 1 NP Carbon footprint

2019-2021

Reduce energy demand by 23 tonnes CO2e savings further 8% v 2015 baseline from EV charging

Landlord CO2 e reductions optimised and offset Generated 450mWh clean Achieved 73% recycling opportunities in place for power rate and reduced net remainder operational resource use 4 additional PV arrays Energy procurement model from 3,000 tonnes to1,200 installed driving additional renewable tonnes 16% reduction in phase 1 capacity NP water demand Net positive approach 34% reduction in Phase 1 embedded in City Quarters NP resource use footprint Increase onsite renewable 150+ business start ups and EV capacity supported Improve energy efficiency of retail units

66

Westquay, Southampton

02

UK flagship destinations

67

Appendices: UK flagship destinations

H1 2019 UK flagship leasing performance H1 2019 leasing £m

H1 2019 UK flagship destinations leasing (£m) 5

8

4.5 4 3.5

7

Principal leasing

3.1

6

Reconfigurations

0.2

Temporary and other

1.1

5

3 2.5

4

2

3

1.5

Total

4.4

2

1

0.5

Monthly leasing 2019 (LHS)

Cumulative leasing activity 2017 (RHS)

Cumulative leasing activity 2018 (RHS)

Cumulative leasing activity 2019 (RHS)

1 2

UK flagship leasing key facts

0

Leasing vs. Dec 18 ERV -4%(1)

June

May

April

March

February

January

0

1

Principal leases only Excludes temporary leases (FY2018: average lease term 11 years, average incentive 8 months)

Leasing vs. previous passing -8%(1) Average lease term: 9 years(2) Average incentive: 3 months(2)

68

Appendices: UK flagship destinations

Profile of leasing at UK flagship destinations UK flagship destinations leasing(1) vs previous passing rent – H1 2019 (£’000s) 200

No.

£’000s

% vs previous passing

% vs ERV

Principal

26

2,577

-8%

-4%

Temporary

19

1,082

-26%

-55%

7

494

626%

-2%

52

4,152

-1%

-25%

Type

150

100

50

Temporary/ vacant to principal -50

Total

-100

-150

-200

1

All leasing, new and renewal, excluding storage and three reconfiguration lettings of £0.2m

69

Appendices: UK flagship destinations

Differentiation between categories and brands in our UK portfolio H1 2019 Sales

Hammerson UK flagship destinations category sales and range

Hammerson -2.0% Index -1.7%(1)

60%

H1 2019 Footfall Hammerson +0.5% Index -3.2%(2)

40%

H1 2019 price deflation(3) Non-food -0.6%

20%

Clothing -7.2% 6.6%

0%

3.4%

3.4%

2.2% -0.2%

-2.2%

-3.6%

-4.1%

-5.9%

-6.9%

-8.3%

Fashion Aspirational

Health & Beauty

Fashion Modern

Home, Consumer Brands & Gifts

Leisure

Dept Store Mainstream

Fashion Traditional

-20%

-40% Jewellery & Dept Store Personal Aspirational Luxuries

1 2 3

Source: Visa F2F Index Source: Shoppertrak BRC Nielsen shop price index

F&B

Sportswear

70

Appendices: UK flagship destinations

Exposure to department stores Hammerson exposure to department stores in UK Number of stores

Floorspace

Harvey Nichols

2

8

Selfridges

1

24

John Lewis

5

114

Marks & Spencer

4

28

Fenwick

1

16

Debenhams

5

75

House of Fraser

3

46

21

311

Total

(‘000 m2)

Hammerson sales growth

Bullring & Grand Central, Birmingham

+ve

-ve

71

Appendices: UK flagship destinations

Proactively reconfiguring department store space House of Fraser Highcross, Leicester

Indicative plans for further repurposing

Replaced with upsized Zara and JD Sports flagships, Adventure Golf, restaurants and additional car parking Additional £1.5m of rental income £17m project cost

Upsized Zara store

72

Les Terrasses du Port, Marseille

03

France flagship destinations

73

Appendices: France flagship destinations

Portfolio remains weighted towards flagship assets Focus on flagship destinations

89%

Les Terrasses du Port

Italie Deux

Les 3 Fontaines

Other

Portfolio value: £2.0bn Largest three assets 89% of portfolio(1)

1

By value at 30 June 2019 including developments

7 France flagship destinations

74

Appendices: France flagship destinations

H1 2019 leasing performance H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m) 1.6

H1 2019 leasing £m

7

1.4

6

1.2

5

1.0 4 0.8

Principal leasing

1.7

Reconfigurations

0.8

Temporary and other

0.3

Total

2.8

3 0.6 2

0.4

France flagship leasing key facts Leasing vs. Dec 18 ERV +4%(1)

1

0.2

Monthly leasing 2019 (LHS) Cumulative leasing activity 2018 (RHS)

1 2

June

May

April

February

March

0 January

0.0

Leasing vs. previous passing +5%(1) Average lease term: 10 years(2) Average incentive: 0 months(2)

Cumulative leasing activity 2017 (RHS) Cumulative leasing activity 2019 (RHS)

Principal leases only Excludes temporary leases (FY2018: average lease term 10 years, average incentive 3 months)

75

Appendices: France flagship destinations

Differentiation between categories and brands in France H1 2019 Sales

Hammerson UK flagship destinations category sales and range

Hammerson +1.3% Index +0.2%(1)

60%

H1 2019 Footfall

Hammerson +0.5%

40%

Index +0.3%(2) 20%

9.5% 0%

8.0%

3.1%

2.0%

1.3%

0.7%

0.0% -0.2%

-0.4%

-0.5%

-0.6%

Leisure

Fashion Traditional

-20%

-40% Fashion Sportswear Aspirational

1 2

Health & Beauty

Source: Banque de France (YTD 30 June 2019) Source: CNCC

Fashion Modern

Dept Store Aspirational

F&B

Home, Consumer Brands & Gifts

Dept Store - Jewellery & Mainstream Personal Luxuries

76

Dundrum, Dublin

04

Ireland flagship destinations

77

Appendices: Ireland flagship destinations 200,000m2 of prime space plus sustainable development opportunities

Focus on flagship destinations

Dundrum

Pavilions

Ilac

Developments

Portfolio value: £1.1bn Dundrum 68% of portfolio(1)

1

By value at 30 June 2019 including developments

78

Appendices: Ireland flagship destinations

Key retail centres map

79

Freeport Lisboa, Lisbon

05

Premium outlets

Appendices: Premium outlets

Overview of European outlet market Number of outlets in Europe(1)

Leading operators by GLA(2) McArthurGlen Neinver VIA

17%

43 UK

60

Italy France

213 outlets

30

13

Value Retail 41%

circa 3.5million m2

Spain Germany

9%

Landsec 8%

Poland

ROS

Other

17

Realm

25

4%

25

4% 4% 4%

4%

5%

Multi Concepts & Distribution Other

Limited number of outlets in Europe with high barriers to entry

1 2

High concentration – c. 60% of GLA managed by nine operators

Source: FSP’s European Outlet Industry Report March 2017 Source: Cushman & Wakefield. Market share by GLA. Total GLA – c. 3.5 million m2

81

Appendices: Premium outlets

Tiered European outlet market Sales densities €/m2

€30,000+

€2,000–€10,000

80% fixed, remainder turnover; includes car park income and inducement amortisation

43

(7)

59.0% EBIT margin(2)

(4.0)

Interest

Interest: secured debt structure; weighted average cost of debt of 2.1%

(7)

Tax: corporation tax ranges from 15.8% in Germany to 25% in Spain and the Netherlands

(1.4) (2)

Tax

6.7

EPRA Earnings -

15

32.7% EPRA Earnings margin(3)

5.0

10.0

15.0

20.0

25.0

£m 1 2 3

All figures at Hammerson share FY 2018: EBIT margin 58.1% FY 2018: EPRA Earnings margin 32.7%

89

Appendices: Premium outlets

Multi-phase extensions – a source of significant growth Completed

Future 5,800m2

2,500m2

33 units

21 units

TDC

TDC

£100m

€50-60m

YOC

Opening Q4 2020

+15% Bicester Village, Oxfordshire

Q4 2017

La Roca Village, Barcelona

5,500m2

2,500m2

45 units

15 units

TDC

TDC

€26m

€11m

YOC

Opening Q4 2019

+11% Batavia Stad, Amsterdam

Q2 2017

Hede Fashion Outlet, Gothenburg

90

Martineau Galleries, Birmingham

06

City Quarters

Appendices: City Quarters

The City Quarters opportunity

Major

Strategic

Near term

Key schemes

Area

Next Start on planning site submission

Retail

F&B

Residential

Workspace

Leisure





Les 3 Fontaines, Cergy

8,400m2

n/a

On site

Citywall House, Southampton

2,800m2

2019

Q2 2020

10,000m2

2019

Q3 2020

Victoria Hotel, Leeds

8,400m2

2019

Q3 2020

Ladywood House, Birmingham

9,300m2

2020

Q4 2020

Martineau Galleries, Birmingham

7 acres

2019









Callowhill Court, Bristol

9 acres

2020









Dublin Central

6 acres

2021









Dundrum Phase 2

6 acres

2021







Pavilions Phase 3, Swords

18 acres

2021







Victoria Phase 2, Leeds

10 acres

2021











Brent Cross

15 acres

n/a











Croydon

22 acres

n/a











The Goodsyard, London

10 acres

2019









Dundrum Building 5, Dublin

TOTAL



Education

Culture

Hotel

Public spaces

 

  

















 



 























103 acres

92

The Orchard Centre, Didcot

07

UK Retail Parks

Appendices: UK retail parks

H1 2019 operational update UK retail parks H1 2019

H1 2018

1.0

-3.4

96.7

94.5

Leasing activity (£m)

0.6

1.3

Leasing vs. ERV (%)(1)

+1

+4

+13

+2

+0.6

-1.9

LfL NRI (%) Occupancy (%)

Leasing vs previous passing (%)(1) Footfall (%)(2)

1 2

Principal leases only H1 2019 UK benchmark +0.3% (Source: Springboard Retail Parks Index)

94

Appendices: UK retail parks

Key retail park disposals 2016 to 2019 Proceeds(1) £m

Buyer

2016: average 7% below BV Thurrock Shopping Park, Thurrock

100

TH Real Estate

Cramlington Retail Park, Cramlington

78

Arch (local authority)

Westmorland Retail Park, Cramlington

36

Arch (local authority)

80

BMO (private equity)

Battery Retail Park, Selly Oak

58

NFU Mutual

Wrekin Retail Park, Telford

35

Ediston/Europa

2017:

average -3% below BV

Thanet Retail Parks, Kent

2018: average -7% below BV

Imperial Retail Park, Bristol/Fife Central Retail Park, Kirkcaldy

164

Capreon (private equity)

2019: average -6% below BV Dallow Road RP, Luton

24

Total 2016 – 2019(2)

Private equity

571 1 2

Gross proceeds Total annual gross proceeds: 2016 - £221m; 2017 - £86m; 2018 - £257m , 2019 - £33m

95