CANARY WHARF GROUP PLC

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CANARY WHARF GROUP PLC
Presentation to Analysts 9th March 2001
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Chairmans Chief Executives Statement -
Highlights
Leasing and Construction programs continue to
accelerate
3.24 million sq. ft. of Agreements to Lease since
September
1 million sq. ft. Heads of Terms with Lehman
Brothers
All of Heron Quays underway with completion in
2003
12 developments totalling 7.1 million sq. ft.
under construction
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Canary Wharf Will Continue To Be A Growth Company
We intend to continue to develop and expand the
estate
Potential to build additional 2 million sq.ft. on
the Canary Wharf estate
Acquired Shed 35 and Riverside for approximately
3 million sq.ft. of additional development
potential
Targeting additional 2 - 3 million sq. ft. of
site acquisitions
Objective is to enlarge estate by 50 subject to
market demand
Reviewing optimal structure and financing which
may include new separate development company
We are committed to complete the Return of
Capital Program
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(No Transcript)
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PROGRESS UPDATE - since July 2000
Lease contracts exchanged
Office 2,254,000 sq.ft.
Retail 80,000 sq.ft.
Agreed heads of terms 1,000,000 sq.ft.
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PROGRESS UPDATE - since July 2000
Under construction
Shell Core
Office approx 6,850,000 sq.ft
Retail approx 290,000 sq.ft
Pre-staging
Office approx 1,500,000 sq.ft
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PROGRESS UPDATE - since July 2000
Fit-out contracts by Canary Wharf Contractors
Under construction 4,272,000 sq.ft
Agreed heads of terms 1,000,000 sq.ft.
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HQ1
Lease contracts exchanged in October 2000 with
Morgan Stanley for leasing of 512,000 sq. ft.
building
Piling complete and enabling works commenced
for construction of basement
Completion anticipated mid 2003
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HQ2
Agreement reached in February 2001 with
Lehman Bros for lease of 1,000,000 sq.ft.
building
Piling completed and foundations / basement
construction in progress
Completion anticipated in third quarter 2003
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HQ 3
Piling and raft completed
Concrete core and basement construction in
progress
Speculative building to be available for multi
tenant occupation in early 2003
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HQ4
Lease contracts exchanged in November 2000
with The Northern Trust Company for occupation
of 135,000 sq.ft. in 210,000 sq.ft. building
Concrete core completed and steel structure at
Level 1
Completion anticipated 2002
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HQ5
Lease contracts exchanged in November 2000 with
Clifford Chance for lease of 785,000 sq.ft. in
1,000,000 sq.ft. building
Piling and tower raft completed
Podium raft construction in progress
Completion anticipated mid 2003
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JUBILEE PARK MALL
Further 85,000 sq.ft. of retail bringing total
to over 500,000 sq.ft. and to approach regional
mall status
Links to HQ1-5 buildings, Jubilee Line and DLR
Stations, and pedestrian bridge to South Quay
Piling completed and foundations / basement
construction underway
Completion mid 2003
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25 CANADA SQUARE
1,200,000 sq.ft. Citigroup building topped out
Steel structure complete and cladding up to level
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Pre-commissioning and testing of systems commenced
Internal fit-out to level 30 in progress
Initial occupation anticipated September 2001
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DS4
Lease contracts exchanged in December 2000
with McGraw-Hill for leasing of 322,000 sq.ft.
in 500,000 sq.ft. building
Piling completed and raft construction in
progress
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CANADA PLACE EXTENSION - Retail
Lease contracts exchanged for 80,000 sq.ft.
Waitrose Food Home Store
Development to include 92,000 sq.ft. premier
health club, two roof top restaurants and 300
parking spaces
Steel frame up to level 2
Completion due 2002
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DS3
Construction to street level underway
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8 - 16 CANADA SQUARE
1,100,000 sq.ft. HSBC headquarters building
topped out
Structure completed and cladding installed up to
level 40
Cat A fit-out in progress up to level 39
Completion due February 2002
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5 CANADA SQUARE
Lease contracts exchanged in January 2001 with
CSFB for lease of 515,000 sq.ft. building
Steel frame up to level 4
Completion due May 2002
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15 WESTFERRY CIRCUS
Steel structure completed on 175,000 sq.ft.
building for Morgan Stanley
Cladding substantially completed
Anticipated completion 3rd quarter 2001
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CHURCHILL PLACE
Cofferdam construction proceeding
SHED 35
Acquired December 2000
RIVERSIDE
Acquired December 2000
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INTERIM RESULTS
1 JULY 2000 to 31 DECEMBER 2000
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FINANCIAL HIGHLIGHTS
6 months
6 months
ended
ended
Dec 2000
Dec 1999
Change

m
m
55.6 n/a n/a
(38.2)
74.2 22.5 -
22.5
47.7 (2.7) 39.1
36.4
Turnover
Profit / (loss) before exceptional item
Exceptional profit on the sale of competed
properties
Profit for the financial period
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FINANCIAL HIGHLIGHTS
As at December 2000
As at June 2000
Change
m
m

1,624.5 (856.3) 3,083.6 4,247.2 5,546.7 6.02
1,520.1 (596.3) 2,668.7 3,628.7 4,787.2 5.31
6.9 (43.6) 15.5 17.0 15.9 13.4
Net assets - at book value
Net debt
Property portfolio - at book value
Property portfolio - at OMV
Property portfolio - at NRV
NAV per share based on NRV
Excludes Shed 35 site acquired in six months to
December 2000
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SUMMARY CONSOLIDATED PROFIT LOSS
Change

m
m
74.2 59.6 (8.3) (10.1)
- 42.0 (19.1) 22.5
3.3 p 3.2 p
47.7 32.3 (6.4) (4.0)
39.1 62.6 (26.4) 36.4 5.3
p 5.2 p
55.6 84.5 (32.9) 27.7
(38.2)
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TURNOVER ANALYSIS
6 months
6 months
ended
ended
December
December
2000
1999
Change
m
m

56.9 13.8 3.5 74.2
33.1 11.9 2.7 47.7
71.9 16.0 29.6 55.6
Rent
Service charge
Other
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PROPERTY PORTFOLIO
2,292.7 629.7 161.2 3,083.6
235.9 57.9 41.4 79.7
2,196.7 325.0 147.0 2,668.7 2,668.7
414.9 3,083.6
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SUMMARY CONSOLIDATED BALANCE SHEET
December 2000 m
June 2000 m
Change
Assets
3,083.6 37.7 3,121.3
6.9 1,617.6 1,624.5 856.3 451.3
189.2 3,121.3
2,668.7 42.3 2,711.0
6.9 1,513.2 1,520.1 596.3 424.6
170.0 2,711.0
15.5 6.9
Properties
Other Assets
Financing
Equity share capital
Reserves
Equity shareholders funds
Net debt
Deferred income relating to building sales
Other liabilities
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PROFORMA BALANCE SHEET
Investment properties
4.4 25.6 15.9
Properties under construction
Properties held for development
Net debt excluding prepayments
Other net liabilities
LUL commitment
6.02
NAV per share based on NRV
5.31
OMV and NRV for properties held for development
exclude Shed 35
Based on 688,448,629 shares at 31st December
2000 (30 June 2000 - 685,714,629)
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NET DEBT
December 2000
June 2000
944.7 93.3 676.6 1,714.6
(477.9) (2.1) 1,234.6 (266.6)
968.0 (111.7) 856.3 7.2
941.8 - 675.1 1,616.9
(574.8) (2.3) 1,039.8 (236.5)
803.3 (207.0) 596.3 7.2
Securitised debt
Loans
Finance lease obligations
Total borrowings
Less cash collateral for borrowings
Less other cash collateral excluding pre-payments
Less cash deposits
Net debt excluding pre-payments
Cash deposits arising from pre-payments in
respect of buildings contracted to be sold
Weighted average cost of debt
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SUMMARY OF EXPENDITURE ON COMMITTED BUILDINGS
2002 m
2003 m
2001 m
526 122 17 665
120 14 12 146
661 63 28 752
Pre - let
Speculative
Infrastructure
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CAPITAL EXPENDITURE
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1BILLION REVOLVING FACILITY
Completed November 2000
1billion revolving facility with ability to
increase up to 1.5billion
Facility to be sub divided into separate loans
each used to develop an individual property
Largest construction loan arranged in the UK for
commercial development
LIBOR 1
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SECURITISATION 1 - TAP ISSUE
Completed February 2001
Increase of 120m on initial 555m
securitisation completed in 1997
105m AAA spread of 102 basis points over gilts
achieved
Twice over - subscribed
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Leasing Rent Review
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LEASING RENT REVIEW
Canary Wharf Group granted 1.75 million sq.ft.
of occupational leases on the Estate in the 6
months to end December 2000. 2.65 million sq.
ft. for the year
In January 2001, CSFB committed to a further
515,000 sq. ft. at 5 Canada Square and in
February this year Canary Wharf Group agreed
heads of terms with Lehman Bros for 1,000,000
sq.ft. building
Canary Wharf secured one third of deals over
100,000 sq.ft. in 2000
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LEASING RENT REVIEW
Canary Wharf has over 1 million square feet in
solicitors hands - recorded demand remains
strong
There is clear evidence of rental growth in all
sub-markets and is reflected in the rent reviews
Market conditions continue to support Canary
Wharf Groups strategy on new development. We
have the lowest vacancy rate in all sub-markets
(0.6)
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CENTRAL LONDON OFFICE MARKET BALANCE - 1984-2000
Source Knight Frank Research
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CENTRAL LONDON OFFICE MARKET
Development Take-up, 1984-2001
Annual Take-up
Million sq.ft
Source Knight Frank Research
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CENTRAL LONDON OFFICE MARKET VACANCY RATES
Source Knight Frank Research
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CENTRAL LONDON OFFICE MARKET VACANCY RATES - by
sub market 1997-2000
Source Knight Frank Research
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CENTRAL LONDON OFFICE SUPPLY DEMANDby size
band sub-market - 2000
0-10,000
10-30,000
30-60,000
60-100,000
100-200,000
200,000
Source Knight Frank Research
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CENTRAL LONDON OFFICE MARKET - 2000
16
7
Source Knight Frank Research
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CENTRAL LONDON OFFICE MARKET DEMAND - 2001
Source Knight Frank Research
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PRIME HEADLINE RENTAL VALUES - March 2001
CW
Source Knight Frank Research