Land Securities Group Plc (LAND) Earnings Call Transcript & Summary

Ladies and gentlemen, it is -- good morning. Just about a -- big welcome to Greater Manchester. It's been over 2.5 years, I think, since we had our last physical Capital Markets Day. So it's great to be able to bring so many people together, and I hope we've got a really exciting and illuminating day planned for you. Focusing, of course, initially on our Greater Manchester assets here at MediaCity and then at Mayfield, but talking about our mixed-use pipeline more broadly as well. Just a little bit of housekeeping to make sure I remember. There aren't any fire alarms planned today. So if you do hear something, it is a real thing. So please head to the stairs either end of the floor on here. So as I mentioned, the focus of our Capital Markets Day today is our plan of urban mixed-use developments and importantly, their potential for value creation in the years ahead. So we will, of course, focus on our Greater Manchester assets here at MediaCity and Mayfield, but you'll also hear more about the overall pipeline and its potential to add around GBP 350 million of development profits over the next 5 years. You'll hear shortly from Colette O'Shea, our COO; followed by David Heaford, who heads our development function; and Vanessa Simms, who I'm sure you all know as our CFO. We'll then have a brief overview of MediaCity itself before we then embark on a tour of MediaCity. And for that tour, you will all have been allocated to 1 of 3 groups, and that's indicated by a number on your name badges, but we'll come back to the logistics of that a little later. From here, we're going to be taking the tram across to Mayfield, which is adjacent to Piccadilly Station where many of you -- most of you will have arrived this morning. We'll have some lunch there and then hear from the team at U+I about our plans for Mayfield. So as a brief reminder, we launched our strategy at our last CMD, and that was held virtually in October 2020, and it sees us focus on 3 key areas: Central London offices, major retail destinations and mixed-use urban neighborhoods. And what binds those 3 things together is the importance of a sense of place to their long-term and enduring success. And each of those 3 areas is grounded in our core purpose: Sustainable places, connecting communities, realizing potential. And each of them is based on a clear, sustainable or attainable competitive advantage. And we have really good momentum in every part of the business. In London, we're seeing any -- really encouraging returns to the office. Utilization last week was back up to around 50% of pre-pandemic levels and we're seeing week-on-week material increases in occupancy. Now more importantly, the utilization itself is that's reflected in positive leasing activity. And as you may have seen, we announced last week, we've recently signed 11 new deals circling 200,000 square feet, and we expect another 200,000 square feet to be signed before the end of our financial year in March. And we expect that leasing evidence to be firmly supportive in terms of terms and rents. We've got an attractive near- and medium-term development program. We're continuing to actively recycle capital out of assets with limited further value creation potential, and we have a program which will keep Landsec at the forefront of the green agenda. In retail, clear signs of rents and values stabilizing. Investor activity returning to the sector, including our own acquisition of a further 25% stake in Bluewater as announced just before Christmas. And as we said, with our interims, vacancy across our retail estate fell from 8.8% at the start of the year to 7.5% at the half year. And across 181 new lettings in retail, we were on average 3.3% ahead of ERV, and we expect to be reporting similarly positive data at our full year results in May. And in mixed-use, as you will see today, we have materially accelerated our strategy with our investments at MediaCity and in U+I. So we now have a pipeline of projects which could contribute around GBP 350 million of development profits over the next 5 years. As a result of the healthy momentum in all parts of the business, we now have a clear view of the potential returns that each area can generate. Now with a similarly clear view of the risks involved in each area, this means that we can make clear-eyed decisions about capital allocation, confident that those decisions are and will be value accretive. And the chart on the right-hand side here, which we first produced with our interims back in the autumn, shows the range of potential returns that are available to us across each business area. And as we said at that point, overall, we are aiming to deliver a mid- to high single-digit annual return on NAV through the cycle, and that's split broadly equally between income and growth. Now of course, a key element of our strategy is the effective recycling of capital into areas that offer the best risk-adjusted prospects. At our last CMD, we identified a medium-term target of around GBP 4 billion of disposals in the medium term. Since then, we've already sold around GBP 900 million, and we've invested about the same in new opportunities across all 3 areas of the business whilst also progressing our pre-existing London development program. As a result of that, we've already begun to see a change in the composition of our portfolio as shown in these charts, with Urban Mixed-Use now accounting for 8% and London reduced from 64% -- sorry, to 64% from 69% at the half year. And our medium-term expectation remains that London will represent somewhere between 55% and 60% of the portfolio in the medium term, while each of Retail and Urban Mixed-Use will be around 20% to 25%. You should expect to see ongoing capital recycling in 2022, with the effective matching of disposals and reinvestment of proceeds a really important priority. So after those few brief introductory remarks, I'm now going to hand you over to Colette. Thank you.

Thank you, Mark. For those of you I haven't spoken to yet, good morning, and it's great to see you all in person again. Mark has talked to you about how mixed-use urban neighborhoods accord to our strategy. I'm going to take you through how we intend to make the most of the opportunities in this sector to create value and drive growth. We believe the opportunities are significant because they're supported by structural trends, which are changing city centers. People want to be able to live, work and play within neighborhoods. The idea of localities being reserved for single uses, as we saw with high streets and shopping centers, is now a thing of the past, and we think that's a good thing. It means we're going back to a world of properly town planning on neighborhoods, districts and cities. And last week's leveling up white paper provides political support for our activity, with both Greater Manchester and Glasgow a particular focus of the government's plans. And of course, we're seeing a huge shift in how we prioritize where and how we live. People want a sustainable future where quality of life, health, well-being, environmental sustainability are paramount. The tide was turning 10 years ago, but the pandemic has put it on acid. Getting this right means we'll be a partner of choice for public and private sector organizations, who hold the key to unlocking acres and acres of potential. This means we can create and curate the places and spaces people want to be in, which in turn will unlock strong returns for shareholders. Let's focus for a moment on those returns. As you've heard from Mark, we're targeting a mid- to high single-digit IRR across the portfolio. This captures an attractive mix of income and development upside. These returns are both attractive and have a balanced risk profile for 3 reasons. The portfolio's mixed use with a good balance between offices and residential. It has a good geographic spread, and the Phase E enables us to control capital recycling and adapt plans to create even greater returns. Our acquisitions mean that we can scale up, accelerating our ability to deploy capital into this part of the business. We've doubled the portfolio, so it now represents 8% of the whole and have line of sight to grow this to 20%, 25% in the medium term. We've more than doubled the square footage to 9 million square feet, with the potential to deliver 7,000 homes, 3 million square feet of offices and 1 million square feet of retail and other uses. And we have 5 projects, 2 of which are already virtually ready to start on site. We've rebalanced the residential to office mix and broadened our geography to Manchester, a very attractive market. And as you can see from the bar chart on the right, we're now planning to invest GBP 1.5 billion over the next 5 years. And with an expected profit on cost of around 20%, you can see from the graph how that's increased potential returns. Plus, we're doing all this while carrying a book value of around GBP 900 million, which is generating around GBP 58 million of income, so a decent return while we prepare for development. So now to the individual assets, starting with MediaCity. There are 3 primary reasons why we were attracted to this asset. Firstly, it's already established and is Europe's largest purpose-built creative tech and media hub. Secondly, it gives us both secure income and access to future growth with its development potential, a really attractive combination. Thirdly, we could see the benefits of taking a 75% stake, gaining the proven market and development expertise of Peel, who've owned the site since 1987. Phase 1 is 96% let with GBP 23 million of income, reflecting a yield of 5.8%, and the WAULT is 10 years. All in all, a great set of numbers. So that's Phase 1, the stabilized assets and secure income. Phase 2 is the growth opportunity. It comprises 15 acres of development land. We have outline consent for 1.7 million square feet of residential and commercial uses and plan to be ready with a 270,000 square foot office building that could start at some point next year. Consent was obtained in 2016, but since then, the development environment in Greater Manchester has really moved on, so there's an opportunity for us to adapt the scale and massing of future phases. This then brings me to the U+I deal. This was very attractive to us for similar reasons to MediaCity as it means we can materially accelerate our plans. Firstly, it's given us immediate access to 2 highly attractive developments, one of which is Mayfield in the heart of Manchester. In our eyes, one of the most exciting regeneration projects in the U.K. Secondly, it's brought us leading front-end regeneration expertise as well as broadening our geographic spread. And thirdly, it's given us future growth potential via several other sites. So let me take you through the numbers. We acquired U+I for GBP 269 million, and we'll sell around GBP 200 million of assets that are not core to our strategy over the next 2 years. This effectively means we acquired the 5 core assets for between GBP 60 million to GBP 75 million, well below their collective market value. And as you can see, the development profit we expect over the next 5 to 6 years is significant compared to this price. Taking these factors together, the U+I acquisition gives us an expected IRR of between 11% to 14%. I'll now give you a very brief overview of Mayfield, which we're going to later. Then I'll go through the 2 assets we've identified for future growth, namely Greenwich and Cambridge, and then Liberty of Southwark, an office development in London. So starting with Mayfield. It covers 24 acres next to Manchester Piccadilly station, and as I said, is one of the best regeneration opportunities in the U.K. Mayfield was historically a station and its depot buildings, which you'll see, will be retained to preserve its railway heritage. Its future will be carefully planned. 2.5 million square feet of mixed-use that is anchored in history and community, and it will include a 6.5-acre park, the first to be built in Manchester for over 100 years, all of which will bring new life into the area. We're getting 300,000 square feet of offices ready in 2 buildings that could start later this year as well as completing the park, which you'll see is well underway. So back to London, and Morden Wharf in Greenwich is 19 acres right on the River Thames owned by Morden College. U+I, as development manager, achieved a planning resolution last year for 1,500 homes plus warehouse and commercial space, and the Section 106 is now being negotiated. Cambridge Northern Fringe East is 120 acres on the outskirts of Cambridge in a joint venture between Cambridge City Council and Anglian Water with U+I acting as development manager. Whilst we're at feasibility stage, it's looking like it could become a new district of around 5,000 homes plus 0.5 million square feet of life science, office and lab space. Finally, Liberty of Southwark is 5 minutes' walk from London Bridge and Borough Tube Station. The 160,000 square foot office building, which will be net 0, makes a cracking addition to our office portfolio. The site's in joint venture with TfL, they're the freeholder, and we're in the process of agreeing the terms of funding agreement with them as well as getting ready to start on site later this year. So in a nutshell, our acquisitions of MediaCity and U+I have really stepped up our game in mixed-use urban neighborhoods on all fronts. I'll now provide a very, very quick update on the schemes that we already had in the portfolio. David is going to take you through O2, so I'll focus on Lewisham and Buchanan Galleries. It's interesting to note that all 3 of these are secondary shopping centers that have great regeneration potential. Lewisham is adjacent to the Lewisham Gateway regeneration project, which will deliver thousands of homes, and our proposals are seen by the local authority as a natural extension of that. We're evolving plans for 1.8 million square feet of a residential-led scheme and expect to submit a planning application in the next 12 to 18 months. Buchanan Galleries in Glasgow is a tired shopping center connected to Queen Street Station. The site comprises 8 acres, and we've developed an office-led scheme of just over 1 million square feet. Phase 1 is likely around 400,000 square feet of offices, and we're planning to start on site with enabling works in 2023. So we've significantly increased our pipeline and now have 5 schemes delivering returns in the short term. We can now deploy around GBP 4 billion from next year. We expect to achieve a yield on cost of between 5.5% and 6% to the London schemes and 6.5% to 7% for the regional ones, and deliver a profit on cost of around 20%. As you can see, we're making mixed-use urban neighborhood a significant part of the business. To show that in even more detail, looking at the left-hand chart, you can see how the GBP 1.5 billion will be invested across the 5 schemes over the next 5 years. And the right-hand chart shows how this investment, along with our expected profit on cost, increases the total development value from around GBP 900 million in March to close to GBP 3 billion in 5 years' time, in line with our target to grow this part of the business to 20% to 25% in the medium term. As Mark said, our strategy is focused on 3 things: Central London offices, major retail destinations and mixed-use urban neighborhoods. What binds them together is our total commitment to the importance of creating great places that will inspire community, leading to the transformation of whole neighborhoods for the long term as well as unlocking value for shareholders. We have many of the skills necessary to do this, but U+I are well known for their visionary and place-making expertise, and these will complement our existing strengths as we maximize the opportunities in our larger, vaster program. And as you'd expect, sustainability in its broadest sense from community to net 0 will drive our decision-making. So in conclusion, we have a clear plan to unlock returns early starting this year. We have an attractive balance of risk return to enhance our target returns. We have a phased delivery plan to enable us to manage our capital recycling and speculative development exposure, and now have a clear pathway to grow our urban mixed-use neighborhoods to around 20% to 25% of the portfolio over the medium term. And with that, now let me hand you over to David who's going to give you some more detail on O2 back in London.

Thank you, Colette, and good morning to you all. As Colette said, we really are motoring with our mixed-use urban developments. And before you let out into a sunny-ish Salford, dry at least, I want to take you back to London. Specifically, let's go back to O2 in London. Now that's O2 Finchley Road, [indiscernible] not O2 Greenwich. There's no [indiscernible] dancing shows at our O2 center. Now I shared some of these plans for O2 at our last Capital Markets Day, which was Autumn-2020. Seems like a lifetime ago. A lot has happened since then, and if you're anything like me, 2020 and '21 are a complete blow. So for those of you that may have been there, as a reminder, it was the virtual Capital Markets Day, where you were probably sat at home in your slippers and pajamas, at least from the waist down, watching from your home office. I shared this video. [Presentation]

Despite being sandwiched between stations, West Hampstead and Finchley Road, 2 tube lines, the overground line, Thameslink, and so many bus routes, you can't really get any more connected. And there are already very well-established thriving communities at each end of this site. The rental tone is well and truly set. Let me now get you around this site as it stands today. So starting with the shopping center highlighted in purple anchored by a large Sainsbury's, and least we forget these local convenience-led retail centers have weathered the storm well through the various lockdowns and variants. The center also has a Vue cinema and a Virgin Active gym, both of which are rapidly filling up again. We're finalizing plans for these to be joined by Aldi's new convenience concept. And on the first floor, new F&B offerings, a Pan Asian restaurant, a net 0 carbon pizza offering and a Salt Beef diner. Camden Council have also chosen the O2 to house their Tech Academy, a training center specializing in robotics and app building for any budding students in the local community. Then we have a large car park that, despite only being at ground level, it's simply much bigger than it needs to be. At the other end of the car park is a rather tired homebase. And those 3 parts, the center, car park and homebase collectively are under our current ownership. We're working through plans to take ownership of the car showrooms and then the builders' yards leading down to West End Lane shown on the left. Well, since autumn 2020, we've been really busy. And I am very pleased to say we've done exactly what that opening video told you we would do. We've now submitted planning for 1,800 homes across this 14-acre site. In total, this team has 10 plots, 7.5 acres of public green space and 180,000 square foot of convenience-led retail. With enabling works planned to start at the end of this year, we have an earliest PC date of Q1 '26. The planning amplification is broken into 3 phases: a detailed first phase and then outline plans for phases 2 and 3. We will start within our existing ownership at the homebase end of the car park, the current shopping center remaining car park stay open for business. The total development cost for Phase 1 is around GBP 250 million and includes over 600 residential homes. Now, I'll expand on that in a moment. Then we move west, down towards West End Lane and the West Hampstead stations. Here, we have the ability to deliver 350 more homes across a further 3 plots with a total development cost of around GBP 200 million. Finally, we move East, taking down the existing shopping center for the third and final phase. Here, we have the ability to deliver another 850 homes across 4 plots with a further GBP 500 million to GBP 600 million of development costs, ultimately creating a green and open new urban neighborhood. So let me show you Phase 1 in a little more detail. As I said before, we have -- we plan to start enabling works later this year and with 608 residential homes across 3 plots. There is also 1.5 acres of green space in Phase I. The existing rental price points in Finchley Road are on average GBP 1,600 for a studio up to GBP 3,500 for a 3-bed flat. It's clear that O2 offers a very attractive income profile. This is a highly desirable location, benefiting from fantastic schools, both private and states. The public transport connectivity is exceptional into Central London and the major motorway network is within a 10-minute drive. We are busy working up our first residential rental proposition and products with a target build cost of GBP 265 per square foot, which we intend to launch ahead of the PC of the first blocks. Now we'll be bringing all of our sustainability experience from London offices to bear on this scheme. We will recognize last year for achieving the first net 0 development in the country, that's our Forge development in Southwark. We've now also been recognized for designing the most efficient building in operation, the sustainability of the credentials through its lifetime for the building and again, in Southwark, and again, a first in the U.K. Timber Square will have a 5-star excellent rating when complete, and we hope to start the main build later this year. All of this knowledge will be applied at Finchley Road. So that's Phase 1. But these multi-phase schemes offer more flexibility and the ability to balance incoming capital returns over the long term. As this chart shows, the existing shopping center stays intact and operation for a long time, generating income. With planning and permission expected to be granted within the coming year, we'll start to see capital returns flowing. We then deploy capital into Phase 1 and begin marketing through to first phase PC at Q1 '26. Incoming capital flowing, we repeat the same for each of Phase 2 and 3, with the ability to throttle phases and plots within each. Then in the third and final phase, we demolish the existing shopping center and complete the master plan. Capital and income return are delivered throughout as we transform the entire site. Owning such a major site enables us to deploy capital into a known entity where we're in control of the place. We have a deep relationship with the council, and where we are connected to the local community. So real progress at Finchley Road with a fantastic return profile. We are really excited about this scheme. Thank you. I'll hand over to Vanessa before we let out into sunny-ish Salford.

Thanks, David, and good afternoon. As you can tell, activity across our business has stepped up quite significantly in the recent months, and that's really there to enhance our future returns. So I've got a few slides here today just to bring this together. So as Mark shared earlier, we are a total return business, and we are seeking to deliver a mid- to high single-digit annualized return on our equity, and that's split broadly between -- equally between both income and capital growth. Our development program, including the urban mixed-use schemes that you've seen today materially advances our future returns. And CapEx over the next 5 years will be broadly GBP 2.8 billion, and we expect to deliver a 20% profit on cost from this investment, and we'll fund this activity through our disposals, recycling the capital out of lower yielding assets into higher return opportunities and allocating capital to areas of growth. And I expect our LTV to be below the mid-30s in the future. Our pipeline of development opportunities is now attractively balanced between both London offices and the urban mixed-use. And today, we focused on our urban mixed-use schemes, but we've also added the Liberty of Southwark to our London office development pipeline, and that's following the recent acquisition of U+I. The Liberty scheme adds to our existing opportunities within Southwark. Planning is in place, and we expect to start on site later this year. Total development cost of the scheme is around GBP 225 million, and we expect to deliver a development yield of 6.3%. If occupier demand remains strong, we'll also expect to start on site at Timber Square later in this year, and the indicative cost of our future pipeline of the London office developments is around GBP 1.3 billion. And our future pipeline of London offices and the mixed-use includes the recent acquisitions and this has increased significantly, creating investment opportunities of over GBP 5 billion for the longer term, and we'll fund this through the recycling of our assets. So at the 2020 Capital Markets Day, we shared a target to sell GBP 4 billion of assets to fund our growth. And to date, we have sold GBP 880 million, up 5% ahead of the book value. We plan to dispose of a further GBP 1.7 billion of London offices, where you know the investment demand at the moment is strong, and GBP 1.3 billion of subscale assets over the medium term. And we have flexibility around the timing of the future disposals to align the quantum and the timing of investment activity, and this allows us to maximize the value from the assets that we intend to sell. Both the retail parks and [indiscernible] have seen a strong performance over the first half of this year, and we're expecting this to continue. Our disciplined approach to capital recycling enables us to maintain a broadly net debt neutral position throughout the cycle, and it protects our income. And as our operational risk increases, to achieve the higher returns, we will manage our financial risk accordingly, so keeping our net debt broadly neutral and limiting the speculative development CapEx to around 10% of our balance sheet's gross asset value. And our development program will provide a regular flow of completions, and this will be a source of both development profits and our future income growth starting in the first half of the next financial year. So this slide illustrates how the phased nature of the urban mixed-use schemes complement our London office program. With the first phases of both MediaCity and Mayfield planned to complete in the second half of financial year '24, '25. To summarize, today, we have shared how our urban mixed-use neighborhoods will deliver a positive impact on capital returns and income, contributing to our aim of achieving high- to mid-single-digit annualized total return through the cycle. These schemes are phased, and they enable us to provide both balanced and constant returns through the cycle of each of the schemes. And that phasing also enables us to dispose at the right time accordingly, so it enables us to maximize the value of those assets that we sell to fund our investment activity. And the yield differential between our disposals and our investment activity will drive a significant growth in our income, and this chart indicates that its likely impact on income of the net investments over the next 5 years. And as you can see on the chart, there is potential for us to grow income by over GBP 100 million through our capital recycling whilst maintaining net debt neutral, and this excludes any like-for-like rental growth assumptions. So in summary, we are in a strong position to grow our total return and income and to maintain a strong balance sheet through the pipeline of opportunities that we have created. So thank you. I'll hand back to Mark for Q&A at this point.

Thank you very much. Now the rest of the day after this session is to be very much focused on the Greater Manchester market, our investment here at MediaCity and then at Mayfield. So what we thought we'd do is just pause briefly at this point. We tried to share an update there on our wider urban mixed-use program, so I'm going to ask the speakers just to come back on the stage briefly. We've probably got 10, 15 minutes or so if there are questions around the wider sort of mixed-use strategy. I thought we just try and separate that from some of the questions we'll have later, I'm sure, around the Manchester and Southwark markets. So Chris first, and then I'll come to Mark just here. We do have microphones. Forgot to say that, sorry.

One question was on residential, and the other question was on the phasing of disposals and acquisitions. I think you had said you're funding the CapEx with the disposals, and I suppose the question was, how much are you -- I can see how that creates net debt neutrality. Are you also trying to manage income neutrality? So you're avoiding selling income until the income is secured and going to come through? Or -- so if you could just clarify that, please. And then the second bit was just on residential. There's clearly a lot of residential in there in the development pipeline. Are you looking to -- is it built to sell? Or is it built to rent? And is there a residential rental business starting to grow here? Or are you going to just do that sort of capital rotation build to sell?

Cool. Okay. I'll make a couple of general comments around the capital recycling approach and then perhaps Vanessa, just add a little further to that. So as we've said and since back at the time of the interims, we are very much focused on making sure that we can match the inflows and outflows as best we can, and I think what we've done over the course of the last 12 months so is the -- whilst that's not necessarily that easy to do, we have been able to do that thus far. And we certainly have a mind to the income impact of that, but we're not going to slavishly be trying to precisely match the income. But what the acquisition here, for example, the investment here showed is the ability to buy into mixed-use where there is income. So we certainly would always have to take that property consideration, but we're not slavishly trying to match them. Is that fair? Vanessa, anything you'd add?

So yes, and probably fair. We -- I also shared that we are looking to align our LTV so that we expect, given the plans that we have in place, to have that probably below the mid-30s as well as we go through the cycle. Of course, there will be some ups and downs along the way because it's not precisely timed, but that would be our aim.

And on the residential question, and both Colette and David have been involved in over a number of years in terms of debating, considering residential for us. Just a couple of general points, and I'll ask them that if there's anything to add. I think we like, in principle, the idea of being able to build a core income stream from build to rent over time. We feel we have time to look at how we design, procure and ultimately operate within that space. But of course, we've got to think through what scale of activities is required in order to be efficient and how do those returns work. So I think we have an aspiration and an intent to build a build-to-rent portfolio. That doesn't mean that everything here is going to end up being default build to rent. It could be that to get the right blend and mix of what we want to achieve in a particular location or to manage the amount of capital tied up or the returns that we could look at some mix of build-to-rent and build-to-sell. But I think we do have an intent and time to turn it into reality, to build a residential capability. I think David and Colette, I think that's fair.

Yes. I think the only other thing I would add is one of the points that I made was about the phasing, and once you get your planning consent, actually, you have a lot of flexibility because you get a planning consent for resi building. But then what the actual -- whether it's build-to-sell, build-to-rent or whether you choose to sell it, it gives you plenty of options at the point that you need to make your decision. So this is one of the great attractions of having phases across all of the projects that we've been talking about this morning.

Okay. I think, Mark, we had a question in the middle here.

Only one question for me, which is about sustainability, which is the main topic right now in -- especially in London. How do you think everything you're going to invest in the next 10 years is going to move a proportion of your portfolio, which is currently certified, if I'm correct, the starting point deducts 44%. What sort of target should we assume in the next 10 years in terms of certified buildings? That's first question. But -- the second question around it is, if I'm correct, you don't have any outstanding BREEAM building right now in your portfolio. Is there any intention from this CapEx to move that 0% to a certain level?

So with respect to the overall carbon efficiency of our portfolio. And of course, at the moment, things are primarily measured by energy performance, typically EPCs and there's a requirement to get to grade B. So I guess that's what you're referring to in terms of the percentage at the moment. And that's primarily a function -- a feature of our Central London office portfolio. So alongside the interims, we talked about GBP 135 million investment between now and 2030. And what that does is keep us on the correct pathway according to the science-based targets initiative, for us to be able to make our contribution to limiting global warming to 1.5 degrees, so our focus has been on that rather than what will the EPC rating, et cetera, or the BREEAM rating may be. Because there are so many different ways, and I think this is evolving quite quickly, in terms of how buildings are rated. So for example, EPC is a design standard, so it is a theoretical energy performance of a building based on the design. It is very different to the energy and use of what is actually being emitted and used in terms of energy. So our target is to reduce our energy in use, which will be more significant than the design requirement, to maintain that 1.5-degree pathway. So that will, by extension, have everything graded EPC B or better by 2030. But I stress, that wasn't our objective. We're not just to keep up with regulation, our objective is to stay on that pathway. Now that net 0 for 2030 is all of our Scope 1, Scope 2, it's 11% of our Scope 3. So the biggest proportion of really getting to true net 0 as a society, ultimately, is going to be how we tackle the Scope 3 emissions, and that's where we look at embodied carbon. So everything that we've designed since 2019 has been designed to be net zero, but that would include specific offsets, but there will be a huge amount more work to do to reduce the embodied carbon in development. And I think that will go well beyond anything being BREEAM Excellent, BREEAM Outstanding. And we're certainly supportive of and have signed up to a number of things that would ultimately see the amount of embodied carbon in new development being capped. And I think we will see regulation around that area in due course. So I feel we still -- we are at the forefront of what's going on in greening, but we mustn't kid ourselves that GBP 135 million investment fixes everything by 2030. There's a huge way to go, and it's an area that we -- not just financially but in terms of resources internally as well, continue to focus on significantly. And you'll hear a bit more about the sustainability credentials of the assets here and the development plans here later on today. With -- other -- actually, question from Max here, just a --

Just a quick one to kind of follow up on the resi side of things, and you talk about the flexibility that you have in that planning there. How much pressure I'm thinking about leveling up and all this kind of sort of things do you have in terms of affordability? And do you expect that to increase in the years as we move forward into these developments, and how that kind of impacts your returns in terms of how much affordable housing you have to produce?

Colette...

Yes. I mean, there's definitely a lot of pressure on getting that right and what I would say is that the -- we're now sort of facing where there's much more greater -- there's much greater flexibility in terms of the affordable component as to exactly what it is, whether it is affordable rents, whether it's social rented. And a lot of it depends also which borough you're operating in because we need to get the mix right to meet the needs of the individual boroughs, so there's quite a lot of dialogue to really get that right. It's not something that we feel we should be pushing back too hard on. We feel that the scale of these projects and what we're trying to do in terms of embedding these in the community, we don't feel it's about as a numbers game particularly with the local authority, so we are very much trying to work with them to meet their particular needs. And it's quite interesting. If we were talking to the politicians last week up here in Manchester, there's quite a lot of demand for maybe more family housing. And therefore -- and then in O2, well, the criteria will be slightly different. So the main thing is really about the flexibility. And as I said, it comes back to -- as we come to pressing the button on each of the phases, we still have plenty of time to be able to change mixes, adapt the buildings so that we can continue to meet the needs of the community and the needs of the local authority.

Now, I mean, I would just add to the scale point that Colette made. So if you've got O2 as an example, 1,800 homes, and that counsel's overall affordable housing targets. We obviously can deliver a very significant absolute quantum of that, and that obviously plays to our favor as we work through the details.

Yes. So I think you probably saw earlier a 35% of the overall provision as part of the planning submission of O2, which would be GLA compliant, probably below what the borough would aspire to in percentage terms. But as you say, the absolute quantum of what's being delivered there is pretty significant.

I think we're probably ready to move on at this point. Obviously, we're around and about for the remainder of the day. So anything that has come up, please, of course, feel free to find any of us during the sort of remainder of the tour. I'm now going to hand over firstly to Phil Davies from Landsec and also Stephen Wild from -- at Peel, who looks after MediaCity here. So from here, very much focusing more on the Greater Manchester assets. So Phil, on to you.

Thanks, Mark, and good afternoon, everyone. So I'll be joined by Stephen from Peel, and we'll talk you through the exciting future for MediaCity. But before we do, I'd like to take a step back and just reflect on what attracted us to Manchester. So Manchester is a winner city. It's the fastest at -- it's the largest and fastest U.K. regional city and is also a European center for digital tech. Outside of London, it's the largest office market in terms of stock, take-up and capital markets, and it's the most mature build-to-rent market. It has the key ingredients of success. It enjoys political support and should benefit from the level in that agenda. It has a young demographic and a deep pool of talent. With the exception of London, it has the largest student population in Europe with a high graduate retention rate. And it offers excellent connectivity with the Metro Link linking the city and direct trains to London in just over 2 hours. And HS2 will both increase capacity and shorten journey timings to London and Birmingham by half and Manchester is also served by the U.K.'s third busiest airport. So I'll now hand over to Stephen to take you through one, Phase 1, and then I'll come back to talk you through Phase 2, so Stephen.

Right. By now, I think you know I'm Stephen Wild, Managing Director at MediaCity. And this is the first time we've hosted a Capital Markets Day with our new partners, Landsec, so we welcome you all. Hope we get out before the rain starts, we can have an interesting, enthralling day for you. I think I've been asked just to give you a quick whistle-stop tour over what we're trying to achieve here, and where we are. So I think I'm slightly old school, so I will try and multitask, keep the slides going, but do forgive me if not. So I thought I'd just touch on first the partnership side because it's strongly important to us. Some of you may know Peel, maybe you may not know, Peel. We are a family-owned private enterprise. Strong asset base in property and infrastructure, predominantly around the Northwest, and we'll touch on [indiscernible] in a second. I think, interesting, this is our 50th anniversary this year of basically being a partner of choice for changing London property and transforming that. And when you overlay that with the development, placemaking skills and financial power of Landsec, we personally think this is a really formidable partnership, and I think Phil is going to touch on later how we -- this will accelerate through the vision that we had for some time now. So we feel our local knowledge, teamed up with the skills of Landsec, will really push this forward. We've been trying to build -- we have been building a creative and digital cluster for some time now. 10 years, we've been -- I've been here that long, I'm afraid to say. This will accelerate that and come through. Placemaking, we'll touch on as we go through. Phenomenally important, too. And the conclusive events will really deliver the place and the differential that we're looking at. Sustainability. Obviously, we've just heard quite a few questions. It's completely embedded in what we do here, and we'll touch on that later. Workspace. Workspace is the future. We've seen some massive changes over the last couple of years. We're keeping pace, and I think you will go out afterwards and see some of that as well. Before I go into a little bit more detail, as always, you have to little bit of a film and video. So [indiscernible] equipment, if that's okay. [Presentation]

So all amazing places always have a great back story, and we actually sit here on the banks of this Man Ship Canal, which was constructed by some of our forebear, linking Liverpool to south of the Manchester in the Industrial Revolution. Interesting, what we are seeing now is the next industrial revolution. Innovation in digital and technology is happening here. A lot of our occupiers are very, very active, and after, we'll touch on those in a second. But what's happened here? So it was touched on that we've owned the sites in Salford Quays for -- since the late 1980s, but actually, there was a big catalyst here in about 2006, when we had long discussions with the BBC not about just build the BBC and office building, but about moving the BBC into a new environment for these businesses that could grow and aspire to grow and move on. Partnerships, very strong with us. So Salford City Council and the BBC and ourselves brought this vision for the purpose-built tech and digital hub that we see today. It's important for the BBC, this is a long-term home for them. The commitment is significant. There's over 4,000 people working at the BBC now, and some of that leading-edge content comes from here. We're going to go into the studios afterwards and have a quick word there. But the Olympics comes from here. The leaders' debate for the general elections come from here. This is -- not only have we seen good lease length, which have been picked up on before, but actually the commitment is really strong. The faith BBC showed with -- since our ITV joined us, and we start to see that cluster grow, that creative and digital cluster starting to grow there. Talent, touch on that slightly, that's very important. The University itself has been followed, and you'll be viewing the building by the university shortly. Today, clustered around these anchors, there's 250 burgeoning enterprises, which call MediaCity their home. There's 8,000 employees. It's not just broadcast, interestingly. Cyber-security, e-commerce, e-gaming, we're seeing all these digital businesses evolve here. We've also obviously got residential here. There's more than 2,000 people who now live in MediaCity as well. So what have we built? This is a plan, you'll see a few times, I think, today. To make it easy between Phil and I, I'm talking about the pink bit, Phil's talking about the blue bits, so it -- he will touch on those bits. And that is an asset plan focused around [indiscernible] Central Plaza, where we've got the Van Gogh Alive exhibition at the moment, which some of you will want to pass through, no doubt. So what have we built so far? The 37.5-acre site. We have constructed 1.7 million square feet in the last 10 years. We sit in the state-of-the-art studio at the moment, the [indiscernible] studio block in Europe, and so you will go around that. There's 9 office buildings, we're going to go in one of those in there. We continue to invest in those to make sure that workspace actually is appropriate as well. The residential, 2,000 people live here. Car parks, hotels, and the ancillary places. All that environment that's needed to make this a really truly sustainable place. We've touched on a number of entities that are here as well. So we're not just office space. We're the home of the BBC Philharmonic Orchestra. Immersive entertainment, fantastically important to it, and this is a visitor destination as well. But what makes it so great for our customers? We are the most -- one of the most connected places in Europe. We were WiredScore Platinum before they introduce the WiredScore Neighborhood certification, we were the first place in the U.K. to have that certification. We're also Vodafone's 5G hub, so what does this mean for the speed of data transfer and the digital environment we're seeing now? This is the easiest place to do business in the country to our mind. I am obviously slightly northern focused rather than London, so you would expect me to be there. So that's really, really important to us. But we've got the number of employees of 4,000 at the BBC. Well, it's 50,000 hours of content come out of here, some of the biggest, most iconic content that there is. And all that goes on a massive reach, which starts connectivity allows us to do. But it's not just about offices and this live music, the restaurants, the bars, whole place. There is an orchestra, obviously. The tours, the cinema, the theater, the culture, depending on your leaning. Old Trafford is just behind there -- in there, so we're in this wider environment as well as place in there. Place is phenomenally important to us. And we've got a dedicated place team, and you will be talking to them later on the tours. Some of the things we've done, Box on the Docks, this is our response to pandemic in their award-winning, how do we support local cultural industries? How do we support our tenants to ensure that they can be used in there and really actively work with them? We're currently reimagining it at the moment, and Josie will no doubt to touch on that later. Van Gogh Alive, leading immersive entertainment venue on the piazza. Over 130,000 people have come to visit that since November. They will be back next year. I can't tell you what with yet, but we'll let you know going forward. So realist placemaking is phenomenally important to us. So the industries and the businesses that are here are also massively important. We've got a range. People have started with us as one person, and they're now growing to many, many more. We've got loads of stories of this. And they call MediaCity home, they grew up at MediaCity, they remain at MediaCity, and we will hopefully see the next great invention happen here as well. So the sustainable business is massively important to us and our flexible workspace in there as well. However, no business can survive without talent, and we work beyond building properties and such like with a lot of our partners here. The University of Salford, we've touched on. There's also a UTC, the Salford City College. There's 10,000 students studying here at MediaCity, working with the business as an industry here, who will become the talent form of the next generation. It makes it a very sustainable place in which your business to come and grow. Sustainability has been touched on a number of times. It is absolutely embedded in everything we do. I know your comments, Mark, about BREEAM, but we were the first BREEAM sustainable community. 12 years ago, things have moved on massively, and so have we. We have an ESG strategy. We are [indiscernible], Green Flag awards, everything that you want. Massive focus on energy reduction, and you will be talking in one of the tours around to our sustainability team who will let you know what we've got there. Our environmental and social targets listed down in the presentation are very clear in what we're trying to do, and are very demonstrable. So I think, that's probably me. And Phil, I think you're going to tell everybody about the exciting future for us.

So thanks, Stephen. So as you heard from Stephen, MediaCity is an established mixed-use urban neighborhood. Now Phase 1 was delivered just over 10 years ago and has maintained high occupancy, which is great from a cash flow perspective but hasn't allowed the estate to attract new customers and grow. But this is how Phase 2 comes into play. Now, we're not started from scratch here. We're going to benefit and augment the already-established Phase 1 with a phased delivery of new residential space, allowing MediaCity to grow and thrive. So what is Phase 2? So outline consent was secured in 2016 for 2.3 million square foot. Since then, Peel have sold -- have delivered 2 19-story residential buildings, highlighted in blue on the left of the plan, both of which have been sold. And more recently, plot D3 to the north of the plan in blue was sold to Glenbrook, and you can see them on site at the moment. And they'll deliver a further 280 residential units, which we'll understand to be a mix of BTR and shared ownership. So this leaves us with 15 acres currently divided in 8 plots covering 1.7 million square foot, and this is in pink on the plan. And just to clarify, we're talking about gross square foot here. So we get to a net letter for floor space, you need to take 75% of this proportionally. And the mixed-uses is broadly 40-60 residential and commercial, but we retain full flexibility to respond to the market. And we plan an 8-year phase delivery, investing between GBP 500 million and GBP 600 million of total development cost, including the land. So to give you an idea of the scale of the opportunity, I'll just talk through the master plan. So the 1.7 million square foot broadly breaks down to -- into just over 1 million square foot of residential, 600,000 square foot of offices and 50,000 square foot of retail and leisure uses. Now, we're currently revisiting the master plan to ensure it's fit for purpose and satisfies the evolving requirements of our customers, and I'll touch on more on this shortly. But let's start -- starting from East to West. We have plot C3. This has outline consent for 117,000 square foot office building, and this will be the first phase of the development plots we bring forward. And we are already underway with Stage 2 design, aiming to submit a detailed planning application in April this year to have the option to start on site in Q1 next year. And you can see from this page that our aspirations for C3 are much grander than the outline consent in terms of density and massing, with [indiscernible] in 27,000 square foot net office building. And we see the delivery of C3 as our statement of intent for the next phase of MediaCity in terms of specification, amenity and ESG. So we'll be designing it to be net 0, both in construction and operation. We'll have an EPC of A, we'll be BREEAM Excellent with aspirations to be Outstanding. It will be WELL Gold with aspirations to achieve Platinum, and will be -- have a NABERS rating 5 stars plus. So C3 sits at the half of the neighborhood and will be contemporary, striking and unique in design, and it will show a progression in technology, creativity and innovation, allowing our existing and future customers to thrive. So we're targeting rental values of GBP 31.5 a square foot, which still reflects a healthy discount to the core. And if we achieve this, we'll see a healthy wash through back to the rest of the build estate in terms of our ERV, which will help rent reviews and, of course, values. And we'll be targeting IRRs in excess of 11% with gross yield on cost in the high 7s. So let us step back to the master plan now. So future commercial buildings are envisaged in plots B5, D4 and C5. So B5 will be a best-in-class 400,000 square foot office building overlooking the shipping canal, and we may look to split this into 2 to give us more flexibility over delivery. D4 is a mixed-use office and multi-story car park, providing 44,000 square foot offices and just over 1,000 car parking spaces. But what we're looking to do is reallocating some of those car parking spaces to plot E1 on the bottom right, which is currently a surface-level car park, and this will allow us to develop more space, more commercial space on D4. And then finally, in the commercial world, C5 is an 11,000 square foot retail and market hall. And this will evolve the retail and leisure amenity of the state, catering for the existing and new population of workers and residents. So if we move on to the residential at the bottom row. So the outline consent provides just over 1 million square foot across 3 buildings: C4, C6 and C5. And our immediate focus is to bring forward a plan and application for the first phase of residential to be on site in H1 2024 with completion in H1 2027. And whilst we have consent for 1.7 million square foot, it's worth emphasizing that we retain full flexibility over Phase 2. And when I talk about flexibility, I mean, flexibility of use to satisfy market demand, accelerate delivery and creates a diversified income stream. Flexibility over density and massing, as Colette explained, the planning outlook in Salford has changed since 2016 and we believe we can get 10% to 40% more floor space by increasing density and massing without sacrificing in the public realm. And this will allow us to free up more space to create a centers place, building on the success of Phase 1. And more isn't always better, but when it comes down to land values, it generally is. So we paid GBP 35.5 million for the land at 100% levels, which works out at roughly about GBP 20 a square foot. So the more square foot we can build, the lower the land value per square foot, which generally improves profitability. We have flexibility of a phasing. We plan to build out over 8 years, but we can accelerate or decelerate to respond to market demand. And finally, flexibility of the business plan. And what I mean by this is we can choose to develop the land ourselves or sell off plots. To give you an idea, the last plot sale achieved GBP 27 per square foot, which is well above what we pai. So there you have Phase 1 and Phase 2 in a nutshell. So once complete, MediaCity will cover 37 acres with 3.5 million square foot of workspace, residential, hotel, retail and leisure uses. The rent roll will be in the high GBP 80 million, and they'll have a value close to GBP 1.5 billion. So thank you for your time. We'll be happy to take questions on the tour.

Good afternoon, everyone. Welcome to Part 2 of our Capital Markets Day, now back in the center of Manchester. We probably should have done a diligent count of heads earlier to make sure that we haven't lost anyone. But if there is someone you're expecting to see that you can no longer see, please do let one of us know, and we'll do our best to track them down somewhere between MediaCity and here at Mayfield. To give you just a little bit of a sense of the plan of action for the next couple of hours. Relatively short period of time here with a couple of presentations. I'm delighted to say that we're joined by Counselor Bev Craig, who is the leader of Manchester City Council, who will talk a bit about what's going on in Manchester, and also importantly, as a partner of us in Mayfield. We'll talk about Mayfield in that context as well. We're then going to hear from Mike and Martyn at U+I about Mayfield, anything that's going on here. We'll have a little bit of opportunity for Q&A, but we are keen to make sure we get you out -- have plenty of time for the tours, and of course, light will be fading. So our objective is to make sure we're out of here before 4 so that you get a good opportunity to see the site whilst daylight is on our side. I'm going to quickly check with Ed, who I've temporarily lost -- there he is, whether I've missed anything, or I'm meant to be covering anything else at this point. Fantastic. Well let me introduce you to Bev Craig, who is the leader of Manchester City Council. Was elected to that position last year, taking over from Sir Richard Leese, who had been in post, I think, for something approaching 25 years probably prior to that. Took up the post formally in December, so we're delighted she's able to join us. And as I think you'll hopefully have got a bit of a sense, there's a lot going on in Manchester. A really exciting place to be. We're delighted to be -- becoming part of that through our involvement here at Mayfield [indiscernible]. So Bev, I ask you to join us. Thank you very much.

Thanks, and it's good to be here, although a little bit different probably to be here in the day. I'm accustomed to generally being here at night, probably with a drink in my hand, so it's great to be able to see the facility today. So as we've said, I'm the leader of Manchester City Council. I took up the post on the first of December. And I think when I come to events like this, and it's great to see you all here, often it feels when you go and you talk to people, the question always on people's tongues is, why Manchester? What I would say is, why not Manchester? And I think what you will have seen when you've come up today and traveled the line, but what you'll see, I think, was the scale of what we're trying to achieve here in Mayfield. It's hopefully something that's really exciting, something that has been a long time coming and something that's been carefully crafted in terms of the vision and the partnerships that we seek to create. So I'm excited about what we can do in Mayfield, and I hope that you'll be excited too. So if I think about Manchester and I think about the history that is root in our city, a city of firsts all the way back to the first Industrial Revolution, the home of the suffragette movement, [indiscernible], the first computer. One of the things that really, I think, differentiates what we have in the city is the spirit of the future and to not stand still, and we see that in the city center when we walk around. If I think back, 1990, we had 500 people lived in Manchester City -- Manchester City central area. You look around now, and we're approaching well over 60,000 people. We've got a thriving and growing population that sees our population numbers move up to 600,000 by next year and an extra 30,000 projected by 2026 alone. Manchester has already been named, in the U.K., the most livable city, but also by Time Out, the third coolest city in the world to live in. And that's something that we don't want to rest on our laurels, something that we will continue to strive. How we can create, I think, neighborhoods in our city that are different, that offer different opportunities to people and to create thriving economies of the specialisms that we've already created. So we're Europe's fastest-growing tax city, but we're also looking at what more we can do to diversify our economy, to bring in new businesses and new industries into what's already, I think, a thriving eco space. And I would say from my perspective, and I've been in the country -- in the city for 10 years, I oversaw the city's health and care response to the pandemic. I think even we've been surprised in Manchester the pace and the speed that we've bounced back post-pandemic. At a time when people were telling us the days of the office is over as we know it, Manchester, over the last 12 months, has seen a really accelerated rise in the number of companies choosing our city as a home either to have the base or to have European hubs. And that's something, I think, that really excites me. In the city, we're also known for our partnerships. And I think we're really looking forward to the coming years, working with U+I and Landsec to make sure we build on the partnerships we already have, because that really is our strength. And I think when you walk around the city, you see differentiated neighborhoods, many of which weren't there 20 years ago. There's something really important to me around having a clear narrative and vision for a new neighborhood. That means that it will stand the test of time, that it will benefit and deliver for the people of Manchester, but will also drive Manchester forward in a globally competitive world. So we're an ambitious city. We're a confident city, and you've obviously been out today and you've seen MediaCity. And we in Greater Manchester work together really closely to make sure we're maximizing all of our opportunities because I think the opportunity comes for Greater Manchester when we play to all of our strengths. And I think that's hopefully something that you will get to experience and get to see more of. But I suppose that the bit that I would also say, and I think one of the exciting things about the city is that when we look forward, we don't just want to see more of the same. We want to see exciting new ideas that play into our ambitions around zero carbon, but also speak to what residents tell us they want to see. And that's around what you get out of neighborhoods, livable neighborhoods with lots of exciting and fun stuff to do. And hopefully, that's the message you get from Manchester as well. We're quite big in our fun. So from creative industries, our night life to the music and sports team, it's something that runs through our DNA. But it's also a real strength because when I go out and speak to businesses that are choosing Manchester as a place that they relocate to, they talk about the lifestyle that the people who work for them get to have. They talk about the experiences that you get when you clock off and when you get to do in the weekends. So great to see you all here. I'm excited about the future of Mayfield. I think we've got something really exciting, and a very rare opportunity, actually, to build a neighborhood from scratch. To start with the vision where the first thing you build is a public park, and that's Manchester first public park in over 100 years, has really excited, I think, our people locally. And saying, actually, when we look at a neighborhood, when we look at the future of the city center, we're starting with the building blocks. We're starting with a bit that you'll experience first that will excite you, that will draw you into the area, and we're building around it. So I'm just really pleased to be here. Pleased to welcome you here. I think you're going to do an incredible job with delivering on our vision going forward, and I'm excited to see what we can do. So thank you.

Thank you very much, and really appreciate you taking the time to join us today. I meant to say earlier as well, of course, that you're also the perfect poster child for graduate retention in Manchester. It is one of the big things that drives the economy here, 60% or so graduates stay after graduating. Bev arrived from Belfast in 2003? So 19 years later, now leading the case, so thank you for joining us. I'm now going to pass over to Martyn and Mike, who are going to talk through Mayfield.

Thank you. Hello, everybody. I'm Martyn Evans. I'm U+I's Creative Director. We are so happy that you are here today with us at Mayfield, and we're really happy that you've been able to share some food before you sat down and listened to us to talk because we are extraordinarily proud of this project. It's been quite a long time getting to today, so I'm just going to do a quick whip through where this project started, why it's important to us. Why it's now important part of Landsec's wider portfolio, and then Mike is going to talk about the business of Mayfield. This place is about this, really. It's about an illustrious future built on an industrious past. As Councilor Craig said, Manchester has a place in the world as the beginning of the Industrial Revolution. This is a place where industry was born. We're in a building that was a product much later than the Industrial Revolution of that industry. This building was built in 1910, it was built as an extension to Piccadilly railway station to cope with the increasing suburbs in Southern Manchester, the passenger load coming from the south of the city. And it's in a hugely important and quite beautiful part of this city's history. And so our job is to take that industry's past and create a new industrious, illustrious future. This is it. So this picture was taken in about 1905, you can see -- have I got a laser? No. You can see the depot where we are, which is about, we are in here. You can see the railway construction, you can see Piccadilly Station above. You can see just the little square box which is our office now, which is just here. And Mayfield Baths. So this place was a place of great transport infrastructure. It was a place of great industry in the 18th century, and it was a place, in the Victorian era, of great public amenity. So those Baths were baths where people came to wash their clothes and wash themselves. And the Poulton, one of the buildings that we're going to tell you about in a little while, which is our first building that's going to be on site, is named after George Poulton who was an entertainer who worked at the Baths, and it was his job to encourage people to think that it was okay to get wet. So he would perform in the swimming baths. He used to smoke a pipe under water and drink a pint of milk underwater and swim and do flips and dive and all those things to make people feel that they were happy to get wet and get clean. So Mayfield has been also a place of great public education and a place where people came to form a sense of community. In 1782, came to this great place, Thomas Hoyle. Thomas was a textile printer, and it's very easy for us to imagine that that's much like many other places in Greater Manchester and Lancashire and the Northwest, but Thomas came to do a particular thing, which was to make very cheap cotton, calico, that had never been able to be, before he started working with it, white. And you need white cotton in order to be able to print bright colors on it. And he created a way that was, in 1782, probably not the most environmentally friendly way of bleaching cotton to make it white so that it could be printed in bright colors. That created a social revolution, because it meant that people who were of low income, who bought very cheap clothing and very cheap cloth, could have very bright colorful clothing, which previously had been muddy and grim. And so this mill that was on site, and we have just not that long ago, finished excavations with our archaeology team to uncover all of the basis of his factory, which is quite beautiful infrastructure. Created a revolution, a social revolution here at Mayfield. Fast forward to 2015. This site since had closed in 1986 as a useful place had lain derelict, I think a product of often public sector land in multiple ownership not developed. In 2015, the 3 parties who owned the land here, so Manchester City Council, Transport for Greater Manchester, and [indiscernible] came together to form a concerted vision for what this place wanted to be and went out and sought a development partner. Our company was very lucky enough to be selected by Sir Howard and his colleagues at Manchester City Council with the partners to be the development partner to the public sector consortium of the scheme. We wanted this scheme very badly. This is a wonderful city where we were not working to any great degree before, but we saw enormous opportunity here. And we were very excited to be able to sign a development agreement at the end of 2016. So this is the shape of our partnership. So the Transport for Greater Manchester, LCR and City Council, have a consortium. They own 50% of this development, and U+I now, as part of Landsec, have the other 50%. So we have a Board for the development, the public sector partners have their own Board, and together, we come to make this place happen. Towards the end of 2018, we negotiated an SRF, strategic regeneration framework, with the City Council's planning team, which is effectively an outline consent. And this is basically what we negotiated. So you can see it's very large, it's 24 acres of Central Manchester right in the heart of the city with, as Councilor Craig said, a park in the middle, and then buildings all around the outside in a kind of ellipse. And that's what it looks like as we start to develop more detail in the design, so we are currently in here. And it's going to begin to look at something like this as we start to move into delivery. As we walk around in a short while, you're going to get to see the park. I'm told that they are laying turf today for the first time, so everybody that's come and visited to date has seen a brown muddy field. You're going to actually get to see some green, which is perfect. So you can see the kind of place that we're going to build. What's really important in regeneration development: to derisk planning, to create a sense of momentum that everybody involved in delivering it can gather around, to create proper value in place like this is to create a sense of place in connection. We want to be about as far away as possible from this being a property development. We're building a place. Now, we've got an enormous privilege here in Manchester. We're being given, for the tiny little period that we're all alive, custody of 24 acres of the center of this great city, and so we have a duty to do right by it. And so creating a sense of place and connection is right at the heart of what we do here in Mayfield. And so as soon as we arrived, we hunted for a place on site where we could bring people in immediately because, of course, what would be the cheapest and easiest thing to do is erect a great big fence all the way around the site and hire a security guard with a dog and keep people out. But of course, that does nothing to achieve that, so we are keen always to open our doors and invite people in. No better place to invite people in than over some food, as I hope you've experienced just now. And so in one of the arches which we'll look at as we go on our tour down at the east end of the site, we created Grub, a immediate food and drink venue where people could come and eat and share and meet. You could get married here, in fact, at one point before it closed. Manchester International Festival is an enormously important cultural event in this city. It's one of the most important cultural festivals in the world, and they have been here 3 times in the last 6 years doing really large and important events. This is a place [indiscernible] happened in the depot, and you will see it as we go on our tour. We started to put some enterprise on site. This is all about us creating little glimpses with the tools that we have of how this place is going to be in the long term. So when we finish building Mayfield, 16,000 people will work here, some of the most innovative companies in the world, as Councilor Craig has said. We started with 6 small businesses in a little stack of shipping containers up on the top. And you might think that was -- is insignificant, but it isn't. It's about creating a sense of place and building a jigsaw of people here to imagine a glimpse of how it's going to be in the future. Tens of thousands of children came here and rode BMX bikes through a BMX track that we put in one of those single-story sheds out in the middle of the site. They were operating for 2.5 years, and we're enormously successful. And then came the real fun. What we knew we needed to do here was to create a sense of place in a big way, and so where you're sitting now is part of that response. So we went for the experts, and ou to consortium in these 3 organizations, who -- we just gave them a simple brief. How do we open the doors to this place and invite people in to have fun? And so their response was to propose that we build a 10,000 capacity night club. So we know how to do that, never done that before. But of course, we relied on them and their expertise. And so in 16 weeks, they built a night club, and you're going to get to see it as we go on our tour. Opened in August 2019, and 350,000 people came and dance the night away in the 5 months that it was open before it had closed before March in the pandemic. And there it is. It's a business partnership between U+I and our Landsec and the Broadwick Group, so we are in business with them. So it's a moneymaking venture but it's, most importantly, a venture that draws people here. We cleared the site and 15,000 people came in the summer of 2019 to Pride in Manchester. Pride is one of the most important events in the cultural calendar in this city. Manchester is particularly important city in the Pride movement. And so Ariana Grande was here, I don't think that's her, but she was here on the stage entertaining 15,000 people in the park. When COVID hit, it was important that we had a response to that, and so the large team that had been assembled to create the depot pivoted. And very, very quickly, as we came out of the first lockdown, they were able to open a response to COVID. And outside, where -- just where you came in, the seats and tables outside were where we began this project with an outdoor COVID-secure food and drink operation. That ran very successfully during the various lockdowns and the iterations. And then when we came out of lockdown last summer properly, this place had been created and now 6,000 people at night are entertained here. By the end of this month, we will have entertained over 2 seasons at the warehouse project in the depot and straight, we will have entertained 1 million paying customers on site here at Mayfield. So that's the alternative to putting a fence up and hiring a security guard and a dog, is investing, making some money, opening the doors and entertaining 1 million people. And so I think that if you'd asked 100 people in Manchester what Mayfield was 3 years ago, most of them would have shrugged and said they weren't entirely sure. A small amount who knew where it was probably came here for slightly nefarious purposes. Now, you ask 100 people in Manchester what Mayfield is, they say it's one of the most jumping, exciting, amazing places in the city, and we haven't built a single brick of a building yet, so very successful exercise. But of course, as Counselor Craig said, at the heart of our scheme and the first thing that we're delivering is Manchester's first new public park for over 100 years. And it's not just a nice thing to do for the city, it's also a sensible thing to do for this project. We know that in order to make this project as competitive as possible as a commercial opportunity, we need to create a sense of difference and a sense of place here. It's no good [indiscernible] in post COVID particularly, it's no good asking large companies to come and imagine putting 5,000 of their employees in this location if you don't tell them why they need to come and put 5,000 of their employees here. Because this is a fantastically amazing place where their employees can not only have a successful working life but have a successful lunch hour, evening time and bring their families at the weekends. Not to mention the people who will live here. So very, very important that we put the park first in our development plan because it sets a stake in the ground and sets a tone for the place. We had a plan to pay for the park and build it and then pay that money back from the development process. But of course, COVID got a little in the way, and so the confidence with which we wanted to do that was a little knocked. And so the government stepped in and from its COVID Getting Building Fund, we were awarded GBP 23 million through the combined authority and city council down to the park, and we began to build almost immediately. So in the autumn of 2020, we began building the park, and you will see it's almost complete when we go on our tour. And by the end of March, the construction will be finished. And then over the summer, the horticulturists move in, and it will open to the public in September. And it will look something like this. It has a lawn where we have capacity to entertain 3,000 people to events. It has an amazing children's play area that is just finished being installed and you will get to see it with a slide that goes over the river, so you can [indiscernible] down. And this is what this place that was industrial dereliction not that long ago, will look like by September this year. The entire site has 13 acres of public rail. In the middle of it, a 6.5-acre park with the River Medlock through its heart, and construction will be complete in the next 6 weeks. So that's a quick whip through why this scheme is what it is. Mike will tell you what our plans are for it going forward.

Thank you, Martyn. Good afternoon, everybody. It's very nice to see some familiar faces. I'm going to talk to you a bit about the future of Mayfield. What you've heard from Martyn is our journey to date, how we set the vision together with our partners. And now, we're very much focused on how we realize that vision together. Working with our partners at Mayfield, we've created this wonderful 24-acre mixed-use opportunity at the heart of this great city. And over time, what we expect is that Mayfield will deliver over 1.5 million square feet of new office space, 1,500 new homes, and in total, the development that has a value of, we hope, north of GBP 1.5 billion in GDV. And we hope that it has a broader value as well for Manchester. We believe this development will deliver over GBP 7.4 billion of social and economic value to the city of Manchester over the next 10 years, and that includes 16,000 new jobs. And we want to help Manchester enriching its targets to become carbon net 0 by 2030 by doing that here at Mayfield by 2028. We're going to show you around in a minute, and that's something we're really keen to do. We're really excited. This is one of the best projects in the U.K. for regeneration. This is to help orientate you. As Martyn indicated, we're broadly sat under #8 at the moment in the depot, which remains as a core part of this project. The whole scheme has effectively an outlined planning consent and SRF which sets the massing, the mixture of uses and such like for the scheme, and we're now starting to think about how we realize it. And 2, 3 and 4, our first of 16 development plots. 2, 3 and 4 have detailed planning permission. And as you'll see in a minute, include the Poulton and the Republic, which are our first 2 office offerings. Over time, we expect to work along the Mancunian way, which you see at the bottom of this diagram. And then we expect to flip over into the depot transforming what are temporary uses in the space to permanent uses as part of a program of exciting, leisure, food, beverage and other uses across the site. And then building on top of this great depot is some fantastic new office spaces. And as we move through the site, as you see the teal-colored dots, and in particular, 13 to 16 at the end, you see more residential coming through with about 1,200 residential units at that end of the site. We see this coming forward in phases, and we're working with our partners at the moment to consider how we might do that. What I'm sure you'll be interested in is what the opportunity here -- is at Mayfield. And whilst that's still being developed, we think the opportunity in Phase 1 is in the order of 1 million square feet of development, 400,000 square feet of new offices in 2 buildings, over 400 new homes, and we think that has a value of over GBP 300 million and an opportunity to invest over GBP 200 million of capital. And as you heard from Colette earlier on today, we think these types of projects should be delivering a return which is low to mid-double digits. So just to give you a little bit of flavor, this is the Poulton. This is our first building on site. It looks directly on to the park that Martyn just talked about. It's a smaller office building, just over 70,000 feet. And what it provides is an opportunity for us to set the tone here at Mayfield. Potentially, it's a mixture of different talents, it's potentially including some flexible working. But what it does, as all of the buildings do at Mayfield, it includes fantastic ground floor spaces for restaurants and other mixed uses, which will become part of a programmed series of spaces across the whole estate. It's very important for all of our partners that this scheme gets going as soon as we finish the park, and we're working together to try and get this building on site this year. This is a sense of the lobby space. And then we move on to the steps in building the Republic. This sits next to the Poulton as we work our way along Mancunian way. It's a larger building of 244,000 square feet, and again, it has a larger footprint as the opportunity if people want to, and we hope they will, to pre-let and to bring bigger companies and organizations to Mayfield. It also has the opportunity to create larger public and amenity spaces at the ground floor. What you see here is the auditorium, which would be available not just for companies that are based within the Republic but also for the general public who want to come to Mayfield and enjoy Mayfield. All of our buildings are highly sustainable. We talked earlier about some of the targets. Mayfield would also be progressive and best-in-class as far as the quality of the buildings that we create here. Going back to what Martyn was saying, when we started this project, it was really important that we set out a vision for Mayfield, and with our partners, we wrote this. And I'll show you in a film in a minute, which was what we also did. What we said is that Mayfield will deliver exemplary regeneration in an inclusive and authentic way, from immediate worthwhile uses that you see here today to long-lasting social and economic growth and societal well-being. Mayfield will create a brand-new part of Manchester City Center through intelligent urban development. It'll retain much of the beautiful historic industrial infrastructure that you see today, alongside new sustainability designs, market-leading buildings in 11 acres of new green public space, including the part that you will see today. 16,000 new jobs across tech, professional services and creative industries who will find a home here. First-time buyers, professionals, families will find homes in 1,500 new houses and apartments surrounded by cafes, bars, shops and leisure spaces. And when we do this well together, we'll benefit from land enablement gains, recurring development management fees, develop our profits and recurring income where we retain assets to capture their long-term value. And these returns are attractive, they're long term and they're risk balanced, and importantly, they're shared with our partners and with the community within which we're working. What I'm going to show you next is the other thing we did at the very start of this project. And as Martyn said, it would be too easy to put a hoarding up or do a flashy brochure. We work with a poet and an artist called Our Kid who is a well-known Manchester man, and what he helped us do is to capture, within a short film and a poem, our vision for Manchester. The essence of what we want to create here. And what we hope is it gets your blood boiling and excites you as you start the tour of this site. [Presentation]