Executive Summary
Workspace owns and manages real estate. It operates business parks, offices and other properties which rent out to smaller and mid-size businesses across London. Its leases are flexible, and intended to make it easier for small companies to rent space which they can then upscale (or downsize) in response to their requirements. Workspace owns over 5.5 m square feet of space at over 100 separate properties.
Company History
Workspace was founded in 1987 (as London Industrial) with the privatisation of part of the Greater London Council's property portfolio [1] . In 1993 it joined the London Stock Exchange. After various diversifications, the group decided to concentrate on London and sold off the properties it had acquired in the Midlands in 2001. Growth since then has been mainly organic. It converted to REIT status in 2007.
Current Events
Business Model
Workspace owns all its properties. It has concentrated on creating flexible leases at affordable rates for small and medium sized businesses. It owns 5m square feet of space, mainly freehold, within the M25, with 124 separate properties and over 4,000 tenants.
The tenant base is highly diverse - creative industries account for 34%, professional and business services for 24%, and manufacturing for 10%, the remainder being split between a large number of sectors [2]
The company is focused on increasing the value of the portfolio through active management. For instance at several properties the company has gained planning permission to increase the lettable area, to reposition to higher value uses, or to add new facilities such as restaurants. Some properties have been turned over to student housing, with Workspace making a one-off gain and retaining some of the space for business use. Refurbishment and upgrades can also justify increases in rental levels.Average rents are currently £11.54 a square foot [3] .
Segments/Customers
The company focuses on small and medium enterprises as its tenants, predominantly those employing between 1 and 20 people. The company estimates that there are 150,000 such businesses within the London area [4] . Many of the company's new tenants are at the stage where having been started in a home office environment, their needs have outgrown the home office and formal business space is required for the first time.
Market & Competition
The market for…
