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RNS Number : 2061T Workspace Group PLC 21 July 2022
21 July 2022
Workspace GROUP PLC
FIRST Quarter business update FOR THE
PERIOD ENDING 30 JUNE 2022
Workspace Group, London's leading provider of flexible offices, provides a
business update for the first quarter ending 30 June 2022, unless otherwise
stated.
HIGHLIGHTS
· Continued good underlying levels of customer enquiries, viewings and
lettings
· Further improvement in pricing with like-for-like rent per sq. ft. up
2.6% in the quarter to £38.07
· Like-for-like occupancy stable at 89.6%
· Like-for-like rent roll up 2.9% in the quarter to £93.8m
· Strong demand at recently completed projects, with overall occupancy
on these schemes increasing by 5% to 74% in the quarter
· Integration of McKay assets progressing to plan with good traction on
leasing activity
· Exchanged contracts for disposal of residential scheme at Riverside,
Wandsworth, for £55m, in line with the March 2022 valuation. Completion
expected December 2022
· Progressing with the disposal of McKay non-core assets and continue to
target completion by December 2022
· LTV at 32% on a proforma basis, before proceeds from planned disposal
programme
Graham Clemett, Chief Executive Officer, Workspace Group PLC, commented:
"We have had a good start to the year, with customer demand for our
distinctive flexible offering driving further like-for-like pricing growth and
high occupancy levels. We are also delivering additional rent roll growth from
the strong progress we are making letting up recently completed schemes and
the successful integration of recent acquisitions.
We continue to closely monitor the wider economic situation but are not
currently seeing any meaningful impact on customer demand. As we have
consistently demonstrated in the past, in these more challenging business
environments our active operational capabilities combined with the attractions
of our flexible offer and broad range of properties resonate strongly with our
diverse customer base of agile, innovative SMEs."
Customer Activity
We saw good underlying levels of demand in the first quarter, although the
reported levels of enquiries, viewings and lettings were impacted by bank
holidays including the timing of Easter, the additional Jubilee holidays and
disruption caused by tube and rail strikes in June. Overall leasing activity
was strong with 325 lettings completed in the first quarter, with a lease
value of £8.3m. This momentum has continued into the second quarter. In the
first two weeks of July 2022 there were 379 enquiries, 226 viewings and we
completed 60 lettings with a lease value of £1.4m.
Monthly Average Monthly Activity
Q1 Q1 30 Jun 31 May 30 Apr
2022/23 2021/22 2022 2022 2022
Enquiries 757 947 685 815 771
Viewings 508 615 447 562 516
Lettings 108 125 108 103 114
Total rent roll increased by £24.3m to £135.3m in the quarter, as detailed
below:
Total Rent Roll £m
At 31 March 2022 111.0
Like-for-like portfolio 2.6
Completed projects 0.6
McKay portfolio 22.0
Other (0.9)
At 30 June 2022 135.3
Portfolio Activity
Occupancy in our like-for-like portfolio was stable at 89.6% and we are seeing
a further improvement in pricing with like-for-like rent per sq. ft. up by
2.6% in the first quarter to £38.07.
Quarter Ended
30 Jun 22 31 Mar 22** 31 Dec 21**
Like-for-like occupancy 89.6% 89.5% 86.3%
Like-for-like occupancy change* 0.1% 3.2% 0.6%
Like-for-like rent per sq. ft. £38.07 £37.12 £36.68
Like-for-like rent per sq. ft. change 2.6% 1.2% 1.6%
Like-for-like rent roll £93.8m £91.2m £87.6m
Like-for-like rent roll change 2.9% 4.1% 2.2%
*Absolute change
** Prior periods restated for the reclassification of Riverside, Wandsworth,
which has been removed from like-for-like following exchange for sale
We have made strong progress in letting up our recently completed projects,
with occupancy across these properties increasing by 5% to 74% in the quarter.
This includes:
· Mirror Works, Stratford, up by 14.6% to 38.0%
· Mare Street, Hackney, up 9.9% to 80.0%
· Pall Mall Deposit, Ladbroke Grove, up 4.7% to 80.3%
Rent roll across the completed projects category in total increased by 8.9% to
£7.2m, with rent per sq. ft. up 1.8%.
We have made solid progress on the integration of the McKay portfolio acquired
in May 2022, with the London assets live on our website and leasing interest
and activity now coming through the Workspace platform. We have seen good
leasing traction since the acquisition, with some 49,000 sq. ft. completing or
coming under offer, in line or ahead of March 2022 ERV's. This includes 13,500
sq. ft. of new deals and 4,000 sq. ft. of renewals in London and 4,500 sq. ft.
of new deals and 27,000 sq. ft. of renewals in the South East.
Disposals
We have exchanged on the sale of the residential element of our Riverside
redevelopment for £55m, in line with the March 2022 valuation. This sale was
contingent on an amendment to the planning application, for which we received
a resolution to grant consent on 28 June 2022. Completion is due by 31(st)
December 2022 subject to us achieving vacant possession and signing of the
s106 agreement.
We are progressing with the disposal of the non-core assets from the McKay
portfolio, which are performing in line with expectations. We continue to
target completion of these disposals by December 2022.
Financing
Net debt as at 30 June 2022 was £909m, a £5m reduction from the proforma 31
March 2022 position adjusted for the McKay acquisition. The average maturity
of drawn debt is 3.9 years and the average effective interest rate is 3.2%,
with 69% of the drawn amount at fixed rates.
Total facilities at 30 June 2022 were £1.2bn, with cash and available
facilities of £336m. The required amendments to the McKay facilities
following acquisition are expected to be completed by September 2022.
LTV at June 2022 was 32% on a proforma basis, based on the 31 March 2022
property valuations for Workspace and McKay (adjusted for the disposal of
Great Brighams Mead). The proceeds from our programme of planned disposals
during the current financial year should reduce our LTV to well below 30%, and
will significantly increase our proportion of fixed-rate debt.
- ENDS -
For further information, please contact:
Workspace Group PLC
020 7138 3300
Graham Clemett, Chief Executive Officer
Dave Benson, Chief Financial Officer
Kate Annakin, Interim Investor Relations Manager
FGS Global
020 7251 3801
Chris Ryall
Guy
Lamming
Notes to Editors
About Workspace Group PLC:
Established in 1987 and listed on the London Stock Exchange since 1993. We are
home to
thousands of businesses, including fast growing and established brands across
a wide range of sectors.
Workspace is geared towards helping businesses perform at their very best. We
provide inspiring, flexible work spaces in dynamic London locations.
Workspace (WKP) is a FTSE 250 listed Real Estate Investment Trust (REIT) and a
member of the European Public Real Estate Association (EPRA).
Workspace® is a registered trademark of Workspace Group Plc, London, UK.
LEI: 2138003GUZRFIN3UT430
For more information on Workspace, please visit www.workspace.co.uk
(http://www.workspace.co.uk)
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