REG - Workspace Grp PLC - FOURTH QUARTER BUSINESS UPDATE

WorkspaceAnnouncement

17/04/2024 07:01

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RNS Number : 8740K  Workspace Group PLC  17 April 2024

17 April 2024

Workspace GROUP PLC

 

Fourth Quarter business update FOR THE

PERIOD ENDING 31 MARCH 2024

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space for SMEs, provides a business update for the
fourth quarter ending 31 March 2024.

 

HIGHLIGHTS

 

·    Resilient customer demand with 343 new lettings completed in the
quarter, with a total rental value of £8.7m per annum

·    Significant customer activity over the year as a whole with 1,238
lettings completed with a total rental value of £31.3m, highlighting the
appeal of our flexible offer and strength of our operating platform

·    Continued rental growth with like-for-like rent roll up 1.9% in the
quarter, up 9.6% since 31 March 2023

·    Improved pricing with like-for-like rent per sq. ft. up 1.9% in the
quarter, up 10.4% since 31 March 2023, to £44.27

·    Like-for-like occupancy broadly stable at 88.1% (31 December 2023:
88.4%)

·    Further progress on disposal of non-core assets, with £41m of sales
since 31 December 2023 and £143m of sales in the year

·    Robust balance sheet with £145m of cash and undrawn facilities and
proforma LTV of 34% (based on 30 September 2023 valuation)

 

Graham Clemett, Chief Executive Officer, Workspace Group PLC, commented:

 

"We have had another year of strong trading, with continued demand for our
offer delivering double digit rent roll and pricing growth in the year.

 

We have made additional progress on disposals, recycling capital efficiently
to invest in our value-enhancing programme of refurbishment projects across
the portfolio, while further strengthening our balance sheet.

 

As the leading provider of flexible work space to London's SMEs with a track
record spanning more than 35 years, we remain well-positioned to capitalise on
the growing shift towards flex and to support the SME community - the unsung
heroes of the Capital's economy."

 

Customer activity

 

We have seen good demand in the fourth quarter, although the early timing of
Easter impacted enquiries in March and early April. We were, however, able to
maintain robust levels of viewings and lettings activity through the quarter,
with 343 new lettings completed with a total rental value of £8.7m. Overall,
1,238 lettings were completed in the year to 31 March 2024 for a total rental
value of £31.3m.

 

            Monthly Average     Monthly Activity
            Q4        Q4        31 Mar  29 Feb  31 Jan

            2023/24   2022/23   2024    2024    2024

 Enquiries  818       932       658     836     961
 Viewings   589       589       507     668     593
 Lettings   114       114       116     124     103

 

Total rent roll increased by 2.1% (£2.9m) in the quarter to £143.4m,
reflecting like-for-like growth and continued letting up of refurbishment
projects, offset by disposals as detailed below:

 

 Total Rent Roll                     £m
 At 31 December 2023                 140.5
 Like-for-like portfolio             2.1
 Projects underway and design stage  1.0
 Disposals                           (0.3)
 Other                               0.1
 At 31 March 2024                    143.4

 

 

Like-for-like rent roll was up 1.9% in the quarter and 9.6% since 31 March
2023 to £111.2m. Like-for-like rent per sq. ft. increased by 1.9% in the
quarter and 10.4% since 31 March 2023 to £44.27. Like-for-like occupancy was
marginally down by 0.3% in the quarter to 88.1%.

 

                                        Quarter Ended
                                        31 Mar 24  31 Dec 23(**)  30 Sep 23(**)  30 Jun 23(**)
 Like-for-like occupancy                88.1%      88.4%          88.5%          89.0%
 Like-for-like occupancy change*        (0.3)%     (0.1)%         (0.5)%         (0.1)%

 Like-for-like rent per sq. ft.         £44.27     £43.46         £42.82         £41.45
 Like-for-like rent per sq. ft. change  1.9%       1.5%           3.3%           3.4%

 Like-for-like rent roll                £111.2m    £109.1m        £108.0m        £104.7m
 Like-for-like rent roll change         1.9%       1.0%           3.2%           3.2%

 

*Absolute change

**Restated for the reclassification of Lock Studios and Mirror Works, which
are now included in the like-for-like category, and the removal of Poplar as
exchanged for sale.

 

 

Portfolio activity

 

Since 31 December 2023, we have exchanged on the sale of five non-core
properties for a total of £41m at a net initial yield of 6% and 3% below the
September 2023 valuation, comprising:

 

·    An industrial estate in Poplar for £21.5m in January 2024

·    An industrial estate in Banbury for £3.8m in February 2024

·    A residential development opportunity at Chocolate Factory, Wood
Green, for £7.3m in February 2024

·    A small office property, Mallard Court in Staines, for £4.3m in
March 2024

·    The former McKay head office, 20-30 Greyfriars in Reading, for £4.0m
in April 2024

 

We continue to make good progress on our major refurbishment projects at Leroy
House in Islington, Chocolate Factory in Wood Green and The Biscuit Factory in
Bermondsey, which will deliver 211,000 sq. ft. of new and upgraded space.

 

Financing

 

Net debt was broadly unchanged in the quarter at £855m (31 December 2023:
£853m), with cash and undrawn facilities of £145m as at 31 March 2024 and
LTV at 34% on a proforma basis, based on the 30 September 2023 valuation.

 

- ENDS -

 

 

For further information, please contact:

 

 Workspace Group PLC                                             020 7138 3300
 Paul Hewlett, Director of Strategy & Corporate Development
 Clare Marland, Head of Corporate Communications

 FGS Global                                                      020 7251 3801
 Chris Ryall
 Guy Lamming

 

Notes to Editors

 

About Workspace Group PLC:

 

Workspace is London's leading owner and operator of flexible work space,
currently managing 4.5 million sq. ft. of sustainable space at 77 locations in
London and the South East.

 

We are home to some 4,000 of London's fastest growing and established brands
from a diverse range of sectors. Our purpose, to give businesses the freedom
to grow, is based on the belief that in the right space, teams can achieve
more. That in environments they tailor themselves, free from constraint and
compromise, teams are best able to collaborate, build their culture and
realise their potential.

 

We have a unique combination of a highly effective and scalable operating
platform, a portfolio of distinctive properties, and an ownership model that
allows us to offer true flexibility. We provide customers with blank canvas
space to create a home for their business, alongside leases that give them the
freedom to easily scale up and down within our well-connected, extensive
portfolio.

 

We are inherently sustainable - we invest across the capital, breathing new
life into old buildings and creating hubs of economic activity that help
flatten London's working map. We work closely with our local communities to
ensure we make a positive and lasting environmental and social impact,
creating value over the long term.

 

Workspace was established in 1987, has been listed on the London Stock
Exchange since 1993, 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, visit www.workspace.co.uk
(http://www.workspace.co.uk)

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