REG - Workspace Grp PLC - Q1 Business Update

WorkspaceAnnouncement

11/07/2024 07:00

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RNS Number : 9277V  Workspace Group PLC  11 July 2024

 

11 July 2024

 

                                                                Workspace GROUP PLC

 

FIRST Quarter business update FOR THE

PERIOD ENDING 30 JUNE 2024

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space, provides a business update for the first
quarter ending 30 June 2024.

 

HIGHLIGHTS

 

·    Resilient customer demand with 307 new lettings completed in the
quarter, with a total rental value of £8.5m per annum

·    Continued rental growth with like-for-like rent roll up 1.2% in the
quarter to £111.8m

·    Improved pricing with like-for-like rent per sq. ft. up 1.2% in the
quarter to £46.28

·    Like-for-like occupancy stable at 88.2% (31 March 2024: 88.2%)

·    Further progress on disposal of non-core assets, with £8.1m
exchanged for sale since 31 March 2024

·    Robust balance sheet with £172m of cash and undrawn facilities and
proforma LTV of 34% (based on 31 March 2024 valuation)

 

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

 

"It has been a good start to the year with occupancy stable and continued
pricing improvements in the first quarter, reflecting the resilience of our
diverse SME customer base and the appeal of our distinctive, flexible offer.

 

We are progressing with the disposal of non-core assets, recycling capital to
invest in accretive refurbishment projects across the portfolio. We are
looking forward to the opening of Leroy House in Islington in September, which
will be our first Net Zero building and the latest delivery from our project
pipeline.

 

Looking ahead, our scalable operating platform puts us in a strong position to
continue to deliver near and long-term income and dividend growth, and we move
into the second quarter of the year with positive momentum."

 

Customer activity

 

We have seen resilient demand in what is typically a quieter quarter. While
enquiry levels are lower, there has been an improved conversion to viewings
and lettings, with 307 new lettings completed with a total rental value of
£8.5m.

 

            Monthly Average     Monthly Activity
            Q1        Q1        30 Jun  31 May  30 Apr

            2024/25   2023/24   2024    2024    2024

 Enquiries  688       738       650     689     725
 Viewings   499       491       474     485     537
 Lettings   102       87        110     105     92

 

 

Like-for-like rent roll was up £1.3m (1.2%) in the quarter to £111.8m.
Like-for-like rent per sq. ft. increased by 1.2% in the first quarter to
£46.28. Like-for-like occupancy was unchanged in the quarter at 88.2%.

 

                                        Quarter Ended
                                        30 Jun 24  31 Mar 24(1)  31 Dec 23(1)
 Like-for-like occupancy                88.2%      88.2%         88.2%
 Like-for-like occupancy change(2)      (0.0)%     (0.0)%        (0.2)%

 Like-for-like rent per sq. ft.         £46.28     £45.73        £44.82
 Like-for-like rent per sq. ft. change  1.2%       2.0%          1.4%

 Like-for-like rent roll                £111.8m    £110.5m       £108.1m
 Like-for-like rent roll change         1.2%       2.2%          0.9%

 

(1) Restated for the transfer in of Old Dairy, Shoreditch, where occupancy is
now stabilised post-acquisition and the transfer out of The Biscuit Factory
site in Bermondsey which is undergoing major refurbishment and redevelopment
activity

(2) Absolute change

 

Total rent roll decreased by £0.1m in the first quarter to £143.3m, as
detailed below:

 

 Total Rent Roll                     £m
 At 31 March 2024                    143.4
 Like-for-like portfolio             1.3
 Completed projects                  (0.1)
 Projects underway and design stage  0.2
 South-East portfolio                0.2
 Disposals                           (1.7)
 At 30 June 2024                     143.3

 

 

Portfolio activity

 

Since 31 March 2024, we have exchanged on the sale of two small non-core
office properties in Reading and Staines and an industrial estate in
Folkstone, for a total of £8.1m, in line with the March 2024 valuations. We
have received £26.4m in cash from the completion of non-core disposals in the
first quarter.

 

We expect to complete the refurbishment and extension of Leroy House in
Islington in September 2024, delivering 58,000 sq. ft. of new space. This is a
great example of our refurbishment-first, sustainable approach and will be our
first Net Zero building.

 

Financing

 

Net debt reduced by £27m in the quarter to £828m, with cash and undrawn
facilities of £172m as at 30 June 2024 and LTV at 34% on a proforma basis,
based on the 31 March 2024 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 workspace,
currently managing 4.4 million sq. ft. of sustainable space at 74 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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