REG - Workspace Grp PLC - STRONG FOURTH QUARTER TRADING PERFORMANCE

WorkspaceAnnouncement

13/04/2023 07:00

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RNS Number : 0253W  Workspace Group PLC  13 April 2023

 

 

13 April 2023

 

         Workspace GROUP PLC

 

STRONG FOURTH Quarter TRADING PERFORMANCE

 

Workspace Group, London's leading owner and operator of sustainable, flexible
work space, provides a trading update for the fourth quarter ending 31 March
2023.

 

HIGHLIGHTS

 

·    Continued resilient levels of customer demand with enquiries
averaging 932 per month, highlighting the appeal of our flexible offer and
strength of our operating platform

·    Good conversion of demand into new lettings with 341 new lettings
completed in the quarter, with a total rental value of £8.3m per annum

·    Further positive pricing momentum with like-for-like rent per sq. ft.
up 2.7% in the quarter, up 9.4% since March 2022, to £40.61

·    Like-for-like occupancy stable at 89.1% (31 December 2022: 89.2%)

·    Like-for-like rent roll up 1.2% (£1.2m) in the quarter, up 7.2%
since March 2022, to £97.7m. Total rent roll up £2.2m (1.6%) in the quarter
to £140.1m

·    Sale of the residential component of the Riverside mixed-use
redevelopment in Wandsworth completed in March 2023 for £54m, in line with
its September 2022 valuation

·    Robust balance sheet with a proforma LTV of 32% (based on 30
September 2022 valuation) and an average maturity of drawn debt of 4.1 years

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

 

"We saw a strong fourth quarter of trading activity with customer demand
enabling us to continue moving our pricing forward.

 

This performance reflects the continuing attractions of our offer to the
changing needs of businesses looking for space. We provide flexibility in
terms of both lease length and size of space at affordable prices within
high-quality sustainable buildings, in well-connected locations across London.

 

Importantly in these challenging economic times we have a robust balance
sheet, with the majority of our debt on long maturities. This will be further
enhanced as we progress with the disposal of non-core assets.

 

Our distinctive offer, proven operating track record and ownership of an
extensive property footprint across London sets us apart from others in the
growing flexible space market. This all provides us with an exciting
opportunity to deliver sustainable long-term growth."

 

Customer activity

 

We have seen strong demand in the fourth quarter despite the disruption caused
by tube and rail strikes.

 

            Monthly Average               Monthly Activity
            Q4        Q4        FY        31 Mar  28 Feb  31 Jan

            2022/23   2021/22   2022/23   2023    2023    2023

 Enquiries  932       957       798       986     863     946
 Viewings   589       634       518       613     578     577
 Lettings   114       127       110       150     95      96

 

Total rent roll increased by 1.6% (£2.2m) in the fourth quarter to £140.1m,
as detailed below:

 

 Total Rent Roll          £m
 At 31 December 2022      137.9
 Like-for-like portfolio  1.2
 Completed projects       1.1
 Projects underway        (0.2)
 Recent acquisitions      0.1
 At 31 March 2023         140.1

 

We have been able to continue to move pricing forward across our like-for-like
portfolio with rent per sq. ft. increasing by 2.7% in the fourth quarter to
£40.61, up 9.4% in the year. We are seeing stronger demand at higher pricing
for smaller units and are subdividing a number of our larger units to meet
this requirement. Like-for-like occupancy was down 0.1% to 89.1% in the
quarter, with an overall increase in rent roll of £1.2m (1.2%) to £97.7m.

 

                                        Quarter Ended
                                        31 Mar 23  31 Dec 22  30 Sep 22  30 Jun 22
 Like-for-like occupancy                89.1%      89.2%      89.6%      89.6%
 Like-for-like occupancy change         (0.1)%     (0.4)%     -          0.1%

 Like-for-like rent per sq. ft.         £40.61     £39.56     £38.59     £38.07
 Like-for-like rent per sq. ft. change  2.7%       2.5%       1.4%       2.6%

 Like-for-like rent roll                £97.7m     £96.5m     £94.5m     £93.8m
 Like-for-like rent roll change         1.2%       2.2%       0.7%       2.9%

 

We have made good progress letting up space at our recently completed projects
with rent roll up 9% (£1.1m) in the quarter. Good progress has also been made
at the McKay London-based properties with rent roll up 12% (£0.9m). This is
offset by a £0.8m reduction in rent at the McKay industrial estate in
Weybridge where we now have vacant possession, with planning approved for the
refurbishment of the site.

 

Disposals

 

The disposal of the Riverside residential scheme in Wandsworth completed on
10( )March 2023 for £54m, in line with its September 2022 valuation, with
£44m paid on completion and the remaining £10m payable in March 2024. We
continue to progress discussions for the sale of other non-core properties.

 

Financing

 

Net debt decreased by £33m in the quarter to £902m, with cash and undrawn
facilities of £148m as at 31 March 2023 and LTV at 32% on a proforma basis,
based on the 30 September 2022 valuation. At 31 March 2023 our average cost
of debt was 3.7%, with 73% at fixed rates and an average maturity of drawn
debt of 4.1 years.

 

- ENDS -

 

For further information, please contact:

 

 Workspace Group PLC                                             020 7138 3300
 Graham Clemett, Chief Executive Officer
 Dave Benson, Chief Financial Officer
 Paul Hewlett, Director of Strategy & Corporate Development

 FGS Global                                                      020 7251 3801
 Chris Ryall
 Guy Lamming

 

Details of Year End Results Presentation

 

Workspace will host a results presentation for analysts and investors on
Thursday 25 May 2023 at 9:00am at the London Stock Exchange.

 

Notes to Editors

 

About Workspace Group PLC:

 

Workspace is London's leading owner and operator of flexible work space,
managing five million sq ft of sustainable space across 77 characterful
properties 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.

 

Our ownership model 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, please visit www.workspace.co.uk
(http://www.workspace.co.uk)

 

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