REG - Workspace Grp PLC - THIRD QUARTER BUSINESS UPDATE

WorkspaceAnnouncement

20/01/2022 07:05

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RNS Number : 0131Z  Workspace Group PLC  20 January 2022

 

20 January 2022

 

Workspace GROUP PLC

 

THIRD Quarter business update FOR THE

PERIOD ENDING 31 DECEMBER 2021

 

Workspace Group, London's leading provider of flexible offices, provides a
business update for the third quarter ending 31 December 2021.

 

HIGHLIGHTS

 

·    Customer demand has remained strong, with an average in the quarter
of 831 enquiries per month (Q3 2020/21: 672) and 117 lettings per month (Q3
2020/21: 109)

·    Like-for-like occupancy continues to improve, up 1.0% in the quarter
to 86.6%

·    Like-for-like rent per sq. ft. up 1.2% in the quarter to £35.92

·    Like-for-like rent roll up 2.3% in the quarter, to £89.3m, with
total rent roll up £5.1m to £107.2m

·    Acquisition of The Busworks in Islington for £45m in November 2021

·    Bank facilities refinanced with £200m sustainability-linked
revolving credit facility

·    Pro forma LTV at 25% at 31 December 2021, based on the September 2021
valuation

·    £225m of cash and available facilities provides financial
flexibility to continue to invest in the project pipeline and acquisition
opportunities

 

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

 

"It has been a good quarter, with continued positive momentum in occupancy and
pricing. We are seeing strong demand for our space, with good levels of
enquiries, viewings and lettings despite the renewed work from home guidance
issued by the Government in December. Our performance in the third quarter and
early signs of trading in the fourth show that SMEs are looking through the
current short-term uncertainty to choose the right space for their business
longer-term. They are looking for flexible terms and attractive, sustainable
office space in well-connected locations and Workspace is ideally placed to
continue to capture this demand."

Customer Activity

 

We have seen good levels of demand in the third quarter, with a monthly
average of 831 enquiries and a good conversion to viewings and subsequent
lettings. This has continued in the fourth quarter, with 487 enquiries and 248
viewings in the first two weeks of January.

 

 

            Monthly Average     Monthly Activity

            Q3        Q3        31 Dec  30 Nov  31 Oct

            2021/22   2020/21   2021    2021    2021

 Enquiries  831       672       590     948     955
 Viewings   513       322       302     642     594
 Lettings   117       109       101     116     135

 

Utilisation of business centres by our customers fell back following the work
from home guidance issued by the Government in December but has picked up in
the first two weeks of January and is currently running at 43% of pre-Covid
levels. This compares to 55% of pre-Covid levels reached in November 2021.

 

Like-for-like occupancy has continued to improve in the third quarter, up 1.0%
to 86.6%, reflecting demand from both new customers and existing customer
expansions.

 

Having seen pricing stabilise during the first half, like-for-like rent per
sq. ft. increased by 1.2% in the third quarter to £35.92.

 

                                        Quarter Ended
                                        31 Dec 21  30 Sep 21  30 Jun 21
 Like-for-like occupancy                86.6%      85.6%      82.9%
 Like-for-like occupancy change*        1.0%       2.7%       1.0%

 Like-for-like rent per sq. ft.         £35.92     £35.50     £35.41
 Like-for-like rent per sq. ft. change  1.2%       0.3%       (2.3)%

 Like-for-like rent roll                £89.3m     £87.3m     £84.6m
 Like-for-like rent roll change         2.3%       3.2%       (1.1)%

 

*Absolute change

 

The combined impact of the growth in like-for-like occupancy and rise in rent
per sq. ft. in the quarter resulted in a 2.3% increase in like-for-like rent
roll, to £89.3m. Total rent roll increased by 5.0% in the third quarter to
£107.2m. This included rent of £1.4m from the acquisition of The Busworks,
Islington, in November 2021.

 

Rent Collection

 

Rent collection remains robust, despite the continued Government restrictions
on rent collection measures. The majority of our customers pay monthly and we
have, as of 18 January 2022, collected 96% of rent due for the third quarter
taking the collection rate for the first three quarters of the year to 97%.

 

 

Acquisitions

 

In November 2021, we acquired The Busworks, in Islington, for £45m. This
off-market acquisition was funded from existing facilities. The property
provides 104,000 sq. ft. of net lettable space across two conjoined warehouse
buildings on 1.6 acres and has significant potential to be sustainably
upgraded and repositioned.

 

Financing

 

In December 2021, we agreed a new £200m sustainability-linked revolving
credit facility ("RCF") with an enlarged syndicate including two additional
banks. The facility has an initial term of three years, with the potential to
extend by a further two years and to increase the facility amount to a maximum
of £300m, subject to lender consent.

 

The RCF replaces the Group's previous revolving credit facility and extends
the average maturity of the Group's debt facilities to 5.2 years. Pricing for
the new facility is in line with the previous facility, with a margin of 1.65%
over SONIA, but also includes a margin adjustment depending on performance
against a number of ESG-related metrics.

 

Net debt increased by £43m in the quarter to £575m, with cash and undrawn
facilities of £225m as at 31 December 2021 and LTV at 25% on a proforma
basis, based on the 30 September 2021 property valuation.

 

- ENDS -

 

 

For further information, please contact:

 

Workspace Group PLC
 
 

Clare Marland, Head of Corporate
Communications
020 7369 2301

 

Finsbury Glover Hering
 
   020 7251 3801

Guy
Lamming
 

Chris Ryall
 

 

 

Notes to Editors

 

About Workspace Group PLC:

 

Established in 1987, and listed on the London Stock Exchange since 1993,
Workspace owns and manages some 4 million sq. ft. of business space in London.
We are home to London's brightest 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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