REG - Workspace Grp PLC - WORKSPACE GROUP PLC SECOND QUARTER BUSINESS UPDATE

WorkspaceAnnouncement

12/10/2023 07:00

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RNS Number : 8381P  Workspace Group PLC  12 October 2023

12 October 2023

 

Workspace GROUP PLC

 

SECOND Quarter business update FOR THE

PERIOD ENDING 30 SEPTEMBER 2023

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space, provides a business update for the second
quarter ending 30 September 2023.

 

HIGHLIGHTS

 

·    Good customer demand with 323 new lettings completed in the quarter,
with a total rental value of £8.0m per annum

·    Strong rental growth with like-for-like rent roll up 3.0% in the
quarter, up 6.3% in the half year to £108.6m, and up 9.9% over the last year

·    Improved pricing with like-for-like rent per sq. ft. up 3.3% in the
quarter, the ninth consecutive quarterly increase, and 6.6% in the half year,
to £42.98

·    Like-for-like occupancy broadly stable at 88.7% (30 June 2023: 89.2%)

·    Good progress on disposals of non-core assets, with £92.8m completed
in the first half of the year, and a further £9.0m disposal exchanged in
October

·    Robust balance sheet with £133m of cash and undrawn facilities and
proforma LTV of 32.6% (based on 31 March 2023 valuation)

 

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

 

"Our offer is tailored to the needs of bright, growing SMEs, the unsung heroes
of the London economy. Our strong first half performance demonstrates that
this focus sets us apart from others in the market.

 

Space requirements are undoubtedly changing, which is playing to our
advantage. Our customers want a great working environment, in the right place,
with true, all-round flexibility - not just a shorter lease - at good value.
This is driving strong demand and with occupancy stable at around 90%, the
resulting pricing tension enables us to continue to improve rents.

 

We have also made good progress in the planned disposal of non-core assets,
enabling us to recycle capital efficiently, selectively investing in our
programme of upgrades across the portfolio.

 

We enter the second half of the year in a strong position. Although mindful of
the wider economic challenges, we are confident that we are well placed with a
differentiated offer that resonates with London's SMEs."

 

 

Customer activity

 

We have seen good demand with 323 new lettings completed in the second quarter
with a total rental value of £8.0m.

 

            Monthly Average               Monthly Activity
            Q2        Q1        FY        30 Sep  31 Aug  31 Jul

            2023/24   2023/24   2022/23   2023    2023    2023

 Enquiries  837       738       798       916     824     771
 Viewings   527       491       517       578     480     524
 Lettings   108       87        109       112     111     100

 

Total rent roll increased by 1.3% (£1.8m) in the first half to £141.9m, as
detailed below:

 

 Total Rent Roll          £m
 At 31 March 2023         140.1
 Like-for-like portfolio  6.4
 Disposals                (4.8)
 Other                    0.2
 At 30 September 2023     141.9

 

 

Like-for-like rent roll was up 3.0% in the quarter, 6.3% in the half year, to
£108.6m and 9.9% over the last year (with a 3.4% increase in like-for-like
rent roll reported in the six months to 31 March 2023). Like-for-like rent per
sq. ft. increased by 3.3% in the second quarter and 6.6% in the half year, to
£42.98. Like-for-like occupancy remained broadly stable, down by 0.5% in the
quarter to 88.7%.

 

                                        Quarter Ended
                                        30 Sep 23  30 Jun 23**  31 Mar 23**
 Like-for-like occupancy                88.7%      89.2%        89.3%
 Like-for-like occupancy change*        (0.5)%     (0.1)%       0.0%

 Like-for-like rent per sq. ft.         £42.98     £41.60       £40.30
 Like-for-like rent per sq. ft. change  3.3%       3.2%         3.0%

 Like-for-like rent roll                £108.6m    £105.4m      £102.2m
 Like-for-like rent roll change         3.0%       3.1%         1.8%

 

*Absolute change

**Restated for the reclassification of Westbourne Studios, which is now
included in the like-for-like category

 

Portfolio activity

 

In June, we completed on the sale of five light industrial and logistics
properties in Bracknell, Crawley, Poyle, Theale and Weybridge for £82.0m,
in line with their March 2023 valuations.

 

In the second quarter, we completed on the sale of Columbia House, Farnborough
for £7.3m and Ancells Road, Fleet for £3.5m, both in line with their March
2023 valuations.

 

In aggregate, these disposals have delivered £92.8m of proceeds in the first
half of the year, at a net initial yield of 5.1%.

 

In October, we exchanged on the sale of an advertising tower adjacent to The
Mille Building in Brentford for £9.0m in line with the March 2023 valuation,
with completion expected by the end of the month.

 

Financing

 

Net debt increased by £33m in the quarter to £867m, following payment of the
full year dividend. Cash and undrawn facilities were £133m as at 30 September
2023 with LTV at 32.6% on a proforma basis, based on the 31 March 2023
valuation. At 30 September 2023, our average cost of debt was 4.1%.

 

Half year results

 

Workspace will publish its half year results for the six months to 30
September 2023 on 21 November 2023. A presentation to analysts and investors
will be held at 9.00 in our recently opened Eventspace, at our refurbished
Salisbury House, 114 London Wall, EC2M 5QA.

 

- 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

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 4.7 million sq. ft. of sustainable space at 79 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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