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

WorkspaceAnnouncement

25/01/2024 07:00

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RNS Number : 8284A  Workspace Group PLC  25 January 2024

25 January 2024

 

                                                               Workspace GROUP PLC

 

THIRD Quarter business update FOR THE

PERIOD ENDING 31 DECEMBER 2023

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space, provides a business update for the third
quarter ending 31 December 2023.

 

HIGHLIGHTS

 

·    Resilient customer demand with 312 new lettings completed in the
quarter, with a total rental value of £7.6m per annum

·    Continued rental growth with like-for-like rent roll up 1.0% in the
quarter, up 7.4% since March 2023

·    Improved pricing with like-for-like rent per sq. ft. up 1.7% in the
quarter, up 8.5% since March 2023, to £43.63

·    Like-for-like occupancy broadly stable at 88.2% (30 September 2023:
88.6%)

·    Further progress on disposal of non-core assets, with £39m of sales
since September 2023, £132m of sales since March 2023

·    Robust balance sheet with £147m of cash and undrawn facilities and
proforma LTV of 34% (based on 30 September 2023 valuation)

·    Corporate Purchase Power Agreement signed to supply around two thirds
of our electricity demand over the next 10 years from a newly constructed
solar plant

 

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

 

"We have delivered another resilient operational performance in the third
quarter, highlighting the attraction of our distinctive, flexible offer. A
good start to the fourth quarter, combined with a positive trading outlook and
strong balance sheet, underpins our confidence for the year ahead.

 

We continue to progress the disposal of non-core assets, enabling us to
recycle capital efficiently, selectively investing in our value enhancing
programme of upgrades and refurbishment projects across the portfolio.

 

We have also taken a significant step forward in our path to net zero with
some two thirds of our electricity to be sourced from a newly constructed
solar plant in Devon, underpinning the long-term energy security for Workspace
and our customers."

 

Customer activity

 

We have seen resilient underlying demand in the third quarter, despite the
typical seasonal slowdown in activity we see in December, with 312 new
lettings completed with a total rental value of £7.6m.

 

            Monthly Average     Monthly Activity
            Q3        Q3        31 Dec  30 Nov  31 Oct

            2023/24   2022/23   2023    2023    2023

 Enquiries  759       724       573     846     858
 Viewings   488       479       385     545     533
 Lettings   104       110       104     118     90

 

We have seen a return to good levels of demand in January 2024 with 629
enquires in the first three weeks of the new year.

 

Total rent roll decreased by 1.0% (£1.4m) in the third quarter to £140.5m,
reflecting like-for-like growth offset by asset disposals and project activity
as detailed below:

 

 Total Rent Roll                     £m
 At 30 September 2023                141.9
 Like-for-like portfolio             1.1
 Disposals                           (1.0)
 Projects underway and design stage  (1.6)
 Other                               0.1
 At 31 December 2023                 140.5

 

 

Like-for-like rent roll was up 1.0% in the quarter (7.4% in the year to date)
to £108.3m. Like-for-like rent per sq. ft. increased by 1.7% in the third
quarter and 8.5% since March 2023, to £43.63. Like-for-like occupancy was
marginally down by 0.4% in the quarter to 88.2%.

 

                                        Quarter Ended
                                        31 Dec 23  30 Sep 23**  30 Jun 23**
 Like-for-like occupancy                88.2%      88.6%        89.1%
 Like-for-like occupancy change*        (0.4)%     (0.5)%       (0.1)%

 Like-for-like rent per sq. ft.         £43.63     £42.90       £41.50
 Like-for-like rent per sq. ft. change    1.7%      3.4%         3.2%

 Like-for-like rent roll                £108.3m    £107.2m      £104.0m
 Like-for-like rent roll change         1.0%       3.1%         3.2%

 

*Absolute change

**Restated for the reclassification of Centro - Atelier House, which is now
included in the refurbishment category

 

Portfolio activity

 

In October 2023, we exchanged on the sale of an advertising tower adjacent to
The Mille Building in Brentford for £9.0m and in November, we exchanged on
the sale the Three Acre industrial estate, Folkestone for £4.5m in line with
the September 2023 valuation. Both disposals completed in the third quarter.

 

In January 2024, we exchanged on the sales of an industrial estate in Poplar
for £21.5m and an industrial estate in Banbury for £3.8m, 4% below the
September 2023 valuation. The sale of the industrial estates are expected to
complete in the fourth quarter.

 

We obtained vacant possession of Atelier House, at the northern end of our
Centro property, in December 2023, which allows us to now progress with our
planned conversion of this building to a Workspace business centre.

 

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.

 

Financing

 

In November 2023, we extended the maturity of our £335m revolving credit
facilities by one year on existing terms, with £200m of these facilities now
maturing in December 2026 and £135m in April 2026.

 

Net debt decreased by £14m in the quarter to £853m, with cash and undrawn
facilities of £147m as at 31 December 2023 and LTV at 34%, 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 workspace,
currently managing 4.6 million sq. ft. of sustainable space at 78 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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