Slide 1: Customer focus driving growth: The Workspace Advantage
Customer focus driving growth The Workspace Advantage Full year results Investor and Analyst Presentation 7 June 2017 1
Slide 2: Agenda
AGENDA Workspace Jamie Hopkins Chief Executive Officer Performance Graham Clemett Chief Financial Officer Direction Jamie Hopkins Chief Executive Officer Questions 2
Slide 3: The Workspace Advantage
WORKSPACE The Workspace Advantage Personalisation Choose what you need with no constraints CUSTOMER REQUIREMENTS Connectivity Communities Powering all businesses Open to all 3
Slide 4: The Workspace Advantage: Assets and Marketing
WORKSPACE The Workspace Advantage Our Our Assets Marketing Two distinct • Well connected parts that come • Customer-first brand and culture • Inspiring spaces together to drive • Direct relationships • Appropriately managed growth and add • Data, insight and knowledge • Fully owned value • Flexible
Slide 5: Results
WORKSPACE Results March March Change Active Management 2017 2016 Rent Roll (lfl) £59.6m £52.4m 13.7% Rent per sq. ft. (lfl) £28.17 £24.96 12.9% Enquiries (per month) 1,060 1,029 3.0% Occupancy (lfl) 90.3% 90.4% 0.1% Property Valuation £1,844m £1,779m 2.1%* Capital Value per sq. ft. (lfl) £427 £404 5
Slide 6: Demand
WORKSPACE Demand 1,400 1,200 1,000 800 600 400 200 - Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Monthly Enquiries Rolling 3 months 6
Slide 7: Growth
WORKSPACE Growth Like-for-like Occupancy pricing Completed projects Letting up pricing Projects underway Letting up pricing Project Pipeline Acquisitions 7
Slide 8: Like-for-like
WORKSPACE Like-for-like Rent roll Rent per sq. ft. £65.0m £30.00 +3.6% £28.00 +3.0% +4.1% +1.6% £26.00 +3.1% +2.6% £60.0m £24.00 +3.6% £22.00 +3.2% £20.00 £55.0m +3.6% £18.00 +3.8% £16.00 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 £50.0m Occupancy 95.0% £45.0m 91.2% 90.4% 90.6% 90.3% 89.7% 90.0% £40.0m 85.0
Slide 9: The Record Hall
WORKSPACE The Record Hall Rent Roll Opened 2,000,000 May 2017 1,500,000 Official Launch June 2017 1,000,000 Floor Total 500,000 58,000 sq. ft. - Mth 0 Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Actual Plan Occupancy Pricing £90 60% £80 50% £70 40% £60 £50 30% £40 20% £30 10% £20 £10 0% Mth 0 Mth 1 Mth 2 Mt
Slide 10: The Workspace Advantage
WORKSPACE The Workspace Advantage Personalisation Choose what you need with no constraints CUSTOMER REQUIREMENTS Connectivity Communities Powering all businesses Open to all 10
Slide 11: Income Statement
PERFORMANCE Income Statement March March Change £m 2017 2016 Net Rental Income 79.2 74.1 +7% Joint Venture Income 0.3 1.3 Administrative Expenses (15.1) (14.6) +3% Net Finance Costs (13.7) (16.9) (19)% Trading Profit after Interest 50.7 43.9 +16% Investment Property Surplus 39.5 296.6 Joint Venture
Slide 12: Net Rental Income
PERFORMANCE Net Rental Income 12
Slide 13: Like-for-like Properties
PERFORMANCE Like-for-like Properties Rent Roll Growth 20% • Represents 67% of total rent roll 18% at March 2017 15% • Comprises 35 properties with 15% 14% 2.3m sq. ft. of space • Recent growth largely from 10% pricing increases 9% • Occupancy stable at around 90% 5% 0% 2014 2015 2016 2017 13
Slide 14: Completed Projects
PERFORMANCE Completed Projects Rent Roll £10.0m • Represents 8% of total rent roll +£1.5m 8.6 at March 2017 7.1 • 2 refurbishments and 1 new building £5.0m • 190,000 sq. ft. of new and upgraded space £0.0m March ----------------- Future 2017 Refurbishments Redevelopments Future rents based on the as
Slide 15: Projects Underway
PERFORMANCE Projects Underway Rent Roll £40.0m 34.1 • Represents 13% of total rent roll +£22.1m at March 2017 £30.0m • 12 refurbishments underway at a total cost of £168m £20.0m (£122m to come) 12.0 • 3 new buildings to be delivered £10.0m from contracted redevelopments • 840,000 sq. ft. of new and
Slide 16: Acquisitions
PERFORMANCE Acquisitions Rent Roll £10.0m • Represents 7% of total rent roll at March 2017 7.4 +£1.5m • Comprises 5 properties 5.9 acquired in recent years being £5.0m repositioned and let • Properties undergoing major capital expenditure transferred to refurbishment category £0.0m March -----------
Slide 17: Future Rent Roll Growth
PERFORMANCE Future Rent Roll Growth ERV Growth Rental Reversion Notes • Not a profit forecast, for illustrative purposes only • Future rents (ex. like-for-like) based on the assumptions set out in Appendices 1 & 2 • Excludes pipeline projects not yet underway • Excludes acquisitions and disposals af
Slide 18: Cash Flow
PERFORMANCE Cash Flow £m Total Trading Net Cash from Operations after Interest 53 26 Dividends Paid (27) Investment Capital Expenditure (58) Purchase of Investment Properties (Deposits) (11) Property Disposals 8 8 Capital Receipts 23 Distributions and Proceeds from Joint Ventures 46 Net Movement in
Slide 19: Balance Sheet
PERFORMANCE Balance Sheet March March £m 2017 2016 Investment Property Valuation 1,844 1,779 Other Investment 3 27 Net Debt (242) (276) Other (26) (12) Net Assets 1,579 1,518 EPRA NAV per Share £9.53 £9.23 Loan to Value 13% 16% Net Initial Yield (lfl) 5.4% 4.9% Equivalent Yield (lfl) 6.5% 6.4% 19
Slide 20: Property Valuation
PERFORMANCE Property Valuation 20
Slide 21: Revaluation
PERFORMANCE Revaluation Uplift/(Deficit) Main drivers ERV per sq. ft. up 6.7% £51m Like-for-like £47m Equivalent Yield out 0.1% £(15)m Uplands Industrial Estate £11m Grand Union Studios £3m Completed Projects £8m The Print Rooms £4m Redevelopments £8m Arches Business Centre £4m Edinburgh House £(10)
Slide 22: Debt
PERFORMANCE Debt March March 2017 2016 Net Debt £242m £276m Average Interest Cost 5.2% 5.1% Undrawn Facilities £123m £134m Marginal Cost (undrawn facilities) 1.7% – Average Period to Maturity 5.2 years 5.9 years Facilities By Type Maturity Profile £200m £150m Private Bank Debt Placement 41% 43% £100
Slide 23: Proforma Impact of Acquisition and Disposal Activity
PERFORMANCE Proforma Impact of Acquisition and Disposal Activity As at 31 March Fitzroy Uplands £m 2017 Acquisition Disposal Proforma Rent Roll 89.5 4.9 (1.6) 92.8 Valuation 1,844 99 (40) 1,903 Net Debt (242) (99) 50 (291) LTV 13% – – 15% Undrawn Facilities 123 (99) 50 74 23
Slide 24: Growth
DIRECTION Growth Like-for-like Occupancy pricing Completed projects Letting up pricing Projects underway Letting up pricing Project Pipeline Acquisitions 24
Slide 25: Project Pipeline
Sq. ft. 0 100,000 120,000 140,000 20,000 40,000 60,000 80,000 Grand Union Studios Vox Studios (Phase 1) 2016 Projects Underway The Print Rooms Completed Projects DIRECTION The Record Hall Project Pipeline Barley Mow Centre 2017 The Leather Market The Fuel Tank Southbank House Pipeline Design The Bis
Slide 26: Like-for-like Rent Per Sq. Ft.
DIRECTION Like-for-like Rent Per Sq. Ft. Metal Box Factory, Bankside £80 £70 £60 £50 Havelock Terrace, Battersea Uplands, £40 Walthamstow £30 £20 £10 £0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Recent refurbishment or redevelopment 26
Slide 27: Acquisition: 13-17 Fitzroy Street, W1
DIRECTION Acquisition 13-17 Fitzroy Street, W1 27
Slide 28: Acquisition: 13-17 Fitzroy Street, W1
DIRECTION Acquisition 13-17 Fitzroy Street, W1 • Acquired April 2017 • 92,700 sq. ft. • 3 year lease to break • £52.50 per sq. ft. • £98.5 million • 4.6% net initial yield 28
Slide 29: Disposal: Uplands, Walthamstow
DIRECTION Disposal Uplands, Walthamstow • Sold May 2017 • 290,000 sq. ft. • 11 acres • £5.70 per sq. ft. average • £50 million • 3.1% net initial yield 29
Slide 30: Outlook
DIRECTION Outlook Right market London is growing and changing Right Right brand properties Increasing Creating recognition and modern growth reputation THE environments WORKSPACE ADVANTAGE Right Right people customers Driving Open performance to all 30
Slide 31: Questions
Questions WORKSPACE
Slide 32: Supplementary information
Supplementary information
Slide 33: Appendix 1: Refurbishment Projects
APPENDIX 1 Refurbishment Projects Actual/ Estimated Estimated Rent Estimated Cost to Estimated Upgraded New ERV at 90% March 2017 At March 2017 Valuation cost Complete Completion area space (Average) occupancy Rent Roll Completed Vox Studios (phase 1) £56m £17m – Jan 2016 27,954 51,216 £47 £3.4m £3.
Slide 34: Appendix 2: Redevelopment Projects
APPENDIX 2 Redevelopment Projects Commercial space returned Other proceeds Development March 2017 Estimated Residential Estimated Estimated Cash Cash Overage At March 2017 partner Valuation Rent Roll completion units no. New Space ERV Rent* received to come to come Completed Grand Union Studios Tayl
Slide 35: Appendix 3: Property Portfolio
APPENDIX 3 Property Portfolio 35
Slide 36: Appendix 4: Customer Mix
APPENDIX 4 Customer Mix Data as at March 2016 36
Slide 37: Disclaimer
DISCLAIMER The information in this document may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumptions ab