Slide 1: Investor and Analyst Presentation 6 June 2018
WORKSPACE” Investor and Analyst Presentation 6 June 2018
Slide 2: Agenda
AGENDA WORKSPACE QUESTIONS Jamie Hopkins Chief Executive Officer PERFORMANCE SUPPLEMENTARY Graham Clemett Chief Financial Officer INFORMATION DIRECTION Jamie Hopkins Chief Executive Officer 2 Investor and Analyst Presentation 6 June 2018
Slide 3: Workspace
WORKSPACE
Slide 4: Performance and Growth
WORKSPACE Performance and Growth LIKE-FOR-LIKE PROJECTS ACQUISITIONS Strong demand Extensive pipeline Well positioned 111 4 Investor and Analyst Presentation 6 June 2018
Slide 5: Results
WORKSPACE Results Active Management March 2018 March 2017 Change Rent Roll (lfl) £65.9m £60.7m 8.6% Rent per sq. ft. (lfl) £35.50 £33.00 7.6% Enquiries (per month) 1,016 1,060 4.2% Occupancy (lfl) 91.6% 90.8% 0.8% Property Valuation £2,280m £1,844m 5.0%* Capital Value per sq. ft. (lfl) £549 £506 8.5
Slide 6: Portfolio Evolution
WORKSPACE Portfolio Evolution 6 Investor and Analyst Presentation 6 June 2018
Slide 7: Performance
PERFORMANCE
Slide 8: Income Statement
PERFORMANCE Income Statement £m March 2018 March 2017 Change Net Rental Income 95.6 79.2 +21% Joint Venture Income – 0.3 Administrative Expenses (16.1) (15.1) +7% Net Finance Costs (18.8) (13.7) +37% Adjusted Trading Profit after Interest 60.7 50.7 +20% Investment Property Surplus 82.5 39.5 Profit o
Slide 9: Net Rental Income
PERFORMANCE Net Rental Income Net rental income (£m) 9 Investor and Analyst Presentation 6 June 2018
Slide 10: Like-for-like Properties
PERFORMANCE Like-for-like Properties Rent Roll Growth Occupancy Rent per sq. ft. Growth • Represents 58% of total rent roll • Occupancy up 0.8% to 91.6% • Rent per sq. ft. up 7.6% to £35.50 • CBRE ERV per sq. ft. up 5.9% to £39.80 10 Investor and Analyst Presentation 6 June 2018
Slide 11: Completed Projects
PERFORMANCE Completed Projects Rent Roll (£m) • Represents 13% of total rent roll • 389,000 sq. ft. of new and upgraded space • 32% increase in rent roll over the last year The Leather Market – refurbishment completed August 2017 Note: • Future rents based on the assumptions set out in Appendices 1
Slide 12: Projects Underway
PERFORMANCE Projects Underway Rent Roll (£m) • Currently represents 6% of total rent roll • 16 projects underway delivering 773,000 sq. ft. of new and upgraded space • 9 projects completing during 2018, including 4 new buildings Edinburgh House – opening Summer 2018 Notes: • Future rents based on th
Slide 13: Projects Underway
PERFORMANCE Projects Underway Annualised Rent Roll Monthly Net Rental Income • Typical phasing of rent roll and net rental income at a new building • Net rental income at low occupancy levels impacted by unrecovered service charge and empty rates Note: • Example Rent Roll and Net Rental Income profi
Slide 14: Acquisitions
PERFORMANCE Acquisitions Rent Roll (£m) • Represents 19% of total rent roll • Fitzroy Street and Alexandra House let to single occupiers until 2020 and 2021 respectively • The Salisbury and Centro Buildings to be progressively repositioned as business centres The Salisbury – acquired June 2017 Notes
Slide 15: Future Rent Roll Growth
PERFORMANCE Future Rent Roll Growth Rent Roll (£m) Notes: • Not a profit forecast, for illustrative purposes only • Future rents for projects based on the assumptions set out in Appendices 1 & 2 • Excludes projects at the design stage 15 Investor and Analyst Presentation 6 June 2018
Slide 16: Cash Flow
PERFORMANCE Cash Flow £m March 2018 March 2017 Trading Net Cash from Operations after Interest 74 53 37 26 Dividends Paid (37) (27) Investment Capital Expenditure (74) (58) Purchase of Investment Properties (370) (11) Property Disposals 128 (312) 8 8 Capital Receipts 9 23 Other (5) 46 Net Movement (
Slide 17: Balance Sheet
PERFORMANCE Balance Sheet £m March 2018 March 2017 Investment Property Valuation 2,280 1,844 Net Debt (517) (242) Other (50) (23) Net Assets 1,713 1,579 Equivalent Yield (LFL) 6.5% 6.6% Net Initial Yield (LFL) 5.4% 5.5% EPRA NAV per Share £10.37 £9.53 Loan to Value* 23% 13% * Proforma Loan to Value
Slide 18: Property Valuation
PERFORMANCE Property Valuation Property Valuation (£m) * Net of costs 18 Investor and Analyst Presentation 6 June 2018
Slide 19: Revaluation
PERFORMANCE Revaluation Valuation Uplift/(Deficit) Main components ERV per sq. ft. up 5.9% £61m Like-for-like £1,112m £73m Equivalent Yield in 0.1% £12m The Leather Market £10m Completed Projects £290m £25m The Record Hall £9m The Light Box £5m Southbank House Current Refurbishments £308m £9m £3m Ed
Slide 20: Debt
PERFORMANCE Debt March 2018 March 2017 Net Debt £517m £242m Average Interest Cost 4.3% 5.2% Undrawn Revolver Facilities £148m £123m Marginal Cost (undrawn facilities) over LIBOR 1.5% 1.4% Average Period to Maturity 5.5 years 5.2 years Facilities By Type (%) Maturity Profile (£m) 20 Investor and Anal
Slide 21: Direction
DIRECTION
Slide 22: Performance and Growth
DIRECTION Performance and Growth LIKE-FOR-LIKE PROJECTS ACQUISITIONS Strong demand Extensive pipeline Well positioned 22 Investor and Analyst Presentation 6 June 2018
Slide 23: Investor and Analyst Presentation 6 June 2018
23 Investor and Analyst Presentation 6 June 2018
Slide 24: Demand
DIRECTION Demand 24 Investor and Analyst Presentation 6 June 2018
Slide 25: Like-for-like
DIRECTION Like-for-like Rent per sq. ft.(£) 25 Investor and Analyst Presentation 6 June 2018
Slide 26: Projects
DIRECTION Projects Project Pipeline (sq. ft.) 26 Investor and Analyst Presentation 6 June 2018
Slide 27: Projects: China Works
DIRECTION Projects CHINA WORKS State-of-the-art refurbishment and repositioning of historic building 27 Investor and Analyst Presentation 6 June 2018
Slide 28: Projects: Cocoa Studios at The Biscuit Factory
DIRECTION Projects COCOA STUDIOS AT THE BISCUIT FACTORY Brand new building opening in June 2018 28 Investor and Analyst Presentation 6 June 2018
Slide 29: Acquisitions: Centro Buildings Camden
WORKSPACE Acquisitions CENTRO BUILDINGS CAMDEN 29 Investor and Analyst Presentation 6 June 2018
Slide 30: Acquisitions: Centro Buildings Camden
WORKSPACE Acquisitions CENTRO BUILDINGS CAMDEN 30 Investor and Analyst Presentation 6 June 2018
Slide 31: Acquisitions: Centro Buildings Camden
WORKSPACE Acquisitions CENTRO BUILDINGS CAMDEN 31 Investor and Analyst Presentation 6 June 2018
Slide 32: Acquisitions: Acquisition Financials
WORKSPACE Acquisitions CENTRO BUILDINGS CAMDEN Acquisition Financials Acquired February and April 2018 Total £186 million 4.5% net initial yield £859 capital value per sq. ft. Average passing rent of £48.30 per sq. ft. 32 Investor and Analyst Presentation 6 June 2018
Slide 33: Acquisitions: Asset management opportunity
WORKSPACE Acquisitions CENTRO BUILDINGS CAMDEN Asset management opportunity 216,000 sq. ft. 7 buildings 21 customers 85% occupied 33,000 sq. ft. to let 33 Investor and Analyst Presentation 6 June 2018
Slide 34: Outlook
DIRECTION Outlook Strong Extensive Well demand pipeline positioned Underpinned by Asset ownership Customer relationships THE WORKSPACE ADVANTAGE 34 Investor and Analyst Presentation 6 June 2018
Slide 35: Questions
QUESTIONS
Slide 36: Supplementary Information
SUPPLEMENTARY INFORMATION
Slide 37: Appendix 1: Refurbishment Projects
Appendix 1 Refurbishment Projects Actual/ Estimated Estimated Estimated Cost to Estimated Unaffected Upgraded New Space ERV Rent at 90% March 2018 At March 2018 Valuation cost Complete Completion area (sq. ft.) area (sq. ft.) (sq. ft.) (Average) occupancy* Rent Roll Completed The Record Hall £61m £2
Slide 38: Appendix 2: Redevelopment Projects
Appendix 2 Redevelopment Projects Commercial space returned Other proceeds Commercial March Space Development 2018Rent estimated Residential New Space Estimated Estimated Cash Cash to Overage to At March 2018 partner Valuation Roll completion units no. (sq. ft.) ERV Rent* received come come Complete
Slide 39: Appendix 3: Diversified Customer Base
Appendix 3 Diversified Customer Base Rent Roll by no. of customers • Top 10 customers: 11% of total rent roll Data as at 31 March 2018 39 Investor and Analyst Presentation 6 June 2018
Slide 40: Appendix 4: Business Overview
Appendix 4 Business Overview • FTSE 250 Real Estate Investment Trust (REIT) • Provide inspiring, flexible work spaces with super- fast technology in dynamic locations • Established in 1987 and listed on the London Stock Exchange since 1993 • Home to thousands of businesses, from early stage start-up
Slide 41: Appendix 5: The Workspace Advantage
Appendix 5 The Workspace Advantage Our Strategy Our Investment Case Right Market: We continue to believe that • Strong and consistent property London is the right market with growing and financial returns. demand from all types of businesses. • Completed projects driving rental Right Properties: We
Slide 42: Appendix 6: Property Portfolio
Appendix 6 Property Portfolio 42 Investor and Analyst Presentation 6 June 2018
Slide 43: Appendix 7: Property Portfolio
Appendix 7 Property Portfolio Like-for-Like Map Ref Property Name Net Lettable Area Net Rent Roll Map Ref Property Name Net Lettable Area Net Rent Roll (sq. ft.) (£) (sq. ft.) (£) 1 Archer Street Studios 14,984 951,382 21 Quality Court 16,923 954,065 2 Belgravia Workshops 32,025 390,274 22 Riverside
Slide 44: Appendix 7: Property Portfolio
Appendix 7 Property Portfolio Refurbishments Redevelopments Map Ref Property Name Net Lettable Area Net Rent Roll Map Ref Property Name Net Lettable Area Net Rent Roll (sq. ft.) (£) (sq. ft.) (£) 38 12-13 Greville Street 3,787 40,178 56 Bow Enterprise Park 14,634 189,781 39 14 Greville Street 10,961
Slide 45: Disclaimer
Disclaimer The information in this document may include forward- As a result, you are cautioned not to place reliance on such looking statements, which are based on current expectations forward looking statements as a prediction of actual results and projections about future events. These forward-lo