Slide 1: Interim Results: Driving Value
WORKSPACE INVESTOR AND ANALYST PRESENTATION 12 NOVEMBER 2014 INTERIM RESULTS DRIVING VALUE
Slide 2: The Right Strategy
WORKSPACE THE RIGHT STRATEGY INTENSIVE MANAGEMENT AND DIRECT MARKETING RENTAL CAPITAL NEW INCOME ALTERNATIVE ACQUISITIONS GROWTH GROWTH INCOME ORGANIC NEW EQUITY PLACING Announcing a 9.99% cashbox equity placing to enable us to extend our refurbishment pipeline and progress acquisition opportunities
Slide 3: Agenda
AGENDA WORKSPACE Jamie Hopkins Chief Executive Officer PERFORMANCE Graham Clemett Chief Financial Officer DIRECTION Jamie Hopkins Chief Executive Officer QUESTIONS 3
Slide 4: Results
WORKSPACE RESULTS September March Change 2014 2014 Strong Growth Rent Roll (lfl) £42.4m £39.8m +7% Property Valuation £1,230m £1,078m +15%* Like-for-like Capital Value per sq. ft** £227 £202 +12% EPRA NAV (per share) £5.97 £4.96 +20% Operational Momentum Enquiries (per month) 1,258 1,063 +18% Occupa
Slide 5: Performance Highlights
PERFORMANCE HIGHLIGHTS September September Change Income Statement 2014 2013 Net Rental income £27.9m £24.4m +14% Adjusted Trading Profit After Interest £12.4m £9.7m +28% Profit Before Tax £173.7m £107.8m +61% Adjusted Underlying Earnings (per share) 8.4p 6.6p +27% Interim Dividend (per share) 3.89p
Slide 6: Trading Profit After Interest
PERFORMANCE TRADING PROFIT AFTER INTEREST 14 £0.8m £(0.2)m £1.4m £(0.3)m £(0.6)m £(0.1)m £12.4m 12 £1.7m £9.7m 10 8 6 4 2 0 Sept 2013 Like for like Completed Projects Acquisitions Disposals Admin Interest Sept 2014 Income Projects Underway Expenses Costs 6
Slide 7: Rent Roll Growth
PERFORMANCE RENT ROLL GROWTH LIKE-FOR-LIKE COMPLETED PROJECTS £45.0m £42.4m £12.0m £39.8m £2.2m £8.0m £40.0m £38.0m £8.0m £2.1m £5.7m £2.2m £4.4m £4.0m £6.8m £35.0m £5.7m £4.4m +£1.3m +£2.3m £1.2m £0.0m £30.0m Sept 2013 March 2014 Sept 2014 +5% +7% Refurbishment Redevelopment £25.0m £20.0m PROJECTS
Slide 8: Cash Flow
PERFORMANCE CASH FLOW £m Trading Net cash from operations 14 3 Dividends paid (11) Investment Capital Expenditure (16) Property Acquisitions (19) 4 Capital Receipts 38 Investment in joint ventures 1 Net movement in six months 7 Net Debt at March 2014 (338) Net Debt at September 2014 (331) 8
Slide 9: Balance Sheet
PERFORMANCE BALANCE SHEET September March 2014 2014 Investment Property Valuation £1,230m £1,078m Investment in Joint Ventures £29m £23m Net Debt (£331m) (£338m) Other (£27m) (£37m) Net Assets £901m £726m EPRA NAV per Share £5.97 £4.96 Loan to Value 27% 31% Facility Headroom £79m £72m 9
Slide 10: Property Valuation Metrics
PERFORMANCE PROPERTY VALUATION METRICS September March 2014 2014 Total Portfolio £1,230m £1,078m Equivalent Yield 6.8% 7.3% Net Initial Yield 5.3% 6.2% Capital Value per sq.ft £281 £240 Like-for-like* £626m £553m ERV per sq.ft £17.06 £16.05 Equivalent Yield 6.9% 7.2% Net Initial Yield 6.0% 6.4% Capi
Slide 11: Revaluation Uplift
PERFORMANCE REVALUATION UPLIFT Uplift HY 2015 Main movements Pricing £36m Like-for-Like £80m Yield Movement £33m Industrial Portfolio £11m Overage Payments £12m Redevelopments £48m Poplar £11m Screenworks £11m Completed Buildings £18m Refurbishments £28m Projects in Progress £10m Other £1m Total £15
Slide 12: Glebe Proceeds Share
PERFORMANCE GLEBE PROCEEDS SHARE September March 2014 2014 Glebe Portfolio Valuation £222m £217m Comprising: Commercial properties – no plans to sell £129m £110m Properties with residential sales potential £93m £107m Proceeds Share Calculation: Proceeds from sales to date £45m £14m Potential proceed
Slide 13: Debt Analysis
PERFORMANCE DEBT ANALYSIS September 2014 March 2014 Net Debt £331m £338m Total Facilities (unsecured) £410m £410m Hedged/fixed rate facilities 73% 73% Average Borrowing Cost 5.3% 5.3% FACILITIES BY TYPE MATURITY PROFILE £250m £200m £171m £150m Private Bank Debt £150m Placement 37% 38% £100m £58m £50
Slide 14: The Right Strategy
DIRECTION THE RIGHT STRATEGY Workspace Property Redevelopments Refurbishments Acquisitions 14
Slide 15: Redevelopment Projects
DIRECTION REDEVELOPMENT PROJECTS Sq. ft 70,000 60,000 CURRENT Screenworks Islington • 274,000 sq. ft of brand Grand Union Ladbroke Grove 50,000 new business space Light Bulb Wandsworth Deptford Creek The Faircharm The Biscuit Factory Bermondsey 40,000 30,000 20,000 10,000 0 May-14 Dec-14 Dec-15 Jun-
Slide 16: Redevelopment Projects
DIRECTION REDEVELOPMENT PROJECTS Sq. ft 70,000 60,000 CURRENT Screenworks Islington • 274,000 sq. ft of brand Grand Union Ladbroke Grove 50,000 new business space Light Bulb Wandsworth Deptford Creek The Faircharm The Biscuit Factory Bermondsey 40,000 30,000 PIPELINE • Planning obtained for 20,000 a
Slide 17: Screenworks, Islington
DIRECTION SCREENWORKS, ISLINGTON £000’s 1,200 100% 90% 1,000 80% 70% 800 60% 600 50% 40% 400 30% 20% 200 10% - 0% May-14 Jun-14 Jul-14 Aug-14 Sep-14 Rent Roll Planned Rent Roll Occupancy Planned Occupancy 17
Slide 18: Screenworks, Islington
DIRECTION SCREENWORKS, ISLINGTON SCAN THE CODE BELOW TO WATCH OUR INTERIM PRESENTATION VIDEOS OR VISIT: Investors.workspace.co.uk/about-us/media-centre/analyst-presentations/ 18
Slide 19: Redevelopment Projects
DIRECTION REDEVELOPMENT PROJECTS Light Bulb, The Faircharm, Grand Union, Wandsworth Deptford Creek Ladbroke Grove 19
Slide 20: Current Refurbishment Projects
0 20,000 40,000 60,000 80,000 100,000 120,000 Size (sq. ft) 2012 Canalot Studios Completed Ladbroke Grove Whitechapel Technology Centre Whitechapel Underway 2013 Chester House Kennington Leyton Industrial Village (Phase 1) Leyton DIRECTION Westminster Business Centre (Phase 1) Vauxhall Exmouth House
Slide 21: Pill Box, Bethnal Green
DIRECTION PILL BOX, BETHNAL GREEN £000’s 1,000 100% 90% 800 80% 70% 600 60% 50% 400 40% 30% 200 20% 10% - 0% Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Rent Roll Planned Rent Roll Occupancy Planned Occupancy 21
Slide 22: Pill Box, Bethnal Green
DIRECTION PILL BOX, BETHNAL GREEN SCAN THE CODE BELOW TO WATCH OUR INTERIM PRESENTATION VIDEOS OR VISIT: Investors.workspace.co.uk/about-us/media-centre/analyst-presentations/ 22
Slide 23: Pipeline Refurbishment Projects
DIRECTION PIPELINE REFURBISHMENT PROJECTS PIPELINE • Estimated space: 560,000 sq. ft • Estimated spend: £128m Size (sq. ft) • Target IRR: 10% pa+ 100,000 Riverside Wandsworth Avro & Hewlett House Battersea 90,000 80,000 70,000 Islington Leroy House 60,000 Pall Mall Ladbroke Grove Mare Street Hackney
Slide 24: Holywell Centre, Shoreditch
DIRECTION HOLYWELL CENTRE, SHOREDITCH CURRENT PLANNED 24
Slide 25: The Right Strategy
DIRECTION THE RIGHT STRATEGY Workspace Property Redevelopments Refurbishments Acquisitions 25
Slide 26: The Right Strategy
DIRECTION THE RIGHT STRATEGY Workspace Property Redevelopments Refurbishments Acquisitions 26
Slide 27: Acquisitions: Fleet Street, EC4
DIRECTION ACQUISITIONS 160 FLEET STREET, EC4 27
Slide 28: Acquisitions: Fleet Street, EC4
DIRECTION ACQUISITIONS 160 FLEET STREET, EC4 RATIONALE FINANCIALS • Core midtown location: improving • £29.7m • Prominent Fleet Street frontage: brand • £549 per sq. ft capital value • Good strategic fit: cluster efficiencies • Minimal day one expenditure • Optimal floor configuration: smaller units
Slide 29: Acquisitions
DIRECTION ACQUISITIONS CURRENT (Last 12 months) FUTURE FORMAL BIDS: 24 Opportunities PIPELINE: • Increasing £575m • Market levelling • Bidding on £215m ACQUIRED: 4 Properties £63m SWEETSPOT: • £15-50m lot size • Multi-let UNDER OFFER: 1 Property • Undermanaged £6m FOCUS: • In-house resource expanded
Slide 30: Summary
DIRECTION SUMMARY REDEVELOPMENTS • 274,000 sq. ft. of brand new business space completed or underway • Continuing pipeline REFURBISHMENTS • Current programme delivering 584,000 sq. ft. of new and upgraded space at a cost of £104m – 8 projects completed at a cost of £29m – 7 projects in progress at a
Slide 31: The Right Strategy
THE RIGHT STRATEGY INTENSIVE MANAGEMENT AND DIRECT MARKETING RENTAL CAPITAL NEW INCOME ALTERNATIVE ACQUISITIONS GROWTH GROWTH INCOME ORGANIC NEW EQUITY PLACING Announcing a 9.99% cashbox equity placing to enable us to extend our refurbishment pipeline and progress acquisition opportunities 31
Slide 32: Outlook
~)) DIRECTION 'WORKSPACE* RIGHT BRAND Increasing recognition and reputation RIGHT PEOPLE Driving performance. RIGHT MARKET London is growing and changing WORKSPACE UNDERSTANDS WORK SPACE RIGHT PROPERTIES Creating modern growth environments RIGHT CUSTOMERS New and growing companies, 32
Slide 33: Questions
QUESTIONS QUESTIONS 33
Slide 34: Supplementary Information
SUPPLEMENTARY INFORMATION WORKSPACE*
Slide 35: Appendix I: Redevelopment Projects
APPENDIX I REDEVELOPMENT PROJECTS Residential Development Expected units At September 2014 partner Valuation Rent Roll completion No. Commercial space Other proceeds Estimated Estimated Contracted Contracted Overage Area ERV Rent* Cash to come ** Contracted Screenworks Taylor Wimpey £32m £1.2m May 2
Slide 36: Appendix II: Refurbishment Projects
APPENDIX II REFURBISHMENT PROJECTS Actual/ Estimated Estimated Estimated Cost to Estimated Unaffected Upgraded New ERV Rent at 90% Current At September 2014 Valuation cost Complete Completion area area space (Average) occupancy * Rent Roll * Completed Canalot Studios £19m £5m - Sept 2012 - 32,702 16
Slide 37: Appendix III: Pipeline Refurbishment Projects
APPENDIX III PIPELINE REFURBISHMENT PROJECTS Estimated Estimated Upgraded New Property Location Type of Scheme Cost Start area space Status Canterbury Court Kennington Upgrade £4m 2015 24,000 - With planning permission Holywell Centre Shoreditch New build £19m 2015 22,000 33,000 Planning application
Slide 38: How We Make Money
WORKSPACE HOW WE MAKE MONEY WHAT THE RIGHT WE DO STRATEGY TAILORED BUSINESS MARKET ENVIRONMENTS KNOWLEDGE THE RIGHT INCOME PROPERTIES GROWTH CUSTOMER NEW AND RELATIONSHIPS GROWING THE RIGHT CAPITAL COMPANIES SERVICES GROWTH OPERATIONAL CAPABILITY LONDON UNDERSTANDING CREATING DEMAND SUPPLY 38
Slide 39: 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