Slide 1: Interim Results: Momentum Maintained
INVESTOR AND ANALYST PRESENTATION 12 NOVEMBER 2013 WORKSPACE INTERIM RESULTS MOMENTUM MAINTAINED
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: How We Make Money
WORKSPACE HOW WE MAKE MONEY WHAT WE DO 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 3
Slide 4: Results
WORKSPACE RESULTS Six Months Sept 2013 March 2013 Change Rent Roll (lfl) £45.9m £44.2m +4% Rent per sq. ft. (lfl) £14.37 £14.00 +3% Occupancy (lfl) 90.9% 89.9% Up 1.0% Property Valuation £921m £830m +12%* EPRA NAV (per share) £4.04 £3.48 +16% Year on Year Sept 2013 Sept 2012 Change Trading Profit af
Slide 5: Highlights
PERFORMANCE HIGHLIGHTS Income Statement Sept 2013 Sept 2012 Change Total Profit before Tax £100.8m £24.6m x4 Net Rental income £24.4m £23.2m +5% Trading Profit After Interest** £9.7m £8.8m +10% Adjusted EPRA Earnings Per Share** 6.6p 5.9p +12% Interim Dividend (per share) 3.54p 3.22p +10% Balance Sh
Slide 6: Trading Profit After Interest
PERFORMANCE TRADING PROFIT AFTER INTEREST £12.0m £2.0m £(0.1)m £(0.7)m £0.2m £(0.6)m £10.0m £0.1m £9.7m £8.8m £8.0m £6.0m £4.0m £2.0m £0.0m September 2012 Like for like Refurb/Redev Disposals JV Admin Interest September 2013 Income Income Income Income Expenses Costs 6
Slide 7: Rent Roll Growth
PERFORMANCE RENT ROLL GROWTH LIKE-FOR-LIKE REFURBISHMENTS £50m £10m +3.8% £9m +5.7% £8m £45m £45.9m £7m £44.2m £6m £40m £41.8m £5m £6.0m £4m £4.9m £4.3m £3m £35m £2m £1m £30m £0m Sep-12 Mar-13 Sep-13 £25m REDEVELOPMENTS £20m £10m £9m £8m £15m £7m £6m £10m £5m £4m £3m £5m £2m £3.0m £2.8m £2.3m £1m £0
Slide 8: Like-for-Like Trends
PERFORMANCE LIKE-FOR-LIKE TRENDS 95% £17 90.9% 89.9% £16 90% 89.0% 87.3% 87.7% £15 £14.37 85% £14.00 £14 £13.36 £13.13 £12.93 £13 80% £12 75% £11 70% £10 Sep 2011 Mar 2012 Sep 2012 Mar 2013 Sep 2013 Rent per sq ft Occupancy 8
Slide 9: Refurbishment Projects
PERFORMANCE REFURBISHMENT PROJECTS Current Future Upgraded Potential Projects Rent Roll Capex Space New Space Future Rent Completed 6 £2.8m* £0m 91,000 69,000 £4.0m Construction 2 £0.9m £11m 82,000 62,000 £3.7m Design Stage 6 £1.5m** £54m 30,000 180,000 £6.0m +£8.5m Note * Excludes £2.3m of rent not
Slide 10: Completed Refurbishments
PERFORMANCE COMPLETED REFURBISHMENTS CANALOT STUDIOS CHESTER HOUSE £1,000k £300k £900k £250k RENT ROLL RENT ROLL £800k £700k £200k £600k £500k £150k £400k £24 psf £34 psf £100k £300k £200k £50k £100k £0k £0k Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Mar 13 A
Slide 11: Redevelopment Projects
PERFORMANCE REDEVELOPMENT PROJECTS Potential Current Current Residential Business Future Schemes Value Rent Roll Units Space Rent Other £73m cash Underway 5 £122m £1.4m 1,493 231,000 £4.6m + overage With Planning 3 830 163,000 Planning Stage 4 702 90,000 Note Additional detail set out in Appendix II
Slide 12: Refurbishment & Redevelopment Rent Roll Estimates
PERFORMANCE REFURBISHMENT & REDEVELOPMENT RENT ROLL ESTIMATES REFURBISHMENTS REDEVELOPMENTS UNDERWAY £18.0m £18.0m £16.0m £16.0m £16.0m £14.4m £14.0m £14.0m £12.0m £11.5m £12.0m +£73m cash £10.0m £9.3m £10.0m +overage £8.0m £7.5m £7.7m £8.0m £6.0m £6.0m £4.2m £3.7m £4.0m £4.0m £2.6m £2.0m £1.4m £1.6
Slide 13: Cash Flow
PERFORMANCE CASH FLOW £m Trading Net cash from operations 11 1 Dividends paid (10) Investment Capital Expenditure (14) 7 Disposals/Capital Receipts 21 Financing Cancellation of hedging contracts (9) Release of secured bank facility funds 7 (5) Refinancing costs (3) Net movement in six months 3 Net D
Slide 14: Balance Sheet
PERFORMANCE BALANCE SHEET Sept 2013 March 2013 Investment Property Valuation £921m £830m Investment in Joint Ventures £22m £21m Net Debt (£324m) (£327m) Glebe Proceeds Share (£7m) £0m Other (£23m) (£24m) Net Assets £589m £500m EPRA NAV per Share £4.04 £3.48 Loan to Value 35% 40% Facility Headroom £8
Slide 15: Property Valuation
PERFORMANCE PROPERTY VALUATION £950m £52m £2m £921m £900m £38m £4m £850m £830m £20m £15m £800m £750m £700m £650m £600m March Disposals/ Capex Core Refurbishment Redevelopment Other September 2013 Receipts Properties Properties Properties Properties 2013 Revaluation Surplus 15
Slide 16: Debt Analysis
PERFORMANCE DEBT ANALYSIS Sept 2013 March 2013 Net Debt £324m £327m Total Facilities £410m £383m Secured Facilities 0% 85% Average Borrowing Cost 5.3% 5.0% FACILITIES BY TYPE MATURITY PROFILE £250m £200m £171m Private Bank Debt £150m Placement 37% £150m 38% £100m £58m £50m UK Retail Funds Bond £22m
Slide 17: Glebe Proceeds Share
PERFORMANCE GLEBE PROCEEDS SHARE • Portfolio acquired in December 2009 for £15m cash (plus £68m of stapled debt) • Portfolio now valued at £199m, plus £12m cash received from disposals • Workspace retains all rental income (currently £7m pa) • Proceeds share in place with former lenders, no time lim
Slide 18: Glebe Proceeds Share
PERFORMANCE GLEBE PROCEEDS SHARE £m Sept 2013 March 2013 Glebe Portfolio Value (including disposal proceeds) £211m £164m Comprising: Investment Properties, no plans to sell £99m £81m Properties with residential sales potential/sold £112m £83m Net proceeds after estimated sales costs £106m £79m Proce
Slide 19: Capital Growth
DIRECTION CAPITAL GROWTH At 30 September 2013 Core Refurbishment Redevelopment Other Total Number of properties 48 8 9 18 83 Valuation £557m £125m £188m £51m £921m Revaluation surplus in £38m £4m £52m £2m £96m six months Net Initial Yield 7.1% Rent per sq. ft. £14.86 Capital Value per sq. ft. £182 D
Slide 20: Acquisitions: Verulam House, Grays Inn Road, WC1
DIRECTION ACQUISITIONS VERULAM HOUSE, GRAYS INN ROAD, WC1 20
Slide 21: Acquisitions: Verulam House
DIRECTION ACQUISITIONS VERULAM HOUSE, GRAYS INN ROAD, WC1 RATIONALE FINANCIALS • Core midtown location: Crossrail • £18.1m • Good strategic fit: cluster efficiencies • £433 per sq. ft. capital value • Strong customer demand: in-house data • Optimal floor configuration: unit sizing • Minimal day one
Slide 22: Positioned for Growth
DIRECTION POSITIONED FOR GROWTH INTENSIVE MANAGEMENT AND DIRECT MARKETING RENTAL CAPITAL NEW INCOME ALTERNATIVE ACQUISITIONS GROWTH GROWTH INCOME ORGANIC NEW 22
Slide 23: Direction: Watch Our Presentation Video
DIRECTION SCAN THE CODE BELOW TO WATCH OUR INVESTOR AND ANALYST PRESENTATION VIDEO: OR VISIT: INVESTORS.WORKSPACE.CO.UK/ABOUT-US/MEDIA-CENTRE/ANALYST-PRESENTATIONS/ 23
Slide 24: London Locations Map
HIGH BARNET — 9 STANSTED “Rincon? EDGWARE BROMLEY WORKSPACE® 24
Slide 25: Appendix I: Refurbishment Projects
APPENDIX I REFURBISHMENT PROJECTS Project Stage September Expected Cost to Completion Upgraded New Project Updated Expected 2013 Cost Complete area space ERV ERV rent at 90% Valuation (Expected) (Expected) (Average) (Average) occupancy Completed/Letting Canalot Studios Sept 2012 32,702 16,268 £24 £2
Slide 26: Appendix II: Redevelopment Projects
APPENDIX II REDEVELOPMENT PROJECTS Project Stage Development September Expected Residential Commercial space Other proceeds partner 2013 Valuation completion units No. Area Rent* Cash Overage Underway The Filaments (phase 1) Mount Anvil H2 2014 209 53,000 £1.0m n/a Screenworks Taylor H1 2014 72 61
Slide 27: Appendix III: Understanding Customers
APPENDIX III UNDERSTANDING CUSTOMERS SPLIT OF ENQUIRIES ACROSS LONDON 27
Slide 28: Appendix IV: Understanding Customers
APPENDIX IV UNDERSTANDING CUSTOMERS PUTTING OUR CUSTOMER AT THE CENTRE OF OUR BRAND 28
Slide 29: Appendix V: Understanding Our Customers
APPENDIX V UNDERSTANDING OUR CUSTOMERS MARKETING STRATEGIES RESULT BILLBOARDS & SIGNAGE TELEPHONE 10,000 SQ. FT. ACROSS LONDON 14,000 CALLS LOCAL EVENTS MAIL & E-SHOTS 75 CUSTOMER EVENTS INCREASED INCOME RETAIL & LEISURE LINKS 3,000 ATTENDEES TRANSPORT HUBS DATA AND KNOWLEDGE REFERRALS & WEBSITE REC
Slide 30: Disclaimer
DISCLAIMER This presentation contains forward looking statements. Although the Group believes that the estimates and assumptions on which such statements are based are reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Group’s control. The G