Slide 1: Investor and Analyst Presentation, Results 2015
WORKSPACE INVESTOR AND ANALYST PRESENTATION 3 JUNE 2015 RESULTS 2015 GROWTH THROUGH PERFORMANCE
Slide 2: The Right Strategy
WORKSPACE THE RIGHT STRATEGY RIGHT MARKET London is growing and changing RIGHT RIGHT BRAND PROPERTIES Increasing Creating recognition and modern growth reputation WORKSPACE environments UNDERSTANDS WORK SPACE RIGHT RIGHT PEOPLE CUSTOMERS Driving New and performance growing companies 2
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 March March Change 2015 2014 Strong Growth Rent Roll (lfl) £46.5m £39.5m +18% Property Valuation £1,423m £1,078m +30%* Total Property Return 37% 35% Up 2% EPRA NAV (per share) £7.03 £4.96 +42% Dividend (per share) 12.04p 10.63p +13% Operational Momentum Enquiries (per month) 1,222
Slide 5: Income Statement
PERFORMANCE INCOME STATEMENT March March Change £m 2015 2014 Net Rental Income 57.7 50.3 +15% Joint Venture Income 1.2 1.1 +9% Administrative Expenses (13.8) (12.4) +11% Net Finance Costs (18.5) (18.5) 0% Trading Profit after Interest 26.6 20.5 +30% Revaluation Surplus 328.1 228.4 +44% Other items 5
Slide 6: Net Rental Income
PERFORMANCE NET RENTAL INCOME 60 £1.9m £(1.2)m £2.3m £(1.3)m £57.7m £5.7m 55 £50.3m 50 45 40 35 30 March 2014 Like-for-like Completed Completed Projects Projects Projects Underway Acquisitions Disposals March 2015 Projects Underway 6
Slide 7: Like-for-Like Properties
PERFORMANCE LIKE-FOR-LIKE PROPERTIES RENT ROLL GROWTH OCCUPANCY 100% 95% 92.2% 20% 89.8% 90.0% 90% +17.7% 85% £1.2m 80% 15% 2013 2014 2015 +9 10% +9.1% +8.5% RENT PER SQ.FT GROWTH 20% +15.8% 5% 15% +8.5% 10% +6.6% 5% £3.4m £3.0m £1.9m 0% 0% 2013 2014 2015 2013 2014 2015 • Like-for-like performance a
Slide 8: Completed Projects
PERFORMANCE COMPLETED PROJECTS REFURBISHMENTS REDEVELOPMENTS Rent Roll Rent Roll £10.0m £10.0m £8.2m £8.0m £8.0m £6.1m £6.0m £6.0m £4.0m £4.0m £3.1m £2.7m £2.1m £2.0m £2.0m £0.0m £0.0m £0.0m March 2014 March 2015 ----------------- Future March 2014 March 2015 ----------------- Future • 5 refurbishme
Slide 9: Projects Underway
PERFORMANCE PROJECTS UNDERWAY REFURBISHMENTS REDEVELOPMENTS Rent Roll Rent Roll £20.0m £16.9m £10.0m £16.0m £8.0m £12.0m £6.0m £8.2m £7.5m £8.0m £4.0m £3.1m £2.1m £4.0m £2.0m £0.3m £0.0m £0.0m March 2014 March 2015 ----------------- Future March 2014 March 2015 ----------------- Future • 8 projects
Slide 10: Drivers of Income Growth
PERFORMANCE DRIVERS OF INCOME GROWTH LIKE-FOR-LIKE PRICING + OCCUPANCY COMPLETED PROJECTS LETTING UP + PRICING PROJECTS UNDERWAY LETTING UP + PRICING + ACQUISITIONS + PIPELINE 10
Slide 11: Cash Flow
PERFORMANCE CASH FLOW £m Trading Net Cash from Operations 36 19 Dividends Paid (17) Investment Capital Expenditure (37) Property Acquisitions (80) Property Disposals 44 Capital Receipts 55 49 Share Placement 94 Settlement of Glebe Proceeds Share (30) Distributions from Joint Ventures 3 Net Movement
Slide 12: Balance Sheet
PERFORMANCE BALANCE SHEET March March £m 2015 2014 Investment Property Valuation 1,423 1,078 Investment in Joint Ventures 29 23 Net Debt (270) (338) Other (36) (37) Net Assets 1,146 726 EPRA NAV per Share £7.03 £4.96 Loan to Value 19% 31% Facility Headroom £140m £72m 12
Slide 13: Property Valuation
PERFORMANCE PROPERTY VALUATION 1,500 £328m £1,423m 1,400 1,300 1,200 £1,078m £(44)m £80m 1,100 £(57)m £38m 1,000 900 800 700 600 500 March 2014 Property Capital Capex Acquisitions Revaluation March 2015 Disposals Receipts Surplus 13
Slide 14: Revaluation Uplift
PERFORMANCE REVALUATION UPLIFT £m Uplift 2015 Main movements Pricing 59% (£105m) Like-for-Like 177 Yield 41% (£72m) Metal Box Factory £29m Completed Projects 59 ScreenWorks £15m The Pill Box £6m Residential Consents £26m Redevelopments 50 Overage £12m New Business Space £12m Cargo Works £9m Refurbis
Slide 15: Net Asset Value per Share
PERFORMANCE NET ASSET VALUE PER SHARE 8.00 7.50 £0.16 £(0.10) £0.13 £(0.01) £2.01 £(0.12) £7.03 7.00 6.50 6.00 5.50 £4.96 5.00 4.50 4.00 3.50 3.00 March 2014 Valuation Uplift Trading Profit Dividend paid Glebe Proceed Share Placement Other March 2015 March 2015 Share Payment 15
Slide 16: Debt Analysis
PERFORMANCE DEBT ANALYSIS March 2015 March 2014 Net Debt £270m £338m Total Facilities (all unsecured) £410m £410m Hedged/Fixed Rate Facilities 73% 73% Average Period to Maturity 5.8 years 6.8 years FACILITIES BY TYPE MATURITY PROFILE £250 £200 £171m Private Bank Debt £150m Placement 37% £150 38% £10
Slide 17: The Right Strategy
DIRECTION THE RIGHT STRATEGY RIGHT MARKET London is growing and changing RIGHT RIGHT BRAND PROPERTIES Increasing Creating recognition and modern growth reputation WORKSPACE environments UNDERSTANDS WORK SPACE RIGHT RIGHT PEOPLE CUSTOMERS Driving New and performance growing companies 17
Slide 18: Invest in Our Market
DIRECTION INVEST IN OUR MARKET RIGHT MARKET London is growing and changing EXISTING ESTABLISHED EMERGING LOCATIONS LOCATIONS LOCATIONS Refurbish Acquisitions Acquisitions and Redevelop 18
Slide 19: Invest in Existing Locations
DIRECTION INVEST IN EXISTING LOCATIONS THIS YEAR UNDERWAY PIPELINE SCREENWORKS, ISLINGTON THE LIGHT BULB, WANDSWORTH REFURBISHMENTS 218,000 sq. ft. 372,000 sq. ft. 399,000 sq. ft. NEW AND UPGRADED SPACE 5 projects 8 projects 6 projects £32m cost £105m cost £77m cost + more to come REDEVELOPMENTS 114
Slide 20: Grand Union Studios
DIRECTION INVEST IN EXISTING LOCATIONS GRAND UNION STUDIOS PA GRAND UNION Developer: Taylor Wimpey STUDIOS LADBROKE December 2015: GROVE Completion due 60,000 sq. ft. of new business space 20
Slide 21: Metal Box Factory, Bankside
DIRECTION INVEST IN EXISTING LOCATIONS METAL BOX FACTORY BANKSIDE £m £psf 40 3,200 35 30 2,800 25 84% occupied 2,400 at March 2015 20 2,000 Valuation up 15 68% (£29m) to £72m 1,600 10 1,200 5 800 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Rent roll Rent per sq. ft. 21
Slide 22: Metal Box Factory Video QR Code
DIRECTION INVEST IN EXISTING LOCATIONS PLEASE SCAN THIS QR CODE TO SEE THE METAL BOX FACTORY: WORKSPACE RESULTS 2015 VIDEO 22
Slide 23: Invest in Established Locations
DIRECTION INVEST IN ESTABLISHED LOCATIONS 60 GRAY’S November 2013: 160 FLEET November 2014: Acquired Acquired INN ROAD STREET MIDTOWN £26 MIDTOWN £54 Average rent per sq. ft. Average rent per sq. ft. when acquired when acquired Common area + reception: Common area + reception: Upgraded December 2014
Slide 24: Invest in Established Locations
DIRECTION INVEST IN ESTABLISHED LOCATIONS KING’S CROSS SHOREDITCH EASTON STREET OLD STREET FARRINGDON WEST END THE CITY LONDON BRIDGE WATERLOO EASTON STREET CLERKENWELL 24
Slide 25: Easton Street, Clerkenwell Acquisition
DIRECTION INVEST IN ESTABLISHED LOCATIONS EASTON STREET CLERKENWELL RATIONALE FINANCIALS Core Clerkenwell location Increasing demand £16.6m Good strategic fit Cluster of offices £794 per sq. ft. capital value Short term leaseback Refurbish for growth £10 per sq. ft. 2-year leaseback Seller owns next
Slide 26: Invest in Emerging Locations
DIRECTION INVEST IN EMERGING LOCATIONS LONDON BRIDGE WATERLOO VICTORIA EDINBURGH HOUSE KENNINGTON BATTERSEA EDINBURGH HOUSE KENNINGTON 26
Slide 27: Edinburgh House, Kennington Acquisition
DIRECTION INVEST IN EMERGING LOCATIONS EDINBURGH HOUSE KENNINGTON RATIONALE FINANCIALS Off market deal Opportunistic £25.3m Good strategic fit Cluster efficiencies £370 per sq. ft. capital value Let until 2030 Early surrender £22 per sq. ft. Metropolitan Police occupy Well known 5.2% net initial yie
Slide 28: Our Properties
DIRECTION OUR PROPERTIES RIGHT PROPERTIES Creating modern growth environments STYLE CONNECTIVITY ENVIRONMENT TO GROW 28
Slide 29: Cargo Works and Westbourne Studios
DIRECTION OUR PROPERTIES CARGO 60,000 sq. ft. WESTBOURNE 56,000 sq. ft. Size Size WORKS STUDIOS SOUTHWARK £39 LADBROKE £39 Average rent per sq. ft. GROVE Average rent per sq. ft. at March 2015 at March 2015 April 2015: March 2015: Works completed Upgrade works commenced £85 Highest rent per sq. ft.
Slide 30: Westbourne Studios Video QR Code
DIRECTION OUR PROPERTIES PLEASE SCAN THIS QR CODE TO SEE THE WESTBOURNE STUDIOS: WORKSPACE RESULTS 2015 VIDEO 30
Slide 31: Our Performance: Secure, Retain, Grow
DIRECTION OUR PERFORMANCE SECURE RIGHT BRAND Increasing recognition and reputation RETAIN RIGHT RIGHT PEOPLE CUSTOMERS Driving New and performance growing companies GROW 31
Slide 32: Secure Retain Grow
DIRECTION OUR PERFORMANCE SECURE RETAIN GROW 505,000 HITS TO WORKSPACE WEBSITE 4,000 CUSTOMERS 30 BUSINESS CENTRES 15,000 WITH HIGH SPEED DATA CONNECTIVITY 2 ENQUIRIES 114 CUSTOMER SATISFACTION SURVEYS EACH YEAR 16,000+ TWEETS FROM STAFF ON SITE STAFF BASED 1,313 ON SITE AT 10 KEY BUSINESS CENTRES 3
Slide 33: How We Make Money
DIRECTION HOW WE MAKE MONEY WHAT UNDERSTANDING CREATING THE RIGHT WE DO DEMAND SUPPLY STRATEGY MARKET LONDON KNOWLEDGE REVENUE THE RIGHT PROPERTIES + + NEW AND GROWING CUSTOMER + GROWTH RELATIONSHIPS COMPANIES THE RIGHT + + SERVICES CAPITAL TAILORED BUSINESS OPERATIONAL ENVIRONMENTS CAPABILITY 33
Slide 34: Performance
DIRECTION PERFORMANCE RENTAL GROWTH (lfl) TOTAL PROPERTY RETURN BUSINESS CENTRES 37% 40% 20% 18% £21.98 35% 15% rent psf 30% 10% 7% £24.13 25% 17% 5% ERV psf 20% 0% 15% March Sep March 2014 2014 2015 10% 5% Workspace March March 2014 2015 Workspace IPD All properties INDUSTRIAL ESTATES 20% £8.01 15%
Slide 35: Outlook
DIRECTION OUTLOOK RIGHT MARKET London is growing and changing RIGHT RIGHT BRAND PROPERTIES Increasing Creating recognition and modern growth reputation WORKSPACE environments UNDERSTANDS WORK SPACE RIGHT RIGHT PEOPLE CUSTOMERS Driving New and performance growing companies 35
Slide 36: Questions
QUESTIONS QUESTIONS QUESTIONS 36 36
Slide 37: Supplementary Information
SUPPLEMENTARY INFORMATION 37
Slide 38: Appendix 1: Redevelopment Projects
APPENDIX 1 REDEVELOPMENT PROJECTS Development March 2015 Expected Residential At March 2015 partner Valuation Rent Roll completion units no. Commercial space returned Other proceeds Estimated Estimated Cash Cash Overage to Area ERV Rent* received to come come ** Completed ScreenWorks Taylor Wimpey £
Slide 39: Appendix 2: Refurbishment Projects
APPENDIX 2 REFURBISHMENT PROJECTS Actual/ Estimated Estimated Estimated Cost to Estimated Unaffected Upgraded New ERV Rent at 90% March 2015 At March 2015 Valuation cost Complete Completion area area space (Average) occupancy * Rent Roll * Completed Leyton Industrial Village (phase 1) £14m £3m - Apr
Slide 40: Appendix 3: Workspace Portfolio
APPENDIX 3 WORKSPACE PORTFOLIO Workspace property Acquisitions Redevelopments ISLINGTON Refurbishments Crossrail Northern Line Extension KING’S CROSS SHOREDITCH BETHNAL GREEN OLD STRATFORD STREET FARRINGDON PADDINGTON WEST END THE CITY LONDON CANARY BRIDGE WHARF WATERLOO VICTORIA EARLS COURT KENNING
Slide 41: Appendix 4: Portfolio Breakdown
APPENDIX 4 PORTFOLIO BREAKDOWN PORTFOLO RENT ROLL (lfl) VALUE As at 31 March 2015 As at 31 March 2015 Like-for-like properties 54% Industrials 11% Acquisitions 7% Completed Redevelopments projects 14% 13% Refurbishments 12% Business centres 89% 41
Slide 42: 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