Slide 1: Workspace Results 2016: Strong Performance from Active Management
WORKSPACE INVESTOR AND ANALYST PRESENTATION 8 JUNE 2016 RESULTS 2016 STRONG PERFORMANCE FROM ACTIVE MANAGEMENT AND CAPITAL RECYCLING
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 Home to new and
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 Active Management 2016 2015 Rent Roll (lfl) £48.8m £42.3m 15.4% Rent per sq. ft. (lfl) £22.37 £19.22 16.4% Enquiries (per month) 1,029 1,222 (15.8)% Occupancy (lfl) 90.7% 91.8% (1.1)% Property Valuation £1,779m £1,423m 20.9%* Capital Value per sq. ft. (lfl) £359
Slide 5: Income Statement
PERFORMANCE INCOME STATEMENT March March Change £m 2016 2015 Net Rental Income 74.1 57.7 +28% Joint Venture Income 1.3 1.2 +8% Administrative Expenses (14.6) (13.8) +6% Net Finance Costs (16.9) (18.5) (9)% Trading Profit after Interest 43.9 26.6 +65% Investment Property Surplus 296.6 328.1 Joint Ven
Slide 6: Net Rental Income
PERFORMANCE NET RENTAL INCOME £80m £2.9m £0.2m £74.1m £4.8m £0.9m £70m £8.0m £60m £57.7m £50m £40m £30m £20m £10m £0m 2014/15 Like-for-Like Completed Refurbishments & Acquisitions Disposals 2015/16 Properties Projects Redevelopments 6
Slide 7: Like-for-Like Properties
PERFORMANCE LIKE-FOR-LIKE PROPERTIES RENT ROLL OCCUPANCY £55m 100% 95% 92.2% 91.8% 91.1% 91.3% 3.6% 90.4% 90.7% £50m 89.7% 2.0% 90% 3.4% 5.7% 85% £45m 3.2% 7.7% 80% Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 £40m 4.0% RENT PER SQ. FT. £35m £24 3.3% £22 3.6% 1.7% 7.0% £20 2.8% £30m 5.3% £18 4.0
Slide 8: Completed Projects
PERFORMANCE COMPLETED PROJECTS REFURBISHMENTS REDEVELOPMENTS Rent Roll Rent Roll £20m £4m £16.1m £3.3m £15m +£4.1m £3m £12.0m +£2.0m £10m £2m £7.0m £1.3m £5m £1m £0.2m £0m £0m March 2015 March 2016 ------------- Future March 2015 March 2016 ------------- Future • 4 business centres, 272,000 sq. ft.
Slide 9: Refurbishments & Redevelopments
PERFORMANCE REFURBISHMENTS & REDEVELOPMENTS REFURBISHMENTS REDEVELOPMENTS Rent Roll Rent Roll £20m £18.8m £4m £3.7m £16m £3m £12m £9.0m £9.3m £1.8m £2m £1.5m £8m £1m £4m £0m £0m March 2015 March 2016 ------------- Future March 2015 March 2016 ------------- Future Underway Starting 2016/17 Underway S
Slide 10: Acquisitions & Disposals
PERFORMANCE ACQUISITIONS & DISPOSALS ACQUISITIONS DISPOSALS Rent Roll Rent Roll £6m £6m £5.4m £4.9m £5m £5m £4m £3.6m £4m £3m £3m £2m £2m £1m £1m £0.0m £0m £0m March 2015 March 2016 At disposal March 2016 Acquisitions prior year Acquisitions 2015/16 • 5 properties acquired in year, 4 in prior years
Slide 11: Cash Flow
PERFORMANCE CASH FLOW £m Total Trading Net Cash from Operations after Interest 49 28 Dividends Paid (21) Investment Capital Expenditure (57) Property Acquisitions (107) Property Disposals 93 (34) Capital Receipts 30 Distributions and Proceeds from Joint Ventures 9 Other Items (2) Net Movement in yea
Slide 12: Balance Sheet
PERFORMANCE BALANCE SHEET March March £m 2016 2015 Investment Property Valuation 1,779 1,423 Other Investment 27 29 Net Debt (276) (270) Other (12) (36) Net Assets 1,518 1,146 EPRA NAV per Share £9.23 £7.03 Loan to Value 16% 19% Facility Headroom £134m £140m 12
Slide 13: Property Valuation
PERFORMANCE PROPERTY VALUATION £2,000m £1,779m £1,800m £308m £1,600m £107m £1,423m (£85m) £1,400m £56m (£30m) £1,200m £1,000m £800m £600m 2014/15 Property Capital Capex Acquisitions Revaluation 2015/16 Disposals Receipts Surplus 13
Slide 14: Revaluation Uplift
PERFORMANCE REVALUATION UPLIFT Uplift 2016 Main movements Pricing £82m (63%) Like-for-Like £130m Net Initial Yield £48m (37%) Vox Studios £26m Completed Projects £93m Metal Box Factory £24m Grand Union Studios £14m Residential Consents £41m Redevelopments £55m Overage £10m New Business Space £4m Ref
Slide 15: Debt Analysis
PERFORMANCE DEBT ANALYSIS March March 2016 2015 Net Debt £276m £270m Average Interest Cost 5.1% 5.4% Total Facilities (all unsecured) £410m £410m Hedged/Fixed Rate Facilities 50% 73% Average Period to Maturity (*proforma) 5.9 years* 5.8 years FACILITIES BY TYPE MATURITY PROFILE £200m £150m Private B
Slide 16: 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 Home to new and
Slide 17: Property Portfolio
DIRECTION PROPERTY PORTFOLIO Workspace Property 17
Slide 18: Active Management
DIRECTION ACTIVE MANAGEMENT Like-for-Like Redevelopments Crossrail Acquisitions Refurbishments Northern Line Extension 18
Slide 19: Redevelopments: Last Two
DIRECTION REDEVELOPMENTS: LAST Offices > Studios TWO > Storage > > Workshops WANDSWORTH BUSINESS VILLAGE WANDSWORTH 2001 acquired 2010 planning consent 87,000 sq. ft. office and light industrial GRAND UNION >The Business Village CENTRE LADBROKE 3-9 Broomhill Road > Wandsworth > London SW18 4JQ GROVE
Slide 20: Redevelopments: Last Two
DIRECTION REDEVELOPMENTS: LAST TWO THE LIGHT BULB WANDSWORTH March 2015 opened £28 current ERV per sq. ft. 53,000 sq. ft. new business centre £45 highest rent achieved per sq. ft. 91% occupancy at March 2016 Target return exceeded £22 original ERV per sq. ft. GRAND UNION STUDIOS LADBROKE GROVE March
Slide 21: Redevelopments: Next Two
DIRECTION REDEVELOPMENTS: NEXT TWO THE FAIRCHARM DEPTFORD 1999 acquired 2013 planning consent 100,000 sq. ft. industrial THE BISCUIT FACTORY BERMONDSEY 1999 acquired 2013 planning consent 560,000 sq. ft. 330,000 sq. ft. industrial New image to come 21
Slide 22: Redevelopments: Next Two
DIRECTION REDEVELOPMENTS: NEXT TWO THE FAIRCHARM DEPTFORD H1 2017 due to open £20 original ERV per sq. ft. 36,000 sq. ft. new business centre £21 current ERV per sq. ft. THE BISCUIT FACTORY BERMONDSEY H1 2018 due to open £20 original ERV per sq. ft. 48,000 sq. ft. additional new £35 current ERV per
Slide 23: Refurbishments: Last Two
DIRECTION REFURBISHMENTS: LAST TWO VOX STUDIOS VAUXHALL 104,000 sq.ft. with further £17m cost expansion potential £30 original ERV per sq. ft. 51,000 sq. ft. new business centre £48 current ERV per sq. ft. January 2016 opened Target return exceeded 68% occupancy at May 2016 THE PRINT ROOMS SOUTHWARK
Slide 24: Refurbishments: Last Two
DIRECTION REFURBISHMENTS: LAST TWO VOX STUDIOS VAUXHALL THE PRINT ROOMS SOUTHWARK 24
Slide 25: Refurbishments: Next Two
DIRECTION REFURBISHMENTS: NEXT TWO HATTON SQUARE BUSINESS CENTRE HATTON GARDEN 43,000 sq. ft. low grade £23 highest rent achieved office space per sq. ft. HOLYWELL CENTRE SHOREDITCH 22,000 sq. ft. low grade £23 highest rent achieved office space per sq. ft. 25
Slide 26: Refurbishments: Next Two
DIRECTION REFURBISHMENTS: NEXT TWO THE RECORD HALL HATTON GARDEN 61,000 sq. ft. new business centre £40 original ERV per sq. ft. £24m cost £58 current ERV per sq. ft. H1 2017 completion HOLYWELL CENTRE SHOREDITCH 50,000 sq. ft. new business centre £45 original ERV per sq. ft. £25m cost £56 current E
Slide 27: Direction: Invest in Disposals
DIRECTION DIRECTION INVEST IN DISPOSALS DISPOSALS LEYTON INDUSTRIAL VILLAGE OCTOBER 2015 136,000 sq. ft. industrial space £23m NIY of 4.8% 25% premium to March 2015 valuation PARK ROYAL CLUSTER DECEMBER 2015 51,000 sq. ft. of light industrial space £7m NIY of 4.9% 16% premium to September 2015 valua
Slide 28: Acquisitions Update
DIRECTION ACQUISITIONS UPDATE 60 GRAYS INN ROAD VESTRY STREET STUDIOS 40,000 sq. ft. 23,000 sq. ft. Potential extension 100% occupancy Average rent of £26 per sq. ft. Highest rent of £73 per sq. ft. Average rent of £23 per sq. ft. Average rent of £31 per sq. ft. Outdated design Highest rent of £52 p
Slide 29: Acquisitions Update
DIRECTION ACQUISITIONS UPDATE 25 & 28 EASTON STREET ANGEL HOUSE 21,000 sq. ft. 46,000 sq. ft. Potential extension 100% occupancy 100% occupancy Average rent of £29 per sq. ft. Average rent of £8 per sq. ft. Rent increases as leases expire Lease expiry due May 2017 Discussions with tenant Mixed speci
Slide 30: Acquisitions Update
DIRECTION ACQUISITIONS UPDATE GARRATT LANE 43,000 sq.ft. and 200 space car park Master planning over 6 acres underway Vacant Let to match development plans No income Rent of £16 per sq. ft. ACQUIRED: SEPTEMBER 2015 30
Slide 31: 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 Home to new and growing com
Slide 32: Questions
QUESTIONS WORKSPACE
Slide 33: Supplementary Information
SUPPLEMENTARY | INFORMATION ie WORKSPACE
Slide 34: Appendix 1: Refurbishment Projects
APPENDIX 1 REFURBISHMENT PROJECTS Actual/ Actual/ Estimated Estimated Estimated Cost to Estimated Unaffected Upgraded New ERV Rent at 90% March 2016 March 2015 At March 2016 Valuation cost Complete Completion area area space (Average) occupancy* Rent Roll* Rent Roll* Completed Metal Box Factory £97m
Slide 35: Appendix 2: Redevelopment Projects
APPENDIX 2 REDEVELOPMENT PROJECTS Development March 2016 Expected Residential At March 2016 partner Valuation Rent Roll completion units no. Commercial space returned Other proceeds Estimated Estimated Cash Cash Overage Area ERV Rent * received to come to come Completed The Light Bulb Mount Anvil £3
Slide 36: Appendix 3: Customer Portfolio November 2015
APPENDIX 3 CUSTOMER PORTFOLIO NOVEMBER 2015 DATA REPRESENTS 50% OF TOTAL RENT ROLL % Net % Net Rent Rent 1 Marketing 8.62 31 Quantity Surveyors 1.07 2 Business Consultancy 6.62 32 Travel 1.01 3 Architect 5.50 33 Professional Development 1.00 4 Finance 4.83 34 Broadcasting 0.97 5 Brand Design 4.38 35
Slide 37: Appendix 4: Customer Portfolio March 2016
APPENDIX 4 CUSTOMER PORTFOLIO MARCH 2016 DATA REPRESENTS 92% OF TOTAL RENT ROLL % Net % Net Rent Rent 1 Marketing 6.14 31 Leisure 1.16 2 Fashion 5.28 32 Talent Management 1.00 3 Finance 5.26 33 Web Design 0.95 4 Business Consultancy 4.54 34 Technology Design 0.93 5 Not For Profit 4.34 35 Events 0.92
Slide 38: Appendix 5: How We Make Money
APPENDIX 5 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 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