TIDMWKP
RNS Number : 8381P
Workspace Group PLC
12 October 2023
12 October 2023
Workspace GROUP PLC
SECOND Quarter business update FOR THE
PERIOD ENDING 30 SEPTEMBER 2023
Workspace Group PLC ("Workspace"), London's leading owner and
operator of sustainable, flexible work space, provides a business
update for the second quarter ending 30 September 2023.
HIGHLIGHTS
-- Good customer demand with 323 new lettings completed in the
quarter, with a total rental value of GBP8.0m per annum
-- Strong rental growth with like-for-like rent roll up 3.0% in
the quarter, up 6.3% in the half year to GBP108.6m, and up 9.9%
over the last year
-- Improved pricing with like-for-like rent per sq. ft. up 3.3%
in the quarter , the ninth consecutive quarterly increase, and 6.6%
in the half year, to GBP 42.98
-- Like-for-like occupancy broadly stable at 88.7% (30 June 2023: 89.2%)
-- Good progress on disposals of non-core assets, with GBP92.8m
completed in the first half of the year, and a further GBP9.0m
disposal exchanged in October
-- Robust balance sheet with GBP133m of cash and undrawn
facilities and proforma LTV of 32.6% (based on 31 March 2023
valuation)
Graham Clemett, Chief Executive Officer, Workspace Group PLC,
commented:
" Our offer is tailored to the needs of bright, growing SMEs,
the unsung heroes of the London economy. Our strong first half
performance demonstrates that this focus sets us apart from others
in the market.
Space requirements are undoubtedly changing, which is playing to
our advantage. Our customers want a great working environment, in
the right place, with true, all-round flexibility - not just a
shorter lease - at good value. This is driving strong demand and
with occupancy stable at around 90%, the resulting pricing tension
enables us to continue to improve rents.
We have also made good progress in the planned disposal of
non-core assets, enabling us to recycle capital efficiently,
selectively investing in our programme of upgrades across the
portfolio.
We enter the second half of the year in a strong position.
Although mindful of the wider economic challenges, we are confident
that we are well placed with a differentiated offer that resonates
with London's SMEs."
Customer activity
We have seen good demand with 323 new lettings completed in the
second quarter with a total rental value of GBP8.0m.
Monthly Average Monthly Activity
-------------------------
Q2 Q1 FY 30 Sep 31 Aug 31 Jul
2023/24 2023/24 2022/23 2023 2023 2023
---------- ------- ------- -------
Enquiries 837 738 798 916 824 771
Viewings 527 491 517 578 480 524
Lettings 108 87 109 112 111 100
---------- --------- --------- ------- ------- -------
Total rent roll increased by 1.3% (GBP1.8m) in the first half to
GBP141.9m, as detailed below:
Total Rent Roll GBPm
------------------------- ------
At 31 March 2023 140.1
Like-for-like portfolio 6.4
Disposals (4.8)
Other 0.2
At 30 September 2023 141.9
------------------------- ------
Like-for-like rent roll was up 3.0% in the quarter, 6.3% in the
half year, to GBP108.6m and 9.9% over the last year (with a 3.4%
increase in like-for-like rent roll reported in the six months to
31 March 2023). Like-for-like rent per sq. ft. increased by 3.3% in
the second quarter and 6.6% in the half year, to GBP42.98.
Like-for-like occupancy remained broadly stable, down by 0.5% in
the quarter to 88.7%.
Quarter Ended
--------------------------------------
30 Sep 23 30 Jun 23** 31 Mar 23**
---------- ------------ ------------
Like-for-like occupancy 88.7% 89.2% 89.3%
Like-for-like occupancy
change* (0.5)% (0.1)% 0.0%
Like-for-like rent per GBP42.98 GBP41.60 GBP40.30
sq. ft.
Like-for-like rent per
sq. ft. change 3.3% 3.2% 3.0%
Like-for-like rent roll GBP108.6m GBP105.4m GBP102.2m
Like-for-like rent roll
change 3.0% 3.1% 1.8%
*Absolute change
**Restated for the reclassification of Westbourne Studios, which
is now included in the like-for-like category
Portfolio activity
In June, we completed on the sale of five light industrial and
logistics properties in Bracknell, Crawley, Poyle, Theale and
Weybridge for GBP82.0m, in line with their March 2023
valuations.
In the second quarter, we completed on the sale of Columbia
House, Farnborough for GBP7.3m and Ancells Road, Fleet for GBP3.5m,
both in line with their March 2023 valuations.
In aggregate, these disposals have delivered GBP92.8m of
proceeds in the first half of the year, at a net initial yield of
5.1%.
In October, we exchanged on the sale of an advertising tower
adjacent to The Mille Building in Brentford for GBP9.0m in line
with the March 2023 valuation, with completion expected by the end
of the month.
Financing
Net debt increased by GBP33m in the quarter to GBP867m,
following payment of the full year dividend. Cash and undrawn
facilities were GBP133m as at 30 September 2023 with LTV at 32.6%
on a proforma basis, based on the 31 March 2023 valuation. At 30
September 2023, our average cost of debt was 4.1%.
Half year results
Workspace will publish its half year results for the six months
to 30 September 2023 on 21 November 2023. A presentation to
analysts and investors will be held at 9.00 in our recently opened
Eventspace, at our refurbished Salisbury House, 114 London Wall,
EC2M 5QA.
- ENDS -
For further information, please contact:
Workspace Group PLC 020 7138 3300
Graham Clemett, Chief Executive Officer
Dave Benson, Chief Financial Officer
Paul Hewlett, Director of Strategy & Corporate
Development
Clare Marland, Head of Corporate Communications
FGS Global
020 7251 3801
Chris Ryall
Guy Lamming
Notes to Editors
About Workspace Group PLC:
Workspace is London's leading owner and operator of flexible
workspace, currently managing 4.7 million sq. ft. of sustainable
space at 79 locations in London and the South East.
We are home to some 4,000 of London's fastest growing and
established brands from a diverse range of sectors. Our purpose, to
give businesses the freedom to grow, is based on the belief that in
the right space, teams can achieve more. That in environments they
tailor themselves, free from constraint and compromise, teams are
best able to collaborate, build their culture and realise their
potential.
We have a unique combination of a highly effective and scalable
operating platform, a portfolio of distinctive properties, and an
ownership model that allows us to offer true flexibility. We
provide customers with blank canvas space to create a home for
their business, alongside leases that give them the freedom to
easily scale up and down within our well-connected, extensive
portfolio.
We are inherently sustainable - we invest across the capital,
breathing new life into old buildings and creating hubs of economic
activity that help flatten London's working map. We work closely
with our local communities to ensure we make a positive and lasting
environmental and social impact, creating value over the long
term.
Workspace was established in 1987, has been listed on the London
Stock Exchange since 1993, is a FTSE 250 listed Real Estate
Investment Trust (REIT) and a member of the European Public Real
Estate Association (EPRA).
Workspace(R) is a registered trademark of Workspace Group PLC,
London, UK.
LEI: 2138003GUZRFIN3UT430
For more information on Workspace, visit www.workspace.co.uk
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END
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