6 July 2023 WORKSPACE GROUP PLC
FIRST QUARTER BUSINESS UPDATE FOR THE
PERIOD ING 30 JUNE 2023
Workspace Group PLC (“Workspace”), London’s leading owner and operator of sustainable, flexible work space, provides a business update for the first quarter ending 30 June 2023.
HIGHLIGHTS
· Resilient levels of customer demand with 260 new lettings completed in the quarter, with a total rental value of £7.0m per annum
· Like-for-like occupancy stable at 89.2%
· Like-for-like rent roll up 3.2% (£3.2m) in the quarter to £103.6m
· Like-for-like rent per sq. ft. up 3.3% in the quarter to £41.73
· £82m of non-core disposals completed and further £7m exchanged for sale
· Planning consent obtained for 218,000 sq. ft. office redevelopment at Havelock Terrace, Battersea
· Robust balance sheet with £166m of cash and undrawn facilities and proforma LTV of 31% (based on 31 March 2023 valuation)
Graham Clemett, Chief Executive Officer, Workspace Group PLC, commented:
“We have had a good start to the new financial year highlighting the appeal of our flexible offer, with stable like-for-like occupancy and continued improvement in pricing. As always, we are staying very close to our customers monitoring trends on a real time basis. While we remain vigilant, London’s SMEs are proving resilient in the current economic climate.
We continue to make good progress on the disposal of non-core properties completing the sale of the previously announced portfolio of five industrial estates for £82m, and in June exchanging for sale a further industrial estate for £7m.
Our extensive property portfolio across London provides us with a rich opportunity to upgrade and reposition our buildings to meet both the changing needs of our customers and higher environmental standards. We have a number of projects underway and we obtained planning consent in May for a significant office redevelopment adjacent to Battersea Power Station.”
Customer activity
We have seen good demand in the first quarter with 260 new lettings completed with a total rental value of £7.0m.
| Monthly Average | Monthly Activity | ||||
| Q12023/24 | Q12022/23 | 30 Jun2023 | 31 May2023 | 30 Apr2023 | |
| Enquiries | 738 | 757 | 777 | 783 | 655 |
| Viewings | 491 | 508 | 536 | 530 | 406 |
| Lettings | 87 | 108 | 93 | 92 | 75 |
Total rent roll increased by 0.2% (£0.3m) in the first quarter to £140.4m, as detailed below:
| Total Rent Roll | £m |
| At 31 March 2023 | 140.1 |
| Like-for-like portfolio | 3.2 |
| Completed projects | 0.2 |
| Projects underway and design stage | 0.4 |
| South East portfolio | 0.1 |
| Disposals | (3.6) |
| At 30 June 2023 | 140.4 |
Like-for-like rent per sq. ft. increased by 3.3% in the first quarter to £41.73, with like-for-like occupancy stable, down by 0.1% to 89.2%. The net result was a 3.2% increase in like-for-like rent roll to £103.6m.
| Quarter Ended | |||
| 30 Jun 23 | 31 Mar 23** | 31 Dec 22** | |
| Like-for-like occupancy | 89.2% | 89.3% | 89.3% |
| Like-for-like occupancy change* | (0.1)% | 0.0% | 0.0% |
| Like-for-like rent per sq. ft. | £41.73 | £40.41 | £39.30 |
| Like-for-like rent per sq. ft. change | 3.3% | 2.8% | 2.4% |
| Like-for-like rent roll | £103.6m | £100.4m | £98.9m |
| Like-for-like rent roll change | 3.2% | 1.5% | 2.4% |
*Absolute change
** Prior periods restated for the reclassification of Mare Street, Castle Lane and Wilson Street, which are now included in like-for-like
Portfolio activity
In May, we received planning consent for a major redevelopment project at Havelock Terrace, Battersea, which will deliver a new 218,000 sq. ft. office building adjacent to Battersea Power Station.
In June, we completed on the sale of five non-core properties for £82m with a corresponding reduction of £3.6m in rent-roll. The properties sold comprise light industrial and logistics properties in Bracknell, Crawley, Poyle, Theale and Weybridge. We also exchanged contracts for the sale of another non-core industrial estate in Farnborough for £7m, in line with the 31 March 2023 valuation. Completion is expected to take place in July 2023.
Financing
Net debt decreased by £68m in the quarter to £834m, with cash and undrawn facilities of £166m as at 30 June 2023 and LTV at 31% on a proforma basis, based on the 31 March 2023 valuation. At 30 June 2023, our average cost of debt was 4.0%.
Chairman succession
As previously announced, Stephen Hubbard steps down as Chairman following the AGM today and will be replaced by Duncan Owen. Duncan has been a Non-Executive Director of Workspace since July 2021.
– S –