Workspace Group PLC

Investor Presentation • Sep 30, 2013

INVESTOR AND ANALYST PRESENTATION 12 NOVEMBER 2013

WORKSPACE INTERIM RESULTS MOMENTUM MAINTAINED

WORKSPACE

Jamie Hopkins Chief Executive Officer

PERFORMANCE

Graham Clemett Chief Financial Officer

DIRECTION

Jamie Hopkins Chief Executive Officer

QUESTIONS

Sept 2013	March 2013	Change
£45.9m	£44.2m	+4%
£14.37	£14.00	+3%
90.9%	89.9%	Up 1.0%
£921m	£830m	+12%*
£4.04	£3.48	+16%
Sept 2013	Sept 2012	Change
£9.7m	£8.8m	+10%
3.54p	3.22p	+10%

Note

* Underlying increase

** Excluding exceptional interest costs and other income/(expenses)

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 Sheet	Sept 2013	March 2013	Change
Portfolio Valuation	£921m	£830m	+12%*
EPRA NAV (per share)	£4.04	£3.48	+16%
Loan to Value	35%	40%	Down 5%
Debt Maturity Profile	7.3 years	2.9 years	Up 4.4 yrs

* Underlying increase

** Excluding exceptional interest costs and other income/(expenses)

PERFORMANCE TRADING PROFIT AFTER INTEREST

PERFORMANCE RENT ROLL GROWTH

REFURBISHMENTS

REDEVELOPMENTS

PERFORMANCE REFURBISHMENT PROJECTS

	Projects	Current Rent Roll	Future Capex	Upgraded Space	New Space	Potential 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 impacted by refurbishment
• ** Currently reported in like-for-like category

Additional detail set out in Appendix I

PERFORMANCE COMPLETED REFURBISHMENTS

PERFORMANCE REDEVELOPMENT PROJECTS

	Schemes	Current Value	Current Rent Roll	Residential Units	Business Space	Potential Future Rent	Other
Underway	5	£122m	£1.4m	1,493	231,000	£4.6m	£73m cash + overage
With Planning	3			830	163,000
Planning Stage	4			702	90,000

PERFORMANCE REFURBISHMENT & REDEVELOPMENT RENT ROLL ESTIMATES

REFURBISHMENTS REDEVELOPMENTS UNDERWAY

PERFORMANCE CASH FLOW

		£m
Trading
Net cash from operations	11
Dividends paid	(10)	1
Investment
Capital Expenditure	(14)
Disposals/Capital Receipts	21	7
Financing
Cancellation of hedging contracts	(9)
Release of secured bank facility funds	7	(5)
Refinancing costs	(3)
Net movement in six months		3
Net Debt at March 2013		(327)
Net Debt at September 2013		(324)

PERFORMANCE BALANCE SHEET

Sept 2013	March 2013
£921m	£830m
£22m	£21m
(£324m)	(£327m)
(£7m)	£0m
(£23m)	(£24m)
£589m	£500m
£4.04	£3.48
35%	40%
£86m	£55m

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

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 limits
• Net cash proceeds from any disposals to be allocated as follows:

Net Proceeds	Workspace	Former lenders
Up to £92m	100% (£92m)	0% (£0m)
£92m to £170m	50% (£39m)	50% (£39m)
£170m to £200m	70% (£21m)	30% (£9m)
Over £200m	100%	0%

• Maximum proceeds share to former lenders £48m (£39m + £9m)

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
Proceeds Share:
Workspace	£99m	£79m
Former lenders	£7m	£0m

Provision of £7m for Glebe Proceeds Share at 30 September 2013

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 six months	£38m	£4m	£52m	£2m	£96m
Net Initial Yield	7.1%
Rent per sq. ft.	£14.86
Capital Value per sq. ft.	£182

Disposals in Period

Number of properties	1	3	4
Proceeds	£12m	£8m	£20m

VERULAM HOUSE, GRAYS INN ROAD, WC1

VERULAM HOUSE, GRAYS INN ROAD, WC1

RATIONALE

• Core midtown location: Crossrail
• Good strategic fit: cluster efficiencies
• Strong customer demand: in-house data
• Optimal floor configuration: unit sizing
• Operational benefits: Hatton de-cant
• Large surface car park: future opportunities
• Under-managed and under-rented

FINANCIALS

• £18.1m
• £433 per sq. ft. capital value
• Minimal day one expenditure
• Fully occupied by 7 customers
• Average rent currently £26 per sq. ft.

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APPENDIX I

REFURBISHMENT PROJECTS

Project Stage	September 2013 Valuation	Expected Cost	Cost to Complete	Completion	Upgraded area (Expected)	New space (Expected)	Project ERV (Average)	Updated ERV (Average)	Expected rent at 90% occupancy
Completed/Letting
Canalot Studios				Sept 2012	32,702	16,268	£24	£27	£1.2m
Whitechapel				Oct 2012	-	6,532	£21	£22	£0.1m
Chester House (phase 2)				March 2013	-	8,903	£30	£34	£0.3m
Leyton l (phase 1)				April 2013	-	26,600	£12	£12	£0.3m
Westminster (phase 1)				August 2013	5,599	4,464	£28	£28	£0.3m
Exmouth House				August 2013	52,896	5,936	£28	£34	£1.8m
Space not impacted by refurbishment				-	-	-	-	-	£2.3m
	£87m				91,197	68,703			£6.3m
Construction
Metal Box Factory		£15m	£9m	H1 2014	82,000	20,000	£28	£30	£2.8m
The Pill Box		£9m	£2m	H1 2014	-	42,000	£22	£24	£0.9m
	£38m	£24m	£11m		82,000	62,000			£3.7m
Design (with planning)
Bounds Green		£1m		2014	-	14,000	£11		£0.2m
Leyton (phase 2)		£2m		2014	-	21,000	£12		£0.2m
Baldwins Gardens		£21m		2015	-	64,000	£40		£2.3m
Barley Mow Centre		£7m		2015	-	20,000	£30		£0.5m
Linton House		£7m		2015	30,000	16,000	£37		£1.6m
Westminster (phase 2)		£16m		2015	-	45,000	£30		£1.2m
		£54m			30,000	180,000			£6.0m

APPENDIX II

REDEVELOPMENT PROJECTS

Project Stage	Development partner		September Expected 2013 Valuation completion	Residential units	Commercial space		Other proceeds
				No.	Area	Rent*	Cash	Overage
Underway
The Filaments (phase 1)	Mount Anvil		H2 2014	209	53,000	£1.0m	n/a	
Screenworks	Taylor Wimpey		H1 2014	72	61,000	£1.4m	£4.8m	
Grand Union	Taylor Wimpey		H2 2015	145	60,000	£1.2m	£5.9m	
Bow (phase 1)	Peabody		H2 2015	267	10,000	£0.2m	£11.5m	
The Biscuit Factory	Grosvenor		2017	800	47,000	£0.8m	£51.0m	
		£122m		1,493	231,000	£4.6m	£73.2m
With Planning
Faircharm			2015-2016	148	52,000
Bow (phase 2)			2016	290	41,000
Poplar			2017	392	70,000
				830	163,000
At Planning Stage (Indicative scaling)
Marshgate				300	8,000
The Filaments (phase 2)				72	15,000
Rainbow				200	34,000
Highway				130	33,000
				702	90,000

* Expected Rent at 90% occupancy

APPENDIX III UNDERSTANDING CUSTOMERS

APPENDIX IV UNDERSTANDING CUSTOMERS

APPENDIX V UNDERSTANDING OUR CUSTOMERS

MARKETING STRATEGIES

BILLBOARDS & SIGNAGE 10,000 SQ. FT. ACROSS LONDON

LOCAL MAIL & E-SHOTS RETAIL & LEISURE LINKS TRANSPORT HUBS

WEBSITE

467,000 VISITS HEAT MAPPING SEARCH ENGINE OPTIMISATION PPC (PAY PER CLICK) EFFICIENCY TRACKING AND FOLLOW UP SOCIAL MEDIA STRATEGY

TELEPHONE 14,000 CALLS

EVENTS 75 CUSTOMER EVENTS 3,000 ATTENDEES

REFERRALS & RECOMMENDATIONS 82% CUSTOMER SATISFACTION

PR AND MEDIA COVERAGE

RESULT

INCREASED INCOME

DATA AND KNOWLEDGE

INTIMATE UNDERSTANDING

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 Group does not make any representation or warranty that the results anticipated by such forward looking statements will be achieved and this presentation should not be relied upon as a guide to future performance.