Workspace Group PLC

Investor Presentation • Jun 24, 2013

INVESTOR AND ANALYST PRESENTATION 11 JUNE 2013

WORKSPACE RESULTS 2013 DRIVING VALUE

WORKSPACE

Jamie Hopkins Chief Executive Officer

PERFORMANCE

Graham Clemett Chief Financial Officer

DIRECTION

Jamie Hopkins Chief Executive Officer

QUESTIONS

Repositioned the business

Repositioning the portfolio

POSITIONED FOR GROWTH

Repositioned the balance sheet

	March 2013	March 2012	Change
Strong Growth
Rent Roll (lfl)	£45.5m	£41.7m	+9%
Valuation	£830m	£760m	+8%*
EPRA NAV (per share)	£3.48	£3.08	+13%
Trading Profit after Interest	£17.9m	£16.0m	+12%
Operational Momentum
Enquiries (per month)	1,037	1,009	+3%
Occupancy (lfl)	89.8%	87.7%	Up 2.1%
Rent per sq. ft (lfl)	£13.75	£12.90	+7%
Dividend (per share)	9.7p	8.8p	+10%

* Underlying increase

PERFORMANCE HIGHLIGHTS

	March 2013	March 2012	Change
Net Rental income	£47.1m	£44.8m	+5%
Trading Profit After Interest	£17.9m	£16.0m	+12%
Profit Before Tax	£76.4m	£48.5m	+58%
Dividend Per Share	9.7p	8.8p	+10%
EPRA Net Asset Value Per Share	£3.48	£3.08	+13%
Like-for-like Net Initial Yield	7.3%	7.2%	-
Total Property Return (IPD)	13.8%	13.4%	-
Loan to Value	40%	41%	-
Average Interest Cost	5.0%	5.1%	-

PERFORMANCE TRADING PROFIT AFTER INTEREST

PERFORMANCE LFL OCCUPANCY & RENT ROLL TRENDS

PERFORMANCE REFURBISHMENT PROJECTS

	Projects	Current Value*	Current Rent Roll*	Total Cost	Cost to Complete	Upgraded Space	New Space	Potential Future Rent**	Uplift in Rent
Completed	4	£23m	£0.7m	£12m	-	33,000	58,000	£1.9m	+ £1.2m
Underway	4	£49m	£1.9m	£30m	£19m	140,000	72,000	£5.2m	+ £3.3m
Design Stage	6	£31m	£1.7m	£51m	£51m	34,000	225,000	£6.8m	+ £5.1m

* At 31 March 2013

** See Appendix I

PERFORMANCE REDEVELOPMENT PROJECTS

	Projects	Current Value*	Current Rent Roll*	Residential Units	New Business Space	Potential Future Rent**	Other
Underway	4	£73m	£0.3m	693	189,000	£3.8m	£22m cash + overage
With Planning	3	£43m	£1.8m	1,238	142,000	-	-
Planning Stage	5	£45m	£2.1m	1,075	205,000	-	-

* At 31 March 2013

** See Appendix II

PERFORMANCE REFURBISHMENT & REDEVELOPMENT RENT ROLL PROJECTION

Underway - Redevelopment Underway - Refurbishment Completed - Refurbishment

PERFORMANCE PROPERTY VALUATION

PERFORMANCE CASH FLOW

		£m
Trading
Net cash from operations	22
Dividends paid	(13)	9
Investment
Capital Expenditure	(29)
Joint Venture Investments	(8)	(20)
Disposals/Capital Receipts	17
Financing
Retail Bond Issue	58
Repayment of bank borrowings	(58)	(1)
Bond Issue Costs	(1)
Other		(2)
Net movement in year		(14)
Net Debt at March 2012		(314)
Net Debt at March 2013		(328)

	March 2013	Impact of Refinancing	Pro-forma
Total Facilities	£383m	+£27m	£410m
Facility headroom (including cash)	£55m	+£27m	£82m
Term to Maturity (average)	2.9 Years	+4.9 Years	7.8 Years
Average Interest Cost	5.0%	+0.4%	5.4%
Loan to Value	40%	-	40%
Facilities by type:
Secured	£325m	(£325m)	-
Unsecured	£58m	+£352m	£410m

PERFORMANCE PROFORMA DEBT PROFILE

PERFORMANCE EPRA NAV PER SHARE

At 31 March 2013		CORE		OTHER	TOTAL
	Like-for like		Refurbishment Redevelopment	Like-for-like
Number of properties	47	8	10	21	86
Valuation	£509m	£110m	£155m	£56m	£830m
Revaluation surplus in year	£36m	£4m	£20m	-£1m	£59m
Net initial yield	7.3%			7.8%	6.9%
Rent per square foot					£12.98
Capital value per square foot					£177
Disposals in Year
Number of properties				6
Proceeds				£13m
Under offer				£8m

WORKSPACE

90% LETTINGS DONE IN-HOUSE

467,000 website visits 14,000 phone calls 10,000 sq ft of billboards

EVENTS

75 customer networking events 3,000 attendees

CUSTOMER SURVEYS

82% customers satisfaction 86% of customers would recommend

OPPORTUNITY

350,000 PRIVATE SECTOR ENTERPRISES IN LONDON

97% OF THIS SECTOR ARE SMALL BUSINESSES

ENTREPRENEURIAL ACTIVITY IN LONDON IS HIGHEST OF ANY REGION

STRATEGY

MAXIMISE PENETRATION

HEAT MAPPING

SEARCH ENGINE OPTIMISATION

PPC (PAY PER CLICK) EFFICIENCY

TRACKING AND FOLLOW UP

SOCIAL MEDIA STRATEGY

RESULT

INCREASE INCOME DATA AND KNOWLEDGE INTIMATE UNDERSTANDING

CAPTURE GROWTH London factor: Supply Customer growth: Demand Drive income: Trends positive

DRIVE GROWTH Leverage operations and brand Selective acquisitions and disposals Benefit from London residential market

CONFIDENT OUTLOOK Strong and flexible balance sheet Progressive dividend policy Positioned for growth: Focused, energetic and challenging approach

APPENDIX I

Refurbishment Projects

Project Stage	March 2013 Valuation	Expected Cost	Cost to Complete	Completion	Upgraded area			New area
					Expected Area	Expected ERV	Expected Area	Expected ERV
Completed / Letting
Canalot Studios		£5m	-	Sept 2012	32,702	£26	16,268	£30	£1.2m
Whitechapel		£2m	-	Oct 2012	-	-	6,532	£22	£0.1m
Chester House phase 2		£2m	-	March 2013	-	-	8,903	£34	£0.3m
Leyton l (phase 1)		£3m	-	April 2013	-	-	26,600	£11	£0.3m
	£23m	£12m	-		32,702		58,303		£1.9m
Construction
Exmouth House		£4m	£1m	H1 2013	52,000	£27	5,000	£38	£1.4m
Westminster (phase 1)		£2m	£1m	H1 2013	6,000	£27	4,750	£30	£0.3m
The Pill Box		£9m	£6m	H1 2014	-	-	42,000	£24	£0.9m
Metal Box Factory		£15m	£11m	H2 2014	82,000	£26	20,000	£38	£2.6m
	£49m	£30m	£19m		140,000		71,750		£5.2m
Design
Bounds Green		£2m		2014	-	-	13,000	£11	£0.1m
Baldwins Gardens		£17m		2015	-	-	65,000	£40	£2.3m
Barley Mow Centre		£11m		2015	-	-	42,000	£28	£1.1m
Leyton (phase 2)		£4m		2015	-	-	35,000	£12	£0.4m
Linton House		£4m		2015	34,000	£28	15,000	£38	£1.4m
Westminster (phase 2)		£14m		2015	-	-	55,000	£30	£1.5m
	£31m	£51m			34,000		225,000		£6.8m

APPENDIX II

Redevelopment Projects

Project Stage	Development partner	31 March 2013 Expected Valuation completion units		Residential	Commercial space		Other proceeds
				No.	Area	Rent*.	Cash	Overage
Construction
Screenworks	Taylor Wimpey		H1 2014	72	61,000	£1.4m	£4.8m	
Wandsworth (phase 1)	Mount Anvil		H2 2014	209	53,000	£1.0m	-	
Grand Union	Taylor Wimpey		H1 2015	145	60,000	£1.2m	£5.9m	
Bow (phase 1)	Peabody		H2 2015	267	15,000	£0.2m	£11.5m	
		£73m		693	189,000	£3.8m	£22.2m
With Planning
Faircharm			2015-2016	148	52,000
Bow (phase2)			2016	290	30,000
Tower Bridge Development			2015-2018	800	60,000
		£43m		1,238	142,000
Planning Stage
Cremer Street (student housing)				203	45,000
Highway				130	33,000
Marshgate				300	35,000
Poplar				392	77,000
Wandsworth (phase 2)				50	15,000
		£45m		1,075	205,000

*Expected rent at 90% occupancy

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.