Workspace Group PLC

Investor Presentation • Mar 31, 2014

INVESTOR AND ANALYST PRESENTATION 4 JUNE 2014

WORKSPACE RESULTS 2014 DRIVING VALUE

WORKSPACE

Jamie Hopkins Chief Executive Officer

PERFORMANCE

Graham Clemett Chief Financial Officer

DIRECTION

Jamie Hopkins Chief Executive Officer

QUESTIONS

	March 2014	March 2013	Change
Strong Growth
Rent Roll (lfl)	£47.4m	£43.7m	+9%
Property Valuation	£1,078m	£830m	+27%*
Total Property return	35%	14%	Up 21%
EPRA NAV (per share)	£4.96	£3.48	+43%
Dividend (per share)	10.63p	9.67p	+10%
Operational Momentum
Enquiries (per month)	1,063	1,037	+3%
Occupancy (lfl)	90.0%	89.8%	Up 0.2%
Rent per sq. ft (lfl)	£15.28	£14.08	+9%
Trading Profit after Interest**	£20.5m	£17.9m	+15%

* Underlying increase

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

PERFORMANCE HIGHLIGHTS

March 2014	March 2013	Change
£50.3m	£47.1m	+7%
£20.5m	£17.9m	+15%
£252.5m	£76.4m	+230%
13.87p	12.20p	+14%
10.63p	9.67p	+10%
£1,078m	£830m	+27%*
£4.96	£3.48	+43%
£338m	£327m	Up £11m
31%	40%	Down 9%

* Underlying increase

PERFORMANCE TRADING PROFIT AFTER INTEREST

PERFORMANCE LIKE-FOR-LIKE INCOME

OCCUPANCY

PERFORMANCE COMPLETED PROJECTS

• 7 refurbishments completed at cost of £27m
• 210,000 sq. ft of new and upgraded space

PILL BOX BETHNAL GREEN E2

• £9m refurbishment completed February 2014

Note: Further detail in Appendix I

PERFORMANCE CURRENT REFURBISHMENTS

• 8 projects at a total cost of £74m
• 373,000 sq. ft of new and upgraded space

METAL BOX FACTORY SOUTHBANK SE1

• Completing in Summer 2014

Note: Further detail in Appendix I

• 8 redevelopment schemes contracted for sale
• £95m cash plus overage
• 5 new business centres
• Strong pipeline

SCREENWORKS ISLINGTON N5

• New business centre opening June 2014

Note: Further detail in Appendix II

Refurbishments

Redevelopments

PROJECTS LIKE-FOR-LIKE

Transferring to Refurbishment & Redevelopment

		£m
Trading
Net cash from operations	26
Dividends paid	(14)	12
Investment
Capital Expenditure	(30)
Property Acquisitions	(19)
Disposals/Capital Receipts	29	(18)
Investment in joint ventures	2
Financing
Cancellation of hedging contracts	(9)
Release of secured bank facility funds	7	(5)
Refinancing costs	(3)
Net movement in year		(11)
Net Debt at March 2013		(327)
Net Debt at March 2014		(338)

	March 2014	March 2013
Investment Property Valuation	£1,078m	£830m
Investment in Joint Ventures	£23m	£21m
Net Debt	(£338m)	(£327m)
Non Controlling Interest	(£11m)	£0m
Other	(£26m)	(£24m)
Net Assets	£726m	£500m
EPRA NAV per Share	£4.96	£3.48
Loan to Value	31%	40%
Facility Headroom	£72m	£55m

PERFORMANCE GLEBE PROCEEDS SHARE

	March 2014	March 2013
Glebe Portfolio Valuation	£217m	£164m
Comprising:
Commercial properties – no plans to sell	£110m	£81m
Properties with residential sales potential	£107m	£83m
Proceeds Share Calculation:
Proceeds from sales to date	£14m	£nil
Potential proceeds from property sales (see above)	£107m	£83m
Deductible costs	(£7m)	(£4m)
Net Proceeds	£114m	£79m
Allocated to Workspace	£103m	£79m
Allocated to former lenders	£11m	£0m

PERFORMANCE REVALUATION UPLIFT

	No. of properties	Uplift
Like-for-Like	62	£130m	40% PRICING 60% YIELD
Redevelopments	9	£73m	70% FROM CONTRACTED SCHEMES
Refurbishments	8	£25m	£20M OF CAPEX IN YEAR
Other	4	£0m
Total	83	£228m

PERFORMANCE DEBT ANALYSIS

	March 2014	March 2013
Net Debt	£338m	£327m
Total Facilities	£410m	£383m
Secured Facilities	0%	85%
Average Borrowing Cost	5.3% (5.1% exit)	5.0%

FACILITIES BY TYPE MATURITY PROFILE

DIRECTION LONDON IS CHANGING

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DIRECTION LONDON IS CHANGING

INDUSTRIAL

OFFICES

INDUSTRIAL

Like-for-like Property Valuation	March 2014	March 2013	Change
Valuation	£692m	£556m	+23%
Net Initial Yield	6.4%	7.3%	Down 0.9%
Rent per sq. ft	£15.28	£14.08	+9%
ERV per sq. ft	£16.13	£14.37	+12%
Capital Value per sq. ft	£205	£164	+25%

DIRECTION ACQUISITIONS

DIRECTION THE RIGHT STRATEGY

DIRECTION THE RIGHT STRATEGY

33

QUESTIONS

SUPPLEMENTARY INFORMATION

APPENDIX I

	REFURBISHMENT PROJECTS

Project Stage	March 2014 Valuation	Total Cost	Cost to Complete	Estimated Completion	Unaffected area	Upgraded area	New space	Estimated ERV (Average)	Estimated Rent at 90% occupancy *	March 2014 Rent Roll *
Completed
Canalot Studios	£17m	£5m	-	Sept 2012	-	32,702	16,268	£30	£1.3m	£1.1m
Whitechapel Technology Centre	£10m	£2m	-	Oct 2012	31,892	-	6,532	£27	£0.8m	£0.7m
Chester House (phase 2)	£16m	£2m	-	Mar 2013	27,481	-	8,903	£36	£1.1m	£1.1m
Leyton Industrial Village (phase 1)	£12m	£3m	-	Apr 2013	92,377	-	26,600	£12	£0.8m	£0.7m
Westminster Business Centre (phase 1)	£3m	£2m	-	Aug 2013	-	5,599	4,464	£28	£0.3m	£0.2m
Exmouth House	£27m	£4m	-	Aug 2013	-	52,896	5,870	£37	£2.0m	£1.8m
The Pill Box	£16m	£9m	-	Feb 2014	-	-	50,261	£24	£0.9m	£0.3m
	£101m	£27m			151,750	91,280	118,898		£7.2m	£5.9m
Current
Metal Box Factory	£37m	£16m	£6m	Sept 2014	-	82,000	20,000	£30	£2.8m	£1.0m
Leyton Industrial Village (phase 2)	£2m	£2m	£1m	May 2014	-	-	21,000	£12	£0.2m	£0.0m
Westminster Business Centre (phase 2)	£14m	£15m	£14m	Dec 2015	46,910	-	45,000	£31	£1.9m	£0.7m
Bounds Green Industrial Estate**	£11m	£2m	£2m	Dec 2014	123,273	-	14,000	£13	£0.9m	£0.6m
Enterprise House**	£43m	£3m	£3m	Jan 2015	11,843	61,000	-	£49	£3.0m	£2.5m
Hatton Square Business Centre**	£14m	£21m	£21m	Oct 2016	-	-	64,000	£40	£2.3m	£0.9m
Barley Mow Centre**	£26m	£7m	£7m	Feb 2016	60,942	-	20,000	£32	£2.0m	£1.7m
Linton House**	£13m	£8m	£8m	Oct 2015	-	30,000	16,000	£40	£1.7m	£0.7m
	£160m	£74m	£61m		242,968	173,000	200,000		£14.8m	£8.1m

* Includes rent for unaffected areas at March 2014 rental levels

** Included in Like-for-Like properties at March 2014

REDEVELOPMENT PROJECTS

Project Stage	Development partner	March 2014 Valuation	March 2014 Rent Roll	Expected completion	Residential units	Commercial space		Other proceeds
					No.	Area	Estimated ERV	Rent*	Cash	Overage **
Contracted for sale
The Filaments (phase 1)	Mount Anvil	£18m	-	Nov 2014	209	53,000	£22	£1.0m	-	P
ScreenWorks	Taylor Wimpey	£21m	-	May 2014	72	61,000	£25	£1.4m	£5m	P
Grand Union Centre	Taylor Wimpey	£21m	-	Feb 2016	145	60,000	£22	£1.2m	£6m	P
Bow Enterprise Park (phase 1)	Peabody	£3m	-	Dec 2015	267	10,000	£12	£0.1m	£11m	P
Bow Enterprise Park (phase 2)	Peabody	£12m	£0.1m	Dec 2016	160	3,000	£10	£0.0m	£11m	-
The Faircharm	L&Q	£16m	£0.3m	Jun 2016	148	52,000	£20	£0.9m	£10m	-
The Biscuit Factory (part)	Grosvenor	£58m	£1.4m	Oct 2016	800	47,000	£20	£0.8m	£51m	P
Lombard House car park	Hexagon	-	-		22	-	-	-	£1m
		£149m	£1.8m		1,823	286,000		£5.4m	£95m	£6m
With Planning
Bow Enterprise Park (phase 3)		£9m	£0.1m		130	38,000
Poplar Business Park		£32m	£1.1m		392	70,000
The Filaments (phase 2)		£6m	–		77	18,000
		£47m	£1.2m		599	126,000
At Planning Stage (Indicative scaling)
Marshgate					300	8,000
Rainbow***					200	34,000
Highway***					130	33,000
		£20m	£1.0m		630	75,000

* Expected Rent at 90% occupancy

** Overage valued by CBRE as at March 2014

*** Included in Like-for-Like category at March 2014

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.