TIDMWKP
RNS Number : 5471U
Workspace Group PLC
19 January 2017
19 January 2017
Workspace GROUP PLC
INTERIM MANAGEMENT STATEMENT
STRONG CUSTOMER DEMAND AND ACTIVE ASSET MANAGEMENT CONTINUES TO
DRIVE RENTAL GROWTH
Workspace Group PLC ("Workspace") announces its Interim
Management Statement covering the period from 1 October 2016 to the
date of this announcement, including the operational statistics for
the quarter to 31 December 2016.
HIGHLIGHTS
-- Total rent roll up 2.5% (GBP2.1m) in the quarter
to GBP86.9m and up 11.1% (GBP8.7m) over the
nine months from 31 March 2016
-- Like-for-like rent roll up 3.5% (GBP1.8m) in
the quarter to GBP53.3m and 9.3% (GBP4.5m)
over the nine months from 31 March 2016
-- Like-for-like rent per sq. ft. up 3.1% in the
quarter to GBP25.71 and up 7.8% over the nine
months from 31 March 2016
-- Like-for-like occupancy 90.6%, up from 90.3%
at September 2016 (31 March 2016: 90.0%)
-- Contracts exchanged in October 2016 for the
sale of three mixed-use redevelopments
-- Planning consents achieved in October 2016
for two refurbishments in Hackney and Ladbroke
Grove
Commenting on the performance, Jamie Hopkins, Chief Executive
Officer said:
"I am delighted to report another active quarter of strong
rental growth, driven by ongoing customer demand for our product
across London. As well as solid growth in like-for-like pricing
levels, our completed projects continue to let up well and we are
making good progress on our refurbishment and redevelopment
pipeline. We also continue to explore acquisition opportunities
that meet our strict investment criteria.
Workspace's unique combination of modern, designed office space
and state of the art facilities are hugely relevant and
increasingly attractive to our growing customer base of London
businesses, and we have seen the robust levels of demand continuing
into the final quarter of the financial year. With a strong balance
sheet, established brand and high quality offer, despite the
current challenging economic environment, I am confident that the
business is well positioned to make further progress as we look
forward to the year ahead."
For media and investor enquiries, please contact:
Workspace Group PLC 020 7138 3300
Clare Dundas, Head of Corporate Communications
Bell Pottinger 020 3772 2562
Victoria Geoghegan
Nick Lambert
Elizabeth Snow
Notes to Editors:
About Workspace Group PLC:
-- Workspace is a FTSE250 property company and
has been listed on the London Stock Exchange
since 1993
-- Workspace has a unique business model, maintaining
direct relationships with customers and managing
all of its operational activity - from marketing,
viewings, lettings and lease renewals - in-house
-- Workspace provides the right properties in
the right locations to attract its customers
and the right services to retain them and help
them grow
-- Workspace is growing through deep market knowledge,
operational excellence and strong customer
relationships
-- Workspace is a member of the European Public
Real Estate Association
-- For more information on Workspace, please visit
www.workspace.co.uk
Rent Roll Performance
Total cash rent roll is GBP86.9m at 31 December 2016, up 11.1%
(GBP8.7m) from 31 March 2016 as detailed below:
GBPm
-------------------------------------------------- ------
At 31 March 2016 78.2
Growth at like-for-like properties 4.5
Increase in rent at completed projects 4.7
Current refurbishment and redevelopment projects (2.0)
Increase in rent from acquisitions 1.5
At 31 December 2016 86.9
------
Like-for-like portfolio
The like-for-like portfolio represents 61% of the Group's total
rent roll as at 31 December 2016. It comprises properties with
stabilised occupancy over the previous twelve months, excluding
those impacted by significant refurbishment or redevelopment
activity.
We have achieved a strong quarter of like-for-like rent roll
growth, with rent roll up 3.5% (GBP1.8m) in the quarter to GBP53.3m
and up by 9.3% (GBP4.5m) from 31 March 2016. Like-for-like rent per
sq. ft. is the main driver of rental growth up 3.1% in the quarter
to GBP25.71 and up by 7.8% from 31 March 2016. Like-for-like
occupancy has increased by 0.3% in the quarter and 0.6% since 31
March 2016 to 90.6%.
31
Like-for-like 31 Dec 30 Sep 30 Jun 31 Mar Dec
properties 2016 2016 2016 2016 2015
-------------- -------- -------- -------- -------- --------
Number 35 35 35 35 35
Occupancy 90.6% 90.3% 89.6% 90.0% 90.6%
Rent roll GBP53.3m GBP51.5m GBP50.2m GBP48.8m GBP46.6m
Rent per sq.
ft. GBP25.71 GBP24.93 GBP24.57 GBP23.86 GBP22.92
-------------- -------- -------- -------- -------- --------
Completed Projects
The continued strong demand for space at our completed schemes
has resulted in the rent roll increasing by GBP0.5m in the quarter
and GBP4.7m since 31 March 2016 to GBP13.9m. Occupancy at our
completed projects reached 86.8% at 31 December 2016, an increase
of 7.1% in the quarter and 17.7% since 31 March 2016. Most notably,
the occupancy at Grand Union Studios, our new 65,000 sq. ft.
business centre in Ladbroke Grove which opened in March 2017, has
increased from 55% to 80% in the quarter.
Current Projects
We currently have an extensive programme of project activity
ongoing. During the current calendar year, we are expecting to
complete on four refurbishments and open one new business centre
from our redevelopment programme, delivering 344,000 sq. ft. of new
and upgraded space in total.
Rent roll has decreased by GBP0.1m in the quarter and GBP2.0m
since 31 March 2016 to GBP13.5m at properties undergoing
refurbishment or redevelopment. This includes a reduction of
GBP0.7m at Cremer Business Centre, Hoxton, where demolition has
commenced in the quarter.
Acquisitions
Acquisitions are held separately from our like-for-like category
until we have at least twelve months of stabilised occupancy
following any upgrade and refurbishment works. Rent roll fell by
GBP0.1m in the quarter as a result of obtaining vacant possession
at Easton Street, Clerkenwell following the planned vacation of
Amnesty International. We are now progressing with the GBP7m
refurbishment and extension of this property.
Enquiries and Lettings
Enquiry levels have been strong, averaging 1,009 per month in
the quarter and 1,019 in the nine months since 31 March 2016.
Lettings in the quarter, which includes the seasonal impact of
Christmas, are favourable to the comparative quarter in the prior
year. We have continued to see a good level of demand in the first
two weeks of January 2017.
Quarter Ended
----------- ----------------------------------
Average number 31 Dec 2016 30 Sept 30 June 31 March 31 Dec
per month 2016 2016 2016 2015
--------------- ----------- ------- ------- -------- ------
Enquiries 1,009 999 1,050 1,070 994
Lettings 85 103 106 116 73
--------------- ----------- ------- ------- -------- ------
Disposal Activity
In October 2016 we contracted to sell three mixed-use
redevelopments:
-- Arches Business Centre, Southall, which has
planning consent for 110 residential units,
was sold for GBP13.0m
-- The second phase at The Light Bulb, Wandsworth,
comprising planning consent for 77 residential
units, was sold for GBP7.75m together with
the return of 17,000 sq. ft. of new commercial
space
-- Lombard Business Centre, Croydon, which has
planning consent for 96 residential units,
was sold for GBP5.75m
Refurbishment and Redevelopment Activity
In October 2016, we obtained planning permission for the
extension and upgrade of Mare Street Studios, Hackney and Pall Mall
Deposit, Ladbroke Grove. They will provide 115,000 sq. ft. of new
and upgraded space at an estimated cost of GBP27m. We expect to
commence these projects in 2018, with completion in 2019.
Key Property Statistics
Quarter Quarter Quarter Quarter Quarter
ending ending ending ending ending
31 Dec 31 Sep 30 Jun 31 Mar 31 Dec
2016 2016 2016 2016 2015
------------------------------- --------- --------- --------- --------- ---------
Workspace Group Portfolio
Number of estates 69 69 69 69 77
Lettable floor space (million
sq. ft.) (U) 3.6 3.7 3.7 3.8 4.2
Number of lettable units 4,258 4,521 4,513 4,554 4,725
Cash rent roll of occupied GBP86.9m GBP84.8m GBP82.0m GBP78.2m GBP80.8m
units
Average annual rent per GBP27.38 GBP26.86 GBP26.06 GBP24.32 GBP22.39
sq. ft.
Overall occupancy 87.4% 84.2% 84.5% 85.8% 85.8%
Like-for-like lettable
floor space (million sq.
ft.) 2.3 2.3 2.3 2.3 2.3
Like-for-like cash rent GBP53.3m GBP51.5m GBP50.2m GBP48.8m GBP46.6m
roll
Like-for-like average annual GBP25.71 GBP24.93 GBP24.57 GBP23.86 GBP22.92
rent per sq. ft.
Like-for-like occupancy 90.6% 90.3% 89.6% 90.0% 90.6%
------------------------------- --------- --------- --------- --------- ---------
U Excludes storage space
Note:
The like-for-like category was restated in the first half of
2016/17 for the following:
-- The exclusion of Pall Mall Deposit, Ladbroke Grove and
Southbank House, Vauxhall and the Chocolate Factory, Wood Green
which are subject to major refurbishment activity
-- The inclusion of Cargo Works, Southbank and Peer House,
Midtown which have reached stabilised occupancy levels over the
last 12 months, post refurbishment and acquisition respectively
There were no further category changes in the quarter to
December 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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