TIDMWKP
RNS Number : 2570O
Workspace Group PLC
07 October 2021
7 October 2021
Workspace GROUP PLC
TRADING update
Workspace Group PLC, London's leading provider of flexible
office space, today issues a trading update for the second quarter
of its 2021/22 financial year.
HIGHLIGHTS
-- Customer demand has improved through the second quarter, with
a strong pick-up in activity in September. There was an average of
935 enquiries and 138 lettings per month in the quarter
-- Like-for-like rent roll was up 2.1% in the first six months
to GBP87.3m, with occupancy improving and pricing stabilising
-- Like-for-like occupancy was up 2.7% in the quarter to 85.6%,
and up 3.7% in the half year from a low of 81.9% at 31 March
2021
-- Pricing has stabilised, with like-for-like average rent per
sq. ft. up 0.3% in the second quarter to GBP35.50, after a 2.3%
fall in the first quarter
-- Significant increase in our customers returning to their
offices over the second quarter, with utilisation of our centres by
the end of September peaking at 56% of pre-Covid levels mid-week,
and 52% over the week as a whole
-- Strong cash collection, with 97% of rent due for the second
quarter collected to date, ahead of the level of rents collected at
the same point in the previous quarter
-- Strategic recycling of capital with the disposal of 13-17
Fitzroy Street for GBP92m and the acquisition of The Old Dairy in
Shoreditch for GBP43.4m
-- Well positioned to continue to invest in our project pipeline
and acquisition opportunities with GBP318m of cash and undrawn
facilities and proforma LTV of 23%
Graham Clemett, Chief Executive Officer, Workspace Group PLC,
commented:
"It's great to see London coming back to life, and our latest
utilisation and occupancy figures show that London's SMEs are
leading the way back to the office and are optimistic about the
future. These are positive signs of momentum and further proof that
our truly flexible offering is resonating in the evolving working
world. The pandemic has made people appreciate that not all offices
are created equal. More than ever, the right office space in a
great location with strong sustainability credentials and
flexibility really matters to our customers and their employees.
We're perfectly positioned to benefit from this shift and we're
very excited about the future as we continue to expand our property
footprint across London."
Customer Activity
New customer demand for space in our business centres is
improving, with a monthly average of 935 enquiries in the second
quarter and good conversion to viewings and lettings.
Monthly Average Monthly Activity
------------------------------
Q2 Q2 30 Sep 31 Aug 2021 31 Jul
2021/22 2020/21 2021 2021
--------- ------- ------------ -------
Enquiries 935 869 1004 888 912
Viewings 629 435 633 660 593
Lettings 138 119 175 119 119
--------- --------- ------- ------------ -------
We have also seen a strong pick-up in utilisation of our centres
as more customers return to their offices. For the week ending
1(st) October, utilisation of our centres was running at 52% of
pre-Covid levels, with activity peaking mid-week at 56% of
pre-Covid levels.
Like-for-like occupancy has continued to recover in the second
quarter, driven by a combination of new lettings and a return to
more normal levels of customer churn. This has resulted in a 2.7%
increase in like-for-like occupancy in the quarter to 85.6%.
With the improvement in demand and occupancy, we have now seen
pricing stabilise, with average rent per sq. ft. increasing by 0.3%
in the second quarter to GBP35.50.
Quarter Ended
----------------------------------
30 Sep 21 30 Jun 21 31 Mar 21
---------- ---------- ----------
Like-for-like occupancy 85.6% 82.9% 81.9%
Like-for-like occupancy
change* 2.7% 1.0%
Like-for-like rent per GBP35.50 GBP35.41 GBP36.25
sq. ft.
Like-for-like rent per
sq. ft. change 0.3% (2.3)%
Like-for-like rent roll GBP87.3m GBP84.6m GBP85.5m
Like-for-like rent roll
change 3.2% (1.1)%
*Absolute change
The like-for-like category has been restated in the current
financial year for the following:
- The transfer out of Leroy House to the refurbishment project category
- The transfer in of Brickfields and Rainbow Industrial Estate
(part) from the completed projects category
Rent Collection
Cash collection remains robust, despite the continued Government
restrictions on rent collection measures. The majority of our
customers pay monthly and we have to date collected 97% of rent due
for the second quarter taking the collection rate over the first
two quarters of the year to 96%.
Portfolio Activity
We completed the extensive refurbishment of our 59,000 sq. ft.
Pall Mall Deposit business centre in Ladbroke Grove in September
and have also recently opened Mirror Works, a new 41,000 sq. ft.
business centre in Stratford.
During the second quarter, we completed the sale of 13-17
Fitzroy Street in Fitzrovia for GBP92m. We had originally planned a
major refurbishment of this building when the occupier, Arup,
vacated as expected in June. However, having reviewed our options,
we decided to sell and recycle the capital into other more
attractive organic and acquisition opportunities.
In this regard, we recently completed the acquisition of The Old
Dairy in Shoreditch for GBP43.4m. Adjacent to our existing business
centre, The Frames, and currently 80% occupied, we will reposition
The Old Dairy over time to our distinctive, flexible model, which
will strengthen our presence and broaden our offering in this
exciting and dynamic area of London.
Financing
Net debt decreased by GBP41m in the quarter to GBP532m, with
cash and undrawn facilities of GBP318m as at 30 September 2021 and
LTV at 23% on a proforma basis, based on the 31 March 2021 property
valuation.
- ENDS -
For further information, please contact:
Workspace Group PLC 020 7138 3300
Clare Marland, Head of Corporate Communications
Finsbury Glover Hering 020 7251 3801
Guy Lamming
Chris Ryall
Notes to Editors
About Workspace Group PLC:
Established in 1987, and listed on the London Stock Exchange
since 1993, Workspace owns and manages some 4 million sq. ft. of
business space in London. We are home to London's brightest
businesses, including fast growing and established brands across a
wide range of sectors. Workspace is geared towards helping
businesses perform at their very best. We provide inspiring,
flexible work spaces in dynamic London locations.
Workspace (WKP) is a FTSE 250 listed Real Estate Investment
Trust (REIT) and a member of the European Public Real Estate
Association (EPRA).
Workspace(R) is a registered trademark of Workspace Group Plc,
London, UK.
LEI: 2138003GUZRFIN3UT430
For more information on Workspace, please visit
www.workspace.co.uk
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END
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