TIDMWKP
RNS Number : 4828Z
Workspace Group PLC
16 May 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE RETAINED UK LAW VERSION OF the eu MARKET ABUSE REGULATION
(REGULATION 596/2014/EU) PURSUANT TO THE MARKET ABUSE (AMENDMENT)
(EU EXIT) REGULATIONS 2019 (SI 2019/310) ("UK MAR"), AND IS
DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER UK
MAR. THE INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
16(th) May 2023
WORKSPACE GROUP PLC
DISPOSAL OF NON-CORE MCKAY PROPERTIES AND PROGRESS UPDATE
Workspace Group PLC ('Workspace'), London's leading owner and
operator of sustainable, flexible work space, is pleased to
announce the exchange for sale of five non-core properties in the
South-East of England for a total consideration of GBP82m.
Completion will take place in June 2023. This follows the sale of a
medical centre in Newbury for GBP7m in July 2022. These disposals
are from the portfolio of assets acquired as part of the McKay
acquisition completed in May 2022.
The properties being sold comprise light industrial and
logistics properties in Bracknell, Crawley, Poyle, Theale and
Weybridge. The site in Weybridge has been recently vacated with
planning for refurbishment. The sale price represents a discount of
27% to the 30 September 2022 book value of these properties and is
at a net initial yield of 4.5% (5.5% prior to the vacation of the
Weybridge site).
We are progressing with the sale of the remaining non-core
properties from the McKay acquisition. They comprise light
industrial properties in Farnborough, Banbury and two in Folkestone
valued in total at GBP28m as at 30 September 2022 and a vacant
commercial property in Woking town centre where we obtained
planning consent on appeal in December 2022 for a 366-unit
residential scheme. This asset was valued at GBP10m as at 30
September 2022, prior to the grant of planning permission.
The acquisition of McKay in May 2022 allowed us to acquire, at a
discount to book value, good quality office buildings in London, an
office and business park portfolio in South-East and a number of
non-core assets, principally light industrial and logistics
properties.
We still anticipate an attractive return from this acquisition
and we are making good progress, most notably:
-- We completed the operational integration ahead of schedule in
November 2022 with all activity now being managed on the Workspace
platform
-- The seven London properties, valued at GBP162m on 30
September 2022, are now managed as part of our London portfolio.
These buildings are well suited to our business model and are in
areas where we see good demand from our SME customers through our
operating platform. We are progressively adapting them to our
multi-let configuration and flexible offer which we expect will
deliver premium pricing
-- The South-East office and business park portfolio comprises
thirteen buildings valued at GBP134m as at 30 September 2022. These
are good quality, attractive income yielding properties which are
largely fully let. Over time these assets will allow us to
selectively test demand for our business model in well-connected
feeder towns to London which we believe are under-served with
quality flexible space catering to the demands of SMEs
-- Cost synergies are well ahead of our 50% cost reduction
target, with McKay corporate costs reduced from GBP6.4m pa prior to
acquisition to GBP0.9m pa at March 2023
-- We successfully novated a GBP65m long-term loan maturing in
2030, securing an attractive loan at a margin of 4% and avoiding a
potential GBP13m break cost. Alongside this we have transferred
GBP135m of McKay revolver bank facilities on the same terms as our
existing Workspace facilities and extended the maturity to April
2025
The sale of these five non-core properties is being made to
Tudor Investment Holdings Limited, acting as General Partner for
ARGO DFI Logistics Partnership II LP. Net proceeds will be
initially used to pay down the group's bank facilities.
Graham Clemett, Chief Executive Officer of Workspace,
commented:
"This sale of a substantial element of the non-core assets from
our purchase of McKay is an important step in our acquisition plan.
There is still more to do but we are confident our acquisition will
generate attractive returns for shareholders as we complete the
delivery of these plans."
- ENDS -
For media and investor enquiries, please
contact:
Workspace Group PLC
Paul Hewlett, Director of Strategy & Corporate
Development
Duncan Pelham, Senior Corporate Communications
Manager 020 7138 3300
FGS Global
Chris Ryall
Guy Lamming 020 7251 3801
Notes to Editors
About Workspace Group PLC:
Workspace is London's leading owner and operator of flexible
work space, managing five million sq ft of sustainable space, with
77 core locations in London and the South-East.
We are home to some 4,000 of London's fastest growing and
established brands from a diverse range of sectors. Our purpose, to
give businesses the freedom to grow, is based on the belief that in
the right space, teams can achieve more. That in environments they
tailor themselves, free from constraint and compromise, teams are
best able to collaborate, build their culture and realise their
potential.
Our ownership model allows us to offer true flexibility. We
provide customers with blank canvas space to create a home for
their business, alongside leases that give them the freedom to
easily scale up and down within our well-connected, extensive
portfolio.
We are inherently sustainable - we invest across the capital,
breathing new life into old buildings and creating hubs of economic
activity that help flatten London's working map. We work closely
with our local communities to ensure we make a positive and lasting
environmental and social impact, creating value over the long
term.
Workspace was established in 1987, has been listed on the London
Stock Exchange since 1993, 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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