Workspace Group PLC
Harry Platt
Chief Executive
Presentation for Bridgewell Investor Conference:
“Growth and Returns from Bricks & Mortar”
February 6th, 2007
Workspace Group PLC
Workspace:
Performance and History
Workspace:
Our Business
Workspace:
Relation to London Plan
History
• Established 1987
• Joined London Stock Exchange 1993
• Geographical focus
• Scale
Ten Year Results to 31 March
2006
Five Year
Compound Growth
Ten Year
Compound Growth
Adjusted NAV per share
20.9%
21.9%
Property at Valuation
21.3%
22.6%
Trading PBT
9.9%
13.8%
Trading EPS
10.2%
13.0%
Dividend per share
10.2%
11.2%
IPD Performance
30.00%
Percentage Return
25.00%
20.00%
15.00%
10.00%
Workspace
5.00%
IPD
Workspace vs Universe
0.00%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
The Business – Hotelier of Space
to SMEs
To achieve profit and capital growth from:
• Providing workspace to SMEs in London
• Investing in properties with potential
- Income growth
- Capital growth
- Alternative use
• Increasing scale of portfolio, spreading overheads and
developing the brand
• The right financial platform
The Business – Hotelier of Space
to SMEs
“ We provide affordable, flexible space for new and
small businesses in London and the South East ”
•
c.4,300 customers over 113 estates; 6.0 million sq .ft
•
Over 9,900 enquiries a year; market leading brand in
fragmented market
•
A simple product offer
•
Superior service from in-house management
•
Customer focused
Workspace Portfolio 2006
Rents, Affordability: Customer Profile
Typical Workspace tenant*:
M e d ia n
% o f m e d ia n
tu rn o ve r
1996
—
£ 2 5 0 ,0 0 0
—
O ve rh e a d s
£ 9 0 ,0 0 0
36
P ro fits
£ 4 0 ,0 0 0
16
Rent
£ 1 2 ,0 0 0
4 .8
Y e a r o f sta rt
T u rn o ve r
•
•
Rent under 5% of turnover
Average customer in 1,000 sq. ft paying £200 (approx) rent
per week
*Source: Kingston University survey of over 200 customers. Spring 2004
Workspace Customer Base
Customer base of more than 4,000 small
businesses
1%
5%
2%
1%
12%
10%
Manufacture
6%
Retail
Construction
Utilities/Infrastructure
Organisations
18%
45%
Design & Creative
Services
Storage & Distribution
Unclassified
Classification based on DTI categories
About London
• along with New York and Tokyo, is a world city
• most multicultural in the world, home to more than 300 languages
• 12.5% of UK population, responsible for 16.5% of its output
• highest number of business starts and closures in the UK
• highest concentration of fastest-growing, most productive business
sectors
LONDON IS OUR MARKETPLACE
London Population Projections
L o n d o n P o p u la tio n P ro je c tio n s
8 ,4 8 9 ,5 0 0
8 ,5 0 0 ,0 0 0
8 ,0 0 0 ,0 0 0
7 ,5 0 0 ,0 0 0
7 ,3 2 2 ,4 0 0
7 ,0 0 0 ,0 0 0
6 ,5 0 0 ,0 0 0
6 ,0 0 0 ,0 0 0
2001
2004
2011
2016
2021
2026
2031
Source: DMAG Briefing 2005/40
Accounting for Growth
“International migration is now the dominant driver of population change
in the UK and is set to remain so for at least the next 25 years.”
Source: LDA - Estimating London’s new migrant population, Sept 2006
LDA Priority Areas for Investment
• 60% of Workspace stock falls
within these areas
• Workspace is well placed to
benefit from – and contribute
to – the future investment
within these areas.
LDA Priority Areas for Investment
WHARF ROAD, HACKNEY (N1)
• Replacing existing units with:
- 30,000 sq ft of commercial space
- 77 residential units
LDA Areas For Intensification
During 2005:
• 100% of development took place
on previously developed
commercial space
LDA Areas For Intensification
THURSTON ROAD, LEWISHAM (SE13)
• Part of the regeneration of Lewisham
Town Centre
• Conversion of industrial estate into
mixed-use development:
91,000 sq ft non-food retail
16,500 sq ft commercial space
271 residential apartments
LDA Areas of Deprivation
Insert map
In deprived wards, regeneration
opportunities are greatest, through:
• spatial, social, economic
policies & planning
• stimulating business ownership
LDA Areas of Deprivation
N17 STUDIOS, HARINGEY
• situated in one of the most deprived
areas of London
• originally 50 large floor-plate units
• now more than 90 units, 80%
of which less than 1,000 sq ft
PTAL Map
PTAL ratings assess public
transport accessibility
30% of WSG properties have a
rating of 5 or higher
Workspace Portfolio: Current
Low density; low capital value; in areas of change
25% subject to intensification/change of use over 5 years
A further 20% subject to intensification/change of use over
10 years
Stock continually replenished – the acquisition database
Workspace Portfolio: What density
increases achievable?
Wharf Road
Thurston Road
Aberdeen
Grand Union
Wandsworth
Bow
Whitechapel
2x
6x
2x
5x
2x (+)
6x (+)
3.5x (+)
Workspace Portfolio: What mix of
uses?
• Replacement of workspace – new for old
• Residential main other element
• Workspace to be treated as equivalent to affordable
housing (?)
• Other uses
Transport Improvements in London
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www.workspace.co.uk