TIDMWKP
RNS Number : 2061T
Workspace Group PLC
21 July 2022
21 July 2022
Workspace GROUP PLC
FIRST Quarter business update FOR THE
PERIOD ENDING 30 JUNE 2022
Workspace Group, London's leading provider of flexible offices,
provides a business update for the first quarter ending 30 June
2022, unless otherwise stated.
HIGHLIGHTS
-- Continued good underlying levels of customer enquiries, viewings and lettings
-- Further improvement in pricing with like-for-like rent per
sq. ft. up 2.6% in the quarter to GBP38.07
-- Like-for-like occupancy stable at 89.6%
-- Like-for-like rent roll up 2.9% in the quarter to GBP93.8m
-- Strong demand at recently completed projects, with overall
occupancy on these schemes increasing by 5% to 74% in the
quarter
-- Integration of McKay assets progressing to plan with good traction on leasing activity
-- Exchanged contracts for disposal of residential scheme at
Riverside, Wandsworth, for GBP55m, in line with the March 2022
valuation. Completion expected December 2022
-- Progressing with the disposal of McKay non-core assets and
continue to target completion by December 2022
-- LTV at 32% on a proforma basis, before proceeds from planned disposal programme
Graham Clemett, Chief Executive Officer, Workspace Group PLC,
commented:
"We have had a good start to the year, with customer demand for
our distinctive flexible offering driving further like-for-like
pricing growth and high occupancy levels. We are also delivering
additional rent roll growth from the strong progress we are making
letting up recently completed schemes and the successful
integration of recent acquisitions.
We continue to closely monitor the wider economic situation but
are not currently seeing any meaningful impact on customer demand.
As we have consistently demonstrated in the past, in these more
challenging business environments our active operational
capabilities combined with the attractions of our flexible offer
and broad range of properties resonate strongly with our diverse
customer base of agile, innovative SMEs."
Customer Activity
We saw good underlying levels of demand in the first quarter,
although the reported levels of enquiries, viewings and lettings
were impacted by bank holidays including the timing of Easter, the
additional Jubilee holidays and disruption caused by tube and rail
strikes in June. Overall leasing activity was strong with 325
lettings completed in the first quarter, with a lease value of
GBP8.3m. This momentum has continued into the second quarter. In
the first two weeks of July 2022 there were 379 enquiries, 226
viewings and we completed 60 lettings with a lease value of
GBP1.4m.
Monthly Average Monthly Activity
-------------------------
Q1 Q1 30 Jun 31 May 30 Apr
2022/23 2021/22 2022 2022 2022
---------- ------- ------- -------
Enquiries 757 947 685 815 771
Viewings 508 615 447 562 516
Lettings 108 125 108 103 114
---------- --------- ------- ------- -------
Total rent roll increased by GBP24.3m to GBP135.3m in the
quarter, as detailed below:
Total Rent Roll GBPm
------------------------ -----
At 31 March 2022 111.0
Like-for-like portfolio 2.6
Completed projects 0.6
McKay portfolio 22.0
Other (0.9)
------------------------ -----
At 30 June 2022 135.3
------------------------ -----
Portfolio Activity
Occupancy in our like-for-like portfolio was stable at 89.6% and
we are seeing a further improvement in pricing with like-for-like
rent per sq. ft. up by 2.6 % in the first quarter to GBP38.07.
Quarter Ended
--------------------------------------
30 Jun 22 31 Mar 22** 31 Dec 21**
---------- ------------ ------------
Like-for-like occupancy 89.6% 89.5% 86.3%
Like-for-like occupancy
change* 0.1% 3.2% 0.6%
Like-for-like rent per GBP38.07 GBP37.12 GBP36.68
sq. ft.
Like-for-like rent per
sq. ft. change 2.6% 1.2% 1.6%
Like-for-like rent roll GBP93.8m GBP91.2m GBP87.6m
Like-for-like rent roll
change 2.9% 4.1% 2.2%
*Absolute change
** Prior periods restated for the reclassification of Riverside,
Wandsworth, which has been removed from like-for-like following
exchange for sale
We have made strong progress in letting up our recently
completed projects, with occupancy across these properties
increasing by 5% to 74% in the quarter. This includes:
-- Mirror Works, Stratford, up by 14.6% to 38.0%
-- Mare Street, Hackney, up 9.9% to 80.0%
-- Pall Mall Deposit, Ladbroke Grove, up 4.7% to 80.3%
Rent roll across the completed projects category in total
increased by 8.9% to GBP7.2m, with rent per sq. ft. up 1.8%.
We have made solid progress on the integration of the McKay
portfolio acquired in May 2022, with the London assets live on our
website and leasing interest and activity now coming through the
Workspace platform. We have seen good leasing traction since the
acquisition, with some 49,000 sq. ft. completing or coming under
offer, in line or ahead of March 2022 ERV's. This includes 13,500
sq. ft. of new deals and 4,000 sq. ft. of renewals in London and
4,500 sq. ft. of new deals and 27,000 sq. ft. of renewals in the
South East.
Disposals
We have exchanged on the sale of the residential element of our
Riverside redevelopment for GBP55m, in line with the March 2022
valuation. This sale was contingent on an amendment to the planning
application, for which we received a resolution to grant consent on
28 June 2022. Completion is due by 31(st) December 2022 subject to
us achieving vacant possession and signing of the s106
agreement.
We are progressing with the disposal of the non-core assets from
the McKay portfolio, which are performing in line with
expectations. We continue to target completion of these disposals
by December 2022.
Financing
Net debt as at 30 June 2022 was GBP909m, a GBP5m reduction from
the proforma 31 March 2022 position adjusted for the McKay
acquisition. The average maturity of drawn debt is 3.9 years and
the average effective interest rate is 3.2%, with 69% of the drawn
amount at fixed rates.
Total facilities at 30 June 2022 were GBP1.2bn, with cash and
available facilities of GBP336m. The required amendments to the
McKay facilities following acquisition are expected to be completed
by September 2022.
LTV at June 2022 was 32% on a proforma basis, based on the 31
March 2022 property valuations for Workspace and McKay (adjusted
for the disposal of Great Brighams Mead). The proceeds from our
programme of planned disposals during the current financial year
should reduce our LTV to well below 30%, and will significantly
increase our proportion of fixed-rate debt.
- ENDS -
For further information, please contact:
Workspace Group PLC 020 7138 3300
Graham Clemett, Chief Executive Officer
Dave Benson, Chief Financial Officer
Kate Annakin, Interim Investor Relations Manager
FGS Global 020 7251 3801
Chris Ryall
Guy Lamming
Notes to Editors
About Workspace Group PLC:
Established in 1987 and listed on the London Stock Exchange
since 1993. We are home to
thousands of 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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