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.
HIGHLIGHTSTotal rent roll up 2.5% (£2.1m) in the quarter to £86.9m and up 11.1% (£8.7m) over the nine months from 31 March 2016
Like-for-like rent roll up 3.5% (£1.8m) in the quarter to £53.3m and 9.3% (£4.5m) over the nine months from 31 March 2016
Like-for-like rent per sq. ft. up 3.1% in the quarter to £25.71 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 PerformanceTotal cash rent roll is £86.9m at 31 December 2016, up 11.1% (£8.7m) from 31 March 2016 as detailed below:
£m
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% (£1.8m) in the quarter to £53.3m and up by 9.3% (£4.5m) 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 £25.71 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%.
Like-for-like properties
31 Dec
2016
30 Sep
2016
30 Jun
2016
31 Mar
2016
31 Dec
2015
Number
35
35
35
35
35
Occupancy
90.6%
90.3%
89.6%
90.0%
90.6%
Rent roll
£53.3m
£51.5m
£50.2m
£48.8m
£46.6m
Rent per sq. ft.
£25.71
£24.93
£24.57
£23.86
£22.92
Completed Projects
The continued strong demand for space at our completed schemes has resulted in the rent roll increasing by £0.5m in the quarter and £4.7m since 31 March 2016 to £13.9m. 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 £0.1m in the quarter and £2.0m since 31 March 2016 to £13.5m at properties undergoing refurbishment or redevelopment. This includes a reduction of
£0.7m 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 £0.1m 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 £7m 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 per month
31 Dec
2016
30 Sept
2016
30 June
2016
31 March
2016
31 Dec
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 £13.0m
The second phase at The Light Bulb, Wandsworth, comprising planning consent for 77 residential units, was sold for £7.75m 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 £5.75m
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 £27m. We expect to commence these projects in 2018, with completion in 2019.
Workspace Group plc published this content on 19 January 2017 and is solely responsible for the information contained herein.
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