Customer focus driving growth The Workspace Advantage. Full year results Investor and Analyst Presentation 7 June 2017

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Transcription:

Customer focus driving growth The Workspace Advantage Full year results Investor and Analyst Presentation 7 June 2017 1

AGENDA Workspace Jamie Hopkins Chief Executive Officer Performance Graham Clemett Chief Financial Officer Direction Jamie Hopkins Chief Executive Officer Questions 2

WORKSPACE The Workspace Advantage Personalisation Choose what you need with no constraints CUSTOMER REQUIREMENTS Connectivity Powering all businesses Communities Open to all 3

WORKSPACE The Workspace Advantage Our Assets Our Marketing Well connected Inspiring spaces Appropriately managed Fully owned Two distinct parts that come together to drive growth and add value Customer-first brand and culture Direct relationships Data, insight and knowledge Flexible terms and mindset 4

WORKSPACE Results Active Management March 2017 March 2016 Change Rent Roll (lfl) 59.6m 52.4m 13.7% Rent per sq. ft. (lfl) 28.17 24.96 12.9% Enquiries (per month) 1,060 1,029 3.0% Occupancy (lfl) 90.3% 90.4% 0.1% Property Valuation 1,844m 1,779m 2.1% * Capital Value per sq. ft. (lfl) 427 404 5.7% EPRA NAV (per share) 9.53 9.23 3.3% Strong Operating Growth March 2017 March 2016 Trading Profit after interest 50.7m 43.9m 15.5% Total dividend (per share) 21.07p 15.05p 40.0% * Underlying 5

WORKSPACE Demand 1,400 1,200 1,000 800 600 400 200 - Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Monthly Enquiries Rolling 3 months 6

WORKSPACE Growth Like-for-like Occupancy pricing Completed projects Letting up pricing Projects underway Letting up pricing Project Pipeline Acquisitions 7

WORKSPACE Like-for-like Rent roll Rent per sq. ft. 65.0m 60.0m +3.2% +3.6% +2.6% 30.00 28.00 26.00 24.00 22.00 20.00 +3.1% +4.1% +1.6% +3.0% +3.6% 55.0m +3.6% 18.00 +3.8% 16.00 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 50.0m Occupancy 95.0% 45.0m 90.0% 90.4% 89.7% 90.6% 91.2% 90.3% 40.0m 85.0% 35.0m Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 80.0% Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 8

WORKSPACE The Record Hall Opened May 2017 Official Launch June 2017 Floor Total 58,000 sq. ft. Rent Roll 2,000,000 1,500,000 1,000,000 500,000 - Mth 0 Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Occupancy 60% 50% 40% 30% 20% 10% 0% Mth 0 Mth 1 Mth 2 Mth 3 Mth 4 Mth 5 Mth 6 Actual Plan Pricing Actual Plan 90 80 70 60 50 40 30 20 10 0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Unit Size (sq. ft.) 9

WORKSPACE The Workspace Advantage Personalisation Choose what you need with no constraints CUSTOMER REQUIREMENTS Connectivity Powering all businesses Communities Open to all 10

PERFORMANCE Income Statement m March 2017 March 2016 Change Net Rental Income 79.2 74.1 +7% Joint Venture Income 0.3 1.3 Administrative Expenses (15.1) (14.6) +3% Net Finance Costs (13.7) (16.9) (19)% Trading Profit after Interest 50.7 43.9 +16% Investment Property Surplus 39.5 296.6 Joint Venture Performance Fee 0.4 24.1 Exceptional Finance Costs (1.4) Other items (0.4) 26.7 Profit Before Tax 88.8 391.3 Underlying Earnings Per Share 30.6p 26.8p +14% Total Dividend Per Share 21.07p 15.05p +40% 11

PERFORMANCE Net Rental Income 12

PERFORMANCE Like-for-like Properties Rent Roll Growth 20% 18% Represents 67% of total rent roll at March 2017 15% 15% 14% Comprises 35 properties with 2.3m sq. ft. of space 10% 9% Recent growth largely from pricing increases Occupancy stable at around 90% 5% 0% 2014 2015 2016 2017 13

PERFORMANCE Completed Projects Rent Roll 10.0m 5.0m 7.1 + 1.5m 8.6 Represents 8% of total rent roll at March 2017 2 refurbishments and 1 new building 190,000 sq. ft. of new and upgraded space 0.0m March 2017 ----------------- Future Refurbishments Redevelopments Future rents based on the assumptions set out in Appendix 1 & 2 14

PERFORMANCE Projects Underway Rent Roll 40.0m 30.0m 20.0m 10.0m 12.0 + 22.1m 34.1 Represents 13% of total rent roll at March 2017 12 refurbishments underway at a total cost of 168m ( 122m to come) 3 new buildings to be delivered from contracted redevelopments 0.0m March 2017 ----------------- Future 840,000 sq. ft. of new and upgraded space Refurbishments Redevelopments Future rents based on the assumptions set out in Appendix 1 & 2 15

PERFORMANCE Acquisitions Rent Roll 10.0m 5.0m 5.9 + 1.5m 7.4 Represents 7% of total rent roll at March 2017 Comprises 5 properties acquired in recent years being repositioned and let Properties undergoing major capital expenditure transferred to refurbishment category 0.0m March 2017 ----------------- Future Future rents based on CBRE estimated rental values at 31 March 2017 at 90% occupancy 16

PERFORMANCE Future Rent Roll Growth ERV Growth Rental Reversion Notes Not a profit forecast, for illustrative purposes only Future rents (ex. like-for-like) based on the assumptions set out in Appendices 1 & 2 Excludes pipeline projects not yet underway Excludes acquisitions and disposals after 31 March 2017 17

PERFORMANCE Cash Flow m Total Trading Net Cash from Operations after Interest 53 Dividends Paid (27) 26 Investment Capital Expenditure (58) Purchase of Investment Properties (Deposits) (11) Property Disposals 8 8 Capital Receipts 23 Distributions and Proceeds from Joint Ventures 46 Net Movement in year 34 Net Debt at March 2016 (276) Net Debt at March 2017 (242) 18

PERFORMANCE Balance Sheet m March 2017 March 2016 Investment Property Valuation 1,844 1,779 Other Investment 3 27 Net Debt Other (242) (276) (26) (12) Net Assets 1,579 1,518 EPRA NAV per Share 9.53 9.23 Loan to Value 13% 16% Net Initial Yield (lfl) 5.4% 4.9% Equivalent Yield (lfl) 6.5% 6.4% 19

PERFORMANCE Property Valuation 20

PERFORMANCE Revaluation Uplift/(Deficit) Like-for-like 47m Main drivers ERV per sq. ft. up 6.7% 51m Equivalent Yield out 0.1% (15)m Uplands Industrial Estate 11m Completed Projects 8m Grand Union Studios 3m The Print Rooms 4m Redevelopments 8m Arches Business Centre 4m Refurbishments (20)m Edinburgh House The Leather Market (10)m (5)m Acquisitions (5)m Goswell Road (3)m Total 38m 21

PERFORMANCE Debt March 2017 March 2016 Net Debt 242m 276m Average Interest Cost 5.2% 5.1% Undrawn Facilities 123m 134m Marginal Cost (undrawn facilities) 1.7% Average Period to Maturity 5.2 years 5.9 years Facilities By Type Maturity Profile 200m Private Placement 43% Bank Debt 41% 150m 100m Retail Bond 16% 50m 0m 2017 2018 2019 2020 2021 2022 2023 22

PERFORMANCE Proforma Impact of Acquisition and Disposal Activity m As at 31 March 2017 Fitzroy Acquisition Uplands Disposal Proforma Rent Roll 89.5 4.9 (1.6) 92.8 Valuation 1,844 99 (40) 1,903 Net Debt (242) (99) 50 (291) LTV 13% 15% Undrawn Facilities 123 (99) 50 74 23

DIRECTION Growth Like-for-like Occupancy pricing Completed projects Letting up pricing Projects underway Letting up pricing Project Pipeline Acquisitions 24

The Print Rooms The Fuel Tank Grand Union Studios The Record Hall Vox Studios (Phase 1) Barley Mow Centre Southbank House The Biscuit Factory The Frames Vox Studios (Phase 2) Easton Street Brickfields The Light Bulb (Phase 2) Greville Street Edinburgh House The Light Box Pall Mall Deposit Mare Street Studios Rainbow Industrial Estate Bow Enterprise Park (Phase 3) Marshgate Leroy House The Shaftesbury Centre Fitzroy Street The Chocolate Factory (Part) Poplar Business Park (Phase 2/3) The Leather Market Havelock Terrace DIRECTION Project Pipeline Sq. ft. 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2016 2017 2018 2019 2020 2021+ Completed Projects Projects Underway Projects with Planning Pipeline Design 25

DIRECTION Like-for-like Rent Per Sq. Ft. 80 Metal Box Factory, Bankside 70 60 50 40 30 Havelock Terrace, Battersea Uplands, Walthamstow 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Recent refurbishment or redevelopment 26

DIRECTION Acquisition 13-17 Fitzroy Street, W1 27

DIRECTION Acquisition 13-17 Fitzroy Street, W1 Acquired April 2017 92,700 sq. ft. 3 year lease to break 52.50 per sq. ft. 98.5 million 4.6% net initial yield 28

DIRECTION Disposal Uplands, Walthamstow Sold May 2017 290,000 sq. ft. 11 acres 5.70 per sq. ft. average 50 million 3.1% net initial yield 29

DIRECTION Outlook Right market London is growing and changing Right brand Increasing recognition and reputation THE WORKSPACE ADVANTAGE Right properties Creating modern growth environments Right people Driving performance Right customers Open to all 30

Questions

Supplementary information

APPENDIX 1 Refurbishment Projects At March 2017 Valuation Actual/ Estimated cost Cost to Complete Estimated Completion Upgraded area New space Estimated ERV (Average) Estimated Rent at 90% occupancy March 2017 Rent Roll Completed Vox Studios (phase 1) 56m 17m Jan 2016 27,954 51,216 47 3.4m 3.1m The Print Rooms 43m 9m Jan 2016 28,340 17,490 66 2.9m 2.3m 99m 26m 56,294 68,706 6.3m 5.4m Underway The Record Hall 50m 24m 1m May 2017 57,658 63 3.3m 0.0m Barley Mow Centre 41m 11m 3m Jul 2017 54,007 20,983 44 2.9m 1.6m The Leather Market 88m 5m 2m Aug 2017 117,329 52 5.5m 5.1m Southbank House 41m 6m 5m H1 2018 66,716 48 2.9m 1.4m The Frames (formerly Holywell) 15m 25m 18m H2 2018 49,972 57 2.6m 0.0m Edinburgh House 14m 19m 18m H2 2018 69,976 48 3.0m 0.0m Vox Studios (phase 2) 8m 8m 7m H2 2018 27,961 43 1.1m 0.5m Easton Street 15m 9m 9m H2 2018 23,144 65 1.4m 0.0m The Light Box 29m 5m 5m H2 2018 60,481 16,964 34 2.4m 1.6m Brickfields (formerly Cremer St) 11m 27m 25m H1 2019 57,893 48 2.5m 0.0m Pall Mall Deposit 21m 10m 10m H1 2019 36,000 24,000 33 1.8m 1.1m Mare Street Studios 10m 19m 19m H1 2019 55,000 40 2.0m 0.4m Design Stage 343m 168m 122m 334,533 403,551 31.4m 11.7m Leroy House # 15m 15m 2019 35,000 38,000 Greville Street 9m 9m 2019 23,000 The Shaftesbury Centre # 20m 20m 2020 45,000 Chocolate Factory (part) 20m 20m 2021 55,000 18,000 Havelock Terrace # 20m 20m 2021 59,000 40,000 84m 84m 149,000 164,000 # Currently in like-for-like category 33

APPENDIX 2 Redevelopment Projects Commercial space returned Other proceeds At March 2017 Development partner Valuation March 2017 Rent Roll Estimated completion Residential units no. New Space Estimated ERV Estimated Rent* Cash received Cash to come Overage to come Completed Grand Union Studios Taylor Wimpey 36m 1.7m Mar 2016 145 64,725 39 2.3m 9m Bow Enterprise Park (phase 1) Peabody 11m Jun 2016 267 11m 3m 8m 47m 1.7m 412 64,725 2.3m 20m 3m 8m Underway/Contracted The Fuel Tank (formerly Faircharm) L&Q 10m 2017 148 36,000 21 0.7m 10m n/a Poplar Business Park (phase 1) Telford Homes 5m 170 16m 2m 3m Bow Enterprise Park (phase 2) Peabody 160 11m n/a The Biscuit Factory Grosvenor 24m 2018 800 48,000 35 1.5m 48m 3m 0m Arches Business Centre Galliard Homes 13m 0.3m 110 0m 13m The Light Bulb (phase 2) Strawberry Star 15m 2019 77 17,000 33 0.5m 1m 7m 67m 0.3m 1,465 101,000 2.7m 86m 25m 3m With Planning Rainbow Industrial Estate 0.4m 2019 224 33,000 17 0.5m Bow Enterprise Park (phase 3) 2019 130 40,000 30 1.1m Marshgate 0.3m 2020 200 33,000 20 0.6m Stratford Office Village 0.8m 101 Poplar Business Park (phase 2/3) 0.8m 2023 222 58,000 21 1.1m 105m 2.3m 877 164,000 3.3m Design Stage Highway Business Park 2020 113 Chocolate Factory (part) 2021 220 Riverside # /Garratt Lane 2022 350 683 * Expected rent at 90% occupancy # Currently in like-for-like category 34

APPENDIX 3 Property Portfolio 35

APPENDIX 4 Customer Mix Data as at March 2016 36

DISCLAIMER The information in this document may include forward-looking statements, which are based on current expectations and projections about future events. These forward-looking statements reflect the directors' beliefs and expectations and are subject to risks, uncertainties and assumptions about the Company, including, amongst other things, the development of its business, trends in its operating industry, returns on investment and future capital expenditure and acquisitions, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statements. None of the future projections, expectations, estimates or prospects in this document should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the document. As a result, you are cautioned not to place reliance on such forward looking statements as a prediction of actual results or otherwise. The information and opinions contained in this document are provided as at the date of this document and are subject to change without notice. No one undertakes to publicly update or revise any such forward-looking statements. This presentation should also be read in the light of the Company s full preliminary results announcement for the year ended 31 March 2017 including the principal risks and uncertainties identified therein. No statement in this document is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. 37