1 workspace group plc ubs european mid cap real estate conference harry platt 29 november 2006
TRANSCRIPT
1
Workspace Group PLC
UBS EUROPEAN MID CAPREAL ESTATE CONFERENCE
Harry Platt29 November 2006
2
Background
• Established 1987
• Joined London Stock Exchange 1993
• Geographical focus
• Scale
3
Ten Year Results to 31 March 2006
Five Year Ten Year
Compound Growth 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%
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IPD Performance (Investment Property Databank)
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Per
cen
tag
e R
etu
rn
Workspace
IPD
Workspace vs Universe
Workspace outperform the sector
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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
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“ 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
The Business – Hotelier of Space to SMEs
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Workspace Portfolio 2006
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Our Buildings
The Leathermarket, SE1Barley Mow, W4 Southbank House, SE1
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Our Buildings
Chocolate Factory, N22Canalot Studios, W10 The Lightbox, W4
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Our Buildings
Clerkenwell Workshops,EC1 Westbourne Studios, W10 Great Guildford Street, SE1
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Our Customers
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Customer Profile
Median % of median
turnover Year of start 1996 —
Turnover £250,000 —
Overheads £90,000 36
Profits £40,000 16
Rent £12,000 4.8
Typical Workspace tenant*:
• 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
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Total Percentage of Customers by DTI Categories
DTI Classification of Tenants
12% 1%
2%
1%
6%
18%
45%
10%
5%
Manufacture
Retail
Cons truction
Utilities /Infras tructure
Organisations
Des ign & Creative
Services
Storage & Dis tribution
Unclass ified
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Strategy: Focusing on Growth: London Dynamics
London is a global city
London is a growing city
Centre of finance – commerce – culture – knowledge – creativity – power and
influence
London’s population likely to grow by
800,000 to 8.1m by 2016
The working population will rise by 516,000
Net migration continues to run at about
100,000 a year
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Strategy: Focusing on Growth: London SMEs
London is theSME incubator
• 1.07m employ 1 - 20 people
• 30% of these are in London and SE
• 85% of those businesses with employees in London have less than 10 employees
• In 2005, London accounted for 22% (87k) of all new business starts in the England and Wales
• London has the highest concentration of the fastest-growing and most productive business sectors in the UK
London is our Marketplace
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Strategy: Acquisitions in London
The importance of the database
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Strategy: Regeneration in London
Intensification
Transport Improvements
Olympics
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Strategy: Exploiting change of use
• In Joint Venture
• Outside Joint Venture
and reapply proceeds into core business growth
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Strategy: Sustainability….in line with the London Plan
• Accommodate growth in boundaries – brown land
• Better city to live in
• A more prosperous city with diverse economic growth
• Promoting social inclusion
• Improving London’s accessibility, and
• Tackling climate change
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Strategy: Workspace as a REIT
• Comfortably pass tests (ownership, property, trade mix
interest cover etc).
• Eliminate £140m deferred tax (80 pence per share)
• £20m entry cost – short payback
• Earnings (dividend) enhancing
• Strategic plan maintained
• May create acquisition opportunities
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Business Plan: To double shareholder value in 5 years
How?
• Focusing on London
• Growing market place of SMEs
• Rental growth from a low base
• Targeting acquisitions where long term value (through
database)
• Improving estates and pursuing mixed use intensification
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APPENDIX
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Workspace Total Shareholder Return (TSR) Index
0
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006
Workspace FTSE Sm all cap FTSE 250 FTSE Real Es tate FTSE All share
Total Shareholder Return
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5 Year Share Price