Workspace Group PLC

Creative Businesses

And

Workspace Group

Harry PlattChief Executive17 November 2005

Workspace Group PLC

Workspace Group: Who are we?

Comments on Creative Sector and Property

Role of Public Sector

History: Growth in assets and shareholder value

• Founded in 1987

• Listing on London Stock Exchange 1993

• Last equity issue 1994

• Now: Gross Assets over £850 million

Our Business

“ We provide affordable, flexible space for new and small businesses in London and the South East ”

• c.4,000 customers over 107 estates; nearly 6 million sq .ft

• Over 7,700 enquiries a year; market leading brand in fragmented market

• A simple product offer

• Superior service from in-house management

• Customer focused

Changing Environments

Recent Acquisitions

The Quadrangle, SW6 Chiswick Studios, W4 Southgate Office Village, N14

Southbank House, SE1 Homesdale Business Centre, Bromley

Lombard House, Croydon

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

Comments on Creative Sector and Property

• Part of SME sector

• Affordability

• Clusters of Buildings

• Communities of customers

• Character and services of buildings

• Incubation

Part of SME Sector

• Stock of businesses

• Starts and exits: scale and churn

• Most exits are successes

• Do not confuse businesses with owners

Affordability: 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

Source: Kingston University survey of over 200 customers. Spring 2004

Clusters e.g.The Southbank Portfolio

9

1. Kennington Park Studios, SW92. Westminster Business Square, SE113. Southbank House, SE14. Linton House, SE15. Great Guildford Business Centre, SE16. The Leathermarket, SE17. Enterprise Estate, SE18. Hatfield House, SE19. Tower Bridge Business Centre, SE16

Scale = 1:25000

Communities of Customers

• On individual sites

• Between sites

• Tradelink

Homepage

Calendar ofevents from

WSG & beyond

Message boardsfor customerinteraction

Press from andabout tenants(e.g. Awards)

Searchable, up-to-date,

tenant directory

Marketing

Customers and Buildings

Westminster Business Square

The Leathermarket

Faircharm Trading Estate

Customers and Buildings

Pall Mall Deposit Westgate Centre Barley Mow Centre

What do business incubators provide?

  -        Suitable Space

         - Flexibility of tenure

- Low entry costs

         - Benevolent operator

- Business support and mentoring systems in place

-        Mandatory churn

Incubators

THE LONDON YOUTH SUPPORT THE LONDON YOUTH SUPPORT TRUSTTRUST

Founded in 2001 to work with the Princes Trust because:     

- start-ups could not find or afford premises (20% went through process of getting grant funding but could not draw down loan because they could not find premises)

- start-ups needed specialist support over and above the mentor system to increase survival chances

N17 STUDIOSN17 STUDIOS

EUROARTEUROART – an independent multi-disciplinary contemporary arts incubator– started with own funding, no external assistance– specialist, whereas LYST very diverse– focus not on training/teaching residents how to write a business plan,

but how to get their work out for sale/get a market– Partnership broker to make things happen– run on a commercial basis with affordability created by sympathetic

terms from Workspace and subdivision to high value small space– not as much fundamental support in terms of business development but

do provide critique and mentoring for resident artists– supported by the operator not in same way as LYST– operator actively promotes and markets the artists– regular exhibitions of work and invite art consultants to visit– benefits from working in a like minded community

IS WORKSPACE GROUP AN IS WORKSPACE GROUP AN INCUBATORINCUBATOR

WORKSPACE TENANTS – A VERY WORKSPACE TENANTS – A VERY GENERAL PROFILEGENERAL PROFILE

• Eclectic mix of micro businesses in a broad range of sectors• Usually been established in business for a couple of years• High proportion in the creative industry• Unlikely to be concerned with issues affecting companies with 10 or more

employees such as: -– Exit strategies– Venture capital– IPO’s

• They identify with freedom and creativity• Generally anti-corporate• Financially challenged from time to time but have a fair idea of business

demands• Looking for a workplace that reflects what they are trying to achieve• Lives in and out of the workplace not clearly differentiated and time poor• High proportion of women

CONCLUSIONCONCLUSION

Workspace Group IS an incubator, but perhaps for bigger babies.

It still provides most of what an incubator does, apart from the business support and mentoring. It is an ideal next step when time’s up in the incubator

Role of Public Sector

• Complimentary not competitive to private sector

• Targeted incubators - groups

- sectors

• Targeted finance support

• Showcasing

• Talent and Human Resources/Skills

• Business support with growth/added value focus not ‘ancillary’