Workspace Group PLC

The Workspace Story: Creating a new asset out of unloved old buildings Harry Platt Chief Executive 25 April 2006 Fifth Annual “Putting Old Buildings to Productive New Uses” Conference

Workspace Group PLC

Workspace Group: Who are we?

Creating a commercial proposition The Property Case

History: Growth in assets and shareholder value

• Founded in 1987 • Listing on London Stock Exchange 1993 • Last equity issue 1994 • Now: Gross Assets over £950 million

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

• c.4,000 customers over some 100 estates; nearly 6 million sq .ft

• Over 8,000 enquiries a year; market leading brand in fragmented market • A simple product offer • Superior service from in-house management • Customer focused

Workspace Group portfolio 2005/06

Changing Environments

Our Buildings Westminster Business Square The Leathermarket Pall Mall Deposit

Our Buildings Canalot Studios Canalot (Internal) Canalot (Spiderman)

Our Buildings Belgravia Barley Mow Tower Bridge

Our Buildings Europa Studios Europa Stairs

Our Buildings Quality Court (Internal) Quality Court (Internal)

Our Buildings Westbourne - external Westbourne – Internal

Total Percentage of Customers by DTI Categories DTI Classification of Tenants

5% 10% 12% 1% 2% 1% 6% 45% 18% Manufacture Retail Cons truction Utilities /Infras tructure Organis ations Des ign & Creative Services Storage & Dis tribution Unclas s ified

Our Customers

Performance Total Return (Per Annum)

Workspace Group IPD March Universe Percentile Rank IPD Comparator One Year 17.5% 16.7% 54 15.6% Three Years Five Years 15.2% 16.8% 12.6% 23 9.6% 11.0% 1 9.5% Ten Years 18.5% 11.5% Top 11.1%

Creating a commercial proposition: Customers

• The SME sector: spread and risk • Starts and Exits: scale and churn • Most exits are successes • Do not confuse businesses with owners; serial and portfolio entrepreneurs

Creating a commercial proposition: affordability as well as flexibility Typical Workspace tenant:

Year of start Turnover Overheads Profits Rent

Rent under 5% of turnover Median

1996 £250,000 £90,000 £40,000 £12,000

% of median turnover

— — 36 16 4.8 Source: Kingston University survey of over 200 customers. Spring 2004

Creating a commercial proposition: clusters e.g. Southbank portfolio 1. Kennington Park Studios, SW9 2. Westminster Business Square, SE11 3. Southbank House, SE1 4. Linton House, SE1 5. Great Guildford Business Centre, SE1 6. The Leathermarket, SE1 7. Enterprise Estate, SE1 8. Hatfield House, SE1 9. Tower Bridge Business Centre, SE16 Scale = 1:25000 9

Communities of Customers

• • • On individual sites Between sites Tradelink

Marketing

Searchable, up-to-date, tenant directory Press from and about tenants (e.g. Awards) Homepage Calendar of events from WSG & beyond Message boards for customer interaction

The Property Case

• Workspace: Portfolio Value in London Land Value Replacement Value £950m £600m?

£800m?

• Elsewhere? Customers/demand Planning and Regeneration

The Property Case: The Third Dimension, long term sustainability More sustainable

Source: Upstream Strategies

Normalised Sustainability Score Less sustainable