Transcript investors.workspace.co.uk

Workspace Group PLC
Managed Workspace –
The Opportunities over the last
decade and the outlook
through the 21st Century
Harry Platt
Chief Executive
22 May 2006
BCA Annual Conference
Workspace Group PLC
Personal Review of development of flexible leasing
and the targeting of space for SMEs
Growth and development of sector in 1990’s to now –
following experiences of Workspace Group
Looking forward – key factors influencing the
continued development of the sector
The ’70s and ’80s
•
Isolated initiatives – not movement
•
Innovation in private and public sectors
•
Importance of individuals
•
The economic picture
Individuals – the ‘Architect’
entrepreneurs
David Rock/John Townsend
Individuals – the ‘Architect’
entrepreneurs
•
Clerkenwell Workshops/Dryden
Street/Canalot/ Woolwich Dockyard/etc
•
Mike Franks; Ted Potts; Nick Falk;
Gillian Harwood; Bennie Gray; etc
Private Sector
•
St Helens Enterprise Agency
•
B.I.T.C
•
London Enterprise Agency (LENTA)
•
B.A.T.
•
Local London
Public Sector
•
Industrial Building Allowances (IBA’s)
•
Inner Urban Areas Act – and subsequent
•
Economic Development Officers
•
Development Agencies (Wigan)
•
Business Support
UK Business Population
KEY FACTS
•
1980-1990 Total Business Stock: 2.5m to 3.7m
•
Static through the 1990s, on the rise since 2001
•
2004 stands at 4.2m
— 1.1m (26%) employ between 1-20 people
— Only 87,000 businesses employ more than 20
people
(Source: SBS Service, 2004)
Late ’80s/Early ’90s
•
Changing economic background
•
Towards an entrepreneurial culture
•
Flexibility and SMEs
UK Business Population
(By size of firms with employees)
4.8%
1.4%
0.7%
0.6%
9.0%
1-4
5-9
10-19
17.7%
20-49
50-99
65.9%
100-199
200 Plus
(Source: SBS Service, 2004)
The Economic Picture
Churn
•
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
Workspace Group: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
Creating a commercial proposition:
affordability as well as flexibility
Typical Workspace tenant:
Year of start
Turnover
Overheads
Profits
Median
1996
£250,000
£90,000
£40,000
% of median
turnover
—
—
36
16
Rent
£12,000
4.8
Rent under 5% of turnover
Source: Kingston University survey of over 200 customers. Spring 2004
Total Percentage of Customers by DTI
Categories
DTI Classification of Tenants
5%
10%
12%
1%
2%
1%
6%
Manufacture
Retail
18%
Construction
Utilities/Infrastructure
Organisations
45%
Design & Creative
Services
Storage & Distribution
Unclassified
Our Customers
Workspace Group PLC: A
Property Based Business
Workspace
Approach
Tenants
Workspace Group PLC
Customers
Large Businesses – ‘Good Covenants’
Small Businesses
Prime Properties
So-called ‘secondary’ stock
Long Term Leases
Short term flexible leases
Marginal Rents
Average rents
Asset Collectors or Creators
Business
Where are we now?
• SMEs
• Flexibility
• Producers/Consumers/Customers
• Economic efficiency: property ownership
Looking forward – Key factors
influencing the continued development
of the sector
• Continued growth of SME sector and recognition of
benefits of flexible leasing in larger organisations
• Economic driver: Demand
• UK economy and its population demographics
Looking forward – Key factors
influencing the continued development
of the sector
• The direct services and profit contributions
• Bureau, telecoms, conferencing, insurance etc
• Added value and margin contributions: will it be
eroded further?
Looking forward – Key factors
influencing the continued development
of the sector
• The indirect services: here to help you grow, a
service not a “just a space”
• Communities: centres/between centres tradelink
Marketing
Homepage
Searchable,
up-to-date,
tenant directory
Press from and
about tenants
(e.g. Awards)
Calendar of
events from
WSG & beyond
Message boards
for customer
interaction
Looking forward – Key factors
influencing the continued development
of the sector
•
The sustainability agenda
•
Our Buildings
•
Our Customers
•
Our Suppliers
Lower forecaseted returns
Risk Adjusted Returns
Higher forecaseted returns
The Property Case: The Third
Dimension, long term sustainability
More sustainable
Source: Upstream Strategies
Normalised Sustainability Score
Less sustainable
Working Together
• Landlords
PLC
• Customers
• Suppliers
• Communities – like the BCA!