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Share tip summary Workspace offers a combination of asset-backed income and growth that is rare in today's equity market. Trading at 24 per cent below forecast NAv, the shares are a bargain but as always dyor gl all.......
Yet it's vital to remember that London is not in recession. That has helped Workspace report a steady recovery in both occupancy levels and rents since 2009. Like-for-like occupancy rates rose from 86 per cent to 88 per cent over the financial year to 31 March, and by the end of June, at 88.4 per cent, were within a whisker of their 2008 peak. The average rent has also been rising. This trajectory is crucial for two reasons. First, it gives Workspace a capacity for growth that most London-focused property companies lack, with their 97-98 per cent occupancy rates. Workspace has always cited 90 per cent occupancy as a level at which it can increase rents steeply; that level is rapidly approaching. Rising occupancy should sustain dividend increases, while rental growth is the key to the valuation gains that drive net asset value (NAV). Second, the strength of tenant demand should ensure the success of its ambitious refurbishment and extension programme. The group has planning consent for 704,000 sq ft of new or refurbished space in 14 properties; eight projects are under way, with two due to complete this summer. Where it makes sense, Workspace also partners housebuilders to deliver residential projects on redundant but well-located industrial sites. It has two such projects under way - in Highbury and Wandsworth - and has just submitted a planning application for another in Bermondsey. One concern is how Workspace will fund its refurbishments; at 41 per cent, its loan-to-value ratio is comfortable but leaves limited room for manoeuvre. New chief executive James Hopkins seems keen to sell industrial assets with little growth potential and invest in the higher-value office portfolio, which seems sensible as long as the dividend remains covered. Meanwhile, the group has nearly £80m of undrawn debt and cash left over from a fundraising.
Workspace is a London-focused property company. So it benefits from the strength of London's economy and, to a lesser extent, the London property market. However, its shares trade at a huge discount to London specialists such as Derwent or Shaftesbury - and that looks unfair. Of course, Workspace is not - like the companies just mentioned - a play on the West End, where property has become a safe-haven asset for overseas investors. It owns a scattering of offices in off-centre locations, such as Southwark and Clerkenwell, which contribute about 30 per cent of its rent-roll. It also controls a long tail of industrial properties in the suburbs, which certainly don't benefit from the rarefied dynamics of London's inner core. Moreover, its tenant base - small businesses - is far more fragmented than the corporate occupiers of most central London offices. That, theoretically, exposes it to the wave of bankruptcies expected in a recession. Partly for this reason, Workspace almost went to the wall during the 2008-09 property crash.
The 3 month WKP graph must be pretty unique at present! A big couple years ahead here I believe.
I think this means "steady as she goes" is that about it?
Commenting Jamie Hopkins, Chief Executive said: " The positive trading performance of the business has continued into the new financial year with good levels of demand for space driving improved occupancy and rental income. We are also moving forward in line with our plans on a broad range of refurbishment and redevelopment projects that should significantly enhance our ability to grow rental income."
WORKSPACE - CONTINUED PROGRESS Workspace Group PLC ("Workspace"), London's leading provider of space to new and growing companies, is today announcing an Interim Management Statement covering the period from 1 April 2012 to the date of this announcement, including the trading statistics for the first quarter and valuation as at 30 June 2012. · Like-for-like occupancy 88.4%, up 0.6% in the quarter · Like-for-like cash rent roll £45.4m, up 2.0% (£0.9m) in the quarter · Property valuation £773m, with the underlying valuation up 1.1% (£9m) in the quarter · Two properties acquired by the BlackRock Workspace Property Trust for £14m
http://www.investegate.co.uk/Article.aspx?id=201207260700055099I
Deutsche Bank initiates buy on Workspace Group, target price 337.28p.
and one more ! Workspace Group Buy 25-Jun-12 £29,695.50 Graham Clemett 13,198 @ 225.00p
Workspace Group Buy 25-Jun-12 £29,135.25 Christopher Pieroni 12,949 @ 225.00p Workspace Group Buy 25-Jun-12 £29,135.25 Angus Boag 12,949 @ 225.00p
Seymour Pierce maintained its "buy" rating for Workspace Group (WKP) with a target price of 270p. The commercial property company is expected to report pre-tax profit growth of 12.7% for the year ended 31st March 2012, to 15.9 million pounds, with the broker anticipating occupancy rates of 86%. Seymour Pierce estimated that the group has a net asset value of 300p per share, based on a portfolio value of 748.6 million pounds, and forecasts a NAV of 316p for 2013.
Awful lot of very small trades going through today. Anyone know why?
anyone got any views on Threadneedles exit?
There might be something brewing....!!
Not sure why the Olympics would make a difference - this is a longer term property/debt play. If you believe that the debt servicing costs will stay low, that UK business will start to recover soon and that commercial property prices will rise then this is a good stock. If any one of those fails then it's not! I like this stock though - the UK economy is trending towards smaller businesses and this company services that sector. But it's not a fast flyer - though big buys of £4million this week will help!
i really thought this share would take off with the olympics and stufff
Workspace Group PLC, the leading provider of space to small and growing businesses in London, has entered into an agreement with Taylor Wimpey PLC to redevelop the Aberdeen Centre in Islington, N5. Workspace has obtained planning consent for the £55m redevelopment scheme which comprises a new 63,000 sq ft Business Centre and 72 apartments and houses replacing 53,000 sq ft of existing studio and light industrial space on this 1.9 acre site. The construction work will be undertaken by Taylor Wimpey at no cost to Workspace, and is expected to be completed by early 2014. In return for the sale of the residential part of the scheme to Taylor Wimpey, Workspace will receive cash payments of £4.75m over the construction period, a new Business Centre and overage of 30% on private residential sales in excess of £33.1m (equating to a sales value of £750 per sq ft). Workspace owns and manages 100 properties with some 5.5m sq ft of commercial space across London, a significant number of which have potential for mixed use redevelopment. This is the second of these projects to have been announced, the first having been signed in March 2011 with developer, Mount Anvil, for a £80m mixed use scheme in Wandsworth Town Centre. A number of similar projects are being actively progressed with mixed use planning consent already achieved at Bow Enterprise, E3 and Grand Union in North Kensington, W10, for a total of 700 residential apartments and 166,000 sq ft of new Business Centre space.
Outlook Commenting on the results, Harry Platt, Chief Executive said: "During the period we have successfully driven occupancy and rent roll and accelerated our programme of refurbishment and repositioning initiatives. We have also achieved good increases in property values without any benefit from yield movement. We are mindful of the broader economic environment but continue to see, since the half year end, good customer demand and positive KPI's. Further, our intensive management model enables us to respond quickly to both opportunity and challenges. With a strong balance sheet, experienced management team and attractive London property portfolio Workspace is well positioned for further growth." Daniel Kitchen, Chairman, added: "Workspace is a well managed business, soundly financed with a clear strategy. The immediate priority is to ensure delivery of our plans set out at the time of our rights issue in July; we are making good progress here. Given the trading results and positive lead indicators, we have increased the interim dividend by 10% to 2.93p per share, payable in February 2012. We are in the process of appointing a replacement for Harry as Chief Executive and expect to be in a position to announce his successor early in the New Year and so ensure an orderly transition during the first half of 2012."
Highlights for the six months ended 30 September 2011: Financial Performance · Trading profit after interest up 15% to £7.6m (September 2010: £6.6m) · Profit before tax £16.9m (September 2010: £18.0m) · EPRA earnings per share up 7.3% to 5.9p (September 2010 (restated): 5.5p) · Interim dividend per share increased by 10% to 2.93p (September 2010 (restated): 2.66p) · Underlying property valuation up 2.2% (£16m) in the six months to £733m · Net bank debt reduced to £310m (Loan to value 42%). Average cost of debt 5.2% · EPRA net asset value per share £2.90 (March 2011 (restated): £2.86)
http://www.investegate.co.uk/Article.aspx?id=201111140700339940R
sp starting to inch back to respectability. wkp remains my big recovery hope.
had 3k in these and sold for 5k 8 months ago very temp 2 av another go surely their books are looking good with the games cummin up no cracks about the grammar lol
i agree - sorry - maybe i wasn't clear - i certainly think these are going places too...though, due to what they do, they will need a resurgent economy to really start to move. let's face it, if you rent out business space you really need businesses to be opening/expanding to rent those places from you.... i agree with you - this is a great stock for the future...
these things are pretty highly rated by the brokers...and when the economy starts to move again, and people start to need offices to work from again, i can think of many worse places to have your cash - just maybe this isn't quite the right time!