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Workspace Group PLC

Workspace Group PLC. Interim Results For the six months to 30 September 2004. Headline results. Trading PBT £6.92m Up 4.7% Trading EPS 29.6p Up 2.8% Headline PBT £6.54m Down 1.5% Headline EPS 27.6p Down 4.5% Valuation surplus in half year £27.0m £1.60 per share

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Workspace Group PLC

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  1. Workspace Group PLC Interim Results For the six months to 30 September 2004

  2. Headline results • TradingPBT £6.92m Up 4.7% • Trading EPS 29.6p Up 2.8% • Headline PBT £6.54m Down 1.5% • Headline EPS 27.6p Down 4.5% • Valuation surplus in half year £27.0m £1.60 per share • Net Asset Value (per share) £19.87 Up 23% on 12 months • Annual Rent Roll £40.3m Up 5.9% on 6 months • Total Property Valuation £655m Up 16% on 12 months • Gearing 94% • Interim Dividend 11.3p Up 10%

  3. The Business – A Simple Model • To achieve profit and capital growth from: • Providing workspace to SMEs • 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

  4. Our Business – A Reminder • “ We provide affordable, flexible space for new and small businesses in London and the South East ” • 3,900 customers over 100 estates; 5.0 million sq .ft • 6,000 + enquiries a year; market leading brand in • fragmented market • A simple product offer • Superior service from in-house management • Customer focused

  5. Customer Profile Typical Workspace tenant: Rent under 5% of turnover Source: Kingston University survey of over 200 customers. Spring 2004

  6. Occupancy and Rents • Continuing occupancy improvements – 88.5% overall • Rents stable with low base • Cautious approach to rent reviews • Lettings underway at Barley Mow, Quality Court, Europa, Leathermarket

  7. Acquisitions & Disposals Acquisitions Quadrangle, SW6 Southbank House, SE1 Southgate Office Village, N14 Total £28.3m Net Yield 6.9% Disposals Hooley Lane, Redhill Union Street Sites, SE1 Three Mills, E3 £34.5m 2.6%

  8. New Acquisitions The Quadrangle, SW6 Southbank House, SE1 Southgate Office Village, N14

  9. Adding Value: Schemes in 2004/05 Further reorganisation of space and extra floors Phase Two completes September 2005 Full Refurbishment Underway: To complete late 2005 Discussions with Council proceeding. Further planning application in Spring Mixed use (housing/retail warehousing) Planning appeal lodged; Council to consider new application by March 2005 Mixed use (housing/workspace) Council to consider Planning Application in December 2004 Mixed use (housing/workspace) Council to consider Planning Application in February 2005 Mixed use (housing/workspace)

  10. 2004 H1 Results: P & L Account

  11. 2004 H1 Results: Balance Sheet Immediate Investment Capacity = £68.3m (Gearing 115%)

  12. Key Elements on Valuation • Income up 3.9%, ERV up 2.1% (like-for-like) • ERV £54.8m; 90% ERV = £49.3m current rent roll £40.3m • Net initial yield 6.27%, reversionary yield 8.36%, equivalent yield 7.37% • Valuation surplus: 50% rent, 50% yield • Capital value £126 per sq. ft

  13. Looking Forward: The Same Business Model • As stated September 2003 • - 5% per annum rental increases • - No movement in yields/occupancy • - Conservative gearing • - Annual investment £50m - £60m • Aim: - Doubling value in 5 years to 2008 • - £1bn portfolio • On track

  14. Looking Forward: Occupancy and Rents • SME confidence improving • SME numbers growing • London economy robust • See: Investor Relations/Company Presentations • section of www.workspacegroup.co.uk

  15. Looking Forward • Disposals • Acquisitions • Added Value Schemes

  16. Summary • Good enquiry levels; occupancy high and robust • Rental focus in 2005/06 • Added value programme gaining momentum • Business plan on target • Growth opportunities Workspace – Leader in a Growing Marketplace

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