Finance Risk
Lack of funding resulting in inability to meet business plans, satisfy liabilities or breach of covenants. |
- Funding requirements for business plans are reviewed regularly.
- Regular dialogue with main lenders.
- Options for alternative sources of funding monitored.
- Financial ratios and covenant headroom monitored and regularly reported to the Board.
- Working capital forecasts stress tested and regularly reported to the Board.
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Valuation Risk
Value of our properties declining as a result of external market or internal management factors. |
- Independent valuations conducted quarterly by CB Richard Ellis.
- Alternative use opportunities pursued across the portfolio and planning consent progressed.
- Market yields and pricing of property transactions monitored closely across the London market.
- Headroom on Loan to Value banking covenants is maintained and reviewed.
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Occupancy Risk
Demand by SMEs for our accommodation declining as a result of social, economic or competitive factors. |
- Weekly monitoring of occupancy levels and update of pricing at each estate.
- Quarterly customer satisfaction surveys.
- Weekly monitoring of reasons for customers vacating and exit interviews conducted.
- On-site staff maintain regular contact with customers and local monitoring of competitors offering space.
- Extensive marketing using the ‘Workspace’ brand.
- Flexibility offered on deals by dedicated in-house marketing and letting teams.
- External research conducted on the SME sector to understand trends in demand.
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Development Risk
Plans being inhibited as a result of regulations. Risk of cost overrun. |
- Regular monitoring of Government announcements and active involvement in industry responses.
- Alignment of our regeneration proposals with the London Plan and local strategic plans.
- Timing of actual developments can be deferred with properties retained for existing rental use.
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Property Investment
Acquisitions do not generate the expected valuations or rent roll resulting in losses. |
- Thorough due diligence conducted ahead of any property acquisitions.
- Regular monitoring of acquisition performance against target returns.
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Transactional Risk
Joint ventures or other ventures with third parties do not deliver the expected return. |
- Potential joint ventures reviewed and monitored before agreed.
- Regular review of performance of joint ventures throughout term.
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Regulatory Risk
Failure to meet regulatory requirements leading to fines or tax penalties or the introduction of new requirements that inhibit activity. |
- REIT conditions monitored and tested on a regular basis and reported to the Board.
- Close working relationship maintained with HMRC and all relevant issues openly disclosed.
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Business Interruption Risk
Major events mean that Workspace is unable to carry out its business for a sustained period. |
- Business Continuity plans in place and tested.
- Back-up systems at remote locations and remote working capabilities.
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London
Changes in the political, infrastructure and environmental dynamics of London lead to reduced demand from SMEs. |
- Regular monitoring of the London economy, research reports and the commissioning of research.
- Regular meetings with the Greater London Authority.
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Reputational Risk
Failure to meet customer and external stakeholder expectations. |
- Customer surveys undertaken and results acted upon.
- Training and mystery shopper initiatives undertaken.
- Regular communication with stakeholders.
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Energy Risk
Reductions in energy usage are not achieved resulting in excessive costs under the carbon reduction commitment.
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- Initiatives to encourage tenants to reduce energy consumption.
- Installation of energy meters to review and monitor energy consumption and ongoing upgrading of lighting and heating.
- Full compliance with CRC regulations.
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