Workspace Group plc

We own properties that are attractive to our customers and intensively manage these properties to drive occupancy and rents.

At The Leathermarket, we:
• turned the building into a vibrant centre for dynamic creative businesses, with occupancy at 90% and a rent roll of £2.4m (up 6% in 2010/11)
• enhanced The Leathermarket community through new platforms such as its dedicated website, which showcases businesses and events.

The Leathermarket also shows how we understand our customers and enhance our brand by responding to their evolving needs, through:
• continuing to create new services, such as IT and broadband products for existing customers, and business lounges (called Club Workspace) for a wider customer group, and
• developing both these services in partnership with other companies.

Property background
• Acquired in 1993, largely derelict and with 40% occupancy
• Refurbished and invested in over a number of years
• Retained the building’s character

Working sustainably
We have worked sustainably by:
• recycling a historic building and bringing it back to economic use, preventing the environmental impact of constructing a new one
• creating a sustainable business centre, with more people now employed at The Leathermarket than when it was a tannery.

Risk Management
Our work at The Leathermarket has addressed the risk of:
• declining property values, by increasing rents and enhancing the building’s fabric
• declining occupancy levels, by creating an attractive environment for customers.

We maximise the value of some properties by obtaining consent for a change in use and partnering with a developer to create a mixed-use site.

At Wandsworth Business Village, we:
• obtained planning consent to change the site from employment to mixed use
• partnered with Mount Anvil, who will develop and sell 209 apartments and build us a 60,000 sq. ft. business centre, without any cash investment from us
• increased the property’s capital value and doubled our potential rental income
• positioned Workspace to benefit if apartment prices rise, as we will receive 50% of any sales proceeds above £50m.

Portfolio properties with similar potential:
• Aberdeen Centre
• Grand Union Centre
• Bow Enterprise Park
• Poplar Business Centre
• Marshgate Centre
• Creekside

Property background
• Original business centre was low-density and needed investment
• Located in an area key to Wandsworth Council’s regeneration plans

Working sustainably
We have worked sustainably by:
• improving Wandsworth town centre by supporting the local economy
• creating a new, highly attractive business centre that will help customers succeed and generate employment
• improving environmental performance, through a combined heat and power plant that will serve both the business centre and the apartments.
  

Risk Management
Our approach to redeveloping the site has addressed the risk of:
• declining property values, by creating a higher-value business centre
• declining occupancy levels, by creating an attractive centre in an area of proven demand
• over-running development costs, since Mount Anvil is responsible for delivering the new centre
• low return on investment, since we have not had to commit any new capital
• rising energy costs, because of the development’s combined heat and power plant and other environmental benefits.

Another way we can maximise the value of a property is by obtaining planning consent, selling part of the site for alternative use and recycling some or all of the proceeds in creating new lettable space.

At Canalot Studios, we:
• obtained consent for a change of use for the lower value part of the site
• sold the consented site to Nido for redevelopment as student housing
• received cash proceeds of £6.25m
• the ground floor of 5,000 sq. ft. will be returned to us at no cost, as part of the business centre
• recycling part of these proceeds in adding a 17,000 sq. ft. rooftop extension to the business centre and upgrading the building, to more closely align it to the needs of creative customers
• increasing our potential rental income by around £600,000 per year.

Portfolio properties with similar potential:
• Great Guildford Street
• Greenheath Business Centre

Property background
• Acquired in 2003
• One of a cluster of sites, with Westbourne Studios and Pall Mall Deposit close by
• Part of the site originally occupied by single-storey, low-rental sheds, unsuitable for higher-value customers
  

Working sustainably
We have worked sustainably by:
• increasing density and bringing in students, which will help local businesses and make the area more sustainable
• improving Canalot’s environmental performance, by including energy-reduction measures and helping customers cut their energy use.

Risk Management
Our approach to redeveloping the site has addressed the risk of:
• declining property values, by creating a higher-value business centre
• declining occupancy levels, by expanding and improving a centre in an area of proven demand
• low returns on investment, since we are only reinvesting part of the proceeds we received
• rising energy costs, because of the development’s energy-saving benefits.