Interim Results

Workspace Group PLC
26 November 2001


                     WORKSPACE REPORTS EXCELLENT PROGRESS

                       AS SME SECTOR REMAINS RESILIENT

Workspace Group PLC ('Workspace') today announces its interim results for the
six months to 30 September 2001. Workspace provides approximately 4.5 million
sq. ft of flexible business accommodation for over 3,100 small and medium size
enterprises ('SMEs') in London and the South East.


  * Profits before tax up 40% to £5.96 million (2000: £4.26 million)
  * Valuation surplus for half year £14.4m
  * Net asset value per share up 8.1% in half year to £12.90 (31 March 2001:
    £11.93)
  * Basic Earnings per share up 40.1% to 27.6p (2000: 19.7p)
  * Annual rent roll up 6.5% to £26.57 million (31 March 2001: £24.94
    million)
  * Core occupancy levels remain stable at 89.9%
  * Average rents of core portfolio increased in half year by 5.2% to £7.03
    per sq. ft
  * Turnover up 14.6% to £19.41 million (2000: £16.93 million)
  * Interim dividend up 7.7% to 7.0p (2000: 6.5p)



Commenting on the results, Harry Platt, Chief Executive, said,

' The SME sector has remained resilient in the face of the current economic
climate. The demand for space in our stock remains high. Occupancy levels are
stable and rents are moving ahead at a number of our properties.

' We are now focused totally on providing work space in London and the South
East. Following the sale of our Midlands portfolio we are reinvesting the
proceeds into properties located in the South East with good prospects for
income and capital growth. We have acquired four properties for £15.77 million
and we are tracking some excellent acquisition opportunities. We have
currently over £80 million available for acquisitions.

' Current trading remains strong and I am confident that the group is poised
to continue its excellent progress.'

                                    -ends-

Date: 26 November 2001

For further information:

Harry Platt, Chief Executive           Simon Courtenay

Mark Taylor, Finance Director          Ed Senior
                                         
Workspace Group PLC                    City Profile Group
                                         
020-7247-7614                          020-7448-3244

e-mail: [e-mail]      e-mail: [e-mail]
        
web: www.workspacegroup.co.uk



Operating and Financial Review



Review of Activities

The Group continues to make excellent progress.

For the half year pre-tax profits of £5.96 million are up 39.9% on the same
period last year. At the same time, net asset value per share has risen to £
12.90, an increase of 16.8% over the last twelve months, or 8.1% in the last
six months alone.

Both improvements in profitability and asset value have been driven by
continuing increases in rental values. The long term fundamentals for our
market place of small and medium sized enterprises in London and the South
East remains strong. Furthermore, Workspace is the leading provider of space
to such businesses in this market place.

During the first quarter of the year the Group sold its Midlands portfolio for
£42.3 million, representing 11% by value of the Group's total portfolio at 31
March 2001, as the Group focused its expansion on the London and South East
market. Moving forward, the Group is now very well placed (with low gearing
and considerable investment capacity) to move ahead with its expansion, as new
acquisition opportunities providing real long term potential arise.

Key aspects of performance in the half year are: -


  * At 30 September 2001 core occupancy was 89.9% and overall occupancy some
    85.1% (and both remain at these levels at mid November 2001). Occupancy
    has been stable at these levels throughout the half year and maintains
    those achieved in the previous year.

  * Excluding the Midlands portfolio, the rent roll has increased by £1.63
    million or 6.5% to £26.57 million in the half year (from £24.94 million at
    31 March 2001). Of this change £0.49 million reflects the net effect of
    acquisitions/disposals, whilst £1.14 million reflects underlying rental
    growth.

  * With this underlying rental growth, average rents per square foot of the
    core London and South East portfolio have increased by 5.2% over the half
    year, from £6.68 to £7.03 per square foot. This still remains a low rent
    for quality stock of affordable, flexible space for our small and medium
    sized enterprise customers.

  * The estimated rental value, at current market rents, of the portfolio
    now stands at £36.9 million. This assumes full occupancy. At 90% occupancy
    this equates to £33.2 million, some £6.63 million (or 25%) above the
    current passing rent roll. With up to 40% units subject to re-letting or
    review each year this reversionary potential is in early prospect over the
    next two to three years.

  * The Group's properties were valued by Insignia Richard Ellis at 30
    September 2001 at £353.7 million yielding a surplus of £14.4 million, an
    uplift of 4.2% on the portfolio valuation at 31 March 2001 (as adjusted
    for subsequent acquisitions and disposals). This valuation has been
    incorporated in the interim accounts. As a result the net asset value per
    share has increased to £12.90 compared to £11.93 at 31 March 2001 and £
    11.04 at 30 September 2000 (an uplift of 8.1% for the half year and 16.8%
    year on year).

The Group's 'added value' programme involving increasing densities and changes
of use on certain sites continues to gather momentum. We await the outcome of
an application for residential development on a piece of land at Three Mills,
Stratford, E3. Planning applications have also been submitted for a retail
warehouse scheme at Thurston Road Industrial Estate, Lewisham, and for a
residential development at Hooley Lane, Redhill. Other schemes are under
consideration.

Acquisitions and Disposals

During the half year the Group acquired four properties for £15.77 million.
The Midlands portfolio was sold for £42.3 million, and two further disposals
were made for £5.7 million. The table below shows the main details of
acquisitions and disposals in this period.


        Name of Property           Description            Acquisition/  Annual
                                                           Sale Price   Income
        Acquisitions
        Harlow           Single storey estate; 28 units      £3.6m    £344,324
        Enterprise       in 51,851 sq. ft
        Centre, Harlow

        Quality Court,   24,102 sq. ft - vacant subject     £4.22m       Nil
        London, WC2      to refurbishment
First
Quarter

        Disposals
        Midlands         26 multi-let estates; in total     £42.3m  £4,361,240  
        portfolio        1.22 million sq. ft   
                      
        Ashburton        Two storey industrial estate; 5     £2.8m    £230,000
        Trading Estate,  units in 63,065 sq. ft
        London N7


        Acquisitions:
        98 Victoria      Multi-let industrial estate with    £5.45m   £389,382
        Road, Acton,     two storey offices; 18 units in
        London, NW10     69,869 sq. ft
        Europa Building, Three storey industrial and         £2.5m    £120,000
                         warehouse building totalling
Second  Victoria Road,   27,950 sq. ft
Quarter Acton

        London NW10


        Disposal:        Single storey industrial estate;    £2.9m    £114,940
                         7 units in 75,583 sq. ft
        Arklow Road
        Trading Estate,
        London SE14


Following 30 September the Group acquired a business centre at Windmill Place,
Hanwell, Uxbridge, Middlesex. This comprises 63 units in some 26,100 square
feet and was acquired for £3.35 million at an immediate income yield of 9.7%.


Cash Flow and Financing

As a result of the major Midlands portfolio disposal, disposal proceeds
exceeded capital expenditure in the half year by £26.82 million (2000: £10.18
million net expenditure). Consequently, by the half year end gearing had
fallen to 62% (30 September 2000: 89%; 31 March 2001: 82%) with interest cover
at 2.04 times (2000: 1.75 times).

During the quarter holders of £1.14m of the Group's 11% convertible loan stock
2011 exercised their conversion rights. This gave rise to the issue of 228,000
shares.

There was a net cash inflow of £1.67 million (2000: £2.02 million) during the
half year. Net cash flow from operating activities was an inflow of £9.03
million for the half year (2000: £8.16 million).

Occupancy and Trading Statistics

The Group's key statistics relating to its trading operations are given in the
table below.
 ______________________________________________________________________________
                                           30 September     30 June    31 March

                                                   2001        2001        2001
 ______________________________________________________________________________
Number of estates                                    80          79          78
 ______________________________________________________________________________
Total floorspace at end of period             4,520,707   4,513,937   4,525,030
 ______________________________________________________________________________
of which:
  London and South East (sq. ft)              4,134,148   4,127,378
  Three Mills and developments (sq. ft).        386,559     386,559
 ______________________________________________________________________________
Lettable floorspace of core portfolio         3,996,025   4,001,944   3,988,450
 ______________________________________________________________________________
Lettable units (number)                           3,489       3,521       3,507
 ______________________________________________________________________________
Annual rent roll of occupied units          £26,573,800 £25,570,817 £24,941,423
 ______________________________________________________________________________
Average rent (£/sq ft)                            £6.91       £6.71       £6.39
 ______________________________________________________________________________
Average rent of core portfolio (£/sq ft)          £7.03       £6.90       £6.68
 ______________________________________________________________________________
Occupancy overall                                 85.1%       84.2%       86.2%
 ______________________________________________________________________________
Occupancy of core portfolio                       89.9%       89.4%       90.6%
 ______________________________________________________________________________



All figures exclude Midlands portfolio which was sold on 15 June 2001.

Comparisons of overall occupancy and rent roll are distorted by acquisitions,
disposals and transfers. The 'core portfolio' is defined as those properties,
excluding Three Mills (which due to the short term nature of the lettings of
studio space has a volatile occupancy rate which in turn can obscure overall
patterns), that have been held throughout the year to date and which are not
subject to refurbishment/development programmes.

Current Trading

The fundamentals of our market place remain strong and, now nearly two months
into the second half, we are confident that we will meet our targets for the
year as a whole. Despite the tragic events of September 11, and the inevitable
delays in decision making by some of our customers, enquiries and conversion
rates continue at similar levels to earlier in the year, and rents to
increase, with the rent review programme showing good results. We continue to
follow a number of potential acquisitions maintaining our stance that we will
only buy when we see real long term value for shareholders.

Interim Dividend

The Board has declared an interim dividend in respect of the six months ended
30 September 2001 of 7.0p per ordinary share payable on 1 February 2002 to
shareholders on the register at 4 January 2002. This compares with an interim
dividend of 6.5p per ordinary share paid for the same period in 2000 and is an
increase of 0.5p or 7.7%. The Board's intends to increase dividends for the
year as a whole by 10%.



Unaudited Consolidated Profit and Loss Account

for the six months ended 30 September 2001
                               3 months ended               6 months ended 30
                                30 September                     September
                                                  Trading Other   
                                               Operations Items   Total
                                  2001    2000       £000  £000    2001    2000

                                  £000    £000                     £000    £000
 ______________________________________________________________________________
Turnover - continuing            9,395   8,386     19,408     -  19,408  16,933
operations
Rent payable and direct costs  (2,792) (2,325)    (5,497)     - (5,497) (4,629)
 ______________________________________________________________________________
Gross profit                     6,603   6,061     13,911     -  13,911  12,304
Administrative expenses        (1,441) (1,246)    (2,842)     - (2,842) (2,425)
 ______________________________________________________________________________
Operating profit - continuing    5,162   4,815     11,069     -  11,069   9,879
operations
Profit on Disposal of              374      74          -   377     377      62
investment property
Interest receivable                144     142        229     -     229     257
Interest payable and similar   (2,583) (2,991)    (5,714)     - (5,714) (5,937)
charges
 ______________________________________________________________________________
Profit on ordinary activities    3,097   2,040      5,584   377   5,961   4,261
before taxation
Taxation on profit on ordinary   (754)   (551)    (1,508)  (18) (1,526) (1,151)
activities
 ______________________________________________________________________________
Profit attributable to           2,343   1,489      4,076   359   4,435   3,110
shareholders
Dividends                      (1,143) (1,070)    (1,143)     - (1,143) (1,070)
 ______________________________________________________________________________
Retained for the period          1,200     419      2,933   359   3,292   2,040
______________________________________________________________________________
Earnings per shares (basic)      14.5p    9.4p      25.4p  2.2p   27.6p   19.7p
Diluted earnings per share       14.3p    9.3p                    27.0p   19.4p



Statement of Total Recognised Gains and Losses
                                                              6 months ended 30
                                                                   September
                                                                2001       2000
                                                                £000       £000

 ______________________________________________________________________________

Profit for the financial period                                4,435      3,110
Unrealised surplus on revaluation of investment               14,389     31,768
properties
Taxation on revaluation surpluses realised on sale of              -      (510)
properties

 ______________________________________________________________________________

Total gains relating to the financial period                  18,824     34,368



Consolidated Balance Sheet
                                                            Unaudited   Audited
                                                         30 September  31 March
                                                                 2001      2001
                                                                 £000      £000

 ______________________________________________________________________________
Fixed assets
Tangible assets
Investment properties                                         353,734   366,525
Other fixed assets                                              1,686       999
Investment in own shares                                        1,015     1,015

 ______________________________________________________________________________
                                                              356,435   368,539

 ______________________________________________________________________________
Current Assets
Debtors                                                         8,953     5,844
Investments                                                     6,188     5,373
Cash at bank and in hand                                          281       206

 ______________________________________________________________________________
                                                               15,422    11,423
Creditors: amounts falling due within one year
                loans and overdrafts                          (2,627)   (4,355)
                others                                       (24,070)  (25,658)

 ______________________________________________________________________________
Net current liabilities                                      (11,275)  (18,590)

 ______________________________________________________________________________
Total assets less current liabilities                         345,160   349,949
Creditors:      amounts falling due after more than
                one year
                loans (including Convertible Loan           (134,636) (158,371)
                Stock)

 ______________________________________________________________________________
                                                              210,524   191,578

 ______________________________________________________________________________
Capital and reserves
Called up share capital                                         1,644     1,618
Share premium account                                          41,905    40,666
Revaluation reserve                                           132,858   122,739
Profit and loss account                                        34,117    26,555

 ______________________________________________________________________________
Shareholders' funds - equity interests                        210,524   191,578

 ______________________________________________________________________________
Net asset value per share                                      £12.90    £11.93

 ______________________________________________________________________________
Movement in shareholders' funds
Profit for the financial period                                 4,435    13,222
Dividends                                                     (1,143)   (3,723)

 ______________________________________________________________________________
                                                                3,292     9,499
Issue of Shares                                                    26        27
Share premium account                                           1,239       871
Revaluation reserve - increase                                 14,389    38,673
Taxation on valuation surpluses realised on sale of                 -     (510)
properties

 ______________________________________________________________________________
Net movement in shareholders' fund for the                     18,946    48,560
financial period
Shareholders' funds as at 1 April 2001/2000                   191,578   143,018

 ______________________________________________________________________________
Shareholders' fund as at 30 September 2001/31 March           210,524   191,578
2001

 ______________________________________________________________________________



Unaudited Consolidated Cash Flow Statement

for the six months ended 30 September 2001
                                                             6 months ended 30
                                                                  September
                                                               2001       2000
                                                               £000       £000

______________________________________________________________________________

Net cash inflow from operating activities                     9,031      8,155
Return on investment and servicing of finance               (5,673)    (6,196)
Taxation (Payment)/Refund                                   (2,301)        287
Capital proceeds/(expenditure) - net                         26,818   (10,180)
Equity dividends paid                                       (2,659)    (2,391)

______________________________________________________________________________
Net cash inflow/(outflow) before use of liquid resources     25,216   (10,325)
and financing
(Outflow)/inflow from Management of liquid resources          (815)      6,223
(Outflow)/inflow from Financing                            (22,733)      6,122

______________________________________________________________________________
Net cash inflow                                               1,668      2,020

______________________________________________________________________________
Reconciliation of net cash flow to movement in net debt
Increase in cash                                              1,668      2,020
Increase/(Decrease) in liquid resources                         815    (6,223)
Inflow/(outflow) from movements in debt financing            23,870    (5,399)

______________________________________________________________________________
Changes in debt resulting from cash flows                    26,353    (9,602)

______________________________________________________________________________
Net debt at 1 April                                       (157,147)  (148,731)
Net debt at 30 September                                  (130,794)  (158,333)

______________________________________________________________________________



 Notes to the Half Year Results

1. Basis of Preparation

The unaudited financial information contained in this quarterly report does
not comprise statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The statutory accounts for the year ended 31 March 2001
included an unqualified report of the auditors. The Group's unaudited accounts
for the period ended 30 September 2001 have been prepared on the basis of the
accounting policies set out in the Annual Report and Accounts for the year
ended 31 March 2001.

2. Segmental Analysis                      3 months ended        6 months ended 
                                            30 September          30 September
                                           2001      2000       2001       2000
                                           £000      £000       £000       £000

 ______________________________________________________________________________

Rental Income                             7,440     6,636     15,422     13,313
Service charge and other recoveries       1,679     1,480      3,394      2,957
Fees, commissions, and sundry income        276       270        592        663

 ______________________________________________________________________________
                                          9,395     8,386     19,408     16,933

 ______________________________________________________________________________

3. Interest Payable                        3 months ended        6 months ended 
                                            30 September          30 September
                                           2001      2000       2001       2000
                                           £000      £000       £000       £000

 ______________________________________________________________________________

Convertible loan stock and debenture        642       662      1,304      1,324
stock interest
Mortgage interest                         2,006     2,732      4,451      5,340
Bank and other interest                       5        19         29         42
Net development interest capitalised       (70)     (422)       (70)      (769)

 ______________________________________________________________________________
Charged to profit and loss account        2,583     2,991      5,714      5,937

 ______________________________________________________________________________



4. Taxation

The taxation charge, excluding tax on property disposals, for the six months
ended 30 September 2001 is based on the estimated effective tax rate for the
year ending 31 March 2002 of 27% (2001 estimated: 27%). Tax on property
disposals is only 4.8% due to tax losses made on some properties within the
Midlands sale.

5. Earnings Per Share and Net Assets Per Share

Earnings per share have been calculated by dividing the profit after tax for
each period attributable to shareholders by the weighted average number of
ordinary shares in issue during the period less investment in own shares of
200,000 (16,073,119 shares). Net assets per share have been calculated by
dividing net assets at the end of each period by the number of shares in issue
at that time less investment in own shares of 200,000 (16,243,948 shares).

6. Valuation

The Group's investment properties were valued by Insignia Richard Ellis at 30
September 2001 on an open market existing use basis in accordance with the
guidance notes issued by the Royal Institution of Chartered Surveyors.

7. Creditors

Creditors falling due within one year include tenants' deposits of £3.87
million (31 March 2001: £3.26 million) and deferred rental and service charges
of £4.29 million (31 March 2001: £4.95 million).

8. Financial Instruments

In accordance with the requirements of FRS 13, an assessment of the fair value
of the Group's financial instruments held for financing purposes has been
undertaken as at 30 September 2001. The results are summarised as follows:

                                                       Book     Fair 
                                                      Value     Value Difference
                                                  £ Million £ Million  £ Million

 ______________________________________________________________________________

Short term borrowings and current part of long        (2.6)    (2.6)          -
term borrowings
Long term borrowings                                (134.6)  (139.9)      (5.3)
Financial Assets                                        6.5      6.5          -
Interest rate Cap / Collar                              0.3      1.1        0.8
 ______________________________________________________________________________
                                                    (130.4)  (134.9)      (4.5)

 ______________________________________________________________________________



This represents 28 pence per issued ordinary share and if applied to net asset
value per share at 30 September 2001 would reduce the latter to £12.62. On a
diluted basis, allowing for conversion of the Group's convertible loan stock,
this adjustment reduces to 14 pence per share. However, the Group has no
obligation or present intention to repay its Debenture and Convertible
borrowings other than at maturity, when they will be repaid at par. Cash
outflows arising from these borrowings will be limited to the future fixed
interest payments and redemption at par. These outflows are unaffected by the
notional market or fair values referred to above.

9. Interim Statement

Copies of this statement will be dispatched to shareholders on Monday 26
November 2001 and will be available from the Group's registered office at
Magenta House, 85 Whitechapel Road, London, E1 1DU from 9.00am on that day.