Workspace Announce JV
Workspace Group PLC
12 June 2006
WORKSPACE ANNOUNCES DEVELOPMENT
JOINT VENTURE
Workspace Group PLC ('Workspace'), the leading provider of flexible business
accommodation to small and medium sized enterprises in London has announced that
it has formed a joint venture with Glebe, a private property development
company, founded in 2004 by ex Chelsfield Director David Phillips.
The joint venture, in which Workspace will have a 50% equity share, will promote
the redevelopment opportunities for a number of properties contributed to the
joint venture by Workspace and Glebe. Under the terms of the agreement Workspace
and Glebe are contributing £20.0 million of equity each into the joint venture.
Non-recourse debt financing of £126 million has been provided by Bank of
Scotland Corporate.
Initially, Workspace is selling a portfolio of eleven properties into the joint
venture for a cash consideration of £146 million. This represents a surplus of
£8.6 million over the book value at the last external valuation in March 2006 of
£137.4 million. The properties are all located within Greater London and have a
combined lettable area of 1.2 million sq ft and have a passing rental income of
£7.2 million. The joint venture has also agreed to buy three properties from
Glebe for a consideration of £9.1 million. Workspace will continue with the
day-to-day management of the properties, whilst Glebe will apply its expertise
to deliver change of use, extension and redevelopment projects.
Workspace's core business is investing in and managing property let to SMEs. In
2005 the Group reported that up to 45% of its portfolio had the potential to add
value through improvement initiatives. The joint venture enables the group to
crystallise a portion of the value of its current portfolio and retain its focus
on its key skills areas whilst retaining a significant interest and
participation in the gains from development. Profits on the joint venture will
be shared 55:45 in favour of Workspace (in respect of the original Workspace
properties). Workspace and Glebe will continue to source and acquire properties
some of which may be injected into the joint venture.
The use of a leveraged, ring-fenced development vehicle will enable Workspace to
maximise returns.
Workspace will receive net proceeds of £123.2 million which it will use for
general corporate purposes and to pay down debt.
Workspace was advised by Rothschild.
Harry Platt, Workspace Chief Executive commented,
' This a major step for Workspace. This partnership with Glebe will accelerate
our programme for releasing further value from our properties, by driving
through alternative uses or through re-development. I believe that our
association with Glebe will add value to our business by expanding our scope of
activity using their skills and expertise.'
' Our core business remains investing in and managing property that is suitable
for letting to SMEs. This is where our key skills lie. Our market place is huge.
There are over 150,000 SMEs in the capital and we are tracking many properties
that meet our acquisition criteria. They all have the potential to improve
income and capital growth performance through our style of active management.'
David Phillips, Chairman of Glebe commented:
' We are very pleased to be in partnership with Workspace and believe there is
significant potential to be extracted from this group of London assets. Our
complementary skills and extensive experience will realise added value for both
parties, and we intend to grow this joint venture into a major part of our
overall business.'
-ends-
Date: 12 June 2006
For further information contact:
Workspace Group PLC
Harry Platt, Chief Executive
Mark Taylor, Finance Director
020-7247-7614
e-mail: info@workspacegroup.co.uk
web: www.workspacegroup.co.uk
Glebe
David Phillips, Chairman
020-7409-3741
e-mail: dphillips@glebe.com
web: www.glebe.com
Rothschild
Alex Midgen
Robert Waddingham
020-7280-5000
cityPROFILE
Simon Courtenay
Andrew Harris
020-7448-3244
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 hour ago Johnson Matthey
- 2 hours ago Galliford Try
- 2 hours ago Galliford Try
- 2 hours ago Centrica
- 3 hours ago Smith & Nephew