Business model

Business model

the leading provider of flexible office space in London

We let inspiring spaces to over 3,000 businesses and around 30,000 individuals.

We drive capital appreciation and rental growth from our expertise in urban regeneration in London, active asset management and a focus on customer experience.

Our business model

There are six elements to our business model, that allow us to deliver value for all our stakeholders.

  • Customer proposition

    We provide SMEs with blank canvas spaces within unique and inspiring buildings in dynamic London locations. Our customers build their own identity and culture, but crucially our flexible lease terms allow their space requirements to evolve.

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    A flexible offer tailored to customer needs

    Our customers want a home for their business and to create their own brand identity and culture within their office space. Workspace offers that flexibility, as well as flexible lease terms which allow customers to expand and contract in line with their business needs. As businesses return to offices following the pandemic, quality collaboration space has become increasingly important. We dedicate around 30% of our buildings to attractive, well-designed communal and breakout space, which also includes meeting rooms, showers, cycle storage and high-quality cafes.

    Clearly articulating our brand proposition

    With the success of the Covid-19 vaccine rollout and Government restrictions lifting, demand for our space has increased. Our flexible offer is proving attractive to a wider range of businesses following the pandemic. Our recently launched brand campaign highlights our position as home to London’s brightest businesses and aims to further raise awareness of our offer and capture the growing demand.

    Building a customer-first culture

    We are working hard to make ongoing improvements to customer service and encourage all our teams to focus on customer retention.

  • Unique portfolio

    Our high-quality portfolio is wholly London-based. We hold our properties for long-term income generation and our ownership model gives us the flexibility to enhance the quality of space and expand our footprint through refurbishments and redevelopments.

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    Our freehold portfolio has been built up over more than 30 years, with representation across most areas of London. Owning the right properties with the right configuration for our multi-let strategy is critical. Our business centres are typically characterful, relatively low rise, large buildings of 50,000 sq. ft. or more. Location is all-important and our properties are well located around major transport hubs and in vibrant neighbourhoods. Many of them are distinctive landmarks in their areas. Inside, the buildings are modern and well designed to cater for the needs of our customers with lightfilled atriums, lots of communal and breakout space, high-spec meeting rooms and buzzing cafés.

    Active asset management

    We actively manage the portfolio to generate value, driving rents on our like-for-like properties, delivering on our project pipeline or selectively acquiring and disposing of assets. We have a long-term, sustainable approach to asset management, complementing the historic nature of many of our properties. Freehold ownership allows us to quickly respond to changing market demand and to easily reconfigure our space. Our rolling programme of refurbishments and redevelopments allow us to keep the offer up to date and to meet our increasingly strict sustainability criteria. In turn, we benefit from uplifts to the valuation as a result.

    Growing the portfolio

    Our ambition is to continue to grow the portfolio through our project pipeline and strategic acquisitions. We have deep knowledge of the London property market and track properties for many years that would suit our multi-let strategy. We take a disciplined approach driven by the scale of our project pipeline and a rigorous focus on returns.

  • Operating platform

    We have a proprietary and sophisticated in-house platform to manage all interactions with customers. It provides valuable data and insight to support decision-making across the business.

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    Our proprietary, in-house marketing and operating platform enables us to manage a huge volume of customer activity in-house, from enquiries and viewings through to lettings, facilities management, billing and renewals.

    We have strong relationships with our customers and ongoing interaction provides real-time market intelligence, as well as our regular surveys. This data and insight drives decision-making across the business and ensures our product is constantly adapted in line with customer needs.

    The platform is scalable and means we can significantly grow our portfolio without incurring significant operating cost growth.

    This platform is a major competitive strength, built over many years with significant historic data and insight on London’s SME market. Dealing with considerable levels of customer activity requires a particular culture and inhouse expertise and is part of what makes Workspace unique.

  • Talented people

    Our employees are central to our success. We are driven by a diverse, vibrant and inclusive culture, which focuses on customer experience. This dynamic culture helps attract and retain people who align with our values and have a broad range of skills, experience and backgrounds.

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    We are proud of our diverse and skilled team. We have a valuable blend of people with long-term experience at Workspace and those who have joined us more recently from other industries bringing fresh ideas and expertise.

    Operating during the pandemic

    Our teams have worked tirelessly over the past year to ensure customers have the right space for their business, in terms of size, location and affordability. Our centre managers and facilities teams have kept our business centres open and safe for those customers who needed access throughout the pandemic and have implemented measures to safely welcome back customers.

    Importance of culture

    The past year has highlighted more than ever how important company culture is for businesses to operate successfully. Workspace has a vibrant and inclusive culture that has proved strong in a challenging year. With teams working remotely for much of the year, a common sense of purpose brought us together and our values guided our actions and decisions.

    We also hear from our customers how important company culture is to them and it is clear that following the pandemic, successful businesses will be those whose culture prioritises employee wellbeing and satisfaction. With customer service and our engagement with customers front of mind, we recently refreshed our brand proposition and market positioning. As part of that, we rolled out workshops for the entire business to educate our employees on our brand personality and tone of voice.

    Employee wellbeing

    Our first annual employee survey, conducted last year, highlighted the importance of wellbeing and over the year we have made significant progress in this area. We have run a series of wellbeing webinars for employees and are launching a full programme of events for the coming year.

     

  • Prudent financing

    We prudently manage our balance sheet and maintain low levels of gearing. We are focused on generating sustainable, long-term income, which we then reinvest in enhancing the portfolio and return to shareholders via the dividend.

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    Our financial strategy is primarily focused on generating sustainable income

    Since the global financial crisis, we have prudently managed our balance sheet with a mixture of bank debt and private placements. More recently, we successfully raised £300m via a green bond. We have a broad spread of maturities and all our debt is unsecured. We have significant headroom on our covenants, low loan to value of 24% and, as at 31 March 2021, £424m of cash and available facilities to pursue growth opportunities.

    We own our properties for the long term and reinvest profits in our programme of refurbishment and redevelopments to drive rental growth. Enhancing our properties also results in higher valuations. It is this combination of income and capital value growth that makes Workspace a unique investment.

    Owning our assets outright gives us control. We are not constrained and can adapt the properties and our offer to meet fast-changing customer demands. Our efficient and scalable platform enables us to grow the business over time without significantly increasing operating costs.

  • Sustainability

    Creating attractive, sustainable environments is integral to our business. Successful regeneration of London requires high-quality, energy-efficient buildings and vibrant communities that appeal to our customers, their employees and to local residents and businesses.

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    Workspace has played a key role in the employment-led regeneration of areas across London for over 30 years now and we take this responsibility seriously.

    Many of our properties have historic significance in their local area. From formerly thriving factories to furniture depositories, our business centres are often iconic landmarks in their local communities. As the owner of these important buildings, we strive to uphold their legacy for the long term.

    Creating attractive, sustainable environments that positively contribute to local communities closely aligns with the expectations of our customers and investors, who are increasingly concerned with the sustainability of office space and reducing their impact on the environment.

    In addition to mitigating the risk of climate change, as home to London’s brightest businesses, Workspace aims to have a positive impact on our local communities. Through our InspiresMe programme, we work with our customers to support disadvantaged young people in London, offering CV workshops, interview practice and work experience placements.

    Commitment to net zero carbon by 2030

    This year, we committed to becoming a net zero carbon business by 2030 and published our pathway to achieving this goal, in line with our approved Science-Based Targets. These are aligned with limiting global temperature rise to 1.5°C above pre-industrial levels and cover both operational and embodied carbon.

    This will be a significant challenge due to our older and often listed buildings. We take a sustainable approach to refurbishment projects, aiming to retain existing structures and repurpose our buildings, whilst saving on embodied carbon. Thanks to our direct relationships with customers, we are uniquely placed to collaboratively drive down emissions and our in-house facilities management team allows for greater control over our operational energy consumption.

     

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