This is my last report as Chairman. I leave the business in the hands of a strong management team.

Since March 2020, the Covid-19 pandemic has had a significant effect on most businesses, including Workspace. Our customer base of primarily small and medium-sized businesses bore much of the immediate impact of the disruption, with many suffering reductions in
income and cashflow. We believed it was right that Workspace shared that burden, and we swiftly offered measures to help support our customers. The health and safety of our customers, employees and partners is always our primary concern.

Despite the challenging last few months, our business performed strongly over the past year with net rental income increasing 10% to £122m. EPRA NAV per share increased modestly by 0.3% to £10.89, reflecting the market conditions at the height of the Covid-19 pandemic which affected valuations. Overall occupancy averaged 87% with like-for-like occupancy at an all-time high of 93%.

A strong team to meet the challenge

The Board underwent several changes over the year. We said goodbye to Jamie Hopkins who stepped down as Chief Executive Officer in May 2019 and after a rigorous selection process, involving both internal and external candidates, we were delighted to appoint Graham Clemett as our new Chief Executive. Graham’s extensive experience and strong track record over more than 12 years at Workspace give the Board great confidence that the Company will continue to thrive under his leadership.

I am pleased that Stephen Hubbard will be taking over as Chairman from our Annual General Meeting in July 2020. Stephen brings a wealth of experience in the property market as previous Chairman of CBRE UK.

We also welcomed Dave Benson who joined the Board on 1 April 2020 as CFO. Dave will bring strong commercial focus from his experience as Finance Director of Whitbread to the Board. We also welcomed Suzi Williams, who joined the Board in January 2020. Her expertise in marketing and brand development will be highly valued as we refine our strategy in these areas. A full discussion of our corporate governance framework can be found on pages 78 to 167 of the report. 

In these uncertain times, the quality of a company’s managemen team is paramount. We are fortunate to have a talented and experienced Executive team, led at Board level by Graham and Dave, managing a well-located, high quality property portfolio across London.

Focus on our employees

Our employees have been the foundation of our efforts over the year. As liaison for employee relations, I have met with employee groups during the year to hear their views and ideas.

“This is my last report as Chairman. I leave the business in the hands of a strong management team.

Additional employee feedback was incorporated into our Board discussions and was vital in developing our Company Purpose. Going forward, Stephen Hubbard will assume responsibility for employee liaison to continue to develop this valuable initiative. More information on our Company Purpose and employee initiatives can be found on pages 24 to 29 of the report.

ESG, sustainability and ‘Doing the Right Thing’

Climate change and sustainability continue to grow in importance for all our stakeholders. We have an award-winning record of designing and refurbishing our buildings to high environmental standards. In 2020, we have taken a decisive step to set a firm date for achieving net zero carbon by 2050 with science-based targets to deliver our long-term

path to achieve that goal. Our full report on our work on Doing The Right Thing and ESG is on pages 34 to 52 of the report.

Dividend

Our dividend policy is based on sustainable growth in trading profit after interest taking into account our investment and acquisition plans and the distribution requirements that we have as a REIT. We are in a strong financial position, with substantial headroom on our covenants and our proven strategy and business model leave us well positioned for the future. The Board is therefore recommending a final dividend of 24.49p per share, which meets our distribution requirement as a Real Estate Investment Trust and also reflects the Board’s confidence in the outlook for the Company.

Leaving Workspace well positioned

This is my last annual report for Workspace. In my nine years as Chairman, I have seen Workspace continue to grow, creating vibrant neighbourhoods for our customers and the surrounding areas. I am proud to have been a part of this story. When I joined the Company Board in 2011, our EPRA net asset value per share was 29.5p compared with £10.89 in 2020. I am confident that Workspace has the resilience and capabilities to address the current challenges and thrive.

I would like to thank all Workspace employees for their hard work and dedication, especially during the more recent difficult times when they have worked tirelessly to support our customers.

It has been an enormous privilege to serve as Chairman for the past nine years, and I wish you all continued success.

Daniel Kitchen
Non-Executive Chairman
4 June 2020