Workspace Group PLC

Harry PlattChief Executive, Workspace Group PLC

Presentation to London Business School: Real Estate Club

Tuesday 17 April 2007

Workspace Group PLC

Performance and History

Our Business

Workspace as a REIT

Added Value: Relation to London Plan

History

• Established 1987

• Joined London Stock Exchange 1993

• Geographical focus

• Scale

Ten Year Results to 31 March 2006

Five Year Ten Year

Compound Growth Compound Growth

Adjusted NAV per share 20.9% 21.9%

Property at Valuation 21.3% 22.6%

Trading PBT 9.9% 13.8%

Trading EPS 10.2% 13.0%

Dividend per share 10.2% 11.2%

Total Shareholder Return

Workspace Total Shareholder Return (TSR) Index

0

50

100

150

200

250

300

350

2001 2002 2003 2004 2005 2006

Workspace FTSE Sm all cap FTSE 250 FTSE Real Es tate FTSE All share

5 Year Share Price

IPD Performance

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Per

cen

tag

e R

etu

rn

Workspace

IPD

Workspace vs Universe

The Business – Hotelier of Space to SMEs

To achieve profit and capital growth from:

• Providing workspace to SMEs in London

• Investing in properties with potential- Income growth- Capital growth- Alternative use

• Increasing scale of portfolio, spreading overheads and developing the brand

• The right financial platform

“ We provide affordable, flexible space for new and small businesses in London and the South East ”

• c.4,300 customers over 113 estates; 6.0 million sq .ft

• Over 9,900 enquiries a year; market leading brand in fragmented market

• A simple product offer

• Superior service from in-house management

• Customer focused

The Business – Hotelier of Space to SMEs

Workspace Portfolio 2006

Rents, Affordability: Customer Profile

Median % of median

turnover Year of start 1996 —

Turnover £250,000 —

Overheads £90,000 36

Profits £40,000 16

Rent £12,000 4.8

Typical Workspace tenant*:

• Rent under 5% of turnover• Average customer in 1,000 sq. ft paying £200 (approx) rent

per week

*Source: Kingston University survey of over 200 customers. Spring 2004

Customer base of more than 4,000 small businesses

18%

6%

1%2%

1%

12%5%

10%

45%

Manufacture

Retail

Construction

Utilities/Infrastructure

Organisations

Design & Creative

Services

Storage & Distribution

Unclassified

Workspace Customer Base

Classification based on DTI categories

Our Buildings

Westminster Business SquareThe Leathermarket

Our Buildings

Westbourne - external Westbourne – Internal

Clerkenwell Workshops

Kennington

Southbank Portfolio

9

1. Kennington Park Studios, SW92. Westminster Business Square, SE113. Southbank House, SE14. Linton House, SE15. Great Guildford Business Centre, SE16. The Leathermarket, SE17. Enterprise Estate, SE18. Hatfield House, SE19. Tower Bridge Business Centre, SE1610. Langdale House Business Centre, SE1

Scale = 1:25000

10

Communities of Customers

• On individual sites

• Between sites

• Tradelink

Workspace as a REIT

• Comfortably pass tests (ownership, property, trade mix

interest cover etc).

• Eliminate £140m deferred tax (80 pence per share)

• £20m entry cost – short payback

• Earnings (dividend) enhancing

• Strategic plan maintained

• May create acquisition opportunities

About London

• along with New York and Tokyo, is a world city

• most multicultural in the world, home to more than 300 languages

• 12.5% of UK population, responsible for 16.5% of its output

• highest number of business starts and closures in the UK

• highest concentration of fastest-growing, most productive business sectors

LONDON IS OUR MARKETPLACE

7,322,400

8,489,500

6,000,000

6,500,000

7,000,000

7,500,000

8,000,000

8,500,000

2001 2004 2011 2016 2021 2026 2031

London Population Projections

Source: DMAG Briefing 2005/40

Accounting for Growth

Source: LDA - Estimating London’s new migrant population, Sept 2006

“International migration is now the dominant driver of population changein the UK and is set to remain so for at least the next 25 years.”

LDA Priority Areas for Investment

• 60% of Workspace stock falls within these areas

• Workspace is well placed to benefit from – and contribute to – the future investment within these areas.

WHARF ROAD, HACKNEY (N1)

• Replacing existing units with:

- 30,000 sq ft of commercial space - 77 residential units

LDA Priority Areas for Investment

LDA Areas For Intensification

During 2005:

• 100% of development took place on previously developed commercial space

LDA Areas For Intensification

THURSTON ROAD, LEWISHAM (SE13)

• Part of the regeneration of Lewisham Town Centre

• Conversion of industrial estate into mixed-use development:

91,000 sq ft non-food retail16,500 sq ft commercial space271 residential apartments

LDA Areas of Deprivation

Insert mapIn deprived wards, regenerationopportunities are greatest, through:

• spatial, social, economic policies & planning

• stimulating business ownership

N17 STUDIOS, HARINGEY

• situated in one of the most deprived areas of London

• originally 50 large floor-plate units

• now more than 90 units, 80% of which less than 1,000 sq ft

LDA Areas of Deprivation

PTAL Map

PTAL ratings assess publictransport accessibility

30% of WSG properties have arating of 5 or higher

Workspace Portfolio: Current

Low density; low capital value; in areas of change

25% subject to intensification/change of use over 5 years

A further 20% subject to intensification/change of use over 10 years

Stock continually replenished – the acquisition database

Workspace Portfolio: What density increases achievable?

Wharf Road 2xThurston Road 6xAberdeen 2xGrand Union 5xWandsworth 2x (+)Bow 6x (+)Whitechapel 3.5x (+)

Workspace Portfolio: What mix of uses?

• Replacement of workspace – new for old

• Residential main other element

• Workspace to be treated as equivalent to affordable housing (?)

• Other uses

Transport Improvements in London