Workspace Group PLC Managed Workspace – The Opportunities over the last decade and the outlook through the 21 st Century Harry Platt Chief Executive 22 May 2006 BCA Annual Conference

Workspace Group PLC Personal Review of development of flexible leasing and the targeting of space for SMEs Growth and development of sector in 1990’s to now – following experiences of Workspace Group Looking forward – key factors influencing the continued development of the sector

The ’70s and ’80s Isolated initiatives – not movement Innovation in private and public sectors Importance of individuals The economic picture

Individuals – the ‘Architect’ entrepreneurs David Rock/John Townsend

Individuals – the ‘Architect’ entrepreneurs Clerkenwell Workshops/Dryden Street/Canalot/ Woolwich Dockyard/etc Mike Franks; Ted Potts; Nick Falk; Gillian Harwood; Bennie Gray; etc

Private Sector St Helens Enterprise Agency B.I.T.C London Enterprise Agency (LENTA) B.A.T. Local London

Public Sector Industrial Building Allowances (IBA’s) Inner Urban Areas Act – and subsequent Economic Development Officers Development Agencies (Wigan) Business Support

UK Business Population KEY FACTS Total Business Stock: 2.5m to 3.7m Static through the 1990s, on the rise since stands at 4.2m —1.1m (26%) employ between 1-20 people —Only 87,000 businesses employ more than 20 people (Source: SBS Service, 2004)

Late ’80s/Early ’90s Changing economic background Towards an entrepreneurial culture Flexibility and SMEs

UK Business Population (By size of firms with employees) (Source: SBS Service, 2004)

The Economic Picture Churn The SME sector: spread and risk Starts and Exits: scale and churn Most exits are successes Do not confuse businesses with owners; serial and portfolio entrepreneurs

Workspace Group:History: Growth in assets and shareholder value Founded in 1987 Listing on London Stock Exchange 1993 Last equity issue 1994 Now: Gross Assets over £950 million

Our Business “ We provide affordable, flexible space for new and small businesses in London and the South East ” c.4,000 customers over some 100 estates; nearly 6 million sq.ft Over 8,000 enquiries a year; market leading brand in fragmented market A simple product offer Superior service from in-house management Customer focused

Workspace Group portfolio 2005/06

Creating a commercial proposition: affordability as well as flexibility Typical Workspace tenant: Rent under 5% of turnover Source: Kingston University survey of over 200 customers. Spring 2004

Total Percentage of Customers by DTI Categories

Our Customers

Workspace Group PLC Workspace Group PLC: A Property Based Business Workspace Approach TenantsCustomers Large Businesses – ‘Good Covenants’Small Businesses Prime PropertiesSo-called ‘secondary’ stock Long Term LeasesShort term flexible leases Marginal RentsAverage rents Asset Collectors or CreatorsBusiness

Where are we now? SMEs Flexibility Producers/Consumers/Customers Economic efficiency: property ownership

Looking forward – Key factors influencing the continued development of the sector Continued growth of SME sector and recognition of benefits of flexible leasing in larger organisations Economic driver: Demand UK economy and its population demographics

Looking forward – Key factors influencing the continued development of the sector The direct services and profit contributions Bureau, telecoms, conferencing, insurance etc Added value and margin contributions: will it be eroded further?

Looking forward – Key factors influencing the continued development of the sector The indirect services: here to help you grow, a service not a “just a space” Communities: centres/between centres tradelink

Marketing

Homepage Calendar of events from WSG & beyond Message boards for customer interaction Press from and about tenants (e.g. Awards) Searchable, up-to-date, tenant directory

Looking forward – Key factors influencing the continued development of the sector The sustainability agenda Our Buildings Our Customers Our Suppliers

The Property Case: The Third Dimension, long term sustainability Source: Upstream Strategies

PLC Working Together Landlords Customers Suppliers Communities – like the BCA!