Workspace Group

WORkSPAcE 
UNDERSTANDS 
WORk SPAcE

ANNUAL REPORT 
AND AccOUNTS 2013

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WORkSPAcE GROUP PLc

Chester house 

Kennington Park

1-3 Brixton road

London

SW9 6DE

telephone: +44 (0) 20 7138 3300

Web: www.workspace.co.uk

Email: info@workspace.co.uk

if you require information regarding 

business space in London call 

+44 (0) 20 7369 2390 or visit 

www.workspace.co.uk.

this report is printed on materials which 

are FSc® certifi ed from well-managed forests.

these materials contain EcF (Elemental 

chlorine Free) pulp and are 100% recyclable.

Designed by carnegie Orr 

(a Workspace Group customer)

+44 (0)20 7610 6140.

www.carnegieorr.com

 
 
 
 
 
 
 
cONTENTS

REViEW OF OPERATiONS
IFC  Our business model
01  2013 highlights
02  Strong momentum
04  Chairman’s Statement
06  Chief Executive Offi  cer’s Strategic Review
08  Our strategy 
10 
12  Portfolio potential
14  Corporate Social Responsibility
16  Business Review
26  Key Property Statistics

 Generating value

GOVERNANcE
28  Chairman’s Introduction 
30  The Board and Executive Committee
32  Report of the Directors
35  Corporate Governance Report
45  Directors’ Remuneration Report
61  Directors’ Responsibilities

FiNANciAL STATEMENTS
62 

 Independent Auditors’ Report to the 
Members of Workspace Group PLC

64 
65 

63  Consolidated Income Statement
 Consolidated Statement of 
63 
Comprehensive Income
 Consolidated Balance Sheet
 Consolidated Statement of 
Changes in Equity
 Consolidated Statement of Cash Flows

66 
67  Notes to the Financial Statements
91 

 Independent Auditors’ Report to the 
Members of Workspace Group PLC 
(Parent Company)

92  Parent Company Balance Sheet 
93 

 Notes to the Parent Company 
Financial Statements

95  Five-Year Performance
95  Key Performance Indicators

SHAREHOLDER iNFORMATiON
96  Property Portfolio
99 
100  Glossary of Terms

Investor Information

our business 
moDel

worKspaCe group online

WHAT WE DO
Workspace provides business 
premises tailored to the needs 
of new and growing companies 
across London.

HOW WE DO iT 
Workspace understands the 
changing needs of these 
companies and actively adapts 
and manages its buildings to 
create an environment for growth.

WHERE WE DO iT
Workspace owns over 100 
properties in London providing 
5.2 million square feet of space 
and is home to some 4,000 
businesses employing more 
than 30,000 people.

HOW WE GENERATE VALUE
Workspace is growing through 
deep market knowledge, 
operational excellence and 
strong customer relationships.

Workspace is enhancing both core 
operational income and capital 
values by repositioning specifi c 
property assets.

Workspace provides the right 
properties to attract its customers 
and the right services to retain 
them and help them grow.

RELATED iNFORMATiON
OUR STRATEGy P.08

workspace’s comprehensive website gives you fast, 

direct access to a wide range of Company information.

to fi nd out more go to www.workspace.co.uk

cUSTOMERS

Offi  ce

Light industrial

Studios

Workshops

Serviced offi  ces

co-working

investors

iNVESTORS

about us

corporate information

corporate social responsibility

rNS announcements

Share price and information

Publications archive

Bonds

cO-WORkiNG

club locations

Join club

Our events

hold a meeting

about club

2013  
highlights

iNVESTOR HiGHLiGHTS

DiViDEND PER SHARE GROWTH

TOTAL SHAREHOLDER RETURN

 +10%

51%

TRADiNG PERFORMANcE

ENQUiRiES PER MONTH

LikE-FOR-LikE OccUPANcy

1,037

 2013
 2012
 2011

89.8%

1,037 

1,009 

960 

 2013
 2012
 2011

89.8% 
87.7% 
86.2% 

LikE-FOR-LikE RENT ROLL

TRADiNG PROFiT (AFTER iNTEREST)

 +9%

 +12%

 2013
 2012
 2011

up 5% 

up 4% 

up 9% 

 2013
 2012
 2011

£17.9m 

£16.0m 

£14.2m 

cAPiTAL PERFORMANcE

PROPERTy VALUATiON

+8%

 2013
 2012
 2011

LOAN TO VALUE

40%

up 5.1% 

up 4.7% 

up 7.7% 

 2013
 2012
 2011

40% 

41% 

50% 

EPRA NAV PER SHARE

TOTAL PROPERTy RETURN

 +13%

 2013
 2012
 2011

13.8%

£3.08 

£2.86 

£3.48 

 2013
 2012
 2011

13.8% 

13.4% 

11.7% 

01

Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013The businesses we host are 
critical in driving the Uk’s growth 
and by serving them with focus 
and energy we will maintain our 
strong momentum.

To achieve this we are putting  
in place:

–  Clear priorities.

–  the right strategy and team.

–  Deeper customer relationships, increased 

lettings. 

–  hands-on active portfolio management.

–  refined debt profile enabling more flexible 

operations. 

–  Focused programme to refurbish, redevelop  

and acquire the right properties.

DANiEL kiTcHEN
NON-ExEcutivE chairmaN

strong  
momentum

02

Workspace Group PLC Annual Report and Accounts 2013Review of operations 
 Governance 
 Financial statements 
 Shareholder information 

01-26 
27-61
62-95
96-100

03

Workspace Group PLC Annual Report and Accounts 2013Chairman’s 
statement

clear priorities. 
Renewed momentum.

Workspace had a successful year, sticking resolutely to  
our strategy of driving value by growing income through 
increased rent and occupancy while adding to the value  
of our assets through focused refurbishment and 
redevelopment. i am pleased to report that this has 
delivered a strong set of results for the year. 

Our cEO, Jamie hopkins, has brought a renewed energy 
to bear which has resulted in a clear focus on our priorities, 
driving our performance and moving the company back 
into the FtSE250. We achieved strong growth in revenue 
and trading profit for the year. Group net rental income 
was £47.1m, an underlying increase of 6%, trading profit 
after interest was £17.9m, an increase of 12%, and EPra 
Nav per share was £3.48, an increase of 13%.

Based on these results and the company’s future 
prospects, the Board is recommending the payment of  
a final dividend of 6.45p per share (a total of 9.67p for  
the year) to be paid on 2 august 2013, an increase of  
10% on last year. this is in line with our progressive 
dividend policy. 

During the year we continued to deploy the funds raised  
in our 2011 rights issue. We executed a focused capital 
expenditure programme to refurbish and extend existing 
assets and create buildings that suit our strategy whilst 
disposing of those that don’t. the result is an integrated 
portfolio of core buildings that we actively manage, 
increasing rental values.

We also refined our debt profile, lengthening the terms 
and diversifying the sources of funding. the successful 
refinance announced on 11 June 2013 alongside the  
retail Bond issued earlier in the year will have a  
significant positive impact on the flexibility of our 
operational capabilities. 

throughout the year, our Board has played an active  
role in helping guide the company and we remain 
committed to a strong succession approach. John 
Bywater’s retirement as a Non-Executive Director will 
occur in July this year and he leaves with our thanks for  
his long-standing contribution over the last nine years. 
Joining us, we welcome chris Girling and Damon  
russell. chris has a strong background in finance and 
management while Damon brings a wealth of experience 
across the telecommunications, internet, digital and media 
sectors. Ensuring the long-term strength of our Board is a 
priority and we will be making a further Non-Executive 
Director appointment in due course.

We are also aware of our wider responsibilities in the 
communities where we work, as well as being conscious  
of our environmental impact and we remain committed  
to strong health and safety and energy sustainability 
principles. We are proud that we have once again been 
included in the FtSE4Good index and that we have 
recently been awarded the Bitc communitymark. We will 
continue to do the right things by all of our stakeholders.

the company is working hard so that our customers and 
our employees flourish, our communities and environment 
stay vibrant and our shareholders are rewarded for their 
support. the achievements during the year are many  
and i would particularly like to thank our Workspace 
employees for delivering another strong performance.

the Board and i believe that we are clear on our 
objectives, have the right strategy and team in place to 
achieve them and, as a result, are ideally positioned to take 
advantage of the strength of the London economy. the 
businesses we host are critical in driving the uK’s growth 
and by serving them with focus and energy we are 
confident that we will maintain our strong business 
momentum. 

DANiEL kiTcHEN
NON-ExEcutivE chairmaN

RELATED iNFORMATiON
cORPORATE SOciAL RESPONSibiLiTy P.14 
cORPORATE GOVERNANcE REPORT P.35

04

Workspace Group PLC Annual Report and Accounts 2013Daniel KitChen
NON-ExEcutivE chairmaN

05

Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013ChieF exeCutive oFFiCer’s  
strategiC review

Our customers need more 
than just space. We are 
recognising that with a 
successful strategy.

New and growing companies are the engine of growth  
for the whole country. Our strategy of focusing our 
resources on supporting these companies continued to 
pay off and this, coupled with the quality and location of 
the assets we own, has helped us to report like-for-like 
growth of 9% in our rent roll and an 8% uplift to the  
capital value of our portfolio. 

Overlaid on our deep understanding of London 
commercial real estate is a detailed appreciation of  
the essential attributes of support that help our  
customers’ businesses be successful; from the right 
technology and services, to flexibility of environment, 
these fast-moving companies need more than just space. 
We are alive to that and last year we developed our 
customer relationships and grew the number of new 
lettings by understanding and meeting this need.

all of this was achieved by remaining true to the four 
long-term strategic priorities that underpin everything  
we do.

WE OWN THE RiGHT PROPERTiES THAT ARE 
TAiLORED TO MEET OUR cUSTOMERS’ NEEDS AND 
WE iNTENSiVELy MANAGE THEM TO DRiVE 
OccUPANcy AND RENTS
this year saw us drive forward a number of new projects 
across our portfolio from full building refurbishments and 
extensions through to new floors and the modernisation  
of reception areas. at all times we keep as many existing 
customers in situ as possible while working on the 
buildings. many of those customers who do have to  
move out are keen to return once the projects are 
complete or they often take an alternative solution  
within our extensive portfolio.

more broadly, everyone in our business from our central 
marketing and lettings teams through to our staff on site 
are motivated to increase occupancy and rent wherever 
possible across our portfolio.

WE MAXiMiSE THE VALUE OF OUR LONDON-bASED 
PROPERTy PORTFOLiO AND iTS WiDER 
OPPORTUNiTiES FOR REPOSiTiONiNG AND 
REDEVELOPMENT
Planning consents progressed strongly resulting in 
short-term capital gains as well as longer-term income 
growth potential. Grand union, Kensington, was a good 
example where we obtained planning permission for  
145 residential units alongside a brand new tailor-made 
business centre on an existing industrial site. We will  
start to market this business centre to customers upon 
completion at the beginning of 2015. 

reflecting our focused portfolio management approach, 
we also made some disposals, removing properties which 
were no longer aligned to our strategic objectives. 

WE UNDERSTAND OUR cUSTOMERS AND ENHANcE 
OUR bRAND by RESPONDiNG TO THEiR NEEDS
a true differentiator for Workspace is the way in which  
we interact directly with our customers all of the time – we 
don’t rely on agents or intermediaries – and this allows us 

to work in true partnership with them and have a stronger 
understanding of where future demand lies. this has 
helped us as, amongst other things, roll out more of our 
co-working club Workspace sites and continue to develop 
our digital platform, where already we are receiving almost 
40,000 visits a month to our website. 

WE WORk SUSTAiNAbLy AS PART OF EVERyDAy 
bUSiNESS FOR US, OUR cUSTOMERS AND OUR 
PARTNERS
Promoting entrepreneurship and lowering carbon 
footprints are no longer mutually exclusive goals as more 
and more business is transacted digitally and we work 
hard to ensure we remain at the forefront in environmental 
and sustainability practice. Elsewhere, working alongside 
London’s mayor in our inspiresme programme to 
encourage today’s schoolchildren to aspire to be 
tomorrow’s entrepreneur was one example of the depth  
of our involvement in the local community.

We also know how important it is that our employees  
feel fully engaged in what we are doing so this year we 
launched a Share incentive Plan to help them benefit  
from the future success of the company. this culture of 
ownership is creating an even stronger focus on the link 
between us, our properties and our customers.

as our understanding of our customers deepens and our 
engagement with them broadens, it is clear that demand 
is evolving into what we see as the next generation of 
work space. customers are relying increasingly on digital 
platforms and scalability, but in addition they also value 
the creative interaction that comes with being part of 
physical business communities. Listening to them, we  
are putting in place superior telecoms infrastructure  
and services on the same flexible terms as our leases.  
We are also facilitating access to cloud computing, we  
are bringing customers together at organised events  
that result in networking and inter-trading and we are 
broadening our footprint for the smaller entrepreneurs 
with club Workspace.

these and other new initiatives are establishing us as  
an essential partner to our customers, enabling their 
businesses to grow faster and, in turn, positioning us  
as the leading provider of space, environment and 
communities tailored to the needs of these new and 
growing companies.

Looking forward, i see our target customer base 
continuing to grow. Whether they are labelled ‘new and 
growing companies’, the ‘tmt’ sector or ‘SmEs’, we do all 
we can to position ourselves as the landlord of choice for 
this tenant type. We have an experienced and talented 
team at Workspace and a very clear and focused strategy 
for growth. Our assets are of quality and character, 
relevant to the modern needs of today and extremely  
well positioned to benefit from the increasing migration  
of occupiers across London.

JAMiE HOPkiNS
chiEF ExEcutivE OFFicEr

06

Workspace Group PLC Annual Report and Accounts 2013Jamie Hopkins,  
CHief exeCutive 
offiCer witH Claudia 
and rutH, Centre staff 
at Canterbury Court 
in kennington park.

Related infoRmation
ouR StRategy p.08
geneRating Value p.10
CoRpoRate SoCial ReSponSibility p.14

07

Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013our strategy

Performance  
summary.

STRATEGic  
PRiORiTiES

PRiORiTiES  
iN 2012/13

PERFORMANcE  
iN 2012/13

OWNiNG THE RiGHT  
PROPERTiES THAT ARE  
TAiLORED TO OUR cUSTOMERS’ 
NEEDS AND iNTENSiVELy 
MANAGiNG THESE PROPERTiES  
TO DRiVE OccUPANcy  
AND RENTS.

Owning properties that are tailored 
to our customers’ needs
–   complete refurbishment of 

canalot Studios.

–   commence a further six 
refurbishment schemes.

–   refurbishments at canalot Studios and 

Whitechapel completed.

–   Six refurbishment schemes commenced 
comprising 250,000 sq. ft. of which 
chester house Phase 2 and Leyton 
Phase 1 completed in march 2013.

–    Like-for-like occupancy up from 87.7%  

to 89.8%.

–   Like-for-like rent roll growth of 9%.
–   Like-for-like rent per sq. ft. up 7% in  

the year.

MAXiMiSiNG THE VALUE 
OF OUR LONDON bASED 
PROPERTy PORTFOLiO AND  
iTS WiDER OPPORTUNiTiES  
FOR REPOSiTiONiNG AND 
REDEVELOPMENT. 

Repositioning and redevelopment
–   appoint developers for the mixed 
use redevelopment schemes  
at Grand union in Kensington  
and Bow.

–   Progress planning consent for 

mixed use schemes at a further 
four sites.

–   Drive value from continued 

occupancy and rent roll growth.

–   taylor Wimpey appointed as developer  
for Grand union. Peabody appointed  
at Bow.

–   Planning and applications made at 

tower Bridge and Faircharm comprising 
948 apartments and 112,000 sq. ft. of 
commercial space.

–   Successful repositioning at canalot  

Studios and Parkhall driving  
pricing growth.

–   underlying property valuation up 8%  

in the year.

UNDERSTANDiNG OUR 
cUSTOMERS AND ENHANciNG 
OUR bRAND by RESPONDiNG  
TO THEiR NEEDS. 

Enhancing our brand (responding  
to customers’ needs)
–   roll out the club Workspace 

format at four additional centres.
–   continue the roll out of our ‘Digital 
Programme’ meeting the needs of 
our digital business customers.
–   Develop inspiresme as a valued 
platform for advice and support  
to new and growing businesses. 

–   three new club Workspace  
co-working lounges opened.

–   club Workspace revenue growth  

of 250%.

–   roll out of ‘digital platform’ providing  
a high quality business grade service 
with the same flexibility of our  
lease terms.

–   complete three further 

refurbishment schemes with a 

fourth due to complete in 2014.

–   Failure to meet customer  

space and service  

expectations.

–   commence three refurbishment 

–   External macroeconomic  

factors influence the demand  

for our accommodation.

schemes.

–   Progress further schemes through 

design phase.

–   Focus on driving pricing as 

occupancy approaches 90%.

–   Obtain planning consent for Tower 

–   adverse planning decisions.

bridge, Poplar and Faircharm.

–   Make planning applications for  

three further schemes.

–   Appoint development partners  

for Tower bridge and Faircharm.

–   construction cost and  

programme over runs.

–   Downturn in the London  

property market.

–   continue the roll out and evolution 

–   Failure to meet customer  

of the club Workspace brand.

–   broaden the range of services 

offered under our digital platform.

service expectations.

–   the performance of our  

selected digital partners.

–   Position Workspace as the 

preferred choice for fast  

growing businesses.

WORkiNG SUSTAiNAbLy AS  
PART OF EVERyDAy bUSiNESS 
FOR US, OUR cUSTOMERS AND 
OUR PARTNERS. 

Sustainable working
–   continue support of charities 

which promote entrepreneurship.
–   Working with customers to lower 

our carbon footprint.

–   inspiresme week placed 20 young 

people in work experience.

–   urban 20 cricket giving experience  

at the Kia Oval cricket Ground for 200  
local children.

–   Ensure that our development 

–   refurbishment schemes achieving  

activities conform with the highest 
environmental and sustainability 
regulations and best practice.

‘very good’ BrEEam (Building research 
Establishment Environmental 
assessment method).

–   continued liaison with customers in 

helping to reduce our carbon emissions.

–   To develop cSR a policy for 

engaging with and encouraging 

school leavers and graduates into 

–   Failure to meet regulatory 

environmental requirements.

–   introduction of new  

requirements causing additional 

costs or inhibiting lettings.

entrepreneurship.

–   Demonstrate tangible savings in 

carbon emissions.

–  Develop charity strategy.

08

       Workspace Group PLC Annual Report and Accounts 2013 
 
Owning properties that are tailored 

–   refurbishments at canalot Studios and 

OWNiNG THE RiGHT  

PROPERTiES THAT ARE  

TAiLORED TO OUR cUSTOMERS’ 

NEEDS AND iNTENSiVELy 

MANAGiNG THESE PROPERTiES  

TO DRiVE OccUPANcy  

AND RENTS.

to our customers’ needs

–   complete refurbishment of 

canalot Studios.

–   commence a further six 

refurbishment schemes.

Whitechapel completed.

–   Six refurbishment schemes commenced 

comprising 250,000 sq. ft. of which 

chester house Phase 2 and Leyton 

Phase 1 completed in march 2013.

–    Like-for-like occupancy up from 87.7%  

–   Like-for-like rent roll growth of 9%.

–   Like-for-like rent per sq. ft. up 7% in  

to 89.8%.

the year.

MAXiMiSiNG THE VALUE 

OF OUR LONDON bASED 

PROPERTy PORTFOLiO AND  

iTS WiDER OPPORTUNiTiES  

FOR REPOSiTiONiNG AND 

REDEVELOPMENT. 

Repositioning and redevelopment

–   appoint developers for the mixed 

–   taylor Wimpey appointed as developer  

for Grand union. Peabody appointed  

use redevelopment schemes  

at Grand union in Kensington  

at Bow.

–   Progress planning consent for 

mixed use schemes at a further 

commercial space.

–   Planning and applications made at 

tower Bridge and Faircharm comprising 

948 apartments and 112,000 sq. ft. of 

–   Successful repositioning at canalot  

and Bow.

four sites.

–   Drive value from continued 

Studios and Parkhall driving  

occupancy and rent roll growth.

pricing growth.

–   underlying property valuation up 8%  

in the year.

UNDERSTANDiNG OUR 

cUSTOMERS AND ENHANciNG 

OUR bRAND by RESPONDiNG  

TO THEiR NEEDS. 

Enhancing our brand (responding  

to customers’ needs)

–   three new club Workspace  

co-working lounges opened.

–   roll out the club Workspace 

–   club Workspace revenue growth  

format at four additional centres.

of 250%.

–   continue the roll out of our ‘Digital 

–   roll out of ‘digital platform’ providing  

Programme’ meeting the needs of 

a high quality business grade service 

our digital business customers.

with the same flexibility of our  

–   Develop inspiresme as a valued 

lease terms.

platform for advice and support  

to new and growing businesses. 

PRiORiTiES  
FOR 2013/14

kEy  
RiSkS

–   complete three further 

refurbishment schemes with a 
fourth due to complete in 2014.
–   commence three refurbishment 

schemes.

–   Progress further schemes through 

design phase.

–   Focus on driving pricing as 

occupancy approaches 90%.

–   Failure to meet customer  

space and service  
expectations.

–   External macroeconomic  

factors influence the demand  
for our accommodation.

–   Obtain planning consent for Tower 

bridge, Poplar and Faircharm.
–   Make planning applications for  

three further schemes.

–   Appoint development partners  
for Tower bridge and Faircharm.

–   adverse planning decisions.
–   construction cost and  
programme over runs.
–   Downturn in the London  

property market.

–   continue the roll out and evolution 

–   Failure to meet customer  

of the club Workspace brand.
–   broaden the range of services 

offered under our digital platform.

service expectations.
–   the performance of our  
selected digital partners.

–   Position Workspace as the 
preferred choice for fast  
growing businesses.

iPD Performance 

13.8% 

13.4% 

6.3% 

2013

3.2% 

2012

2011

11.7% 

11.2% 

Workspace Group PLC
IPD Universe (quarterly)

WORkiNG SUSTAiNAbLy AS  

PART OF EVERyDAy bUSiNESS 

FOR US, OUR cUSTOMERS AND 

OUR PARTNERS. 

Sustainable working

–   inspiresme week placed 20 young 

–   continue support of charities 

people in work experience.

which promote entrepreneurship.

–   urban 20 cricket giving experience  

–   Working with customers to lower 

at the Kia Oval cricket Ground for 200  

our carbon footprint.

local children.

–   Ensure that our development 

–   refurbishment schemes achieving  

activities conform with the highest 

‘very good’ BrEEam (Building research 

environmental and sustainability 

regulations and best practice.

Establishment Environmental 

assessment method).

–   continued liaison with customers in 

helping to reduce our carbon emissions.

–   To develop cSR a policy for 

engaging with and encouraging 
school leavers and graduates into 
entrepreneurship.

–   Demonstrate tangible savings in 

carbon emissions.

–  Develop charity strategy.

–   Failure to meet regulatory 

environmental requirements.

–   introduction of new  

requirements causing additional 
costs or inhibiting lettings.

RELATED iNFORMATiON
PRiNciPAL bUSiNESS RiSkS P.22

09

    Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013 
 
Generating 
value.

From redevelopment and 
acquisitions, planning gains 
and refurbishments, direct 
communication with our 
customers and hands-on 
active management, the 
case studies we highlighted 
in our last report have all 
generated significant value.

FOR MORE iNFORMATiON
WWW.WORkSPAcE.cO.Uk

10

Workspace Group PLC Annual Report and Accounts 2013repositioning

reDevelopment

planning gain

aCquisition  
anD Disposal

What 
we said

unDerstanDing 
our Customers

Corporate 
soCial
responsibility

Driving rental 
growth

repositioning 
Exmouth house, Ec1r 0Jh

redevelopment 
ScreenWorks, N5 2Ea

We anticipate the additional 
floor and refurbishment of 
Exmouth house will achieve 
rental levels similar to that 
of clerkenwell Workshops, 
our other business centre  
in Ec1. On track to open in 
July 2013.

ScreenWorks, our new  
61,000 sq. ft. business  
centre in islington is  
on track to open in  
December 2013.

planning gain 
the Pill Box, E2 6JL 

acquisition and disposal 
Little London, SE1 2Ba 

We made a gain from the  
sale of surplus land with 
planning consent. We are 
now investing in a new 
business centre in Bethnal 
Green, which is on track to 
open in January 2014.

During the year we 
acquired five new buildings 
in the Blackrock Joint 
venture and sold six from 
the portfolio.

How we
delivered

understanding our customers 
club Workspace

Our unique club 
Workspace format has 
continued to attract new 
customers and we have 
opened a further three 
sites, taking us to a total  
of five and increased 
revenue by 250%.

Corporate social 
responsibility 
chester house, SW9 6DE 

Our customers tell us the 
BrEEam ‘very good’ rating 
at chester house helped 
attract them and allowed 
us to gain rents 20% higher 
than anticipated.

Driving rental growth 
Parkhall, SE21 8EN

Our active marketing, 
digital platforms and 
flexibility for customers 
have helped grow 
like-for-like rent roll by 9%.

Workspace Group PLc Annual Report and Accounts 2013

11

 
 
 
 
 
 
 
portFolio  
potential

The reach and scale of our 
property portfolio is creating 
essential business communities 
across London.

–  86% of our customers would recommend us.

–  467,000 website visits in the year.

–  1,887,730 page visits in the year.

–  over 90% of all lettings are completed via  
our in-house sources such as the website,  
signage and customer referral.

–  worldwide search volumes for ‘co-working’ 

have increased by 488% over the last  
four years.

FOR MORE iNFORMATiON
www.workspace.co.uk

12

Workspace Group PLC Annual Report and Accounts 201313

Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013Corporate soCial  
responsibility

A wider  
understanding.

OUR 
APPROAcH

cUSTOMERS 
customer satisfaction and loyalty are key to the 
sustainability of our business.
We help our customers to connect with local 
communities by participating in our community 
programmes and working with them to improve 
the environmental performance of our centres. 

SUPPLiERS AND PARTNERS
We aim to build long-term relationships with our 
suppliers by being a responsible purchaser of  
goods and services.
We also work closely with our partners to integrate 
sustainability into the design, construction and 
redevelopment of Workspace centres. 

cOMMUNiTiES
We aim to make the communities in which we  
operate better places to live and do business in.
Our flagship E3 community investment strategy  
provides education, employment and entrepreneurial 
opportunities for young people. 

EMPLOyEES
We provide a safe and rewarding work environment  
to ensure we attract and retain talented and  
ambitious individuals. 
Our commitment to diversity encourages innovation  
and ensures our workforce reflects the diversity of  
our customers and communities.

ENViRONMENT
Our buildings are our biggest environmental impact  
and we are committed to making the most of 
opportunities to reduce carbon emissions and  
energy use, benefiting the environment and  
reducing operating costs.
We strive to reduce other environmental impacts  
and costs such as waste. 

Jamie hopKins 
chiEF ExEcutivE OFFicEr

We have long understood the value that a focused 
corporate Social responsibility (cSr) programme can 
create for Workspace, delivering operational efficiencies  
in the process and contributing to our reputation as 
a responsible business. We believe our cSr activities 
benefit financial performance by driving occupancy  
rates, delivering cost savings and creating a more 
attractive business environment for our customers. 

the primary role of our business is to meet the space  
and environment needs of new and growing companies 
across London. We foster entrepreneurial activity and 
create vibrant working communities that in turn support 
local businesses by boosting employment and economic 
growth. We believe that by adhering to our fundamental 
principles of helping businesses to grow and being a  
good community member, we can be a force for good 
benefiting both our customers and wider society.

Not only do we work within the regulatory environment 
for real estate providers, adhering to the uK Energy act, 
carbon reduction commitment and landfill tax regime, 
but we go beyond our legal obligations. this approach  
has generated opportunities to reduce operating costs,  
by sending zero waste to landfill and installing more 
efficient boilers in our centres, for example.

a selection of the year’s performance highlights against 
stakeholder goals can be seen in the table opposite.  
We are particularly pleased that our E3 community 
investment strategy was recognised by Business in the 
community, one of the uK’s leading cSr organisations, 
who awarded us their prestigious communitymark. We 
were amongst four businesses that have achieved this 
accolade in 2013. Similarly, we are proud to once again be 
included in the FtSE4Good index which helps us assess 
our achievements against a transparent and evolving  
global corporate responsibility standard. 

Our goal is to ensure that we fully consider the impact  
that we and our stakeholders have and that we address 
these impacts positively and transparently. We want to 
ensure that our customers and employees flourish, our 
communities and environment stay vibrant and that our 
shareholders are rewarded for their support. the Board, 
the management team and i remain focused on these 
important objectives.

more detail on our cSr activities in 2012/13, including  
our performance against EPra sustainability indicators,  
is available at www.workspace.co.uk.

We are particularly proud to once again be included  
in the FtSE4Good index which helps us assess our 
achievements against a transparent and evolving  
global corporate responsibility standard.

14

 We achieved an average customer experience score  

–   Launch programme to reduce energy in partnership 

of 82% exceeding our target of 80%.

with customers at flagship sites.

–   Review sustainability questions in annual  

customer survey.

–   Create a customer focused sustainability  

marketing factsheet for three assets.

 We received a Bronze certificate in the Mayor’s Green 

Procurement Code – the third year we have achieved  

–   Continue to achieve a Bronze certificate  

in the Mayor’s Green Procurement Code. 

this award.

Payment Code.

 We are now an approved signatory of the Prompt  

–   Require suppliers to demonstrate that a  

minimum of 80% of timber is procured from a  

certified sustainable source (FSC or equivalent).

–   Register all developments over 2,000m2 with  

the Considerate Constructors Scheme.

  We invested in community initiatives.

–   Continue delivery of E3 strategy.

 E3 received the Business in the Community 

CommunityMark in recognition of our  

commitment to delivering tangible  

benefits for our business and communities. 

–   Evaluate the socio-economic impact of a completed 

Workspace development by March 2015.

–  Develop a strategy for charitable donations.

–   On-going training and development for all employees 

–   With the Government’s pension auto-enrolment 

which helps to develop the right skills to support our 

growth plans.

–   Over the last 12 months we have embedded a new  

appraisal process to further enhance employee 

understanding of how their objectives will assist  

in driving business performance.

–   We continued to drive engagement through our 

communications channels to ensure employees  

understand our strategy and the part they play.

feel engaged in what we are doing, so this year we 

launched a Share Incentive Plan to help them benefit  

from the future success of the Company.

–   Participation in the Sharesave Scheme continues to  

be popular with employees. In total, 55% of employees 

participate in the Sharesave Scheme.  

changes effective for the Company from April 2014,  

we will ensure that we can meet the legislative 

requirements efficiently.

–   Continue to focus on training and development.

–   Continue with Director led staff briefings designed  

to keep employees well informed of the performance 

and objectives of the Group.

–   The Group remains committed to an equal 

opportunities policy from recruitment and selection 

–   We recognise how important it is that our employees  

through to training and development.

 Total energy consumption from electricity was 24,360,097 

–   Set portfolio energy (kWh) reduction target.

kWh1. Total energy consumption from fuels was 21,124,428 

kWh2. Although energy from electricity decreased by 2% 

compared to 2011/12 (adjusted for occupancy), our overall 

energy consumption (electricity and fuels) increased by  

9% on an absolute basis.

 Total direct GHG emissions were 3,878 tonnes CO2e3.  

Total indirect GHG emissions were 13,179 tonnes CO2e4.  

This meant our total GHG emissions (direct and indirect) 

increased by 5% compared to 2011/12 driven by higher gas 

consumption primarily due to the unusually cold winter.

 Our centres generated 10.48 tonnes of waste of which  

48% (6,612 kg) was recycled and 52% (3,873 kg) was 

converted to energy5. 

–   Achieve an average recycling rate of 55% for all  

assets where Workspace manages the waste. 

–   Send zero waste to landfill for all assets where 

Workspace manages the waste.

–   Divert at least 75% (by weight) of non-hazardous 

construction waste away from landfill for all 

developments and refurbishments over 2,000m2.

–   Divert at least 90% (by weight) of non-hazardous 

demolition waste away from landfill for all 

developments and refurbishments over 2,000m2.

–   We will record water consumption at all properties.

–   Achieve BREEAM Very Good for all developments 

and refurbishments over 2,000m2. 

Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
 
  
 
 
 
 
 
 
cUSTOMERS 

customer satisfaction and loyalty are key to the 

sustainability of our business.

We help our customers to connect with local 

communities by participating in our community 

programmes and working with them to improve 

the environmental performance of our centres. 

SUPPLiERS AND PARTNERS

We aim to build long-term relationships with our 

suppliers by being a responsible purchaser of  

goods and services.

We also work closely with our partners to integrate 

sustainability into the design, construction and 

redevelopment of Workspace centres. 

cOMMUNiTiES

We aim to make the communities in which we  

operate better places to live and do business in.

Our flagship E3 community investment strategy  

provides education, employment and entrepreneurial 

opportunities for young people. 

EMPLOyEES

We provide a safe and rewarding work environment  

to ensure we attract and retain talented and  

ambitious individuals. 

Our commitment to diversity encourages innovation  

and ensures our workforce reflects the diversity of  

our customers and communities.

ENViRONMENT

Our buildings are our biggest environmental impact  

and we are committed to making the most of 

opportunities to reduce carbon emissions and  

energy use, benefiting the environment and  

reducing operating costs.

We strive to reduce other environmental impacts  

and costs such as waste. 

1 
2 
3 
4 
5 

 EPra Sustainability Performance measure 3.1
 EPra Sustainability Performance measure 3.3
 EPra Sustainability Performance measure 3.5
 EPra Sustainability Performance measure 3.6
 EPra Sustainability Performance measures 3.10 and 3.11

PERFORMANcE 
HiGHLiGHTS iN 2012/13

TARGETS 
FOR 2013/14

 We achieved an average customer experience score  
of 82% exceeding our target of 80%.

–   Launch programme to reduce energy in partnership 

with customers at flagship sites.

 We received a Bronze certificate in the Mayor’s Green 
Procurement Code – the third year we have achieved  
this award.
 We are now an approved signatory of the Prompt  
Payment Code.

–   Review sustainability questions in annual  

customer survey.

–   Create a customer focused sustainability  

marketing factsheet for three assets.

–   Continue to achieve a Bronze certificate  
in the Mayor’s Green Procurement Code. 
–   Require suppliers to demonstrate that a  

minimum of 80% of timber is procured from a  
certified sustainable source (FSC or equivalent).

–   Register all developments over 2,000m2 with  

the Considerate Constructors Scheme.

  We invested in community initiatives.

 E3 received the Business in the Community 
CommunityMark in recognition of our  
commitment to delivering tangible  
benefits for our business and communities. 

–   Continue delivery of E3 strategy.
–   Evaluate the socio-economic impact of a completed 

Workspace development by March 2015.
–  Develop a strategy for charitable donations.

–   On-going training and development for all employees 
which helps to develop the right skills to support our 
growth plans.

–   Over the last 12 months we have embedded a new  
appraisal process to further enhance employee 
understanding of how their objectives will assist  
in driving business performance.

–   We continued to drive engagement through our 
communications channels to ensure employees  
understand our strategy and the part they play.

–   We recognise how important it is that our employees  
feel engaged in what we are doing, so this year we 
launched a Share Incentive Plan to help them benefit  
from the future success of the Company.

–   Participation in the Sharesave Scheme continues to  

be popular with employees. In total, 55% of employees 
participate in the Sharesave Scheme.  

–   With the Government’s pension auto-enrolment 

changes effective for the Company from April 2014,  
we will ensure that we can meet the legislative 
requirements efficiently.

–   Continue to focus on training and development.
–   Continue with Director led staff briefings designed  

to keep employees well informed of the performance 
and objectives of the Group.

–   The Group remains committed to an equal 

opportunities policy from recruitment and selection 
through to training and development.

 Total energy consumption from electricity was 24,360,097 
kWh1. Total energy consumption from fuels was 21,124,428 
kWh2. Although energy from electricity decreased by 2% 
compared to 2011/12 (adjusted for occupancy), our overall 
energy consumption (electricity and fuels) increased by  
9% on an absolute basis.
 Total direct GHG emissions were 3,878 tonnes CO2e3.  
Total indirect GHG emissions were 13,179 tonnes CO2e4.  
This meant our total GHG emissions (direct and indirect) 
increased by 5% compared to 2011/12 driven by higher gas 
consumption primarily due to the unusually cold winter.
 Our centres generated 10.48 tonnes of waste of which  
48% (6,612 kg) was recycled and 52% (3,873 kg) was 
converted to energy5. 

–   Set portfolio energy (kWh) reduction target.
–   Achieve an average recycling rate of 55% for all  
assets where Workspace manages the waste. 
–   Send zero waste to landfill for all assets where 

Workspace manages the waste.

–   Divert at least 75% (by weight) of non-hazardous 

construction waste away from landfill for all 
developments and refurbishments over 2,000m2.
–   Divert at least 90% (by weight) of non-hazardous 

demolition waste away from landfill for all 
developments and refurbishments over 2,000m2.
–   We will record water consumption at all properties.
–   Achieve BREEAM Very Good for all developments 

and refurbishments over 2,000m2. 

15

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100 
 
 
 
 
 
  
 
 
 
 
 
 
business  
review

Trading  
performance.

ENQUiRiES AND LETTiNGS
average number per month

1,050

1,026

84

70

1,107

104

964

79

Quarter to
June
2012
Lettings

Quarter to
September
2012

Quarter to
December
2012

Quarter to
March 
2013

Enquiries

Our aim is to be the preferred choice for new and  
growing businesses looking for space in London. We have 
continued to attract strong levels of demand with enquiry 
levels up 3% on the prior year to an average of 1,037 per 
month, and new lettings running at an average of 84 per 
month (2012: 82 per month). Good levels of enquiries and 
lettings have continued into the first quarter of the current 
financial year.

average number
per month
Enquiries
Lettings

march 
2013
1,107
104

Quarter Ended 

Dec 
2012
964
79

Sept 
2012
1,026
70

June 
2012
1,050
84

the like-for-like property portfolio, which excludes 
properties impacted by refurbishment or redevelopment, 
has seen both occupancy and rents improve strongly over 
the year reflecting the consistent high level of customer 
demand. Occupancy improved by 2.1% to 89.8% and rent 
per square foot is up by 6.6%. this has produced a strong 
growth in like-for-like rent roll of 9.1% (2012: 4.7%).

LikE-FOR-LikE OccUPANcy AND RENT ROLL

87.0

87.3

87.4

87.7

88.6

89.0

89.9

89.8

90
45.5

45.5

40.6

41.0

41.1

41.7

42.6

43.1

43.8

Jun
2011

Sep
2011

Dec
2011

Mar
2012

June
2012

Sep
2012

Dec
2012

Mar
2013

70
35.0

1231
86.5

104

39.9

0

Mar
2011
0

Rent Roll (£m)

Occupancy (%)

Like-for-like
properties
Number
Occupancy
rent roll
rent per sq. ft.

31 march  
2013
68
89.8%
£45.5m
£13.75

30 September 
2012
68
89.0%
£43.1m
£13.12

31 march  
2012
68
87.7%
£41.7m
£12.90

Overall occupancy is 87.0% at march 2013 (march  
2012: 85.3%) and cash rent roll has increased to £52.7m 
(march 2012: £50.2m). the strong growth in like-for-like 
rent roll has been off-set by the net loss of income at 
properties where we are undertaking refurbishment and 
redevelopment activity and property disposals made 
during the year:

rent roll at 31 march 2012 
Like-for-like rent roll growth
rent reduction on redevelopment and 
refurbishment underway
increase in rent from newly refurbished space
rent roll on property disposals 
rent roll at 31 march 2013

£m
50.2
3.8

(0.9)
0.6
(1.0)
52.7

the contracted rent roll is £2.3m higher than the cash  
rent roll at £55.0m at march 2013. this relates primarily to 
stepped rent increases and rent free periods, with around 
75% expected to convert to cash rent roll in the next year.

16

Workspace Group PLC Annual Report and Accounts 2013Driving enquiries 
and lettings

MARkETiNG
Cathie Sellars (centre), Head of Marketing discussing 
enquiries and deals with James Friedenthal,  
Managing Director Club Workspace and Kylie Ferns, 
Marketing Executive.

cUSTOMER UNDERSTANDiNG
We interact directly with our customers. We don’t rely  
on agents. Over 90% of our lettings come from internally 
generated leads and managed transactions.

OVER 26,000 UNiQUE WEb ViSiTS PER MONTH TO 
WORkSPAcE.cO.Uk

26,000+

Workspace Group PLc annual report and accounts 2013

17

Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100business  
review
cONTiNUED

PROFiT bEFORE TAX

£m
Net rental income – underlying 
Net rental income – disposals
Joint venture income
administrative expenses
Net finance costs 
trading Profit after interest 
change in fair value of  
investment properties
Other items
Profit before tax

31 march
2013 
46.5
0.6
1.1
(11.0)
(19.3)
17.9

59.0
(0.5)
76.4

31 march
2012
43.7
1.1
0.5
(10.2)
(19.1)
16.0

35.6
(3.1)
48.5

EPra earnings per share

12.2p

11.9p

TRADiNG PROFiT AFTER iNTEREST 
£m

3.4

(0.6)

(0.5)

0.6

(0.8)

(0.2)

17.9

16.0

trading profit after interest is up 12% in the year to £17.9m 
reflecting the strong growth in rental income. 

Profit before tax is up 58% to £76.4m with the improved 
trading performance supplemented by an underlying 
increase of 8% (£59.0m) in the property valuation. 

EPra earnings per share has increased by 3% to 12.2p, 
lagging the growth in trading profit following the rights 
issue which was completed in July 2011. 

DiViDEND
the Board has proposed a final dividend of 6.45 pence 
per share, (2012: 5.86 pence) which will be paid on  
2 august 2013 to shareholders on the register at 12 July 
2013. this dividend will be paid as a normal dividend 
(non-PiD). the total dividend for the year is 9.67 pence, a  
10% increase on the prior year, which is covered 1.26 times 
by EPra earnings per share.

PROPERTy VALUATiON
at 31 march 2013 the wholly owned portfolio was 
20
independently valued by cBrE at £830m, an underlying 
increase of 8% (£59m) in the year. the main elements  
of the increase in the valuation over the year are set  
out below:

valuation at 31 march 2012
Property Disposals
capital expenditure
0
revaluation surpluses:
6 months to September 2012
6 months to march 2013
capital receipts
valuation at 31 march 2013

£m
760
(15)
30

18
41
(4)
830

VALUATiON AT 31 MARcH 2013 
£m

760

(19)

30

36

(1)

830

830

24

March
2012

Disposals/
Receipts

Capex

Refurb/
Redevel

Core 
Like-for-like
Properties

Other Like-
for-like
Properties

March
2013

500

a more detailed analysis of our properties at 31 march 2013 
is set out in table 1. 

March
2012

Like-
for-like
Income

Refurb/
Redevel
Income

Disposals
Income

JV
Income

Admin
Expenses

Interest
Costs

March
2013

the improving levels of occupancy and pricing have 
translated into a good growth in income with underlying 
net rental income up 6% (£2.8m) in the year to £46.5m. 
the growth in net rental income at like-for-like properties 
of 9% (£3.4m) and new income from completed 
refurbishments of £0.3m is offset by income reduction  
of £0.9m at properties currently being refurbished and 
redeveloped.

Joint venture (Jv) income represents our 20.1% share of 
net rental income from the properties in the Blackrock 
Workspace Jv. income has grown as properties have  
been acquired by the Jv with the initial investment phase 
completed in October 2012. the portfolio comprised of  
16 properties with a rent roll of £7.0m at march 2013.

administrative expenses have increased by 8% (£0.8m) in 
the year. Long-term incentive plan costs have increased by 
£0.8m as a result of the improved share price performance 
alongside a £0.2m increase in salary and bonus costs 
offset by net savings of £0.2m in other cost categories. 

Net finance costs increased by £0.2m with net debt 
increasing by £14m to £328m over the year as a result of 
increased capital expenditure but the weighted average 
interest cost fell by 0.1% to 5.0% (2012: 5.1%).

18

Workspace Group PLC Annual Report and Accounts 2013 
 
 
Workspace delivered a total property return over the year 
of 13.8%, well ahead of the iPD universe (Quarterly) at 
3.2%. this strong performance came from:

–   a £36m uplift in value at the core like-for-like properties 
from driving increases in occupancy and rent roll (which 
is up 10% in the year) with no benefit from movement in 
valuation yield, offset by a marginal fall of £1m in the 
value of other like-for-like properties; and

–   a £24m uplift in value from our refurbishment and 

redevelopment activity, mainly in the second half of the 
year. there was a £6m increase at each of Grand union 
centre, W10 and Bow Enterprise Park, E3 following the 
signing of development agreements in October 2012. 
there was also an £8m increase at tower Bridge 
Business complex, SE16 ahead of achieving planning 
consent at this site (subsequently achieved in may 2013) 
with a further uplift in valuation expected in the current 
financial year.

the other property category represents generally good 
quality but small properties, primarily industrial estates, 
where the opportunity for Workspace to add premium 
operational or brand value is limited.

During the year we realised £13m from the disposal of  
six non core properties at a loss of £2m compared to  
book value at march 2012. a further three properties  
are currently under offer for £8m in line with their book 
values at march 2013.

the net initial and equivalent yields of our portfolio as 
reported by cBrE are set out below:

at 31 march
Like-for-like 
Properties
refurbishment/
redevelopment
total

net initial yield

2013

2012

equivalent yield
2012

2013

7.3%

7.2%

8.1%

8.3%

5.3%
6.9%

6.6%
7.1%

8.1%
8.1%

8.9%
8.4%

the total net initial yield is impacted by the declining yield 
at refurbishment and redevelopment properties where we 
are running down income. the like-for-like (investment) 
net initial yield has softened marginally to 7.3%.

total Estimated rental value (Erv) of the overall portfolio 
at march 2013 is £67.4m (march 2012: £65.4m). the Erv  
of the like-for-like portfolio is £51.3m up 4.0% in the year 
(march 2012: £49.3m). capital value per sq. ft. is £177 up 
from £152 at march 2012.

REFURbiSHMENT AcTiViTy 
During the year we completed four refurbishments:

–   49,000 sq. ft. refurbishment and two storey roof 

extension at canalot Studios (cost: £5m)

–   7,000 sq.ft. side extension at Whitechapel (cost: £2m)
–   9,000 sq.ft. roof extension to chester house at 

Kennington Park (cost: £2m)

–   27,000 sq.ft. of new industrial buildings at Leyton,  

E10 (cost: £3m)

We have seen good progress with the letting up of the 
space at these schemes at pricing levels ahead of our 
expectations when these projects were approved. the 
rent roll at these four properties at 31 march 2013 was 
£0.7m. We would expect to achieve an uplift in rent roll  
of £1.2m to £1.9m at current estimated rents once these 
schemes reach 90% occupancy.

refurbishment is underway at a further four properties  
as shown in table 2.

these properties were valued at £49m at march 2013  
with rent roll of £1.9m. £11m of the total estimated capital 
expenditure of £30m has been incurred on these projects 
to date. We expect to achieve an uplift in rent roll of £3.3m 
to £5.2m, at current estimated rents, once these schemes 
are completed and have reached 90% occupancy.

TAbLE 1: 
PROPERTiES AT 31 MARcH 2013 

No of properties
valuation
revaluation surplus
rent roll yield

TAbLE 2: 
REFURbiSHMENT AcTiViTy

Westminster (Phase i), SE11
Exmouth house, Ec1
the Pill Box, E2
metal Box Factory, SE1

like-for-like
47
£509m
£36m
7.8%

Estimated
cost
£2m
£4m
£9m
£15m

Core

refurbishment
8
£110m
£4m
4.4%

redevelopment
10
£155m
£20m
2.5%

other
like-for-like
21
£56m
(£1m)
7.6%

Expected  
completion
h1 2013
h1 2013
h1 2014
h2 2014

upgraded  
area (sq. ft.)
6,000
52,000
–
82,000

New area  
(sq. ft.)
5,000
5,000
42,000
20,000

19

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100business  
review
cONTiNUED

REDEVELOPMENT AcTiViTy
many of our properties are in areas across London where 
there is strong demand for mixed use redevelopment. 
these schemes generally require demolition of an existing 
building to deliver new residential and commercial space. 
We obtain mixed use planning consent and then agree 
terms with a residential developer to undertake the 
construction at no cost to Workspace. We generally 
receive back new commercial space together with a 
combination of cash and overage in return for the sale  
of the residential component to the developer.

in October 2012 we announced that we had exchanged 
contracts for the redevelopment of Grand union, W10  
and the first phase of Bow Enterprise, E3:

–   at Grand union we will receive back on completion  
of the redevelopment a new 60,000 sq.ft. business 
centre together with £5.9m of cash that will be paid 
over the development period together with overage  
on the private residential component. 

–   at Bow Enterprise we received £11.5m of cash in april 
2013 having achieved vacant possession of the site in  
six months, and on completion of the redevelopment  
we will receive 15,000 sq. ft. of new industrial space  
and overage on the private residential component.

We have now signed development agreements for four 
redevelopment schemes for a total of 693 residential units 
as detailed in table 3.

On these four schemes Workspace will receive a total of 
189,000 sq. ft. of new business space, cash of £22m and 
overage on the residential component of the schemes. 
these properties were valued at £73m at march 2013  
with rent roll of £0.3m which will fall to zero during 
redevelopment. at current estimated rents and 90% 
occupancy we would expect the new business space  
to deliver £3.8m of rent roll. 

in may 2013 we received planning consent for a further 
two mixed use redevelopments:

–   at tower Bridge Business complex, SE16 we secured 
planning on the northern part of this large 12 acre site 
for 800 residential units and 60,000 sq. ft. of new 
business space. 

–   at Faircharm Estate, SE8 we secured planning for  
148 residential units and 52,000 sq. ft. of new  
business space.

these two properties, together with Bow (Phase 2),  
E3 where we have already obtained planning consent  
for 290 residential units and 30,000 sq. ft. of business 
space were valued at £43m at 31 march 2013 with rent  
roll of £1.8m. 

cASH FLOW AND FiNANciNG
Our customer payment profile and cash collection 
statistics are strong with bad debts in the year of  
£0.3m (2012: £0.4m). Net debt has increased by £14m  
to £328m over the year due to an acceleration in capital 
expenditure on refurbishment projects. a summary of  
the movements in cash flow is set out below: 

Net cash from operations
Dividends paid
capital expenditure
Property disposals/capital receipts
investment in joint ventures
retail Bond issue
Net repayment of bank borrowings
Other
Net movement in year

Net debt at 31 march 2012
net debt at 31 march 2013

£m
22
(13)
(29)
17
(8)
58
(58)
(3)
(14)

(314)
(328)

TAbLE 3: 
REDEVELOPMENT AcTiViTy

Wandsworth, SW18
ScreenWorks, N5
Grand union, W10
Bow (Phase 1), E3

Developer
mount anvil
taylor Wimpey
taylor Wimpey
Peabody

Expected  
completion
h2 2014
h1 2014
h1 2015
h2 2015

residential  
units
209
72
145
267

commercial  
area (sq. ft.)
53,000
61,000
60,000
15,000

cash
– 
£5m
£6m
£11m

Other
Overage
Overage
Overage
Overage

20

Workspace Group PLC Annual Report and Accounts 2013at 31 march 2013 the Group had £383m of committed 
facilities with an average period to maturity of 2.9 years 
and the earliest maturity in June 2015. Details are set  
out below:

rBS/hSBc club
Bayern club
retail Bond
total

Drawn 
Committed 
amount
maturity
Facilities
£125m
£80m Jun 2015
£200m £200m Jun 2015
£58m Oct 2019

£58m

£383m £338m

the refinance extends the weighted average maturity  
of our debt at 31 march 2013 from 2.9 years to 7.8 years. 
Following the refinance we expect the weighted average 
interest rate on our debt (based on the drawn debt at  
31 march 2013) to be around 5.4%. it will be necessary  
to amend/cancel existing interest rate hedges at an 
estimated cost of around £10m. 

EPRA NET ASSET VALUE PER SHARE 
£

at 31 march 2013 there were £45m of available facilities  
and £10m in cash deposits. Overall loan to value was 40% 
with good headroom on all of bank and bond covenants.

3.08

0.40

0.12

(0.09)

(0.03)

3.48

Our interest rate hedging is structured to maintain a stable 
interest rate over the medium term. at 31 march we had 
£210m of fixed rate hedges at 2.9% out to June 2015, 
alongside the fixed 6% retail Bond out to October 2019. 
the weighted average interest rate on debt in the year  
was 5.0% (2012: 5.1%).

During the year we have focused on diversifying our 
funding, extending the maturity profile and moving 
progressively to an unsecured basis to provide operational 
flexibility.

in October 2012 we raised £57.5m from an unsecured 
retail Bond issue with a 6.0% coupon and a maturity  
date of October 2019. the proceeds were used to repay 
secured bank borrowings.

On 10 June 2013 we agreed the refinancing of the Group’s 
remaining bank facilities through a combination of:

–   the issue of £157.5m of unsecured private placement 
notes, £148.5m with a 10 year maturity and £9m with  
a seven year maturity;

–   unsecured debt of £45m provided by a uK Fund with  

a 9/10 year maturity; and

–   £150m of unsecured five year bank debt provided by  
our core relationship banks, comprising rBS, hSBc  
and Santander.

With effect from 1 July 2013 these new unsecured facilities 
will replace the existing secured bank facilities. Details on  
a pro forma basis of the Group’s facilities from 1 July 2013 
are set out below:

Private Placement notes
uK Fund
Private Placement notes
retail Bond
Bank debt
total

Facility
£148.5m

maturity
June 2023
£45m June 2022/2023
June 2020
October 2019
June 2018

£9m
£57.5m
£150m
£410m

March
2012

Valuation 
Uplift

Trading
Profit

Dividends
paid 

Other

March
2013

EPra net asset value per share at 31 march 2013 was 
£3.48 (2012: £3.08), an increase of 13% in the year with  
the main movements in net asset value per share 
highlighted below: 

EPra Nav per share
at 31 march 2012
Property valuation surplus
trading profit after interest
Dividends paid in year
Other
at 31 march 2013

£
3.08
0.40
0.12
(0.09)
(0.03)
3.48

bLAckROck WORkSPAcE PROPERTy TRUST 
(bLAckROck JV)
We have a 20.1% interest in Blackrock Jv for which we 
also act as property manager receiving management  
and performance fees. it was initially seeded with eight 
properties sold by Workspace to the Jv in February  
2011 for £35m. the fund has acquired a further eight 
properties to complete the initial investment phase 
(allowing for the future capital expenditure). as at  
31 march 2013 the valuation of these properties stood  
at £96m, with an underlying increase in the valuation  
of 5% (£3m) in the year.

Subsequent to the year end, cam road, Stratford was  
sold for £7.6m, a £0.6m surplus to its book value at  
march 2013. it is intended to reinvest the proceeds in 
further property acquisitions. 

21

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100business  
review
cONTiNUED

Principal  
business risks

risk management is an integral part of our activities and 
the day-to-day running of the business. risks are assessed, 
discussed and taken into account when deciding upon 
future strategy, approving transactions and monitoring 
performance. a risk committee is in place to co-ordinate 
the risk management process and assists with reporting to 
the Board and audit committee. the risk committee also 
includes rolling representation from various areas across 
the business to help ensure that lower level issues and 
risks are captured, reported and dealt with as appropriate. 

the process of identifying risks, assessing their impact  
and monitoring their likelihood is considered at two levels:

1.   strategic risks: these are identified, assessed and 
managed by the main board and audit Committee. 

cHANGE

REDUcED

STRATEGic RiSk

RiSk AREA:
FiNANciNG 

DETAiL
reduced availability and cost  
of bank financing resulting in  
inability to meet business plans  
or satisfy liabilities.

2.   operational risks: these are identified, assessed and 

managed by executive Committee Directors.  

RiSk AREA:
PROPERTy VALUATiON 

this segregation ensures that risks related to our strategy 
and major decisions are considered at main Board level 
and that our level of risk appetite remains appropriate.  
Day-to-day operational risks are more closely reviewed and 
managed by the Executive team and senior management.

DETAiL
value of our properties declining  
as a result of macroeconomic 
environment, external market,  
or internal management factors.

NO cHANGE

investment market mood monitoring.

risk registers are maintained by the main Board for 
strategic risks and by the Executive committee for 
operational risks. the absolute levels of risk, the net levels  
of risk taking into account mitigating controls and the 
appropriate level of risk appetite are reviewed regularly. 
high rated risks identified in the registers are regularly 
reviewed by the Board, audit and Executive committees. 

Details of our principal strategic risks and the mitigating 
activities in place to reduce these risks are set out to  
the right.

RiSk AREA:
OccUPANcy 

NO cHANGE

DETAiL
Demand by businesses for our  
space declining as a result of social, 
economic or competitive factors.

RiSk AREA:
LONDON 

NO cHANGE

DETAiL
changes in the political, infrastructure 
and environmental dynamics of  
London lead to reduced demand 
for space from businesses.

RiSk AREA:
DEVELOPMENT

NO cHANGE 

understanding of planning environment and use of 

appropriate advisers.

DETAiL
impact to underlying income and  
capital performance due to: 
−   adverse planning rulings.
−   construction cost  
and timing overrun.

−   Lack of demand for developments.

22

MiTiGATiNG AcTiViTiES

Funding requirements for business plans reviewed 

regularly and options for alternative sources of  

funding monitored. 

range of banking relationships maintained, refinancing 

strategy reviewed regularly.

interest rate hedging policy in place to minimise exposure 

to short-term rate fluctuations.

example of actions undertaken in 2012/13:

–   the group raised £57.5m funding via a retail bond  

issue in october 2012. this widened our financing 

arrangements and also extended our debt maturity.

market yields and pricing of property transactions 

monitored closely across the London market.

alternative use opportunities pursued across the portfolio 

and planning consent progressed.

Sufficient headroom on Loan to value banking covenants 

is maintained and reviewed.

Weekly monitoring of occupancy levels, demand, pricing 

and reasons for customers vacating at each property and  

exit interviews conducted.

On-site staff maintain regular contact with customers  

and local monitoring of competitors offering space.

Extensive marketing using the Workspace brand.

Flexibility offered on deals by dedicated in-house 

marketing and letting teams.

regular monitoring of the London economy, research 

reports and the commissioning of relevant research.

regular meetings with the GLa and London Boroughs.

Detailed development analysis and appraisal undertaken, 

sensitivity and risk scenarios considered. 

Board level discussion and approval prior to project 

commitment.

contract structuring to reduce/eliminate build risk.

example of actions undertaken in 2012/13:

–   as the extensive development programme continues, 

improvements have been made to monthly reporting  

of progress on costs and timings to the board of each 

project underway.

–   enhanced reporting of progress of letting up and 

pricing for completed projects with comparison  

against original appraisals.

Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
 
cHANGE

REDUcED

STRATEGic RiSk

RiSk AREA:

FiNANciNG 

DETAiL

reduced availability and cost  

of bank financing resulting in  

inability to meet business plans  

or satisfy liabilities.

RiSk AREA:

PROPERTy VALUATiON 

DETAiL

value of our properties declining  

as a result of macroeconomic 

environment, external market,  

or internal management factors.

RiSk AREA:

OccUPANcy 

DETAiL

Demand by businesses for our  

space declining as a result of social, 

economic or competitive factors.

NO cHANGE

NO cHANGE

RiSk AREA:

LONDON 

DETAiL

changes in the political, infrastructure 

and environmental dynamics of  

London lead to reduced demand 

for space from businesses.

DETAiL

impact to underlying income and  

capital performance due to: 

−   adverse planning rulings.

−   construction cost  

and timing overrun.

−   Lack of demand for developments.

MiTiGATiNG AcTiViTiES

Funding requirements for business plans reviewed 
regularly and options for alternative sources of  
funding monitored. 

range of banking relationships maintained, refinancing 
strategy reviewed regularly.

interest rate hedging policy in place to minimise exposure 
to short-term rate fluctuations.

example of actions undertaken in 2012/13:
–   the group raised £57.5m funding via a retail bond  
issue in october 2012. this widened our financing 
arrangements and also extended our debt maturity.

NO cHANGE

investment market mood monitoring.

market yields and pricing of property transactions 
monitored closely across the London market.

alternative use opportunities pursued across the portfolio 
and planning consent progressed.

Sufficient headroom on Loan to value banking covenants 
is maintained and reviewed.

Weekly monitoring of occupancy levels, demand, pricing 
and reasons for customers vacating at each property and  
exit interviews conducted.

On-site staff maintain regular contact with customers  
and local monitoring of competitors offering space.

Extensive marketing using the Workspace brand.

Flexibility offered on deals by dedicated in-house 
marketing and letting teams.

regular monitoring of the London economy, research 
reports and the commissioning of relevant research.

regular meetings with the GLa and London Boroughs.

RETAiL bOND iSSUE
Workspace launched a retail Bond in October 2012, 
successfully raising £57.5m.

RiSk AREA:

DEVELOPMENT

NO cHANGE 

understanding of planning environment and use of 
appropriate advisers.

ENHANcED REPORTiNG PROcEDURES
Our development team report directly to the Board on 
costs and programme of all larger developments.

Detailed development analysis and appraisal undertaken, 
sensitivity and risk scenarios considered. 

Board level discussion and approval prior to project 
commitment.

contract structuring to reduce/eliminate build risk.

example of actions undertaken in 2012/13:
–   as the extensive development programme continues, 
improvements have been made to monthly reporting  
of progress on costs and timings to the board of each 
project underway.

–   enhanced reporting of progress of letting up and 
pricing for completed projects with comparison  
against original appraisals.

23

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100 
 
 
 
 
business  
review
cONTiNUED

PRiNciPAL bUSiNESS RiSkS
cONtiNuED

STRATEGic RiSk

RiSk AREA:
iNVESTMENT 

DETAiL
underperformance due to  
inappropriate strategy of:
−  timing of disposal decisions.
−  acquisitions timing.
−   Non achievement of  
expected returns.

RiSk AREA:
TRANSAcTiONAL 

DETAiL
Joint ventures or other ventures 
with third parties do not deliver  
the expected return.

cHANGE

NO cHANGE

MiTiGATiNG AcTiViTiES

regular monitoring of asset performance and positioning 

of portfolio.

plans analysis.

target returns.

acquisition due diligence appraisal and business 

regular monitoring of acquisition performance against 

NO cHANGE

review and monitoring of potential joint ventures 

before agreed. 

RiSk AREA:
REGULATORy 

NO cHANGE

rEit conditions monitored and tested on a regular basis 

and reported to the Board.

DETAiL
Failure to meet regulatory requirements 
leading to fines or penalties or the 
introduction of new requirements 
that inhibit activity.

RiSk AREA:
bUSiNESS iNTERRUPTiON 

DETAiL
major external events result in 
Workspace being unable to carry out 
its business for a sustained period.

REDUcED

continuing monitoring of security threat.

RiSk AREA:
REPUTATiONAL 

DETAiL
Failure to meet customer and external 
stakeholder expectations.

NO cHANGE 

customer survey undertaken and results acted upon.

training and mystery shopper initiatives undertaken.

regular communication with stakeholders.

requirements for business plans are reviewed regularly. 

regular review of performance of joint ventures 

throughout term.

example of actions undertaken in 2012/13:

–   bwpt joint venture has acquired five properties  

during 2012/13 taking the total portfolio to 16.

–   the trust is meeting key objectives and the portfolio is 

performing well, with regular meetings and monitoring  

of performance.

close working relationship maintained with appropriate 

authorities and all relevant issues openly disclosed.

advisers engaged to support best practice operation.

Business continuity plans and procedures in place and 

regularly tested.

example of actions undertaken in 2012/13:

–   moved to a Data Centre with increased resilience.

–   hourly replication of data to our business Continuity 

site with the ability to rapidly redirect services  

when required.

–   Creation of a readily available business Continuity 

office at southbank house.

bUSiNESS cONTiNUiTy
this year we have established a new Business continuity 
office at Southbank house, SE1 7SJ.

24

Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
strAtegiC risk

risk AreA:

investMent 

detAiL

Underperformance due to  

inappropriate strategy of:

−  Timing of disposal decisions.

−  Acquisitions timing.

−   Non achievement of  

expected returns.

detAiL

Joint ventures or other ventures 

with third parties do not deliver  

the expected return.

ChAnge

no ChAnge

MitigAting ACtivities

Regular monitoring of asset performance and positioning 
of portfolio.

Acquisition due diligence appraisal and business 
plans analysis.

Regular monitoring of acquisition performance against 
target returns.

risk AreA:

trAnsACtionAL 

no ChAnge

Review and monitoring of potential joint ventures 
before agreed. 

Requirements for business plans are reviewed regularly. 

Regular review of performance of joint ventures 
throughout term.

Example of actions undertaken in 2012/13:
–   BWPT joint venture has acquired five properties  
during 2012/13 taking the total portfolio to 16.

–   The trust is meeting key objectives and the portfolio is 
performing well, with regular meetings and monitoring  
of performance.

LLoyds Avenue, eC3n 3AX
One of the five new buildings acquired this year through 
the BWPT joint venture.

risk AreA:

reguLAtory 

detAiL

Failure to meet regulatory requirements 

leading to fines or penalties or the 

introduction of new requirements 

that inhibit activity.

risk AreA:

Business interruPtion 

detAiL

Major external events result in 

Workspace being unable to carry out 

its business for a sustained period.

no ChAnge

REIT conditions monitored and tested on a regular basis 
and reported to the Board.

Close working relationship maintained with appropriate 
authorities and all relevant issues openly disclosed.

Advisers engaged to support best practice operation.

reduCed

Continual monitoring of security threat.

Business Continuity plans and procedures in place and 
regularly tested.

Example of actions undertaken in 2012/13:
–   Moved to a Data Centre with increased resilience.
–   Hourly replication of data to our Business Continuity 

site with the ability to rapidly redirect services  
when required.

–   Creation of a readily available Business Continuity 

office at Southbank House.

risk AreA:

rePutAtionAL 

detAiL

Failure to meet customer and external 

stakeholder expectations.

no ChAnge 

Customer survey undertaken and results acted upon.

Training and mystery shopper initiatives undertaken.

Regular communication with stakeholders.

25

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100 
 
 
 
 
Key property  
statistiCs

workspace group portfolio
Property valuation
Number of estates 
Lettable floorspace (million sq. ft.)†
Number of lettable units
Erv
cash rent roll of occupied units 
average rent per sq. ft.
Overall occupancy 
Like-for-like lettable floor space (million sq. ft.)
Like-for-like cash rent roll
Like-for-like average rent per sq. ft.
Like-for-like occupancy

blackrock workspace property trust
Property valuation
Number of estates 
Lettable floorspace (million sq. ft.)†
Erv
cash rent roll of occupied units
average rent per sq. ft.
Overall occupancy 

†  Excludes storage space

quarter
ending
31 march 
2013

Quarter
ending
31 December 
2012

Quarter
ending
30 September
2012

Quarter
ending
30 June 
2012

Quarter
ending
31 march 
2012

£830m
86
4.7
4,626
£67.4m
£52.7m
£12.98
87.0%
3.7
£45.5m
£13.75
89.8%

£96m
16
0.5
£8.4m
£7.0m
£14.20
90.4%

£799m
90
4.8
4,607
£66.7m
£51.0m
£12.33
87.0%
3.7
£43.8m
£13.22
89.9%

£94m
16
0.5
£8.4m
£7.0m
£14.47
88.4%

£781m
90
4.8
4,639
£65.3m
£50.5m
£12.30
84.6%
3.7
£43.1m
£13.12
89.0%

£77m
13
0.5
£6.9m
£5.3m
£13.07
89.3%

£773m
91
4.9
4,643
£65.1m
£50.5m
£12.02
85.5%
3.7
£42.6m
£13.02
88.6%

£69m
12
0.5
£6.2m
£4.7m
£11.36
88.5%

£760m
92
5.0
4,668
£65.4m
£50.2m
£11.79
85.3%
3.7
£41.7m
£12.90
87.7%

£62m
11
0.4
£5.5m
£4.7m
£11.82
89.8%

26

Workspace Group PLC Annual Report and Accounts 2013 
governanCe, FinanCial 
statements anD  
shareholDer inFormation

 review of operations 
 Governance 
 Financial statements 
 Shareholder information 

01-26 
27-61
62-95
96-100

GOVERNANcE
28  Chairman’s Introduction 
30  The Board and Executive Committee
32  Report of the Directors
35  Corporate Governance Report
45  Directors’ Remuneration Report
61  Directors’ Responsibilities

FiNANciAL STATEMENTS
62 

 Independent Auditors’ Report to the Members  
of Workspace Group PLC
63  Consolidated Income Statement
63 
64 
65 
66 
67  Notes to the Financial Statements
91 

 Consolidated Statement of Comprehensive Income
 Consolidated Balance Sheet
 Consolidated Statement of Changes in Equity
 Consolidated Statement of Cash Flows

 Independent Auditors’ Report to the Members  
of Workspace Group PLC (Parent Company)

 Notes to the Parent Company Financial Statements

92  Parent Company Balance Sheet 
93 
95  Five-Year Performance
95  Key Performance Indicators

SHAREHOLDER iNFORMATiON
96  Property Portfolio
99 
100  Glossary of Terms

Investor Information

27

Workspace Group PLC Annual Report and Accounts 2013governance
chairman’s introduction

daniel Kitchen
ChAIRMAN

Good governance, based  
on robust practices and 
processes, is a fundamental 
part of being a responsible 
business.

The Board of Workspace is committed to maintaining  
a high standard of corporate governance in terms of 
leadership, remuneration matters, accountability, and in 
our relationship with our shareholders, all as identified  
by the UK Corporate Governance Code. 

We believe that good governance, based on robust 
practices and processes, is a fundamental part of being  
a responsible business.

BOARD APPOINTMENTS AND SUCCESSION 
In order to implement our strategy successfully, the  
Board monitors and reviews succession planning and 
development requirements for key Executives and senior 
managers across the Company.

Consequently, since last year’s report, we have  
welcomed two new Non-Executive Directors to our  
Board. In February 2013, we announced the appointment 
of Chris Girling. Chris was previously Finance Director at 
Carillion PLC and in recognition of his background and 
extensive experience it is intended that he will succeed 
Bernard Cragg as Chairman of the Audit Committee in 
due course. In May 2013 we appointed Damon Russell, the 
Chairman of New Telecom Express Group, an interactive 
media service provider. Damon brings over 20 years of 
experience across the telecommunications, internet,  
digital and media sectors. 

As I explained last year, Bernard Cragg will remain as a 
Board Director until the Annual General Meeting in 2014. 
We have been mindful to ensure that a certain level of 
continuity is retained given the Board changes last year 
and of course the experience and skills required in 
performing the role of Chair of the Audit Committee  
and Senior Independent Director.

After nine years on the Board, John Bywater will be 
retiring at this year’s Annual General Meeting and we 
would like to thank him for his valued contribution to  
the Board’s activities over the years and in his role as 
Chairman of the Remuneration Committee.

28

Workspace Group PLC Annual Report and Accounts 2013

We continue to review and monitor Board and  
Board Committee composition against our skills and 
experience requirements and expect to appoint one 
further Non-Executive Director this year. We recognise  
the benefits of diversity of skills, gender, knowledge and 
independence and we will continue to ensure that this is 
taken into account when considering any particular 
appointment. The Company’s policy remains that selection 
should be based on the best person for the role. We will 
continue to review candidates from a wide range of 
backgrounds with our foremost priority being to ensure 
that we appoint the most appropriate individuals and 
maintain our merit-based approach to recruitment. 

In accordance with the UK Corporate Governance  
Code, all of the Directors have submitted themselves for 
re-election at the Annual General Meeting. This practice 
will continue at the Annual General Meeting in 2013.

BOARD AND COMMITTEE PERFORMANCE
In the previous financial year, we conducted our annual 
evaluation of the Board and Committee performance 
through an independent external consultancy. This year, 
the evaluation was conducted by me with support from 
the Company Secretary. The process covered Board, 
Committee and personal performance and the output was 
reviewed by the Board. The process confirmed that the 
Board and its Committees continued to work effectively. 

COMMUNICATION WITH SHAREHOLDERS
Communication with shareholders is given a high  
priority by the Board. During the year, the Remuneration 
Committee reviewed the remuneration structure in place 
at Workspace. As part of its review, the Committee 
identified some modifications for long-term incentive 
arrangements. These were discussed with the Company’s 
largest shareholders.

When the Company announces its annual and half year 
results, the Chief Executive Officer, and Chief Financial 
Officer make presentations to institutional investors  
and analysts and hold one-to-one briefings with key 
shareholders. In addition, I am available to meet with 
shareholders if they wish to raise any matters separately.

DANIEL KITCHEN
ChAIRMAN

CORPORATE GOvERNANCE STRUCTURE

I n v e stment
C o mmittee

E

age m e nt
enior 

S
n
a
M

c

t i v e  
u
t e e
m m i t
e   3 7
g
p a

E x e
C o

x

t

A

u

e

r

d

n

i
t

a

R
e
c

E
x

r

t

u

e

i

r

t

n

m

a

e

l

n

t

The Board

t
i
d
u
A

e
e
t
t
i

m
m
o
C

2
4
e
g
a
p

N
o
m

i

n

a

t

i

C
o
m
m

p
a

g

e

i

t

t

o

3

e

n

7

e

s

R

e

m

C

o

m

uneration
mittee

page 38

A

dvisors

k

R i s

C o m m itt e e

o

l

r

e
c
n
a
n
Fi

29

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013 
 
 
the Board and  
eXecutive committee

THE BOARD

1. Daniel Kitchen
Appointment: Non-Executive Chairman 

committee memBershiPs:
Chairman of the Nominations Committee and 
a member of the Remuneration Committee.

BacKground and relevant 
eXPerience:
Daniel Kitchen was appointed to the Board  
on 6 June 2011 and subsequently took on  
the role as Chairman in July 2011. He was 
previously Deputy Chief Executive at Heron 
International plc and prior to that was  
Finance Director at Green Property for  
eight years. He retired as Non-Executive 
Chairman of Irish Nationwide Building  
Society in July 2011 and as Non-Executive 
Director of Kingspan Group PLC in  
May 2012.

current eXternal aPPointments:
He is currently Non-Executive Chairman  
of Key Capital Real Estate Ltd and a 
Non-Executive Director of LXB Retail 
Properties PLC, Irish Takeover Panel Limited 
and Governor of St Patrick Hospital in Dublin.

2. JaMie hOPKinS
Appointment: Chief Executive Officer

BacKground and relevant 
eXPerience:
Jamie Hopkins was appointed to the Board  
as a Non-Executive Director in June 2010  
then subsequently took on the role as Chief 
Executive on 1 April 2012. He was previously 

Chief Executive and a Non-Executive Director 
of Mapeley PLC and a Director of Chester 
Properties. Prior to that, Jamie was a Director 
of Delancey Estates and Savills. 

current eXternal aPPointments: 
Jamie is a Member of the Corporate Board  
of Great Ormond Street Hospital  
Children’s Charity.

3. GRahaM cleMett BSc, aca
Appointment: Chief Financial Officer

BacKground and relevant 
eXPerience:
Graham Clemett joined the Board as Finance 
Director in July 2007. Previously he was 
Finance Director for UK Corporate Banking  
at RBS Group PLC where he worked for a 
period of five years. Prior to that, Graham 
spent eight years at Reuters Group PLC, 
latterly as Group Financial Controller.

4. MaRia MOlOneY PhD, B.leG.Sci,  
D.UniV, M.Phil (laW)
Appointment: Non-Executive Director 

committee memBershiPs: 
Member of the Audit, Remuneration and 
Nominations Committees.

BacKground and relevant 
eXPerience:
Maria Moloney was appointed to the  
Board in May 2012. She was previously on the  
Board of the Belfast Harbour Commissioners, 
the Industrial Development Board for 
Northern Ireland and the Northern Ireland 
Transport Holdings.

current eXternal aPPointments: 
Maria, a lawyer, is currently a Non-Executive 
Director of the Broadcasting Authority  
of Ireland in Dublin and a Trustee of the  
N. Ireland Cancer Centre in Belfast.

5. JOhn BYWateR FRicS
Appointment: Non-Executive Director

committee memBershiPs: 
Chairman of the Remuneration Committee 
and a member of the Audit and Nominations 
Committees. 

BacKground and relevant 
eXPerience:
John Bywater was appointed to the Board in 
June 2004. He was previously an Executive 
Director of Hammerson PLC and retired in 
March 2007. 

current eXternal aPPointments: 
He is Managing Director of Caddick 
Developments Ltd, a Non-Executive Director 
of Canal and River Trust (formerly British 
Waterways) and Realis Estates, a private 
property company; a Non-Executive of Low 
Carbon Workspace Limited and a Trustee of 
Opera North. 

1.

2.

3.

4.

5.

30

Workspace Group PLC Annual Report and Accounts 20136. BeRnaRD cRaGG BSc, aca
Appointment: Senior Independent 
Non-Executive Director

committee memBershiPs: 
Chairman of the Audit Committee and  
a member of the Remuneration and 
Nominations Committees. 

BacKground and relevant 
eXPerience:
Bernard Cragg was appointed to the Board  
in June 2003. He was previously Chairman  
of Datamonitor PLC and i-mate PLC, and  
a Non-Executive Director of Bristol & West  
PLC. He was formerly Group Finance  
Director and Chief Financial Officer of Carlton 
Communications PLC and a Non-Executive 
Director of Arcadia PLC. 

current eXternal aPPointments: 
He is a Non-Executive Director of Astro 
Overseas Limited and Astro Malaysia Holdings 
SDN BHD and the Senior Independent 
Director of Mothercare PLC and Progressive 
Digital Media PLC. He is also Deputy Chairman 
and Senior Independent Non-Executive 
Director of Alternative Networks PLC. 

7. DaMOn RUSSell
Appointment: Non-Executive Director

BacKground and relevant 
eXPerience:
Damon is currently Chairman of New Telecom 
Express Group, an interactive media service 
provider, and has more than 20 years’ 
experience in the industry. He co-founded the 
company in 1989 and has been responsible for 

key client relationships and the business’  
sales strategy since its inception. Telecom 
Express was sold to AMV BBDO, part of the 
Omnicom Group, in 1998. In 2004, Damon  
led a successful management buyout. He also 
holds advisory roles for a number of smaller 
companies in the digital media sector. 

8. caRMelina caRFORa FciS
Appointment: Company Secretary

BacKground and relevant 
eXPerience:
Carmelina Carfora was appointed  
Company Secretary in March 2010. She  
was previously Group Company Secretary  
of Electrocomponents Plc. She has also 
worked in the construction industry and  
for a consultancy firm offering company 
secretarial services.

9. chRiS GiRlinG 
Appointment: Non-Executive Director

committee memBershiPs:
Member of the Audit, Remuneration and 
Nominations Committees.

BacKground and relevant 
eXPerience:
Chris Girling was appointed to the Board in 
February 2013. He was previously Group 
Finance Director of Carillion PLC.

current eXternal aPPointments:
Chris is currently a Non-Executive Director  
and Chairman of the Audit Committees of 
Elementis PLC and Keller PLC and a 
Non-Executive Director of Arco Limited.

EXECUTIvE COMMITTEE

10. anGUS BOaG MSc cenG Mice
Appointment: Development Director

BacKground and relevant 
eXPerience:
Angus Boag joined the Group in June 2007  
as Development Director. He has extensive 
experience in property and construction 
management and was a principal consultant  
at PA Consulting Group. Prior to joining the 
Group he was at Manhattan Loft Corporation 
for 12 years joining as Development Director 
and then being appointed as Managing 
Director in 2001. 

11. chRiS PieROni Ba (hOnS) MSc (ecOn) 
PhD (cantaB) acSi
Appointment: Operations Director

BacKground and relevant 
eXPerience:
Chris Pieroni joined the Group as Operations 
Director in October 2007. Chris is responsible 
for asset management, marketing, 
professional services, brand and business 
development. Prior to joining Workspace,  
he worked at KPMG specialising in real  
estate and infrastructure finance. He began 
his professional career teaching economics  
at Cambridge University. Chris was a 
Non-Executive Director of the Group from 
2000 until his retirement from the Board in 
August 2006.

6.

7.

8.

9.

10.

11.

Workspace Group PLC Annual Report and Accounts 2013

31

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100rePort oF the 
directors

CARMELINA CARFORA
Company Secretary

The Directors present their report on the affairs of the 
Group together with the audited financial statements for 
the year ended 31 March 2013. The Business Review and  
all other sections of the annual report, to which cross 
reference is made, are incorporated into the Report of the 
Directors by reference.

PRINCIPAL ACTIvITY AND BUSINESS REvIEW
The Group is engaged in property investment in the  
form of letting of business accommodation to new and 
growing companies located in and around London.  
At 31 March 2013 the Company had 12 active subsidiaries, 
six of which are property investment companies owning 
properties in Greater London. The other six include: 
Workspace Management Limited which acts as manager 
for all the Group’s property investment companies and  
the BlackRock Workspace Property Trust; Workspace  
16 (Jersey) Limited which invests in the BlackRock 
Workspace Property Trust; LI Property Services  
Limited which procures insurance on behalf of the  
Group; and Anyspacedirect.co.uk Limited which  
operates a web-based service for businesses in search  
of commercial space to rent in the UK. Workspace 
holdings Limited and Workspace Glebe Limited are 
intermediate holding companies. A full list of the 
Company’s trading subsidiaries appears on page 89.

Significant events which occurred during the year are 
detailed in the Chairman’s Statement on page 4, the  
Chief Executive Officer’s Strategic Review on page 6 and 
the Business Review on pages 16 to 25.

BUSINESS REvIEW AND FUTURE DEvELOPMENTS
The Business Review requires a detailed review of the 
business of the Group, the development and performance 
of the Company during the year and at the year end and 
of its strategy and prospects, including an analysis using 
key performance indicators.

This information, together with a description of the 
principal risks and uncertainties facing the Company, 
details of the Company’s health and safety policies and  
its environmental and corporate responsibility activities 
can be found on pages 1 to 26 and page 34.

32

CORPORATE GOvERNANCE
The Company and the Group are committed to high 
standards of corporate governance, details of which  
are given in the Chairman’s Governance Introduction on 
pages 28 and 29 and the Corporate Governance Report 
on pages 35 to 44 and in the Directors’ Remuneration 
Report on pages 45 to 60.

PROFIT AND DIvIDENDS
The Group’s profit after tax for the year attributable  
to shareholders amounted to £76.4m (2012: £49.0m).

The interim dividend of 3.22p (2012: 2.93p) was paid in 
February 2013 and the Board is proposing to recommend 
the payment of the final dividend of 6.45p (2012: 5.86p) 
per share to be paid on 2 August 2013 to shareholders 
whose names are on the Register of Members at the close 
of business on 12 July 2013. This makes a total dividend of 
9.67p (2012: 8.79p) for the year.

GOING CONCERN
The Group’s activities, strategy and performance are 
explained in the Chief Executive Officer’s Strategic Review 
and Our Strategy on pages 6 to 9 and the Business 
Review on pages 16 to 25.

Further detail on the financial performance and financial 
position of the Group is provided in the financial 
statements on pages 63 to 90.

The Directors, having made appropriate enquiries,  
have a reasonable expectation that the Group and  
the Company have adequate resources and sufficient 
headroom on the Group’s debt facilities to continue  
in operational existence for the foreseeable future. For  
this reason, the Directors believe that it is appropriate to 
continue to adopt the going concern basis in preparing 
the Group’s accounts.

LAND AND BUILDINGS
The Group’s fixed assets are mainly investment properties 
of £825.9m (2012: £759.3m). The Group’s investment 
properties have been independently valued by CBRE 
Limited, Chartered Surveyors, at 31 March 2013 at open 
market value.

DIRECTORS
With the exception of Maria Moloney, Chris Girling  
and Damon Russell who were appointed as Directors  
on 22 May 2012, 7 February 2013 and 29 May 2013 
respectively, the Directors of the Company all held  
office throughout the year. The current Directors are 
shown on pages 30 and 31.

All the Directors will retire at the Annual General Meeting 
and, being eligible, will offer themselves up for election  
or re-election. 

Workspace Group PLC Annual Report and Accounts 2013DIRECTORS’ INDEMNITIES
As permitted under the Companies Act 2006 and the 
Company’s Articles of Association, the Company has 
executed a Deed Poll under which it will indemnify its 
Directors, subject to certain limitations and as permitted 
by law, for liabilities incurred in connection with their 
appointment as a Director and in certain circumstances 
fund a Director’s expenditure on defending criminal or civil 
proceedings brought against the Director in connection 
with their position as a Director of the Company or of any 
Group Company.

The indemnity provision was in force during the year and 
at the date of approval of the financial statements.

DIRECTORS’ CONFLICT OF INTEREST
No Director had, during the year, any beneficial interest  
in any contract significant to the Company’s business, 
other than a contract of employment.

Details of the Directors’ shareholdings and options over 
shares are provided on pages 58 to 60.

The Company has procedures in place for managing 
conflicts of interest. Should a Director become aware  
that they, or their connected parties, have an interest in an 
existing or proposed transaction with Workspace Group 
PLC, they are required to notify the Board in writing or at 
the next Board Meeting.

EMPLOYMENT POLICIES
The Group values highly the commitment of its employees 
and has maintained its practice of communicating 
business developments to them in a variety of formats. 
Furthermore, the Group has implemented a series of 
Director-led staff briefings designed to keep employees 
well informed of the performance and objectives of the 
Group. These briefings are held regularly and serve as  
an informal forum for employees to ask questions about 
the Company. 

Employees are appraised regularly. The appraisal process 
has been designed to link closely with the business 
planning process and provides employees with a clear  
set of business and personal objectives.

Share Schemes are a long-established and successful part 
of our total reward package, encouraging and supporting 
employee share ownership. In particular, all employees are 
invited to participate in the Company’s Savings Related 
Share Option Scheme (‘SAYE’). During the year all 
employees were also able to participate in the Approved 
Share Incentive Plan (‘SIP’).

The Group is committed to an active Equal Opportunities 
Policy from recruitment and selection, through training 
and development, performance reviews and promotion. 
All decisions relating to employment practices are 
objective, free from bias and based solely upon work 
criteria and individual merit. The Company is responsive to 
the needs of its employees, customers and the community 
at large. We are an organisation which uses everyone’s 
talents and abilities, where diversity is valued.

The Group remains supportive of the employment  
and advancement of disabled persons and ensures  
its promotion and recruitment practices are fair  
and objective. 

SHARE CAPITAL AND CONTROL
Full details of share options and awards under the terms  
of the Company’s share incentive plans can be found on 
pages 85 to 88.

Other relevant requirements from the takeover  
directive are included elsewhere in the Report of the 
Directors, the Corporate Governance Report, the 
Directors’ Remuneration Report and the notes to the 
Group and Company financial statements. There are  
no agreements in place between the Group and its 
employees or Directors for compensation for loss of office 
or employment that occur because of a takeover bid.

As at 31 March 2013, the Company’s issued share capital 
comprised of a single class of 144,936,155 ordinary shares 
of £1.00 each. Details of the Company’s issued share 
capital are set out on page 84.

SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY
As at 31 March 2013, the Company has been notified, in 
accordance with the FSA Disclosure and Transparency 
Rules of the following interests in the voting rights of  
the Company:

Mr S N Roditi
BlackRock Inc
Standard Life Investments
F&C Asset Management Plc
Invesco Perpetual
Legal & General Investment 
Management
Aberforth Partners
NBIM

 Number 
of Shares 
38,880,258
16,475,156
8,726,570
8,091,140
7,830,749

6,285,840
6,084,364
4,840,332

Percentage
held
26.83
11.37
6.02
5.58
5.40

4.34
4.20
3.34

As at 31 May 2013, the Company has been notified, in 
accordance with the FSA Disclosure and Transparency 
Rules of the following interests in the voting rights of  
the Company:

Mr S N Roditi
BlackRock Inc
Standard Life Investments
Invesco Perpetual
F&C Asset Management Plc
Legal & General Investment 
Management
NBIM

 Number 
of Shares 
38,880,258
16,347,524
10,322,479
7,587,941
7,130,851

5,871,178
5,741,430

Percentage
held
26.83
11.28
7.12
5.24
4.92

4.05
3.96

Mr Roditi’s shareholding is held via a number of different 
trusts and legal entities.

33

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013rePort oF the 
directors
CONTINUED

POLITICAL AND CHARITABLE CONTRIBUTIONS
The Group made no political contributions during the  
year (2012: £nil). Charitable contributions within the UK 
amounted to £45,940 (2012: £43,824) principally through 
rental concessions.

INDEPENDENT AUDITORS
The auditors, PricewaterhouseCoopers LLP (‘PwC’), have 
indicated their willingness to continue in office and a 
resolution that they will be reappointed will be included  
as ordinary business at the Annual General Meeting.

ANNUAL GENERAL MEETING
The 27th Annual General Meeting of the Company will be 
held at Chester house, Kennington Park, 1-3 Brixton Road, 
London SW9 6DE on Thursday 25 July 2013 at 11.00am. 
Accompanying this report is the Notice of the Annual 
General Meeting, which sets out the resolutions to be 
considered and approved at the meeting.

By order of the Board

CARMELINA CARFORA
COMPANY SECRETARY
11 June 2013

HEALTH AND SAFETY
We are committed to health and safety best practice as  
an integral part of our business activities and our drive  
for high performance. 

The Group’s policy is to provide and maintain safe and 
healthy working conditions, equipment and systems of 
work for all its employees and to provide such information, 
training and supervision as they need for this purpose.

Whilst all employees of the Group have a responsibility  
in relation to health and safety matters, certain staff have 
been designated ‘workplace’ responsibilities or other 
co-ordinating responsibilities throughout the Group,  
and ultimately, at Board level, the Chief Executive Officer 
has overall responsibility.

PURCHASING POLICIES AND PAYMENTS
The Group tries, wherever possible, to procure from  
within its own customer base providing customers are 
competitive on price and quality. The Group’s policy  
is that, unless agreed otherwise at the time of the 
transaction, its own payments to others for goods and 
services received are made on average within a month  
of the date of invoice.

During the year to 31 March 2013 the Group’s average 
payment term from the date of invoice was 29 days  
(2012: 33 days). The Parent Company has made no  
trade purchases.

FINANCIAL RISK MANAGEMENT
The financial risk management objectives and policies  
of the Company are set out in note 17 to the financial 
statements and in the Corporate Governance section  
of this report on pages 43 and 44.

DISCLOSURE OF INFORMATION TO AUDITORS
The Directors who held office at the date of approval of 
this Report of the Directors confirm that, so far as they are 
each aware there is no relevant information of which the 
Group’s auditors are unaware; and each Director has taken 
all the steps that they ought to have taken as Directors to 
make themselves aware of any relevant audit information 
and to establish that the Group’s auditors are aware of  
that information.

34

Workspace Group PLC Annual Report and Accounts 2013corPorate  
governance rePort

CORPORATE GOvERNANCE PRINCIPLES AND 
COMPLIANCE STATEMENT
The Board is committed to maintaining high standards  
of corporate governance and we support and apply the 
principles of good governance advocated by the UK 
Corporate Governance Code (the Code). The Board works 
with honesty and integrity which it considers are vital to 
building a sustainable business for all of our stakeholders. 

COMPLIANCE WITH THE UK CORPORATE 
GOvERNANCE CODE
It is the Board’s view that the Group has been fully 
compliant with the Code throughout the year ended  
31 March 2013. The application of the principles contained 
in the Code is described below. Detailed reports on 
Directors’ remuneration and the Audit Committee can  
be found on pages 45 to 60 and pages 42 to 44.

The Board believes that implementing a robust 
governance and corporate social responsibility framework 
in which appropriate management structures, processes 
and safeguards are adopted and are transparently 
communicated to shareholders is essential in aiding 
sustainable long-term economic performance. 

CORPORATE GOvERNANCE STRUCTURE
The Board is responsible to shareholders for the strategic 
direction of the Group and the stewardship of its activities.

The Board has a number of standing committees to  
which specific responsibilities have been delegated and  
for which written terms of reference have been agreed. 

LEADERSHIP
CORPORATE GOvERNANCE STRUCTURE

THE BOARD
– Establish the core values and standards which are implemented by Workspace’s governance framework and operational activities.
– Set Workspace’s business strategy and business objectives in order to create long-term value for shareholders.
– Ensure that the necessary resources are available to fulfil Workspace’s strategic objectives.
–  Review and monitor performance against its business objectives and consider any associated risk factors which may adversely impact the business at large.

EXECUTIvE  
COMMITTEE
–  Address Group-wide issues and initiatives. 

–  Review and approve capital expenditure,  

disposals and certain property acquisitions  
within established levels of authority.

–  Monitor the operating and financial results  

against plans and budgets.

–  Review the effectiveness of risk 

management and control procedures.

REMUNERATION 
COMMITTEE
–  Oversee all aspects  
of remuneration for 
Executive Directors.

–  Recommend  

the Chairman’s 
remuneration.

–  Consider 

remuneration policy 
and practices of  
the workforce.

NOMINATIONS  
COMMITTEE
–  Assess what new  
skills, knowledge  
and experience  
are required on  
the Board.

–  Recommend to the 
Board candidates  
for appointment as 
Executive and 
Non-Executive  
Directors (‘NEDs’)  
of the Group.

–  Consider succession 
policies and talent 
management.

AUDIT  
COMMITTEE
–  Ensure the integrity of financial reporting and audit processes.

–  Ensure maintenance of a sound internal control  

and risk management system.

–  Review and monitor the external auditors independence,  

objectivity and effectiveness of the audit process.

–  Establish and implement the policy on non-audit services.

ADvISORS

–  Advise on all 

aspects of executive 
remuneration and 
aspects associated 
with the LTIP.

–  Advise on 

administration and 
the tax treatment  
of share option 
schemes and 
deferred share 
awards.

EXTERNAL 
AUDITOR
–  Audit and express  
an opinion on the 
financial statements  
in accordance with 
applicable law and 
International 
Standards on 
Auditing  
(UK and Ireland).

FINANCE  

–  Produce the  

interim and annual 
financial reports  
and associated 
announcements.

–  Establish and 

monitor financial 
processes of  
control and cash 
management.

RISK  
COMMITTEE 
–  Review and  
identify risks  
facing the Group.

–  Ensure that 
appropriate  
controls are in  
place to review  
each issue raised.

–  Provides reports  

to the Audit 
Committee.

SENIOR  
MANAGEMENT
–  Assist the Executive 

Committee in  
the running of 
day-to-day 
operations in line 
with Group strategy.

–  Review and track  
major initiatives.

–  Attend regular 

meetings with the 
Executive 
Committee to 
review performance 
and operational 
activity.

INvESTMENT 
COMMITTEE
–  Approve any 
acquisition or 
disposal of 
investment property 
assets.

EXTERNAL 
RECRUITMENT
–  Advise and assist 
the Committee in 
the search for 
appropriate 
candidates. 

–  Advise and assist  
the Nominations 
Committee in 
increasing the 
effectiveness of the 
Board and ensure 
that diversity 
continues to be a 
major factor in 
profiling candidates.

–  Review and monitor 
integration plans for 
acquisitions.

–  Approve and 

monitor 
development 
contracts.

–  Approve and 
monitor asset 
management 
property 
improvements. 

–  Make 

recommendations  
to the Board for  
its approval of any 
business initiative  
with a value of  
more than £2m.

35

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013corPorate  
governance rePort
CONTINUED

THE BOARD
The Board has a duty to promote the long-term success  
of the Company for its shareholders and is responsible  
for safeguarding their interests by establishing a robust 
governance framework which is applied to all aspects  
of its business.

The Board is collectively responsible for the performance 
of the Group. The Board will review and monitor strategic 
plans and objectives, approval of acquisition of investment 
properties, disposals, financing arrangements and capital 
expenditure and of the Group’s systems of internal control, 
governance and risk management. 

Other day-to-day operational decisions are delegated  
by the Board to the Executive Committee.

The Chairman promotes open discussion among the 
Board members and encourages the Non-Executive 
Directors to constructively challenge strategic and  
other business related debate in order to ensure that  
the decisions adopted by the Board have been  
vigorously tested.

To assist the Board in effectively discharging its duties, 
Directors receive relevant supporting information, which 
include but is not limited to the Group’s financial results, 
performance reports and risk assessment reports.  
The governance framework implemented by the Group 
ensures that open communication channels exist between 
the Board, its principal committees and from within the 
organisation. Copies of committee minutes are distributed 
to all Directors and Committee Chairmen report back to 
the Board. Furthermore, the Board routinely considers 
safety, environmental, ethical and reputational issues in 
order to ensure that they are fully reflected in the risk 
management process.

BOARD ACTIvITIES
The full schedule of matters reserved for the  
Board can be found on the Company website at  
www.workspace.co.uk. At least once a year the  
Board reviews the nature and scale of matters reserved  
for its decision. 

During the past financial year, the Board has met for 
scheduled Board meetings eleven times. Key matters  
reserved for the Board at those meetings include:

–   strategy: the setting and monitoring of strategy, 

including the dividend policy;

–   strategy: reviewing performance and implementation 

of the strategy by the Executive Directors; 

–   Property: reviewing the Group’s property valuation;
–   Financing: considering significant financing 

arrangements;

–   acquisitions and disposals: examine and approve 

potential acquisitions and disposals; 

–   Business Plans and Budget: reviewing and approval  

of budgets, business plans and performance;

–   redevelopment activity: approval of redevelopment 

activity and major developments;

–   Financial reporting & controls: approval of the annual, 

half yearly and interim management statement;

–   internal controls: ensuring a sound system of internal 

control and risk management; review of crisis 
management plan;

–   Policy: reviewing and approving policy on key areas 
including sustainability objectives, health and safety 
and the environment;

–   Board membership: approval of Board appointments 
and ensuring adequate succession planning is in place; 

–   corporate governance: undertaking a review of its  
own performance and that of its committees, the 
independence of the Non-Executive Directors and 
reviewing the governance framework in place. 

The Company maintains Directors’ and Officers’ Liability 
insurance which is reviewed annually.

BOARD ATTENDANCE
The Board normally meets at regular intervals during  
the year. Supplementary meetings are also held as and 
when necessary. 

During the year ended 31 March 2013, the attendance of 
Directors at Board meetings was as follows: 

Daniel Kitchen
Jamie hopkins
Graham Clemett
Bernard Cragg
John Bywater
Maria Moloney1
Chris Girling1
Damon Russell2

Scheduled 
Board Meetings
(11)

10
11
11
10
9
10
3
0

Notes:
1. 

 Maria Moloney and Chris Girling were appointed to the Board  
on 22 May 2012 and 7 February 2013 respectively. Since their 
appointment, both Maria Moloney and Chris Girling have  
attended all Board meetings that they were eligible to attend.

2.   Damon Russell was appointed to the Board on 29 May 2013.

Where Directors are unable to attend meetings, their 
comments, as appropriate, are provided to the Board  
or Committee Chairman prior to the meeting.

During the year, the Board held an annual strategy 
meeting at which it considered the future strategy of  
the Group. 

36

Workspace Group PLC Annual Report and Accounts 2013 
THE EXECUTIvE COMMITTEE
The Executive Committee consists of the Executive 
Directors together with the Operations Director and 
Development Director. It is chaired by the Chief Executive 
Officer. The purpose of the Committee is to facilitate  
and assist the Chief Executive Officer in managing the 
day-to-day activities of the Group and addressing 
Group-wide issues and initiatives. The Executive 
Committee is responsible for reviewing and approving 
capital expenditure; disposals and acquisitions of 
investment properties at certain levels as determined by 
the Board; the monitoring of the operating and financial 
results against plans and budgets; and to ensure the 
effectiveness of risk management and control procedures. 
The Executive Committee has its own terms of reference.

The Committee has met 18 times during the year ended  
31 March 2013.

An Investment Committee was also established during  
the year under review, again this comprises the Executive 
Committee and senior managers will be invited to attend 
as required. 

The responsibilities of the Executive Committee  
members include:

Jamie hopkins, chief executive officer
Strategic management; investor relations; acquisitions and 
disposals; health and safety; staff; equal opportunities; 
remuneration; and training and development. 

graham clemett, chief Financial officer
Finance; treasury; company secretarial; investor relations; 
and the Group’s IT strategy.

chris Pieroni, operations director
Portfolio performance; asset management, marketing, 
professional services, brand and business development.

angus Boag, development director
Planning consents; development of assets; valuations; 
disposals; sustainability; and environmental strategy.

BOARD COMMITTEES
The Board has a number of standing committees, namely 
the Remuneration, Audit, and Nominations Committee, to 
which specific responsibilities have been delegated and  
for which written terms of reference have been agreed. 
The terms of reference for the Remuneration, Audit and 
Nominations Committee are available for inspection  
on the Company’s website. Each of these Committees  
is comprised of Independent Non-Executive Directors  
of the Company who are appointed by the Board. Board 
members receive minutes of meetings of all the Board’s 
committees and can request presentations or reports on 
areas of interest. The Company Secretary is secretary to 
each Committee.

Attendance at Committee meetings by Committee 
members during the year was as follows:

Nominations
Committee
(3 Meetings)

Remuneration
Committee
(7 Meetings)

Audit
Committee
(4 Meetings)

chairman
Daniel Kitchen

non-executive 
directors
Bernard Cragg
John Bywater
Maria Moloney1
Chris Girling1

3

3
3
1
–

6

7
7
6
2

–

4
4
3
1

Notes:
1. 

 The attendance of Maria Moloney and Chris Girling is based on the 
number of meetings held in which they were eligible to attend 
following their appointment as a formal member of the Committee. 

 EFFECTIvENESS

 NOMINATIONS COMMITTEE

DANIEL KITCHEN
Chairman

During the year, the Nominations Committee was chaired 
by the Company Chairman, Daniel Kitchen and comprised 
all of the Non-Executive Directors. The names of the 
members of the Committee are shown in the table above 
together with attendance at meetings. The full terms of 
reference of the Nominations Committee are available for 
inspection on the Company’s website at  
www.workspace.co.uk.

The Committee meets as required and recommends to 
the Board candidates for appointment as Directors of  
the Company. The Committee periodically assesses what 
new skills, knowledge and experience are required on the 
Board and, if necessary, the balance of independence. If 
appropriate, a candidate profile is recommended which is 
then used to brief recruitment consultants appointed by 
the Committee to undertake the selection process. Initial 
meetings are generally held by the Company Chairman 
with prospective candidates, and a shortlist of individuals 
is then selected by the Chairman in conjunction with the 
recruitment consultants, to meet with other Nominations 
Committee members and the Executive Directors. The 
Nominations Committee then meets and decides which 
candidate, if any, will be recommended to join the Board. 

37

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corPorate  
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CONTINUED

During the year, the Nominations Committee worked  
on three Non-Executive Director appointments. The 
Committee appointed Spencer Stuart, an external search 
consultancy, to assist it in identifying external candidates 
with diverse experience, one of whom with relevant 
financial experience. 

The Committee met with a number of candidates and 
following several meetings and discussions, the preferred 
candidates, Maria Moloney, Chris Girling and Damon 
Russell, met with each member of the Board prior to  
their appointments on 22 May 2012, 7 February 2013 and 
29 May 2013 respectively. 

BOARD COMPOSITION
The effectiveness of the Board and its Committees is vital 
to the success of the Company. The Board considers there 
to be an appropriate balance between Executive and 
Non-Executive Directors required to lead the business  
and safeguarding the interest of shareholders. The Board’s 
current composition of a Non-Executive Chairman, two 
Executive Directors and five Non-Executive Directors 
meets the requirement of the code for at least half the 
Board, excluding the Chairman, to be independent 
Non-Executive Directors. In the Board’s view, all of the 
current Non-Executive Directors are independent and  
this is explained in more detail on pages 39 and 40.

REMUNERATION COMMITTEE

JOHN BYWATER FRICS
Non-Executive Director

During the year ended 31 March 2013, the Remuneration 
Committee was chaired by John Bywater and comprises 
all of the Non-Executive Directors and the Company 
Chairman who was independent upon appointment.  
The names of the members of the Committee are shown 
in the Table on page 37, together with attendance at  
meetings. The full terms of reference of the Remuneration 
Committee are available for inspection on the Company’s 
website at www.workspace.co.uk.

The Chief Executive Officer is, other than discussions  
in respect of his own position, invited to attend and 
contribute towards meetings.

Under its terms of reference the Committee meets at  
least twice a year. During the year under review the 
Committee met seven times. It is responsible for all 
aspects of the remuneration of the Executive Directors. 
The Committee is also responsible for recommending 
the Chairman’s remuneration to the Board in compliance  
with the UK Corporate Governance Code.

Further details of the Remuneration Committee, 
remuneration policy and of the remuneration of each 
Director are set out in the Remuneration Report.

The Non-Executive Chairman was considered by the 
Board to be independent upon his appointment. 

During the year, a number of changes have been made to 
the Board. On 1 April 2013, Jamie hopkins was appointed 
Chief Executive Officer following the retirement of harry 
Platt in March 2012.

Maria Moloney was appointed as a Non-Executive Director 
on 22 May 2012 and Chris Girling joined the Board as a 
Non-Executive Director on 7 February 2013. 

Damon Russell was also appointed to the Board as  
a Non-Executive Director on 29 May 2013.

The biographies of all members of the Board are set  
out on pages 30 and 31. The Nominations Committee 
regularly reviews the composition of the Board to ensure 
that we have an appropriate and diverse mix of skills, 
experience, independence and knowledge of the Group.

The following Table illustrates the balance of Non-Executive 
Directors to Executive Directors, excluding the Chairman, 
on the Board during the past year:

BALANCE OF NON-EXECUTIvE AND  
EXECUTIvE DIRECTORS

31 March 
2013

31 March
2012

0

10

20

30 40 50 60 70
%

80 90

100

Non-Executive Directors

Executive Directors

BACKGROUND AND EXPERIENCE OF THE BOARD 
The Board currently has eight Directors that bring 
considerable and diverse experience which enables  
them to make a valuable contribution to the Group.  
Their experience, gained from varied commercial 
backgrounds, enables them to bring specific insights  
and make valuable contributions to the Company.

38

Workspace Group PLC Annual Report and Accounts 2013 
 
The following Table illustrates the collective business experience held by Board Directors, outside that acquired at 
Workspace Group PLC.

BOARD EXPERIENCE AND SKILLS

Industry
Experience

Finance

Property, 
Real Estate and 
Infrastructure

Retail

Media

0

1

2

3

4

5

Number of Directors

The Board is actively considering diversity and believes 
this to be an important factor when considering 
appointments to the Board. As part of the recruitment 
process, the composition of the Board will be kept under 
review to ensure the best balance of skills and experience 
is maintained. Further details on our diversity policy can 
be found on page 44.

ROLES OF THE CHAIRMAN, CHIEF EXECUTIvE 
Industry
OFFICER AND SENIOR INDEPENDENT DIRECTOR
Experience
The roles and responsibilities of the Non-Executive 
Chairman, Chief Executive Officer and Senior Independent 
Other
Director are separate and the division of responsibilities 
has been clearly established. 
Media
The Chairman is primarily responsible for leadership of  
the Board, ensuring its effectiveness on all aspects of its 
Retail
role and that it operates in the interests of shareholders. 
The Chairman facilitates the effective contribution of  
Finance
the Non-Executive Directors and ensures all Directors 
receive accurate, timely and clear information. he is also 
Property, 
responsible for effective communication between the 
Real Estate and 
Infrastructure
Board and shareholders. The Chairman is not involved  
in an executive capacity in any of the Group’s activities. 

0

1

2012 AGM

During the year the Chairman held a number of meetings 
with the Non-Executive Directors, without the Executive 
Directors being present. The discussions largely revolved 
around succession planning.

31 March 2012

The Chief Executive Officer has direct charge of the  
Group on a day-to-day basis and is accountable to the 
Board for the financial and operational performance of  
the Group and the determination of the strategy and 
achievement of its objectives.

Bernard Cragg, as the Senior Independent Director, is 
responsible for chairing the meeting of the Non-Executive 
Directors for the purpose of evaluating the Chairman’s 
performance and to provide an alternative communication 
channel for shareholders if required.

INDEPENDENCE OF NON-EXECUTIvE DIRECTORS
Following the 2013 AGM, Bernard Cragg will have served 
as a Board Director for ten years. The Board recognises 
that his tenure will have reached a threshold at which his 
independence could be called into question by some 
shareholders under the criteria set by the UK Corporate 
Governance Code.

The Board has considered the independence of all of  
the Non-Executive Directors, and in particular that of 
Bernard Cragg. The Board concluded that each of the 
Non-Executive Directors is considered to be independent 
of the executive management and free from any business 
or other relationship which could materially interfere  
with the exercise of their independent judgement. All 
Non-Executive Directors act in a robustly independent 
manner and bring constructive challenge to Board 
discussions and independent decision-making to their 
Board and Committee duties.

4

3

2

Number of Directors

The Board believes that no long-standing relationship 
which may be deemed to compromise independence  
has been formed with any of the Executive Directors  
or senior executives at Workspace. Furthermore, the 
longest-standing professional relationship between 
Bernard Cragg and any existing Executive Directors  
is no more than six years.

39

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CONTINUED

The Board accepts that some shareholders take a  
robust view of independence, in particular the tenure  
of Non-Executive Directors. The Board is committed  
to actively refresh its membership and that of its 
committees in line with its succession planning process 
which has been evident during the last 12 months with 
the appointment of Maria Moloney, Chris Girling and 
Damon Russell as Non-Executive Directors. 

COMPANY SECRETARY
Carmelina Carfora is the Company Secretary to the Board 
of Workspace. her biography can be found on page 31. 
Carmelina is responsible for ensuring good information 
flows within the Board and its committees and between 
senior management and Non-Executive Directors. She is 
also responsible for advising the Board, through the 
Chairman on all governance matters.

As explained last year, Bernard Cragg will remain as a 
Board Director until the Annual General Meeting in 2014. 
We have been mindful to ensure that a certain level of 
continuity is retained given the Board changes last year 
and of course the experience and skills required in 
performing the role of Chair of the Audit Committee and 
Senior Independent Director. however, the intention is that 
Chris Girling will succeed Bernard Cragg as Chairman of 
the Audit Committee in due course given his background, 
knowledge and in-depth experience within finance which 
are essential in order to perform the role of Chair of the 
Audit Committee. 

We continue to review and monitor Board and Board 
Committee composition against our skills and experience 
requirements. 

INDUCTION, TRAINING AND DEvELOPMENT
A tailored induction programme is provided for each new 
Director. Overall, the aim of the induction programme is  
to introduce new Directors to the Group’s business and  
its governance arrangements. Such inductions typically 
include meetings with senior management, site visits and 
presentations of key business areas and other relevant 
documentation. In addition, Directors are encouraged  
to update their skills, knowledge and familiarity with  
the Group by attending external seminars and briefings, 
through participation at meetings and through visits to 
estates, meetings with senior management and advisers. 
We recognise that our Directors have a diverse range of 
experience, and so we encourage them to attend external 
seminars and briefings that will assist them individually.

The Directors are regularly updated on new legislation  
and corporate governance issues as they arise. Directors 
have access to independent professional advice at the 
Company’s expense where they judge this to be necessary  
to discharge their responsibilities as Directors. This is in 
addition to the access that every Director has to the 
advice and services of the Company Secretary, who  
is responsible to the Board for ensuring that Board 
procedures are complied with. 

BOARD PERFORMANCE EvALUATION
The Board annually evaluates its own performance and 
that of its Committees and Directors. In 2012 the annual 
evaluation of the Board and Committee performance was 
conducted through an independent external consultancy. 

The results of last year’s evaluation were positive.  
A number of actions were identified to improve and 
maintain the effectiveness of the Board. The actions, 
together with progress are identified below:

2012 BOARD EvALUATION

actions 

Progress

strategy and risk 
management

succession planning and 
implementation

skills, experience and 
performance

communication

–   Annual Board strategy  

day held.

–   Actions from strategy day 
formally recorded in a plan 
which is monitored and 
updated by the Board.
–   Risk Management process 
reviewed and monitored. 

–   Two Non-Executive 

Directors appointed to  
the Board during the year 
under review. 

–   Two Non-Executive 
Directors appointed  
with diverse skills and 
experience, one with 
in-depth financial skills  
in order to assume the  
role of Chair of the Audit 
Committee in due course. 

–   Non-Executive Directors 
have continued their 
interaction with the 
Executive Committee 
members and visited  
sites to gain an enhanced 
understanding of the 
challenges and 
opportunities they face in 
the business environment. 
Additional Board Meetings 
have also been included in 
the Board timetable. 

40

Workspace Group PLC Annual Report and Accounts 2013For the year under review, the process comprised the 
Company Secretary issuing detailed questionnaires 
covering the Board and its Committees to Board 
members. The questionnaires covered those areas as 
detailed in the diagram below:

BOARD AND COMMITTEE EvALUATION

l s
l
  S k i
r i e n c e

f
e

e   o
p
x

c

n

B ala
a n d   E

i

g
n
n
n
a

n
o
i
s
s
e
c
c
u

l

P

S

R

i
s

k

C

o

r

C

M

p

o

a

o

r

a

n

nagement
trols and
te G
overnance

Inductio
Trainin

n a

n

g

d

O

n

g

o

i

o

f

n
g

S
t
r
a
t
e
g
y

D
e
v
e
l
o
p
m
e
nt

g  I n ternal
x t e r n al
hip s
t i o

s

n

M a n a g i n
a n d  
R e l a

E

The responses to the questionnaires were collated 
independently by the Company Secretary who prepared 
reports for the Company Chairman and the Chairman of 
each committee. These reports were discussed at the 
relevant Committee meetings and the Board discussed 
the results at its meeting in March 2013.

The results of this year’s evaluation were positive.  
The following themes were noted for action:

–   Ongoing review of Board composition and succession 

planning;

–   Continued focus on testing and development of 

strategy;

–   Conscious of the ever-changing legislation and 

regulations, presentations and updates will be made 
during the course of the year on both potential and 
impending legal and regulatory changes across areas  
of the Group’s operations to ensure the potential 
impacts on the Group are appropriately addressed  
on a timely basis.

The review includes the assessment of individual Directors’ 
performance, which in the case of the Executive Directors 
is undertaken as part of the wider performance appraisal 
process applied to staff across the Group. 

The review of the Chairman’s performance is undertaken 
by the Non-Executive Directors, led by Bernard Cragg in 
his capacity as the Senior Independent Director, taking 
into account the views of the Executive Directors. 
Following the review, Bernard Cragg met with the 
Chairman to discuss his performance.

ELECTION AND RE-ELECTION OF DIRECTORS
The Articles of Association of the Group require that 
Directors should submit themselves for election at the  
first opportunity after their appointment and thereafter 
for re-election at least every three years. however, at the 
2011 AGM the Group had adopted the requirements of the 
UK Corporate Governance Code (June 2010) in relation  
to Directors’ appointments and in particular the annual 
re-election of all Directors. Therefore, in accordance with 
provision B.7.1 of the UK Corporate Governance Code,  
all the Directors will retire at the AGM and being eligible,  
offer themselves up for election and re-election.

The Board considers that all of the Directors have the 
necessary skills and experience needed to effectively  
lead the business. In addition, the Non-Executive Directors 
are considered to bring independent objectivity in order  
to safeguard and promote the interest of shareholders.

The Board has considered the outcome of the Board 
effectiveness review as well as the performance of  
each individual Director, including how they operate 
as a collective in fulfilling their duties on the Board or  
as members of the Board’s Committees. The Board  
has accepted the recommendations provided by the 
Nominations Committee and is of the opinion that the 
Directors seeking re-election at the AGM have continued 
to give effective counsel and commitment to the 
Company and accordingly should be reappointed by  
the Group’s shareholders at the upcoming AGM.

Jamie hopkins and Graham Clemett have service 
contracts and details can be found on page 49.

None of the Non-Executive Directors have service 
contracts.

The appointment of Daniel Kitchen may be terminated  
by either he or the Company giving six months’ notice  
in writing.

The appointment of John Bywater and Bernard Cragg 
may be terminated by any one of them or the Company 
giving six months’ notice in writing.

41

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CONTINUED

Maria Moloney’s appointment may be terminated by  
either the Company or by her giving three months’  
notice in writing. 

During the year, the Committee met in private sessions 
with its external auditors, PricewaterhouseCoopers LLP 
(‘PwC’), in the absence of management at least twice.

Chris Girling was appointed as a Non-Executive  
Director on 7 February 2013 and was invited to join the 
Remuneration, Audit and Nominations Committees.  
he therefore stands for election at the forthcoming  
Annual General Meeting. Mr Girling’s appointment may  
be terminated by either the Company or by him giving 
three months’ notice in writing. 

Damon Russell was appointed as a Non-Executive 
Director on 29 May 2013. he also stands for election at  
the forthcoming Annual General Meeting. Mr Russell’s 
appointment may also be terminated by either the 
Company or by him giving three months’ notice in writing.

Biographies for the Directors can be found on pages  
30 and 31.

ACCOUNTABILITY
AUDIT COMMITTEE

BERNARD CRAGG BSC ACA
Senior Independent  
Non-Executive Director

The Audit Committee ensures the integrity of financial 
reporting and audit processes and the maintenance of  
a sound internal control and risk management system, 
details of which are described on pages 43 and 44.  
The full terms of reference for the Audit Committee are  
available for inspection on the Company’s website at  
www.workspace.co.uk.

The Committee comprises all the Non-Executive Directors, 
except the Chairman, and is chaired by Bernard Cragg. 
The Group audit partner from the external auditor attends 
the Committee Meeting at least twice a year.

Maria Moloney, was appointed as a member on 31 May 
2012. It was stated last year that the Company intended  
to recruit an additional Non-Executive Director with the 
necessary skills and experience required to become a 
member of the Audit Committee. Consequently, Chris 
Girling was appointed as a Non-Executive Director and 
member of the Audit Committee. Chris Girling was 
previously Group Finance Director of Carillion PLC.

Bernard Cragg, the Chairman of the Audit Committee,  
is a Chartered Accountant and the Board is satisfied  
that he has the required and relevant financial  
experience. The Audit Committee collectively has the  
skills and experience required to fully discharge its  
duties, and it has access to independent advice at the 
Company’s expense.

42

MEETINGS
Meetings of the Audit Committee coincide with key  
dates in the financial reporting and audit cycle. The 
Committee Chairman reports the outcome of meetings  
to the Board. During the year under review the Committee 
met four times.

The Committee has a rolling agenda that ensures that  
the Committee receives appropriate information far 
enough in advance to enable it to fulfil its responsibilities. 
This includes not only information from management  
but also detailed reports from the external auditor.

The Chairman of the Company, the Chief Executive 
Officer, the Chief Financial Officer and other members  
of the senior management team together with senior 
representatives of the external auditor are invited to 
attend all or part of meetings as appropriate.

REvIEW OF THE YEAR
During the year the Committee was responsible for 
reviewing, and reporting to the Board, on a range of 
matters including:

–   The interim and annual financial statements;
–   The appropriateness of the Group’s accounting  

policies and practices;

–  The valuations of the Group’s property portfolio;
–   The review of the Group’s internal control and risk 

management systems;

–   The external auditor’s management letter;
–   The Group’s compliance with REIT legislation;
–   The Company’s approach to compliance with  

legislation and regulations, including arrangements  
for staff to raise concerns in confidence;

–   The relationship with the external auditor, the  

external audit process, the audit and non-audit fee  
and independence; 

–   The need and use for an internal audit function; and 
–   The review of fraud risk.

Due to its size and structure, the Group does not have an 
internal audit function, a matter which is kept under review 
by the Committee. however, management instructs the 
undertaking of a programme of financial, operational and 
health and safety internal audits at its estates. These are 
carried out by qualified senior head Office personnel on  
a rotational basis. Significant findings are reported to the 
Audit Committee.

EXTERNAL AUDITORS
The Audit Committee recognises that the independence 
of the Group’s external auditor is of paramount 
importance to shareholders and the Audit Committee 
terms of reference establish a process for monitoring  
and approving the nature and the level of related fees  
for non-audit services (e.g. accounting, tax or due 
diligence work) paid to the Group external auditors.

Workspace Group PLC Annual Report and Accounts 2013 
The Group uses the external auditor for relevant financial 
work for a variety of reasons, including their knowledge  
of the Group, the audit-related nature of the work and  
the need to maintain confidentiality.

At each meeting, the Committee will be advised of any 
significant non-audit work awarded to the external auditor 
since the previous meeting and the related fees. At the 
annual May meeting, the Committee receive a report of 
fees, both audit and non-audit from PwC for the past 
financial year. The Committee has considered in detail the 
nature and level of non-audit services provided by PwC 
and the related fees. The Committee may challenge and  
in some instances refuse proposals in respect of non-audit 
work to be performed by the external auditor.

In addition, the Committee will assess the threats of self 
review by the external auditors, self interest, advocacy  
and familiarity – these are set out below and considered  
in relation to PwC’s services:

1. A self review threat – this is where, in providing a 
service, the PwC audit team could potentially evaluate 
the results of a previous PwC service.

The Committee specifically will not allow the auditors to:

–   Do anything that is a management responsibility  

(e.g. such as setting performance targets or 
determining employees’ actual compensation).
–   Provide accounting or book-keeping services.
–   Prepare financial statement disclosure items.

2. A self interest threat – where a financial or other 
interest (of an individual or PwC) will inappropriately 
influence an individual’s judgement or behaviour.

The Committee will specifically perform the following:

–   If the external auditor is to be considered for the 

provision of non-audit services, their scope of work  
and fees must be approved in advance by the Chief 
Financial Officer and the Committee Secretary and,  
in the case of fees in excess of £50,000 for a single 
project, by the Committee (or if approval is required 
before the next meeting, by the Committee Chairman). 
For larger assignments in excess of £100,000 this 
would involve a competitive tender process unless 
there are compelling commercial or timescale reasons 
to use the external auditor or another specific 
accountancy firm.

–   It does not accept significant contingent fee 
arrangements with the external auditors.

3. An advocacy threat – this is where PwC or PwC 
personnel promote an audit client’s position to the 
extent where PwC’s objectivity as auditor is 
compromised.

– The Group will not use PwC in an advocacy role.

4. A familiarity threat – this is where, because of a too 
long or too close a relationship, the external auditor’s 
independence is affected.

–   The Committee will prohibit the hiring of former 

employees of the external auditor associated with the 
Group’s audit into management roles with significant 
influence within the Group within two years following 
their association with the audit, unless the Chairman of 
the Audit Committee gives prior consent. Annually, the 
Committee will be advised of any new hires caught by 
this policy. however, there have been no instances of 
this occurring. In addition, PwC will rotate their lead 
audit partner every five years.

–   The Committee will monitor on an on-going basis  

the relationship with the external auditor to ensure its 
continuing independence, objectivity and effectiveness. 

Fees paid to PwC can be found in note 2 on page 71.

ACCOUNTABILITY AND AUDIT 
In its financial reporting to shareholders and other 
interested parties, by means of Annual and half-Yearly 
Financial Reports, Interim Management Statements and 
other periodic statements, the Board aims to present a 
balanced and understandable assessment of the Group’s 
position and prospects.

INTERNAL CONTROL AND RISK MANAGEMENT
The Board has ultimate responsibility for the Group’s 
system of internal control and for reviewing its 
effectiveness. The Board has reviewed the Group’s  
system of controls including financial, operational, 
compliance and risk management on a regular basis 
throughout the year. however, any such system can  
only provide reasonable and not absolute assurance 
against any material misstatement or loss.

The Group has established a risk management framework 
and procedures necessary to enable the Directors to 
report on internal controls in compliance with the Code. 
The risk management procedures involve the analysis, 
evaluation and management of the key risks to the Group.

The other key elements of the Group’s system of internal 
control include:

–   A comprehensive system of financial reporting;
–   An organisational and management Board structure 
with clearly defined levels of authority and division  
of responsibilities;

–   A Risk Committee, which is chaired by the Chief 

Executive Officer and is attended by representatives 
from senior management and operational staff. The 
Risk Committee meets monthly and formally reports  
to the Audit Committee twice a year;

–   A programme of site audit visits, covering a significant 
proportion of the sites each year. Although the Group 
does not have a dedicated internal audit function, an 
operational, finance and health and safety audit are 
carried out at the estates by qualified head Office 
personnel. The results of the audits are reported to  
and reviewed by the Risk and Audit Committees and 
appropriate action taken as required.

43

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CONTINUED

The Risk Committee reviews and identifies risks facing the 
Group and ensures that appropriate controls are in place 
to review each issue raised. Each identified risk is assigned 
a ‘Risk Owner’. The Risk Committee have also devised  
an annual plan of work where a review is undertaken of 
particular areas of the business. Depending on the nature 
of the project, a third party consultant may be appointed 
to assist in the review.

The Group has continued to develop its risk management 
framework and has reappraised its risks in the light of the 
changes in the external environment during the last year.

The Group has also considered the requirements of the 
Bribery Act 2010 and taken steps to ensure that it has 
adequate procedures as set out by the Act.

The Group continues to strengthen its risk management 
processes to ensure these are embedded as part of the 
Group’s culture. The Turnbull Guidance sets out best 
practice on internal control to assist companies in  
applying the Code’s principles with regards to internal 
control. The Board, with advice from the Audit Committee 
continues to review the effectiveness of internal control 
with no significant failings or weaknesses identified.  
The joint venture of the Group are excluded from the 
Turnbull Guidance.

Further information on the Group’s risks is detailed on 
pages 22 to 25.

WHISTLEBLOWING
The Group has ‘whistleblowing procedures’ under  
which staff may report any suspicion of fraud, financial 
irregularity or other malpractice. There is also a process  
in place for staff to report operational risks and issues to 
the Risk Committee.

DIvERSITY
Workspace employs enthusiastic, committed and 
well-trained people, whose diversity reflects that of 
London itself. The Board is fully committed to an active 
Equal Opportunities Policy from recruitment and selection, 
through training and development, performance reviews 
and promotion. All decisions relating to employment 
practices are objective, free from bias and based solely 
upon work criteria and individual merit. Workspace has  
a good record of promoting and appointing women to 
senior positions. The employee gender profile is fairly 
evenly split with a total of 45% female and 55% male 
employees. 

The Board does not consider it appropriate at this time  
to set quotas for Board representation, but will monitor 
developments in best practice. 

TAKEOvER DIRECTIvE
Share capital structures are included in the Report of the 
Directors on page 33.

GOING CONCERN
Going Concern disclosures are included in the Report of 
the Directors on page 32.

RELATIONS WITH SHAREHOLDERS
Communications with shareholders is given a high priority 
and the Company undertakes a regular dialogue with 
major shareholders and fund managers. An analyst and 
investor event was held in October 2012 which provided 
an overview of the portfolio including, a property 
breakdown, examples of asset management initiatives  
and refurbishment and redevelopment schemes,  
along with appraisals and valuation methodology. 

The Executive Directors are the Company’s principal 
representatives with investors, analysts, fund managers, 
press and other interested parties. Frequent discussions 
with institutional shareholders are held on a range of 
issues throughout the year affecting the Group’s 
performance, which include meetings following the 
announcements of the annual and interim results. 

Other ad hoc meetings, presentations and site visits are 
arranged for shareholders throughout the year.

ANNUAL GENERAL MEETING
The Annual General Meeting provides the Board with an 
opportunity to communicate with, and answer questions 
from, private and institutional shareholders and the  
whole Board is available after the meeting, in particular,  
for shareholders to meet new Directors. Details of the 
resolutions to be proposed at the Annual General Meeting 
on 25 July 2013 can be found in the Notice of Meeting. 

The Chairmen of the Audit, Remuneration and 
Nominations Committees normally attend the Annual 
General Meeting and are available to answer any 
questions. All Directors normally attend the meeting.

A copy of the Annual Report and Accounts is sent to 
shareholders and is also available on the Group’s website, 
which additionally contains up-to-date information on  
the Group’s activities and published financial results  
and presentations.

The Board recognises the benefits of diversity of  
skills, gender, knowledge and independence. 
Consequently, diversity will form part of considerations 
afforded to the search and selection process for  
Directors and staff. 

By order of the Board

CARMELINA CARFORA
COMPANY SECRETARY
11 June 2013

44

Workspace Group PLC Annual Report and Accounts 2013directors’  
remuneration rePort

OvERvIEW FROM JOHN BYWATER, CHAIRMAN OF 
THE REMUNERATION COMMITTEE

Remuneration for Executive Directors for 2013 reflects  
a year of strong results, as shown in the table below:

JOHN BYWATER
Chairman of the Remuneration 
Committee

“Transformational year  
drives performance.”

On behalf of the Board, I am pleased to present the 
Directors’ Remuneration Report for the year ended  
31 March 2013.

While the new regulations governing the shareholder 
approval and reporting of executive reward do not  
come into force until Workspace’s 2014 financial year,  
we have incorporated a number of changes this year  
in both content and structure of this report. Section A 
outlines Workspace’s forward-looking remuneration 
policy, sets out the components of pay, how they are 
linked to the business strategy, and potential reward 
opportunities for the Executive Directors. Section B 
reviews how the policy was implemented for the year 
under review and includes changes to existing executive 
remuneration arrangements and a table showing a single 
figure of total remuneration for each Executive Director 
and their outstanding share awards. 

During the year the Committee reviewed the remuneration 
structure in place at Workspace to ensure it remains 
aligned with our business strategy and helps reinforce 
success. As part of its review, the Committee identified 
some modifications for future long-term incentive 
arrangements aimed at providing improved performance 
measurement and extended time horizons for long-term 
incentives. We have also taken the opportunity to increase 
the shareholding requirement for Executive Directors and 
introduce a minimum time horizon to achieve these. The 
outcomes of the review are listed on page 53 and these 
were discussed with the Company’s largest shareholders.

I am also delighted to report that, during the year, all 
employees were able to participate in the Approved Share 
Incentive Plan (‘SIP’). This is an exciting opportunity for all 
employees to share in the future success of the Company.

ACTUAL PERFORMANCE OF STRATEGIC AND 
FINANCIAL MEASURES
2013

2012

+13%

net asset value per share
Up 13% to £3.48

+8%

net asset value per share
Up 8% to £3.08

capital return of 13.8% vs 3.2%  
for iPd quarterly universe

capital return of 13.4% vs 6.4% 
for iPd quarterly universe

+12%

trading Profit after interest
Up 12% to £17.9m

+13%

trading Profit after interest
Up 13% to £16.0m

+10%

dividend per share for full year
Up 10% to 9.67p

+10%

dividend per share for full year
Up 10% to 8.79p

82%

customer satisfaction

51.1%

total shareholder return

84%

customer satisfaction

-7.6%

total shareholder return

We continually keep all aspects of remuneration under 
review and listen to the views of shareholders. We believe 
our current approach to remuneration is responsible and 
appropriate as it:

–   Is structured to drive execution of our business 

strategy;

–   Aligns reward with the creation of shareholder value;
–   Allows the Company to recruit and retain talent; and
–   Incentivises the delivery of long-term, sustainable 

business growth and shareholder value.

The Committee recognises that the business has been 
through a transitional year with the delivery of a strong  
set of results. The focus has remained on driving value by 
growing income through increased rent and occupancy 
while adding to the value of our assets through focused 
refurbishment and redevelopment. We have been 
delighted with the performance of the management  
team through this period of transition. We are pleased  
to be able to reward them for both the shareholder 
return which they have delivered and in the way they have 
developed the Company creating a platform for further 
sustainable growth.

To conclude, the Committee believes that the structure  
of remuneration remains appropriate. Incentives are 
weighted towards long-term variable pay; executive  
share ownership is strongly encouraged; management 
incentives have stretching performance targets; the annual 
bonus focuses on our annual business priorities, and the 
LTIP aligns the interests of participants with those of our 
shareholders. Details of the remuneration policy can be 
found in the policy table on page 47.

JOHN BYWATER
ChAIRMAN OF ThE REMUNERATION COMMITTEE
11 June 2013

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CONTINUED

COMPLIANCE STATEMENT
This Remuneration Report has been prepared on behalf  
of the Board by the Remuneration Committee (the 
‘Committee’). The Committee adopts the principles  
of good governance as set out in the UK Corporate 
Governance Code and complies with the UKLA Listing 
Rules and relevant requirements of Section 421 to the 
Companies Act 2006. The structure of this report  
has been modified from previous years based on the 
proposed regulations put forward by the Department  
for Business, Innovation and Skills (BIS). 

REMUNERATION COMMITTEE
THE MEMBERS OF THE REMUNERATION COMMITTEE
The Remuneration Committee is composed of four 
independent Non-Executive Directors, together with  
the Chairman of the Company. The Remuneration 
Committee met seven times during the year. Attendance
at meetings by individual members is detailed in the 
Corporate Governance Report on page 37. The 
Committee consulted with the Chief Executive Officer  
and Chief Financial Officer and invited them to attend 
meetings when appropriate. No Director is present  
when their own remuneration is being discussed.

In the reporting year the Committee consisted of the 
following Non-Executive Directors:

John Bywater (Chairman)
Bernard cragg
daniel Kitchen
maria moloney (from 22 May 2012)
chris girling (from 7 February 2013)

The Committee’s principal function is to determine 
Workspace’s policy on executive remuneration and to 
approve specific remuneration packages for its Executive 
Directors and members of the Executive Committee.  
It also considers the remuneration of senior managers.

The full terms of reference for the Committee are  
available in the Investor section of the Company’s  
website www.workspace.co.uk.

The key responsibilities of the Committee are summarised 
as follows:

–   Recommending the Company policy on remuneration 
for the Executive Directors and senior managers that 
ensures talented people are recruited, retained and 
motivated to deliver results;
 Reviewing the effectiveness of remuneration policy  
with regard to its impact and compatibility with the 
policy and arrangements throughout the rest of  
the organisation;

- 

–   Determining the terms of employment and 

remuneration for Executive Directors including 
recruitment and termination terms;

–   Reviewing incentive plans annually to ensure they 
remain appropriate to the Company’s current 
circumstances and prospects and that, in particular, the 
policies adopted are aligned and based on the creation 
of value for shareholders and provide appropriate 
incentives for management to achieve this objective;

–   Reviewing the subsequent achievement of the 
performance targets relating to any share  
incentive plan; 

–   Making a recommendation to the Board in respect  
of the remuneration of the Company Chairman; and

–   Reviewing the overall remuneration levels of the 

broader employee population. 

A) POLICY REPORT

PRINCIPLES OF OUR EXECUTIvE REMUNERATION 
POLICY
It is intended that the remuneration policy framework  
as set out to the right, which has applied throughout  
the reporting year, will continue to apply for FY 2014. 

REMUNERATION POLICY
The Company’s remuneration policy reinforces the 
Company’s goals, providing effective incentives for 
exceptional Company and individual performance.

REMUNERATION PACKAGE DESIGN
Remuneration packages are designed to attract, retain 
and motivate Executives of the highest calibre who have 
the experience, skills and talent to manage and develop 
the business successfully.

PERFORMANCE LINKED
A significant part of executive remuneration is variable 
and is determined by the Group’s success and directly 
links reward with Group and individual performance. 

SHAREHOLDERS’ INTERESTS
The Committee strives to ensure that shareholders’ 
interests are served by creating an appropriate  
balance between fixed and performance-related pay.  
A considerable part of the reward package is linked to  
share price performance, is delivered in shares that have  
to be retained until minimum shareholding requirements 
have been met, and requires Executives to invest their  
own funds in Company shares. 

46

Workspace Group PLC Annual Report and Accounts 2013 
SUMMARY OF WORKSPACE’S REMUNERATION POLICY FOR EXECUTIvE DIRECTORS AND  
EXECUTIvE COMMITTEE MEMBERS

THIS SECTION OF OUR REPORT SUMMARISES THE KEY COMPONENTS OF REMUNERATION FOR  
EXECUTIvE DIRECTORS

operation

opportunity

Performance metrics

changes for 2013/14

Purpose and link  
to strategy

Base salary
To reflect market 
value of the role  
and individual’s 
performance and 
contribution.

Reviewed on an annual basis, with 
any increase taking effect from  
1 April.

Base salary increases are 
applied in line with the 
outcome of the review.

The Committee reviews base 
salaries with reference to:

–   the individual’s role, performance 

and experience;

–   business performance and the 

external economic environment;

–   salary levels for similar roles at 

relevant comparators; and

–   salary increases across the Group. 

Payable in cash.

Pension and  
other benefits
To provide market  
competitive 
benefits.

Executives participate in a defined 
contribution pension scheme. 

Other benefits include car allowance, 
private health insurance, and death 
in service cover.

annual Bonus
To reinforce and 
reward delivery of 
annual strategic 
business priorities, 
based on a 
scorecard of KPIs 
relating to both 
Group and individual 
performance.

Bonus deferral and 
LTIP investment 
provide further 
alignment with 
shareholder 
interests.

ltiP
To reinforce delivery 
of sustained 
long-term sector 
out-performance, 
and align the 
interests of 
participants with 
those of 
shareholders.

Executives may also participate in 
the SAYE scheme.

KPIs are reviewed prior to the start 
of the year to ensure they remain 
appropriate and reinforce the 
business strategy. Stretching  
targets are set.

At the end of the year the 
Committee determines the extent  
to which these were achieved. 

The Committee may vary the mix  
of cash and deferred bonus shares 
from year to year. For 2013, the 
minimum deferral requirement has 
been set at 25% of bonus earned.

The Committee retains the 
discretion to mandate deferral  
of a percentage of bonus earned 
(which will normally vest after  
two years, subject to continued 
employment) or allow Executives  
to make an equivalent investment  
in the LTIP.

The Committee may grant  
awards of performance shares  
and matching shares (subject to 
participant investment).

The award levels and performance 
conditions are reviewed in advance 
of grant to ensure they remain 
appropriate.

Awards are in the form of nominal 
priced options which vest after  
three years, subject to performance 
conditions.

Non pensionable.

Company contribution of 
15% of salary for the CEO 
and 16.5% for the CFO. 

Other benefits values vary 
by role and are reviewed 
periodically.

The maximum bonus for 
Executive Directors is 120% 
of salary.

Up to 90% of salary can  
be earned on Group 
performance.

The Group outcome can 
then be adjusted by a  
factor in the range 0.67  
to 1.33 based on individual 
performance.

In the event there is  
no bonus for Group 
performance, the 
Committee has discretion to 
award a bonus of up to 20% 
of salary for exceptional 
individual performance.

Non Pensionable.

Plan provides for annual 
awards of:

–   performance shares of  
up to 100% of salary 
(200% in exceptional 
circumstances); and 

–   matching share awards  

of up to 2 for 1 on 
investments in  
Workspace shares of  
up to 50% of net salary. 

Business and individual 
performance are 
considerations in setting 
base salary.

No change to the process.

Salaries effective from  
1 April 2013 are set out  
on page 51.

Not performance related.

No change.

KPIs selected and their 
respective weightings may 
vary from year to year 
depending on strategic 
priorities.

The Group performance 
measures used for 2013 
annual bonuses were:

–   Trading profit before tax; 

–   Capital return from the 

portfolio versus a defined 
comparator index 
compiled by IPD;

 –  Customer satisfaction 

which is based on survey 
results.

The Group performance 
outcome can then be 
adjusted based on  
individual performance  
as described opposite.

Awards usually vest after  
3 years, subject to  
Company performance  
and continued employment. 

Measures for 2012 awards 
were relative Net Asset 
Value growth (1/3), relative 
TSR (1/3) and absolute  
TSR (1/3). 

TSR is underpinned by 
Committee discretion; 
absolute TSR is subject to  
a relative TSR underpin.

No change.

For 2013 LTIP awards, 
changes to the performance 
conditions and introduction 
of a holding period are 
described on page 53 
of the implementation 
report.

47

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CONTINUED

THE CHAIRMAN AND NON-EXECUTIvE DIRECTORS
The Board determines the remuneration policy and level 
of fees for the Non-Executive Directors, within the limits 
set out in the Articles of Association. The Remuneration 
Committee recommends the remuneration policy and 
level of fees for the Chairman of the Board. Remuneration 
comprises an annual fee for acting as a Chairman or 
Non-Executive Director of the Company. Additional fees 
are paid to Non-Executive Directors in respect of service 
as Chairman of the Audit and Remuneration Committees. 
When setting these fees, reference is made to information 
provided by remuneration surveys, the extent of the duties 
performed, and the size of the Company. The Chairman 
and Non-Executive Directors are not eligible for bonuses, 
retirement benefits or to participate in any share scheme 
operated by the Company. The current fees are:

role

Chairman fee
Non-Executive Director base fee
Committee Chairman additional fee

Fee

£125,000
£40,000
£5,000

PERFORMANCE SCENARIOS
The graphs below provide estimates of the potential  
future reward opportunity for each of the two current 
Executive Directors, and the potential split between  
the different elements of remuneration under three 
different performance scenarios: ‘Minimum’, ‘On Target’ 
and ‘Maximum’. 

Potential reward opportunities illustrated above are  
based on the remuneration policy, applied to the base 
salary as at 1 April 2013. For the annual bonus, the 
amounts illustrated are those potentially receivable in 
respect of performance for 2013/14. For the LTIP, the 
award opportunities are based on those LTIP awards 
which are expected to be granted in June 2013. It should 
be noted that LTIP awards granted in a year normally  
vest on the third anniversary of the date of grant. The 
projected value of LTIP amounts excludes the impact of 
share price movement.

In illustrating potential reward opportunities the following 
assumptions have been made:

component

‘minimum’

‘on-target’

‘maximum’

Base salary

Latest known salary

Fixed

Pension

Contribution rate applied to latest  
known salary

Other benefits

Benefits as provided in the single  
figure table on page 51

annual Bonus

No bonus 
payable

Target bonus  
(50% of max)

Maximum 
bonus

ltiP

No LTIP 
vesting

Assumes full take-up  
of investment  
opportunity, and

Threshold 
vesting 
(20% of max)

Maximum 
vesting

WIDER GROUP REMUNERATION 
The Group’s wider people policies are reported separately 
on page 33. Following probationary periods, all staff in  
the Company are eligible to participate in the Company’s 
bonus scheme, SAYE, SIP, pension scheme, life assurance 
arrangements and medical insurance benefits. Some 
senior staff are also eligible to participate in the 
Company’s long-term incentive plan together with all 
members of the Executive Committee.

£1,795k

£896k

£487k

Workspace operates a number of share schemes available 
to all employees, the details of which are provided on  
pages 86 to 88.

In making remuneration decisions, the Committee also 
considers the pay and employment conditions elsewhere 
in the Group. In particular, the Committee considers the 
range of base pay increases across the Company as a 
factor in determining the base salary increases for 
Executives.

CEO

Maximum

27%

27%

46%

On-target

55%

27%

18%

Minimum

CFO

0

200 400 600 800 1,000 1,200 1,400 1,600

1,800

Fixed

Annual bonus

LTIP

£000s

Maximum

28%

27%

45%

On-target

55%

27%

18%

Minimum

£1,133k

£571k

£316k

0

200

400

600

800

1,000

1,200

Fixed

Annual bonus

LTIP

£000s

48

Workspace Group PLC Annual Report and Accounts 2013The increase to the base salaries of the Chief Executive Officer and Chief Financial Officer with effect from 1 April 2013 
of 2.2% is in line with the average salary increase across the Group.

The Remuneration Committee does not specifically consult with employees over the effectiveness and appropriateness 
of the remuneration policy and framework, although as members of the Board they receive updates from the Executive 
Directors on their discussions and consultations with employees. 

DETAILS OF EXECUTIvE DIRECTORS’ SERvICE CONTRACTS
The Executive Directors are employed under contracts of employment with Workspace Group PLC. The principal terms 
of the Executive Directors’ service contracts are as follows:

Executive Director

Position

Effective date of contract

From Company  

Jamie hopkins
Graham Clemett

Chief Executive Officer  
Chief Financial Officer

3 February 2012  
31 July 2007  

12 months  
12 months  

From Director

12 months
12 months

CHAIRMAN AND NON-EXECUTIvE DIRECTORS
Letters of appointment are provided to the Chairman and Non-Executive Directors. Dates of the Non-Executive 
Directors’ letters of appointment and the unexpired period of their appointments (where appropriate after extension by 
re-election) are set out below: 

Notice Period

Name

Daniel Kitchen 
Bernard Cragg
John Bywater
Maria Moloney1
Chris Girling2
Damon Russell3

Date of Letter

6 June 2011  
22 May 2012  
27 July 2010  
22 May 2012  
7 February 2013  
29 May 2013  

Unexpired 
term as at
31 March 2013

15 months  
16 months  
4 months  
26 months  
34 months  
–  

Date of  

Appointment/Last
reappointment at AGM  

2012  
2012  
2012  
2012  
–  
–  

Notice Period

6 months
6 months
6 months
3 months
3 months
3 months

1.  Maria Moloney was appointed on 22 May 2012.
2.  Chris Girling was appointed on 7 February 2013.
3.  Damon Russell was appointed on 29 May 2013.

The Directors are subject to annual re-election at the AGM.

EXIT PAYMENTS POLICY
Termination payments are limited to the Directors’ basic salary, annual incentives and benefits for the unexpired  
portion of the notice period subject to performance and Committee discretion. The Committee will aim to minimise  
the level of payments to that Director, however, having regard to all circumstances, including the Company’s  
contractual obligations to the Director, the reason for the departure, and the Company’s policy to apply mitigation  
in the case of severance.

In the event of termination of any Director, the Company reserves the right to make phased payments which are  
paid in monthly instalments and subject to mitigation.

In the event that an Executive Director leaves, LTIP awards will normally lapse, unless the individual is considered  
a ‘good leaver’. Good leavers retain an interest in LTIP grants and awards are normally pro-rated for time based  
on the proportion of the vesting period served and for performance to the end of the relevant three-year  
performance period. An individual would normally be considered a good leaver if they leave for reasons of death, 
ill-health, injury, redundancy, retirement with the agreement of the Company, or such event as the Remuneration 
Committee determines. 

Similarly, in respect of Annual Bonus, if an Executive leaves he would normally lose any entitlement for bonus,  
unless a good leaver. Good leavers retain an interest in the bonus and the award is normally pro-rated for time  
and performance. 

49

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directors’  
remuneration rePort
CONTINUED

EXTERNAL APPOINTMENTS
It is the Board’s policy to allow Executive Directors to take 
up one Non-Executive position on the Boards of other 
companies, subject to the prior approval of the Board.  
Any fee earned in relation to outside appointments is 
retained by the Executive Director. No such positions  
were taken and no fees were paid during the financial year.

CONSIDERATION OF SHAREHOLDER vIEWS
The Committee is committed to on-going dialogue with 
shareholders and welcomes feedback on Directors’ 
remuneration. It is the Remuneration Committee’s policy 
to consult with major shareholders prior to any major 
changes to its Executive remuneration structure.

B) IMPLEMENTATION REPORT

The following section provides details of how the 
remuneration policy was implemented during the year.

The Committee met seven times during the year under  
review. Attendance by individual Committee members  
at meetings is detailed in the Corporate Governance 
Report on page 37.

AGENDA DURING 2012/13
–   Approval of the Directors’ Remuneration Report for 

2011/12 and review of the outcome of AGM voting for 
the report;

–   Annual review of all Executive Directors’ and senior 

managers’ remuneration arrangements. For Executive 
Directors, salaries and total remuneration were 
benchmarked against a comparator group of other 
UK-listed property companies and companies of  
similar market capitalisation;

–    Review of annual bonus outcomes for 2011/12 and 

approval of the performance conditions for 2012/13 
annual bonuses;

–    Approval of vesting levels for the 2009 Long Term 

Incentive Plan Awards (‘LTIP’) or (the ‘Plan’);
–    Review of share plan performance measures;
–    Review and approval of all awards under the LTIP, 

taking into account the total value of all awards under 
this Plan;

–   Review and approval of 2012 LTIP award for CEO;
–   Review of the LTIP performance conditions in  

advance of making 2013 awards in June; 

–   Consulted major shareholders on potential changes  

to 2013 LTIP awards;

–   Review and approval of the Approved Share  

Incentive Plan;

–   Review of developments in Corporate Governance 

and the proposals issued by the Business Secretary  
to the UK Government;

–   Review of Executive Director shareholding guidelines;
–   Agreement to propose the renewal of the Savings 

Related Share Option Plan at the 2012 AGM;

–  Review of Committee Performance in 2012/13; and
–  Review of Committee Terms of Reference.

During the year, the Committee sought internal support 
from the Chief Executive Officer and Chief Financial 
Officer who attended Committee meetings by invitation 
from the Chairman, to advise on specific questions  
raised by the Committee and on matters relating to the 
performance and remuneration of senior managers.  
The Chief Executive Officer and Chief Financial Officer 
were not present for any discussions that related directly 
to their own remuneration. The Company Secretary 
attended each meeting as Secretary to the Committee.

ADvISERS
In undertaking its responsibilities, the Committee seeks 
independent external advice as necessary. To this end,  
for the year under review, the Committee continued to 
retain the services of Kepler Associates as the principal 
external advisers to the Committee. During the year, 
Kepler Associates provided independent advice on a  
wide range of remuneration matters including current 
market practice, benchmarking of executive pay and 
incentive design and provides no other services to the 
Company. Grant Thornton was engaged by the Company 
Secretary to advise the Committee and the Company 
generally on the administration of the Company’s share 
plans. Slaughter and May LLP was also engaged by the 
Company Secretary to provide legal advice to the 
Committee and employment law advice concerning  
senior executives of the Company. 

The Company continually assesses on-going advice 
provided by its advisers on remuneration matters. 

The fees paid to advisers in respect of work carried out  
for the year under review are shown in the table below: 

Kepler Associates

Grant Thornton

Slaughter 
and May LLP

Remuneration 
Committee 
Support
Other Support

£86,832
–

–
£60,360

–
£14,500

50

Workspace Group PLC Annual Report and Accounts 2013SUMMARY OF REMUNERATION FOR YEAR 
ENDED 31 MARCH 2013

The table below sets out a single figure for the total remuneration received by each Executive Director for the year 
ended 31 March 2013 and the prior year:

Salary1
Fees1
Benefits2
Pension
Annual bonus3

total 

ltiP
2009 Award4,5
2010 Award4

Jamie hopkins1

Graham Clemett

2013
£000

400.0
–
17.1
60.0
480.0

957.1

2012
£000

23.1
37.7
0.9
3.4
–

65.1

2013
£000

250.0
–
18.1
41.2
300.0

609.3

2012
£000

221.6
–
17.8
36.6
249.4

525.4

–

–

–

–

–

645.4

475.1

–

Notes:
1. 

 Jamie hopkins was appointed as an Executive Director with effect from 12 March 2012. The remuneration reported is that received for qualifying 
services as an Executive Director (and, fees for services as a Non-Executive Director up to 12 March 2012). Jamie hopkins served as an Executive 
Director for only part of 2012 and therefore figures reported for 2012 do not reflect a 12-month period in this role.

The figures have been calculated as follows:

2.   Taxable value of benefits received in the year which includes items such as car allowance and private health insurance.
3.   Annual bonus: this is the total bonus earned in respect of performance during the relevant year. For 2013 the Committee set a minimum deferral 

requirement of 25% of the bonus earned, equivalent to £120,000 for Jamie hopkins and £75,000 for Graham Clemett.

4.   LTIP: this is the market value of shares that vested on performance to 31 March of the relevant year. (2013: 98.9% of the 2010 LTIP grant vested 

on performance, 2012: 66.5% of the 2009 LTIP grant vested on performance). The share price is the trailing three month average on 31 March 
2013 of 333p for the 2010 LTIP and the share price at vesting of 2009 LTIP awards on 12 June 2012 was 226.5p.

5.   Pursuant to the Workspace Long Term Equity Incentive Plan, share awards (conditional on three separate performance conditions for a period  
of three years from grant) were made to the Directors on 12 June 2009. Prior to the vesting date of 12 June 2012, these were converted to nil 
cost options to ease administration. This does not increase the overall cost to the Company. The period in which the nil cost option may normally 
be exercised started on the vesting date 12 June 2012 and will end on 12 June 2017, which is five years after the date of vesting of the award.

REMUNERATION COMPONENTS FOR EXECUTIvES
BASE SALARY AND BENEFITS
The Committee reviews base salaries annually with any changes normally taking effect from 1 April. Individual pay levels 
are determined by reference to the external economic environment, individual performance, experience and rates of 
salary for similar jobs in companies of a similar sector and size. Consideration is also given to salary increases across  
the Company.

In April 2013, the Committee reviewed the base salary of the Chief Executive Officer and the Chief Financial Officer.  
The Committee considered it appropriate that an increase of 2.2% be made to the Executive salaries which is in line  
with the average salary increase across the Group.

The next salary review date for Executives will be 1 April 2014.

All Executive Directors are provided with a Company mobile phone, a car allowance, private health insurance, death  
in service cover and an employer’s contribution to a defined contribution (money purchase) scheme. Executives may 
also join the SAYE scheme. 

Jamie hopkins and Graham Clemett receive an employer’s pension contribution equal to 15% and 16.5% of basic salary 
respectively, which is made to a defined contribution (money purchase) scheme. 

51

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directors’  
remuneration rePort
CONTINUED

ANNUAL BONUS SCHEME
The Group operates an annual bonus scheme which provides for a capped variable (performance related) bonus.  
The maximum bonus potential for the Executive Directors is set at 120% of basic annual salary.

The Committee sets a minimum deferral or investment each year into Workspace shares. For 2012/13 the Committee 
set a minimum deferral requirement of 25% of the bonus earned.

The preferred mechanism for meeting this requirement is participant investment in the LTIP. however, the Committee 
will retain the discretion to mandate deferral of 25% of bonus earned (which will vest after two years, subject to 
continued employment) or allow executives to make an equivalent investment in the LTIP. For 2012/13 the Committee 
has allowed Executives to make an equivalent investment in the LTIP.

The Corporate performance measures and their weightings for 2012/13 Executive Director annual bonuses are 
illustrated below.

1.  Trading profit before tax (50%)
2.  Capital Return from portfolio versus a defined comparator index compiled by IPD (30%)
3.  Customer satisfaction (10%)
4.  Personal objectives

The performance measures applicable for the year ended 31 March 2013 and performance against them are  
detailed below:

measure

Proportion

Bonus Performance targets

Corporate

50%

Personal

Maximum Bonus 
(% of salary)

120%

Trading profit before tax
Capital return from the portfolio versus a 
defined comparator index compiled by IPD
Customer satisfaction (based on survey results)

30%
10%
Corporate performance bonus may be adjusted by a  
factor in the range of 0.67 to 1.33 (with factors greater  
than 1.0 reflecting superior performance)

Performance achieved  
(% of bonus earned)
Jamie  
hopkins 
50%

Graham  
Clemett
50%

30%
10%

30%
10%

1.33

1.33

Total Bonus Earned  
(% of salary)

120%

120%

Against each measure the bonus starts to be paid on the achievement of a threshold performance, increasing on  
a straight line basis until stretch performance is achieved, at which point the full bonus potential for that measure  
is earned. 

The Committee assessed performance and was pleased to note that during the year the Company outperformed  
on every measure. The results of the quantitative measures were:

FINANCIAL AND CORPORATE
–   Trading profit after interest up 12% to £17.9m.
–   The Company delivered a capital return of 13.8%, significantly outperforming the relevant IPD benchmark which  

had a capital return of 3.2%.

–   Customer satisfaction survey confirming 82%.

52

Workspace Group PLC Annual Report and Accounts 2013 
The Committee considered performance during the year 
against personal and strategic objectives and noted the 
following achievements in particular:
–   An increased focus on improving the quality of  

our investor relations and clear communication of  
our strategy.

–   Successful launch of Retail Bond in October 2012.
–   Successful execution of targeted acquisitions and 

disposals. 

In the event of a change of control, LTIP awards would 
normally be pro-rated for time and performance, in line 
with best practice.

Participation in the Plan extends to members of the 
Executive Committee and the Group’s senior managers. 
Full details of the awards made to the Executive Directors 
under the Plan are shown on page 59.

–   Good progress made on development projects with 
£29m invested on capital expenditure projects for 
significant income and capital growth.

–   Good performance against key operational and 

financial metrics:

  –   Rental Income growth. Underlying net rental income, 

excluding disposals, up 6% to £46.5m.

  –   Underlying property valuation excluding disposals 

and capital expenditure up 7.7% to £830m.

  –  Dividend for year up 10% to 9.67p per share.
  –  Net asset value per share up 13% to £3.48.

As part of its review of remuneration arrangements during 
the year, the Committee identified some modifications for 
the Company’s long-term incentive arrangements which 
are summarised below. The Committee consulted with the 
Company’s largest shareholders, the ABI and RREV on the 
proposals during Spring 2013. In total, the holders of more 
than 50% of Workspace’s shares were consulted on the 
changes as part of the review. The Committee believes 
that the changes are in the interests of shareholders and 
will assist the Company in continuing to motivate and 
retain the talent it needs to reinforce long-term success. 

Following consideration of the above, the Committee 
awarded Jamie hopkins and Graham Clemett a bonus of 
120% of salary.

2013 LTIP AWARD
Summary of changes to LTIP grants for 2013: 

For 2013/14, the structure of the Annual Bonus will remain 
as described above. 

LONG-TERM EQUITY INCENTIvE PLAN (‘LTIP’)
The Plan provides for annual awards of performance 
shares of up to 100% of salary (200% in exceptional 
circumstances) and matching share awards of up to 2 for 1 
on investments in Workspace of up to 50% of net salary. 
The maximum matching share award that may be granted 
to the Executive Directors is 100% of their annual basic 
salary. The Company awards matching shares in respect  
of an amount equivalent to two times the grossed up (for 
income tax and National Insurance) amount invested by 
the participant in Invested Shares.

Vesting of performance shares and matching shares is 
based 1/3, 1/3, 1/3 on three-year relative NAV growth, 
relative TSR and absolute TSR. Relative performance is 
measured against the constituents of the FTSE 350 Real 
Estate Index. In addition, for any shares to vest on TSR, the 
Committee must satisfy itself that the recorded TSR is a 
genuine reflection of the underlying business performance 
of Workspace. For awards granted in 2010, 2011 and 2012, 
for any shares to vest on absolute TSR, the Company’s 
TSR must exceed the median TSR of the Comparator 
group by over +1.5% p.a. over the performance period.

The TSR and NAV performance conditions have been 
selected to ensure a balanced portfolio of measures which 
are well aligned with shareholder interests. The Committee 
believes a blend of relative and absolute performance is 
most appropriate for Workspace and that use of absolute 
TSR underpinned by relative TSR provides transparency 
for executives and shareholder alignment (as this element 
will only vest if there is outperformance of sector peers).

–   Calibrate relative TSR performance under the LTIP 

using a simple ranking (rather than % outperformance) 
to provide a more consistent level of stretch for  
future cycles. Under this approach, the relative  
TSR element of LTIP awards will start to vest if 
Workspace’s three year TSR percentile rank is  
51st centile (20% vesting), rising on a straight-line  
basis to full vesting at upper quartile.

–   Extend the LTIP time horizon by introducing a 1-year 

holding period, with clawback. The Committee 
reviewed whether the time horizon of the LTIP should 
be lengthened to reflect current thinking on best 
practice. The Committee concluded that at this time  
it would be appropriate to retain the three year 
performance period, in line with our closest peers to aid 
the recruitment of senior hires. however, the Committee 
decided to require net vested LTIP shares to be held  
for one year, with clawback, before the shares can be 
sold to provide additional alignment with shareholders.

–   Modify the LTIP absolute TSR performance zone  
for future awards to a range of 8% p.a. to 17% p.a.  
These remain above the targets originally approved  
by shareholders. The Committee believes the resulting 
targets will be appropriately stretching for the next  
three years. Vesting of the absolute TSR element of 
2013 LTIP awards will continue to be underpinned by  
relative TSR to ensure this element can only vest if 
Workspace outperforms its sector peers (as well as 
Committee discretion).

–   To further encourage share ownership and strengthen 
alignment with shareholders, the Committee increased 
the share ownership guideline for Executive Directors 
from 100% to 150% of salary and introduced a time 
horizon of five years from appointment by which to 
attain the guideline.

53

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013directors’  
remuneration rePort
CONTINUED

In summary, the 2013 LTIP grant will be subject to the following performance conditions:

Performance 
condition

level of 
performance

one-third
Growth in Net Asset Value  
plus dividends relative to 
companies in the FTSE 350  
Real Estate Index
Company’s 
percentile rank

% of award  
vesting

one-third
Relative TSR (share price  
growth plus reinvested dividends) 
relative to companies in the  
FTSE 350 Real Estate Index
Company’s 
percentile rank

% of award 
vesting

one-third
Absolute TSR1

Company’s 
performance

% of award 
vesting

awards to be made in June 20131,2

threshold
maximum

51st percentile

20%

51st percentile

20%

75th percentile 100%

75th percentile 100%

8% p.a.

17% p.a.

20%

100%

Net vested LTIP shares are required to be held for a one-year holding period before the shares can be sold.

 For any shares to vest on absolute TSR, the Company’s TSR must exceed the median TSR of the comparator group over the performance period.

1. 
2.  There is straight line vesting between the threshold and maximum performance levels. 

For the Executive Directors, the Committee intends to make the awards following the release of the Company’s 
preliminary results announcement on 11 June 2013 and the anticipated size of awards is detailed below.

Director

CEO
CFO

Performance Award

100% of salary
100% of salary

Maximum potential
Matching Award

100% of salary
100% of salary 

In order to participate in the matching element of the plan, the Director must use his own funds to purchase ordinary 
shares, up to a maximum of 50% of net annual basic salary. 

RECAP OF PERFORMANCE CONDITIONS FOR EXISTING AWARDS

Performance 
condition:

level of 
performance

one-third
Growth in Net Asset  
Value relative to  
companies in the FTSE 350  
Real Estate Index
Company’s 
percentile rank

% of award  
vesting

one-third
TSR (share price growth plus 
reinvested dividends) relative  
to companies in the FTSE 350  
Real Estate Index
Company’s 
performance

% of award 
vesting

one-third
Absolute TSR1

Company’s 
performance

% of award 
vesting

awards made in 2010, 2011 and 20121,2
51st percentile

20%

threshold
maximum

75th percentile 100%

Median

Median +  
7.5% p.a.

20%

100%

11% p.a.

20% p.a.

20%

100%

1. 

 For any shares to vest on absolute TSR, the Company’s TSR must exceed the median TSR of the comparator group by +1.5% p.a. over the 
performance period.

2.   There is straight-line vesting between the ‘threshold’ and ‘maximum’ performance levels.

CEO 2012 LTIP AWARD 
As described in last year’s Remuneration Report, the Company granted its new CEO a special one-off award to enable 
his recruitment. Jamie hopkins then went on to invest £300k from his own funds, acquiring 112,525 Workspace shares, 
following which the Company granted Jamie hopkins a one-off award of 112,525 restricted shares (based on 1x the 
number of shares acquired), which may vest subject to the achievement of an absolute TSR underpin of 4% p.a. The 
Company also granted the new CEO an award under the current LTIP of 164,117 in performance shares (equal to 125% of 
salary), which will vest subject to the same performance conditions as for other executives, i.e. 1/3, 1/3, 1/3, on three 
year relative NAV, relative TSR and absolute TSR (subject to a relative TSR underpin). These awards were necessary to 
secure the services of the new CEO, and have been structured to require the new CEO to make a substantial investment 
in Workspace shares, as well as provide alignment with shareholder interests from the outset. 

The performance period is the three years to 31 March 2015, and the awards may vest three years from the date of 
grant, namely 19 November 2015.

54

Workspace Group PLC Annual Report and Accounts 2013 
 
2010 LTIP vESTING
The three year performance period of 2010 LTIP awards 
ended on 31 March 2013. Workspace’s three-year NAV 
growth (plus dividends) of 12.9% p.a. was 79th percentile 
against the FTSE 350 Real Estate which warranted 100% 
of this element vesting (equivalent to 33.3% of LTIP shares 
awarded). Over the three years from 1 April 2010 to  
31 March 2013, Workspace’s TSR outperformed the 
median TSR of the FTSE 350 Real Estate by 8.1% p.a.  
which warranted 100% of this element vesting (equivalent 
to 33.3% of LTIP shares awarded). Workspace’s absolute 
TSR of 19.6% p.a., warranted 96.5% of the absolute TSR 
element vesting (equivalent to 32.2% of LTIP shares 
awarded).

The Committee considered this together with the 
underlying business performance of Workspace, and 
concluded that 98.9% of the 2010 LTIP shares awarded  
to Executives would vest.

JOINTLY HELD LTIP AWARDS
In 2009 the Company offered participants the 
opportunity to restructure their 2009 LTIP awards and 
future awards so that they acquired shares jointly with the 
Company’s Employee Share Ownership Trust (‘ESOT’), 
with the effect that the growth in value of the shares 
creates a capital gain (taxed currently at 18%). Individuals 
were required to pay appropriate income tax and National 
Insurance as part of their upfront acquisition. If the awards 
vest, the participants keep their part-interest in the shares 
and the ESOT also transfers its part-interest to the 
participant at that stage, so that they receive the full value 
of the shares as intended under the terms of the Plan.  
This restructuring has generated ongoing savings for the 
Company and participants.

For the 2009 and 2010 awards Graham Clemett accepted 
the joint ownership awards as part of his total awards, 
taking half of his awards as joint ownership awards, with 
the remainder in the original conditional shares structure.

Under the rules of the SAYE Scheme, a requirement  
exists to renew the terms of the scheme every 10 years.  
At the Annual General Meeting in 2012, shareholders 
authorised the Company to amend the SAYE Scheme  
to allow options to continue to be granted until the  
20th anniversary of the original date of adoption of  
the SAYE Scheme by the Company on 29 July 2003.

SHARE INCENTIvE PLAN (SIP)
The Company implemented a SIP in March 2013. The 
SIP is an all employee share plan that is tax approved  
by hM Revenue & Customs. The share awards granted  
under the SIP constituted a one-off offer to employees  
in 2013 (although the SIP rules are flexible enough to 
accommodate subsequent offers) where up to £1,000  
of free shares were granted per employee.

51,800 ordinary shares were purchased by the Company 
on the market to grant the free shares and are held in a  
UK resident trust. The free shares are to be held in the 
Trust for a minimum period of three years before they  
can be withdrawn by the employees.

SHARE-BASED AWARDS AND DILUTION
The Company’s share schemes are funded through a 
combination of shares purchased in the market and 
new-issue shares, as appropriate. The Company monitors 
the number of shares issued under these schemes and 
their impact on dilution limits. The Company’s usage of 
shares compared to the relevant dilution limits set by the 
Association of British Insurers (ABI) in respect of all shares 
plans (10% in any rolling ten-year period) and executive 
share plans (5% in any rolling ten-year period) as at  
31 March 2013 is detailed below. 

As of 31 March 2013, around 4.3m (3.0%) and 3.6m (2.5%) 
shares have been, or may be, issued to settle awards  
made in the previous 10 years in connection with all share 
schemes and executive share schemes respectively. 
Awards that are made but then lapse or are forfeited are 
excluded from the calculations.

For the 2011 and 2012 awards the Executive Directors  
did not participate in joint ownership awards. 

ALL SHARE PLANS

EXECUTIvE SHARE OPTIONS
Details of outstanding grants made to the Executive 
Directors under the Executive Share Option Scheme and 
the performance targets that have to be satisfied for the 
options to become exercisable are shown on pages 59  
and 60. No grants of options were made during the year 
under the Executive Share Option Scheme and no further 
grants will be made.

Actual

Limit

0

1

2

3

4

SAvINGS RELATED SHARE OPTION PLAN
Executive Directors can participate in the Savings Related 
Share Option Plan (the ‘SAYE Scheme’) which is open to 
all employees. 

The scheme is subject to hMRC rules which limit the 
maximum monthly savings to £250. Under the SAYE 
Scheme, options are granted to acquire the number of 
shares that the total savings will buy when the contract 
matures, at a discounted price set at the start of the 
scheme. The details of the options granted to Executive 
Directors are shown on page 59.

EXECUTIvE SHARE PLANS

Actual

Limit

0

1

2

3

4

5
%

5
%

6

7

8

9

10

6

7

8

9

10

55

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013 
 
directors’  
remuneration rePort
CONTINUED

EXIT PAYMENTS DURING THE YEAR
harry Platt retired from office as Chief Executive on 31 March 2012 but remained employed by the Company until the 
end of June 2012 to facilitate an orderly handover. Salary and other benefits (cash in lieu of pension and private health 
insurance), were paid to harry Platt until the end of June 2012 totalling £105,428. As described in last year’s 
Remuneration Report, harry Platt did not participate in FY 2013 annual bonus and did not receive an LTIP award. he 
received 2009 LTIP shares which vested in June 2012. he also retained an interest in the 2010 and 2011 LTIP grants, 
although awards are pro-rated for time based on the proportion of the vesting period served and for performance to 
the end of the relevant three-year performance period.

No termination payments were made to harry Platt in respect of his notice period upon his retirement from the Board.

EXECUTIvE DIRECTOR SHARE OWNERSHIP
The Committee has adopted guidelines for Executive Directors and other senior executives to encourage substantial 
long-term share ownership. During the year, the minimum guideline was 100% of salary for the Executive Directors. 
however, as part of the review of remuneration policy, the Remuneration Committee agreed that shareholding 
guidelines would be increased to 150% of salary to be achieved within five years of appointment from 1 April 2013.

The table below shows the Executive Directors’ interests in shares and the extent to which Workspace’s shareholding 
guidelines are achieved.

Graham Clemett
Jamie hopkins

Number of 
shares held as 
at 31 March 2013

120,823
117,706

Value of 
shares held at 
31 March 20131

£414,664
£403,966

Current 
shareholding
(% salary)

Shareholding 
guideline
(as % of salary)

166%
101%

100%
100%

Guideline met

Yes
Yes

Notes:
1. 

 Value of shares is based on a price of £3.432 as at 28 March 2013.

The table below shows the Executive Directors’ interests in shares which includes all shares owned beneficially together 
with those interests in shares which have vested and are no longer subject to deferral or performance conditions and 
may be included as an interest in shares under Workspace’s shareholding guidelines.

Executive Director

Graham Clemett

Jamie hopkins

Type

Owned or 
vested outright

Unvested and 
subject to deferral

Shares
Nil cost options1
Market value
 options2
Shares
Nil-cost options1
Market value 
options2

120,823
226,869

Nil

117,706
Nil

Nil

Nil
Nil

4,663

Nil
Nil

4,663

Subject to 
performance3

542,046 
Nil

Nil

276,642
Nil

Total

662,869
226,869

4,663

394,348
Nil

Nil

4,663

1. 

 Interests in shares under awards made in the form of nil-cost options and market value options are stated before the operation of any applicable 
withholdings for tax and social security which would typically arise when a vested award is exercised. Further details can be found on page 60 of 
this report.

2.   Market value options include SAYE options outstanding and not yet matured as at 31 March 2013. The exercise price of these was set at 80% of 

the market value of a share at the invitation date.

3.   For Graham Clemett, the interest in shares of 542,046 consists of the total LTIP awards made in 2010, 2011 and 2012, details of which can be 

found on page 59 of this report. Similarly, for Jamie hopkins, the interest in shares of 276,642 consists of the performance and matching share 
awards made under the LTIP Plan in November 2012 details of which can be found on page 59 of this report.

56

Workspace Group PLC Annual Report and Accounts 2013PERFORMANCE REvIEW

Figure 1: Value of £100 invested on 31 March 2008

Workspace Group

FTSE All-Share Index

FTSE SmallCap Index

FTSE 250

FTSE 350 Real Estate

n
o
d
e
t
s
e
v
n

i

0
0
1
£
f
o
e
u
l
a
V

)
£
(
8
0
0
2
h
c
r
a
M
1
3

180

160

140

120

100

80

60

40

20

0

31 Mar
2008

31 Mar
2009

31 Mar
2010

31 Mar
2011

31 Mar
2012

31 Mar
2013

Figure 2: Value of £100 invested on 31 March 2009

Workspace Group

FTSE All-Share Index

FTSE SmallCap Index

FTSE 350 Real Estate

FTSE 250

n
o
d
e
t
s
e
v
n

i

0
0
1
£
f
o
e
u
l
a
V

)
£
(
9
0
0
2
h
c
r
a
M
1
3

400

350

300

250

200

150

100

50

0

31 Mar
2009

31 Mar
2010

31 Mar
2011

31 Mar
2012

31 Mar
2013

Figure 3: Value of £100 invested on 31 March 2010

n
o
d
e
t
s
e
v
n

i

0
0
1
£
f
o
e
u
l
a
V

)
£
(
0
1
0
2
h
c
r
a
M
1
3

180

160

140

120

100

80

60

40

20

0

Workspace Group

FTSE All-Share Index

FTSE SmallCap Index

FTSE 250

FTSE 350 Real Estate

31 Mar
2010

31 Mar
2011

31 Mar
2012

31 Mar
2013

Figure 1 above compares the total shareholder return performance (TSR) of the Group with benchmark indices over  
the last five years. Given the differing benchmarks used for such performance measurement your Board has decided 
to undertake this comparison against all of the FTSE 250, FTSE All Share, FTSE Small Cap and FTSE 350 Real Estate 
indices. In the opinion of the Directors, these indices are the most appropriate against which the total shareholder 
return of Workspace Group PLC should be measured.

Figure 2 above compares the TSR performance of the Group against benchmark indices over the last four years.

Figure 3 above compares the TSR performance of the Group against benchmark indices over the last three years.

57

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
directors’  
remuneration rePort
CONTINUED

THE FOLLOWING SECTIONS OF THE REMUNERATION REPORT ARE SUBJECT TO AUDIT:
DIRECTORS’ EMOLUMENTS 

Fees
2013
£000

Base
salary
2013
£000

Performance
bonus
2013
£000

Other
benefits
2013
£000

total
emoluments
2013
£000

Pension
scheme
contributions
2013
£000

Total
emoluments
2012
£000

Pension
scheme
contributions
2012
£000

executive directors 
Jamie hopkins1,4
Chief Executive Officer
Graham Clemett2,4
Chief Financial Officer

Prior executive 
directors
harry Platt5

non-executive 
directors
Daniel Kitchen
(Chairman)
Bernard Cragg3
John Bywater3
Maria Moloney
Chris Girling
Prior non-executive 
directors
Jamie hopkins1
Antony hales

–

–

–

–

125.0

45.0
45.0
34.6
5.8

–
–

255.4

255.4

400.0

480.0

250.0

300.0

17.1

18.1

897.1

60.0

24.0

568.1

41.2

488.8

3.4

36.6

–

–

650.0

780.0

–

35.2

–

1,465.2

–

101.2

716.7

1,229.5

–

40.0

–

–
–
–
–

–
–

–

–

–
–
–
–

–
–

–

–

–
–
–
–

–
–

–

650.0

780.0

35.2

125.0

45.0
45.0
34.6
5.8

–
–

255.4

1,720.6

–

–
–
–
–

–
–

–

101.2

98.8

45.0
45.0
–
–

37.7
32.7

259.2

1,488.7

–

–
–
–
–

–
–

–

40.0

Notes:
1. 

 Jamie hopkins was appointed as an Executive Director with effect from 12 March 2012. Consequently, he received a fee for services as a  
Non-Executive Director up to 12 March 2012 and then a salary from this date. 

2.   During the year, Graham Clemett sacrificed part of his basic pay so that pension contributions equal to the amount sacrificed were made into  

a pension plan for the benefit of his dependants. 

3.   Messrs Cragg and Bywater received a fee of £5,000 for acting as Chairman of the Audit and Remuneration Committee respectively.
4.   For 2012/13 the Committee set a minimum deferral requirement of 25% of the bonus earned. Equivalent to £75,000 for Graham Clemett  

and £120,000 for Jamie hopkins.

5.   harry Platt retired from office as Chief Executive on 31 March 2012. No employer pension contributions were made to harry Platt, but he 

received, instead, a cash allowance of £55,600 per annum in lieu of pension at no additional cost to the Company.

DIRECTOR INTERESTS IN SHARES AT 31 MARCH 2013
The following table shows the beneficial interests of the Directors in the shares of the Company as required by the 
listing rules:

Daniel Kitchen1
Jamie hopkins
Graham Clemett
John Bywater
Bernard Cragg
Maria Moloney2
Chris Girling3

1.  Daniel Kitchen acquired 1,000 6% sterling Bonds on 2 October 2012 at a price of £100 per Bond.
2.  Maria Moloney was appointed to the Board on 22 May 2012.
3.  Chris Girling was appointed to the Board on 7 February 2013.

Damon Russell did not hold any shares on date of appointment on 29 May 2013.

Directors’ interests in Incentive Plans and Share Options are disclosed on pages 59 and 60.
There have been no changes in the interests in the period between 31 March 2013 and 11 June 2013.

58

31 march 
2013

31 March 
2012

37,500
117,706
120,823
3,899
66,590
nil
nil

37,500
4,889
99,464
3,899
66,590
Nil
Nil

Workspace Group PLC Annual Report and Accounts 2013SUPPLEMENTARY INFORMATION ON DIRECTORS’ REMUNERATION
LONG-TERM EQUITY INCENTIvE PLAN 2008 
Details of current awards outstanding to the Executive Directors are as follows:

at 1 April 2012

Lapsed during the year

Vested during the year

at 31 March 2013

Performance

Invested

Matching Performance Matching Performance

Invested

Matching Performance

Invested

Matching

Jamie 
hopkins
19/11/2012

graham 
clemett
12/06/2009
06/07/2010
04/08/2011
18/06/2012

harry
Platt
12/06/2009
06/07/2010
04/08/2011

–

–

–

–

–

–

–

–

 164,117

112,525

112,525

 175,175 
 98,057 
 73,882 
–

 40,064 
 23,282 
 17,732 
–

 140,139 
 98,057 
 73,882 
–

 (58,624) 

–
–
–

 (46,900)
–
–
–

 (116,551)
–
–
–

 (40,064) 

 (93,239) 

–
–
–

–
–
–

–
 98,057 
 73,882 
 99,084 

–
 23,282 
 17,732 
 23,780 

–
 98,057 
 73,882 
 99,084 

 213,306 
 149,252 
 112,455 

 60,982 
 35,438 
 26,989 

 213,306 
 149,252 
 112,455 

 (71,386) 
 (49,750) 
 (74,970) 

 (71,386) 
 (49,750) 
 (74,970) 

 (141,920) 

 (60,982) 

 (141,920) 

–
–

–
–

–
–

–
 99,502 
 37,485 

–
 35,438 
 26,989 

–
 99,502 
 37,485 

Notes:
1. 
2.   Performance Awards were made to the Executive Directors: In June 2009 in respect of 100% and 125% of annual salary for harry Platt and 

 Awards will vest subject to the satisfaction of performance conditions detailed on page 54 over the three-year performance period.

Graham Clemett respectively based on a share price at date of award of 16 pence. In July 2010 in respect of 90% of annual salary based on a 
share price at date of award of 20.58 pence; In July 2011 in respect of 90% of annual salary based on a share price at date of award of 27 pence. 
In June 2012 in respect of 90% of annual salary for Graham Clemett based on a share price at date of award of £2.2708. No LTIP awards were 
made to harry Platt in 2012. For Jamie hopkins, Performance Share Awards were made in respect of 125% of gross salary in November 2012 
based on a share price of £3.0466 and Matching Share Awards of 112,525 (subject to overall cap of 1x salary at grant) made in November 2012 
based on a share price of £3.0466. 

3.   Any shares purchased by the Executive Directors during and since the Rights Issue were allowed to count towards investments for the Invested 

Shares subject to the normal cap on individual participation of 50% of net salary.

4.   Matching Awards were granted to participants who purchased Invested Shares or who used shares acquired during and since the Rights Issue as 
Invested Shares. In 2010, 2011 and 2012, Executive Directors invested an amount equal to 45% of their net annual basic salary in invested shares. 
Matching awards were granted to participants who purchased invested shares. 

5.   Participants are entitled to dividends payable on the Invested Shares. The Invested Shares which are beneficially owned by participants are 

included in the table detailing Ordinary Shares held by Directors on page 58 of this Report. 

6.   2009 awards were initially granted as conditional award of shares. On 8 December 2009 the Executive Directors elected to convert part of the 
awards into a combination of interest in shares beneficially held, and linked options over the same total value. Whilst the 2009 conditional share 
awards vested on 12 June 2012, Graham Clemett elected to convert his awards of 209,789 into nil cost options prior to the date of vesting. 
 For the 2010 awards, the Executive Directors elected to convert part of the awards into a combination of interest in shares beneficially held, and 
linked options over the same total value.

7. 

SHARE OPTIONS (AUDITED)
The following table shows the interests of the Directors who served during the year in Savings Related Share Option 
Plan which is subject to hMRC rules.

Director

 At 01/04/2012

Granted 
during 
the year

Lapsed
during
the year

Exercised 
in year

At
31/03/2013

Exercise price

From

To

Normal exercise date

Jamie 
hopkins

graham
clemett

total

–

4,6631

7,8691

7,869

–
4,6631

9,326

–

–
–

–

–

4,663

£1.93

01.09.2015

01.03.2016

(7,869)

(7,869)

–
4,663

9,326

£1.15
£1.93

01.09.2012
01.09.2015

01.03.2013
01.03.2016

1.  Relate to options granted under the rules of the SAYE Scheme and exercised in full in accordance with SAYE Scheme rules. 

59

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013 
 
 
directors’  
remuneration rePort
CONTINUED

The table below shows the interests of harry Platt, a former Executive Director in the Savings Related Share Option 
Plan and the 2000 Approved Executive Share Option Plan.

Director

 At 01/04/2012

harry Platt

Granted 
during 
the year

Lapsed
during
the year

Exercised 
in year

At
31/03/2013

Exercise price

From

To

Normal exercise date

56,2991
37,4861
18,9491
11,2771
7,8692

131,880

–
–
–
–
–

–

(56,299)
(37,486)
(18,949)
(11,277)
–

(124,011)

–
–
–
–
(7,869)

(7,869)

–
–
–
–
–

–

£8.66
£8.25
£13.16
£17.81
£1.15

29.07.2005
29.07.2012
30.06.2006 30.06.2013
30.06.2007 30.06.2014
17.06.2015
17.06.2008
01.03.2013
01.09.2012

total

Notes:
1. 

 Under the rules of the Executive Share Option Plan, if an option holder ceases to be a Director or employee of the Company on account of injury, 
ill health, disability, redundancy or retirement the Option may be exercised within a period of six months after cessation. Given that the exercise 
price of all options that potentially could have been exercised were greater than the mid-market closing share price of Workspace ordinary 
shares on 31 December 2012 (six months from date of cessation of harry Platt) no profit would have arisen upon exercise of any of these options. 
Consequently, these Options have been lapsed in full. 

 The closing mid-market price of Workspace Group PLC ordinary shares at 31 December 2012 was £3.02 and 28 March 2013 was £3.432.  
During the year, the price of the Company’s shares varied between £2.13 and £3.63.

2.  Relate to Options granted under the rules of the SAYE Scheme and exercised in full in accordance with the SAYE Scheme rules. 

There have been no changes in Directors’ interests over options in the period between the balance sheet date and  
11 June 2013.

NIL COST OPTIONS
Graham Clemett holds the following nil cost options. 

Name

Graham Clemett

Number of nil cost options

226,869

Pursuant to the Workspace Long Term Equity Incentive Plan 2008, share awards (conditional on three separate 
performance conditions for a period of three years from grant) were made to the Directors on 12 June 2009. Prior  
to the vesting date, 12 June 2012, these were converted to nil cost options to ease administration. This does not  
increase the overall expected cost to the Company. The period in which the 209,789 nil cost options may normally  
be exercised commenced on the vesting date, 12 June 2012 and will end on 12 June 2017, which is five years after the 
date of vesting of the award.

As part of the bonus arrangements, share awards (conditional on continuous employment for a period of two years 
from grant) were made to Mr Clemett on 12 June 2009. Prior to the vesting date, 12 June 2011, these were converted 
into nil cost options. The period in which the 17,080 nil cost options may normally be exercised commenced on the  
vesting date, 12 June 2011 and will end on 12 June 2019, which is 10 years after the date of the original award. 

By Order of the Board

JOHN BYWATER
ChAIRMAN OF ThE REMUNERATION COMMITTEE
11 June 2013

60

Workspace Group PLC Annual Report and Accounts 2013 
directors’  
resPonsiBilities

STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual 
Report, the Directors’ Remuneration Report and the 
Group and the Parent Company financial statements  
in accordance with applicable law and regulations.

The Directors are responsible for the maintenance and 
integrity of the Company’s website. Legislation in the 
United Kingdom governing the preparation and 
dissemination of financial statements may differ from 
legislation in other jurisdictions.

Each of the current Directors, whose names and functions 
are listed on pages 30 and 31 and 35 to 44 of the Annual 
Report, confirm that, to the best of their knowledge:

–   The Group financial statements, which have been 

prepared in accordance with IFRSs as adopted by  
the EU, give a true and fair view of the assets, liabilities, 
financial position and profit of the Group; and

–   The Business Review on pages 16 to 25 includes a  

fair review of the development and performance of  
the business and the position of the Group, together 
with a description of the principal risks and 
uncertainties that it faces.

Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the 
Directors have prepared the Group financial statements  
in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union, 
and the Parent Company financial statements in 
accordance with applicable law and United Kingdom 
Generally Accepted Accounting Standards (United 
Kingdom Accounting Standards and applicable law). 
Under company law, the Directors must not approve  
the financial statements unless they are satisfied that  
they give a true and fair view of the state of affairs of  
the Company and the Group and of the profit or loss  
of the Group for that period.

In preparing those financial statements, the Directors  
are required to:

–   Select suitable accounting policies and then apply  

them consistently;

–   Make judgements and estimates that are reasonable 

and prudent; and

–   State whether IFRSs as adopted by the European  

Union and applicable UK Accounting Standards have 
been followed, subject to any material departures 
disclosed and explained in the Group and Parent 
Company financial statements respectively.

The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and explain 
the Company’s transactions and disclose with reasonable 
accuracy at any time the financial position of the Company 
and the Group and to enable them to ensure that the 
financial statements and the Directors’ Remuneration 
Report comply with the Companies Act 2006 and, as 
regards the Group financial statements, Article 4 of the 
IAS Regulation. They are also responsible for safeguarding 
the assets of the Company and the Group and hence for 
taking reasonable steps for the prevention and detection 
of fraud and other irregularities.

61

 Review of operations 01-26  Governance 27-61 Financial statements 62-95 Shareholder information 96-100Workspace Group PLC Annual Report and Accounts 2013INDEPENDENT AUDITORS’ REPORT TO
THE MEMBERS OF WORKSPACE GROUP PLC

We have audited the Group financial statements of 
Workspace Group PLC for the year ended 31 March 2013 
which comprise the Consolidated Income Statement, 
Consolidated Statement of Comprehensive Income, 
Consolidated Balance Sheet, Consolidated Statement of 
Changes in Equity, Consolidated Statement of Cash Flows 
and the related notes. The financial reporting framework 
that has been applied in their preparation is applicable law 
and International Financial Reporting Standards (IFRSs) 
as adopted by the European Union.

OPINION ON FINANCIAL STATEMENTS
In our opinion the Group financial statements:
–   give a true and fair view of the state of the Group’s 
affairs as at 31 March 2013 and of its profit and cash 
flows for the year then ended;

–   have been properly prepared in accordance with IFRSs 

as adopted by the European Union; and
–   have been prepared in accordance with the 

requirements of the Companies Act 2006 and Article 4 
of the lAS Regulation.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS  
AND AUDITORS
As explained more fully in the Statement of Directors’ 
Responsibilities set out on page 61, the Directors are 
responsible for the preparation of the Group financial 
statements and for being satisfied that they give a true 
and fair view. Our responsibility is to audit and express  
an opinion on the Group financial statements in 
accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those  
standards require us to comply with the Auditing  
Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared  
for and only for the Company’s members as a body in 
accordance with Chapter 3 of Part 16 of the Companies 
Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any 
other purpose or to any other person to whom this report 
is shown or into whose hands it may come save where 
expressly agreed by our prior consent in writing.

SCOPE OF THE AUDIT OF THE FINANCIAL 
STATEMENTS
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether  
the accounting policies are appropriate to the Group’s 
circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant 
accounting estimates made by the Directors; and the 
overall presentation of the financial statements. In 
addition, we read all the financial and non-financial 
information in the Annual Report and Accounts to 
identify material inconsistencies with the audited  
financial statements. If we become aware of any  
apparent material misstatements or inconsistencies  
we consider the implications for our report.

OPINION ON OTHER MATTERS PRESCRIBED BY THE 
COMPANIES ACT 2006
In our opinion:
–   the information given in the Report of the Directors  
for the financial year for which the Group financial 
statements are prepared is consistent with the  
Group financial statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT 
BY EXCEPTION
We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report 
to you if, in our opinion:
–   certain disclosures of Directors’ remuneration specified 

by law are not made; or

–   we have not received all the information and 

explanations we require for our audit; or

Under the Listing Rules we are required to review:
–   the Directors’ statement, set out on page 32, in relation 

to going concern;

–   the part of the Corporate Governance Statement 

relating to the Company’s compliance with the nine 
provisions of the UK Corporate Governance Code 
specified for our review; and

–   certain elements of the report to shareholders by  

the Board on Directors’ remuneration.

OTHER MATTER
We have reported separately on the Parent Company 
financial statements of Workspace Group PLC for the  
year ended 31 March 2013 and on the information in the 
Directors’ Remuneration Report that is described as 
having been audited.

BOWkER ANDREWS
(SEnIOR STATUTORy AUDITOR)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
11 June 2013

62

Workspace Group PLC Annual Report and Accounts 2013CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH

Revenue
Direct costs

Net rental income
Administrative expenses

(Loss)/profit on disposal of investment properties
Loss on disposal of property, plant and equipment
Change in fair value of investment properties

Operating profit

Finance income
Finance costs
Change in fair value of derivative financial instruments
Gains from share in joint ventures

Profit before tax
Taxation

Profit for the year after tax and attributable to owners of the parent

Basic earnings per share (pence)
Diluted earnings per share (pence)
EPRA earnings per share (pence)

CONSOLIDATED STATEMENT OF  
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH

Profit for the financial year

Total comprehensive income attributable to owners of the parent 

The notes on pages 67 to 90 form part of these financial statements.

notes

1
1 

1
2

3

10

2

4
4
4
12

6

8
8
8

2013
£m

69.5
(22.4)

47.1
(11.0)

36.1

(2.2)
–
59.0

92.9

0.2
(19.5)
1.1
1.7

76.4
–

76.4

2012
£m

67.3
(22.5)

44.8
(10.2)

34.6

0.9
(0.1)
35.6

71.0

0.2
(19.3)
(4.6)
1.2

48.5
0.5

49.0

53.3p
52.1p
12.2p

36.3p
35.5p
11.9p

2013
£m

76.4

76.4

2012
£m

49.0

49.0

63

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100 
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH

Non-current assets
Investment properties
Intangible assets
Property, plant and equipment
Investment in joint ventures
Trade and other receivables

Current assets
Trade and other receivables
Cash and cash equivalents
Corporation tax asset

Current liabilities
Derivative financial instruments
Trade and other payables

Net current liabilities

Non-current liabilities
Borrowings
Other non-current liabilities

Net assets

Shareholders’ equity
Ordinary shares
Share premium
Investment in own shares
Other reserves
Retained earnings

Total shareholders’ equity

notes

10

11
12
13

13
14

16(d) & (e)
15

16(a)
20

21

 23
22

2013
£m

825.9
0.5
1.7
20.7
6.1

854.9

13.0
11.8
0.8

25.6

(11.1)
(31.3)

(42.4)

(16.8)

(337.7)
–

(337.7)

500.4

144.9
58.8
(8.9)
15.3
290.3

500.4

2012
£m

759.3
0.3
1.1
12.3
4.6

777.6

10.6
26.5
0.6

37.7

(14.2)
(27.5)

(41.7)

(4.0)

(337.3)
(0.9)

(338.2)

435.4

144.1
59.2
(8.7)
13.9
226.9

435.4

EPRA net asset value per share

9

£3.48

£3.08

The notes on pages 67 to 90 form part of these financial statements.

The financial statements on pages 63 to 90 were approved and authorised for issue by the Board of Directors  
on 11 June 2013 and signed on its behalf by:

J HOPkINS
G CLEMETT
Directors

64

Workspace Group PLC Annual Report and Accounts 2013 
CONSOLIDATED STATEMENT  
OF CHANGES IN EqUITy

Balance at 1 April 2011

Profit for the year
Release of revaluation of owner 
occupied property

Total comprehensive income

Transactions with owners:
Share issues
Own shares purchase
Dividends paid
Share based payments

Balance at 31 March 2012

Profit for the year

Total comprehensive income

Transactions with owners:
Share issues
Own shares purchase
Dividends paid
Share based payments

Balance at 31 March 2013

Attributable to owners of the Parent

notes

Share
capital
£m

115.3

Share
premium
£m

Investment
in own shares
£m

25.0

(8.0)

22

21
23
7
24

21
23
7
24

–

–

–

28.8
–
–
–

144.1

–

–

0.8
–
–
–

144.9

–

–

–

34.2
–
–
–

59.2

–

–

(0.4)
–
–
–

58.8

–

–

–

–
(0.7)
–
–

(8.7)

–

–

–
(0.2)
–
–

(8.9)

Other
reserves
£m

15.0

–

(1.9)

(1.9)

Retained
earnings
£m

186.5

49.0

1.9

50.9

–
–
–
0.8

13.9

–

–

–
–
–
1.4

–
–
(10.5)
–

226.9

76.4

76.4

–
–
(13.0)
–

Total
£m

333.8

49.0

–

49.0

63.0
(0.7)
(10.5)
0.8

435.4

76.4

76.4

0.4
(0.2)
(13.0)
1.4

15.3

290.3

500.4

The notes on pages 67 to 90 form part of these financial statements.

65

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE yEAR ENDED 31 MARCH

Cash flows from operating activities
Cash generated from operations
Interest received
Interest paid
Tax paid

net cash inflow from operating activities

Cash flows from investing activities
Capital expenditure on investment properties
Proceeds from disposal of investment properties (net of sale costs)
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment (net of sale costs)
Investment in joint ventures
Movement in short-term funding balances with joint ventures
Distributions received from joint ventures

net cash outflow from investing activities

Cash flows from financing activities
Proceeds from issue of ordinary share capital
Fees paid on share issue
Finance costs for new/amended borrowing facilities
Settlement and re-couponing of derivative financial instruments
Repayment of bank borrowings
Drawdown of bank borrowings
Retail Bond issue
Payment of priority fee
Outflow on bank facility rental income accounts
Own shares purchase
Dividends paid

net cash (outflow)/inflow from financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at start of year
Cash and cash equivalents at end of year

The notes on pages 67 to 90 form part of these financial statements.

notes

18

12

12

19

19

7

18
18

2013
£m

38.6
0.3
(16.6)
(0.2)

22.1

(27.3)
16.7
(0.3)
(1.0)
–
(7.7)
–
0.9

(18.7)

0.4
–
(1.1)
(2.1)
(68.0)
10.0
57.5
(0.9)
(0.7)
(0.2)
(13.0)

(18.1)

2012
£m

35.8
0.1
(18.5)
(0.1)

17.3

(18.3)
8.8
(0.1)
(0.7)
3.8
(4.8)
(0.1)
0.4

(11.0)

66.3
(3.3)
(2.2)
(1.3)
(25.5)
–
–
–
(1.7)
(0.7)
(10.5)

21.1

(14.7)

27.4

26.5
11.8

(0.9)
26.5

66

Workspace Group PLC Annual Report and Accounts 2013NOTES TO THE FINANCIAL STATEMENTS

Workspace Group PLC (‘the Company’) and its 
subsidiaries (together ‘the Group’) are engaged in 
property investment in the form of letting of business 
accommodation to new and growing enterprises  
across London.

The Company is a public limited company which is listed 
on the London Stock Exchange and is incorporated and 
domiciled in the UK.

The registered number of the Company is 2041612.

BASIS OF PREPARATION
These financial statements are presented in sterling, which 
is the Company’s functional currency and the Group’s 
presentation currency and have been prepared on a going 
concern basis, in accordance with International Financial 
Reporting Standards (IFRS) and IFRIC interpretations as 
adopted by the European Union and with those parts  
of the Companies Act 2006 applicable to companies 
reporting under IFRS.

The financial statements have been prepared under the 
historical cost convention as modified by the revaluation 
of investment properties and financial liabilities (including 
derivative financial instruments) at fair value through profit 
or loss.

SIGNIFICANT JUDGEMENTS, kEY ASSUMPTIONS  
AND ESTIMATES
The preparation of financial statements in conformity  
with generally accepted accounting principles requires  
the use of estimates and judgements that affect the 
reported amounts of assets and liabilities at the balance 
sheet date and the reported amounts of revenues and 
expenses during the reporting period. Although these 
estimates are based on management’s best knowledge  
of the amount, event or actions, actual results ultimately 
may differ from those estimates.

The Group’s significant accounting policies are stated 
below. not all of these accounting policies require 
management to make subjective or complex judgements. 
The following is intended to provide an understanding of 
the policies that management consider critical because  
of the level of judgement or estimation involved in  
their application and their impact on the consolidated 
financial statements.

INVESTMENT PROPERTY VALUATION
The Group uses the valuation performed by its 
independent valuers as the fair value of its investment 
properties. The valuation is based upon assumptions 
including estimated rental values, future rental income, 
anticipated maintenance costs, future development costs 
and the appropriate discount rate. The valuers also make 
reference to market evidence of transaction prices for 
similar properties.

TRADE RECEIVABLES
The Group is required to judge when there is sufficient 
objective evidence to require the impairment of individual 
trade receivables. It does this on the basis of the age of  
the relevant receivables, external evidence of the credit 
status of the receivable entity and the status of any 
disputed amounts.

COMPLIANCE WITH THE REAL ESTATE INVESTMENT 
TRUST (REIT) REGIME
The Group is a Real Estate Investment Trust (Group REIT). 
In order to achieve and retain Group REIT status, several 
entrance tests had to be met and certain ongoing criteria 
must be maintained. The main criteria are as follows:

–   At the start of each accounting period, the assets of the 
tax exempt business must be at least 75% of the total 
value of the Group’s assets

–   At least 75% of the Group’s total profits each year must 

arise from the tax exempt business

–   At least 90% of the taxable profit of the property rental 

business must be distributed

–   The Group must take reasonable steps to avoid 

payment of dividends to an entity controlling (directly 
or indirectly) 10% or more of the voting rights of 
Workspace Group PLC.

The Directors intend that the Group should continue as  
a Group REIT for the foreseeable future, with the result 
that deferred tax is no longer recognised on temporary 
differences and valuations relating to the property rental 
business and relevant property rental income is treated  
as exempt from taxation.

SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the 
preparation of these consolidated financial statements  
are set out below. These policies have been consistently 
applied to all years presented unless stated otherwise:

BASIS OF CONSOLIDATION
The consolidated financial statements include the 
financial statements of the Company and all its subsidiary 
undertakings up to 31 March 2013. Subsidiaries are entities 
over which the Group has the power to govern the 
financial and operating policies. The financial statements 
of subsidiaries are included in the consolidated financial 
statements from the date that control commences to the 
date control ceases.

Inter company transactions, balances and unrealised gains 
from intra group transactions are eliminated. Unrealised 
losses are also eliminated unless the transaction provides 
evidence of an impairment of the asset transferred.

67

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

INVESTMENT PROPERTIES
Investment properties are those properties owned or 
leased by the Group that are held either to earn rental 
income or for capital appreciation, or both, and are not 
occupied by the Company or subsidiaries of the Group.

Investment property is measured initially at cost, including 
related transaction costs. After initial recognition 
investment property is held at fair value based on a 
valuation by an independent professional external valuer 
at each reporting date. Changes in fair value of investment 
property at each reporting date are recorded in the 
income statement.

Assets acquired under finance leases are capitalised at  
the lease’s commencement at the lower of the fair value  
of the leased property and the net present value of the 
minimum lease payments. The investment properties 
acquired under finance leases are subsequently carried  
at fair value. The corresponding rental obligations,  
net of finance charges, are included in current and non 
current borrowings. Each lease payment is allocated 
between liability and finance charges so as to achieve  
a constant rate on the finance balance outstanding.  
The interest element of the finance cost is charged  
to the income statement. 

Properties are treated as acquired at the point the  
Group assumes the significant risks and rewards of 
ownership and are treated as disposed when these are 
transferred outside of the Group’s control. Existing 
investment properties which undergo redevelopment  
and refurbishment for continued future use remain in 
investment property where the purpose of holding the 
property continues to meet the definition of investment 
property as defined above. 

Subsequent expenditure is charged to the asset’s carrying 
amount only when it is probable that future economic 
benefits associated with the expenditure will flow to the 
Group, and the cost of each item can be reliably measured. 
Certain internal staff costs directly attributable to capital/
redevelopment projects are capitalised. All other repairs 
and maintenance costs are charged to the income 
statement during the period in which they are incurred.

Capitalised interest on the redevelopment expenditure is 
added to the asset’s carrying amount. Borrowing costs 
capitalised are calculated by reference to the actual 
interest rate payable on borrowings, or if financed out  
of general borrowings by reference to the average rate 
payable on funding the assets employed by the Group  
and applied to the direct expenditure on the property 
undergoing redevelopment. Interest is capitalised from  
the date of commencement of the redevelopment activity 
until the date when substantially all the activities necessary 
to prepare the asset for its intended use are complete.

Investment properties are recognised as ‘assets held for 
sale’ when it is considered highly probable that sale 
completion will take place.

Income from the sale of assets is recognised when the 
significant risks and returns have been transferred to the 
buyer. In the case of sales of properties this is generally 
taken on completion. In the case of a part disposal 
agreement, the part of the asset being disposed will  
be derecognised from investment property when  
completion is reached or when a finance lease agreement 
is signed. Any profit or loss on disposal is taken to  
other operating income/expense. Where part of the 
consideration is in the form of the return to Workspace  
of a new commercial building, this element is fair valued 
and included in investment property. Where any aspect of 
consideration is conditional then the revenue associated 
with that conditional item is valued and included as 
deferred consideration. The fair value of deferred 
consideration is assessed at each period end and changes 
in fair value are taken to other operating income/expense. 

INTANGIBLE ASSETS
Intangible assets are stated at historical cost, less 
accumulated amortisation. Acquired computer software 
licences and external costs of implementing or developing 
computer software programmes and websites are 
capitalised. These costs are amortised over their  
estimated useful lives of five years on a straight line basis. 

Costs associated with maintaining computer software 
programmes are recognised as an expense as they  
fall due.

PROPERTY, PLANT AND EQUIPMENT
LAnD AnD BUILDInGS
Land and buildings within property, plant and equipment 
related to the owner occupied building of Magenta House 
which was sold last year. The Group had adopted the 
revaluation model to show this asset category at fair  
value less subsequent depreciation for buildings.

EqUIPMEnT AnD FIxTURES
Equipment and fixtures (including motor vehicles) are 
stated at historical purchase cost less accumulated 
depreciation. Historical cost includes the original purchase 
price of the asset and the costs attributable to bringing 
the asset to its working condition for its intended use.

Subsequent expenditure is charged to the asset’s carrying 
amount or recognised as a separate asset only when it is 
probable that future economic benefits associated with 
the expenditure will flow to the Group and the cost of  
each item can be reliably measured. All other repairs and 
maintenance costs are charged to the income statement 
during the period in which they are incurred.

68

Workspace Group PLC Annual Report and Accounts 2013Depreciation is provided using the straight line method to 
allocate the cost less estimated residual value over the 
asset’s estimated useful lives which range from 4-10 years.

The assets’ residual values and useful lives are reviewed 
and adjusted, if appropriate, at least at each financial  
year end. An asset’s carrying amount is written down 
immediately to its recoverable amount if its carrying 
amount is greater than its estimated recoverable amount.

JOINT VENTURES
Joint ventures are those entities over which the Group, 
either directly or indirectly, is in a position to jointly control 
the financial and operating policies of the entity. Joint 
ventures are accounted for under the equity method 
whereby the consolidated financial statements include  
the Group’s investment in and contribution from the  
joint venture.

TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair 
value and subsequently measured at cost less provision 
for impairment where it is established there is objective 
evidence that the Group will not be able to collect all 
amounts due according to the original terms of the 
receivable. The amount of the provision is the difference 
between the asset’s carrying amount and the present 
value of estimated future cash flows. The provision is 
recorded in the income statement.

Deferred consideration on the disposal of investment 
properties is included within trade and other receivables.  
It is fair valued on recognition and at each year end  
with any movement taken to other operating income  
and expense. 

Other receivables include bank facility rental income 
accounts from which interest to lenders is paid.

TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair 
value and subsequently held at amortised cost.

CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, restricted 
cash in the form of tenants’ deposits and deposits held on 
call with banks. Bank overdrafts are included in current 
liabilities but within cash and cash equivalents for the 
purpose of the cash flow statement.

BORROWINGS
Borrowings are recognised initially at fair value, net of 
transaction costs incurred. Borrowings are subsequently 
stated at amortised cost, with any difference between  
the initial amount (net of transaction costs) and the 
redemption value being recognised in the income 
statement over the period of the borrowings, using the 
effective interest method, except for interest capitalised 
on redevelopments.

Transaction costs are amortised over the effective life of 
the amounts borrowed.

DERIVATIVE FINANCIAL INSTRUMENTS
The Group enters into derivative transactions such as 
interest rate caps and swaps in order to manage its interest 
rate risk. Financial derivatives are recorded at fair value 
calculated by valuation techniques based on market prices, 
estimated future cash flows and forward interest rates. 
Movements in fair value are recognised in the Income 
Statement within total finance costs. Amounts payable  
or receivable under such arrangements are included  
within interest payable or receivable, recognised on an 
accruals basis.

SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs 
directly attributable to the issue of new shares are shown 
in equity as a deduction, net of tax, from the proceeds.

INVESTMENT IN OWN SHARES
The Group operates an Employee Share Ownership Trust 
(ESOT) and a trust for the Share Incentive Plan (SIP). 
When the Group funds these trusts in order to purchase 
Company shares, the loan is deducted from shareholders’ 
equity as investment in own shares.

OPERATING SEGMENTS
Operating segments are reported in a manner consistent 
with the internal reporting provided to the chief operating 
decision maker. The chief operating decision maker is the 
person or group that allocates resources to and assesses 
the performance of the operating segments of an entity. 
The Group has determined that its chief operating decision 
maker is the Executive Committee of the Company. The 
Group considers that it has only one operating segment 
being a single portfolio of commercial property providing 
business accommodation for rent in London. Discrete 
financial information is provided to the chief operating 
decision maker on a property by property basis, including 
rental income and direct costs and valuation gains  
or losses.

69

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

REVENUE RECOGNITION
Revenue comprises rental income, service charges and 
other sums receivable from the Group’s investment 
properties. Other sums comprise insurance charges, 
supplies of utilities, premia associated with surrender of 
tenancies, commissions, fees and other sundry income.

All the Group’s properties are leased out under operating 
leases and are included in investment property in the 
balance sheet. Rental income from operating leases is 
recognised in the income statement on a straight line basis 
over the lease term. Rent received in advance is deferred 
in the balance sheet and recognised in the period to which 
it relates to. When the Group provides incentives to its 
customers the incentives are recognised over the lease 
term on a straight line basis. 

Service charges and other sums receivable from tenants 
are recognised on an accruals basis by reference to the 
stage of completion of the relevant service or transactions 
at the reporting date. These services generally related to  
a 12 month period.

DIRECT COSTS
Direct costs comprise service charge and other costs 
directly recoverable from tenants and non recoverable 
costs directly attributable to investment properties and 
other revenue streams.

SHARE BASED PAYMENTS
The Group operates a number of share schemes under 
which the Group receives services from employees as 
consideration for equity instruments of the Group.

The fair value of the employee services received in 
exchange for the grant of share awards and options  
is recognised as an expense over the vesting period.

Fair value is measured by the use of Black-Scholes and 
Binomial option pricing models. The expected life used in 
the models has been adjusted, based on management’s 
best estimate, for the effects of non-transferability, 
exercise restrictions and behavioural considerations.

PENSIONS
The Group operates a defined contribution pension 
scheme. Contributions are charged to the income 
statement on an accruals basis.

INCOME TAX
Current income tax is tax payable on the taxable  
income for the year and any prior year adjustment,  
and is calculated using tax rates that have been 
substantively enacted by the balance sheet date.

DIVIDEND DISTRIBUTIONS
Final dividend distributions to the Company’s 
shareholders are recognised as a liability in the Group’s 
financial statements in the period in which the dividends 
are approved, while interim dividends are recognised  
when paid.

70

NEW ACCOUNTING STANDARDS, AMENDMENTS  
AND GUIDANCE
a)   During the year to 31 March 2013 the Group adopted 
the following accounting standards and guidance. 
These either had no material impact on the Group’s 
financial statements or resulted in changes to 
presentation and disclosure only:

Standard or interpretation
Amendment: IFRS 7

Content
Financial instruments: 
disclosures on transfers  
of financial assets

b)  The following accounting standards and guidance are 

not yet effective or not yet endorsed by the EU, and are 
either not expected to have a significant impact on the 
Group’s financial statements or will result in changes to 
presentation and disclosure only. They have not been 
adopted early by the Group:

Standard or interpretation
IFRS 9

Amendment: IAS 12
Amendment: IAS 1

IFRS 10

IFRS 11
IFRS 12

Amendment: IFRS 10, 11  
and 12
IFRS 13
IAS 27 (revised)
IAS 28 (revised)
Amendment: IFRS 7

Amendment: IAS 32

Content
Financial instruments: 
classification and 
measurement 
Income taxes on deferred tax
Financial statement 
presentation regarding other 
comprehensive income
Consolidated financial 
statements
Joint arrangements
Disclosures of interest in  
other entities
On transition  
guidance
Fair value measurement
Separate financial statements
Associates and joint ventures
Financial instruments: 
disclosures, on offsetting 
financial assets and liabilities
Financial instruments: 
presentation, on offsetting 
financial assets and liabilities

Annual improvements 2011 Changes to IFRS 1/IAS 1/ 

IAS 16/IAS 32/IAS 34

Workspace Group PLC Annual Report and Accounts 2013 
1. ANALYSIS OF NET RENTAL INCOME AND SEGMENTAL INFORMATION

Rental income
Service charges
Empty rates and other non recoverables
Services, fees, commissions and sundry income

2013

Direct
costs
£m

(0.2)
(16.0)
(3.4)
(2.8)

(22.4)

Net rental 
income
£m

Revenue
£m

51.2
(1.9)
(3.0)
0.8

47.1

50.2
13.7
0.6
2.8

67.3

2012

Direct
costs
£m

(0.1)
(16.2)
(4.1)
(2.1)

(22.5)

net rental 
income
£m

50.1
(2.5)
(3.5)
0.7

44.8

Revenue
£m

51.4
14.1
0.4
3.6

69.5

All of the properties within the portfolio are geographically close to each other and have similar economic features  
and risks and all information provided to the Executive Committee is aggregated and reviewed in total as one portfolio. 
As a result management have determined that the Group operates a single operating segment providing business 
accommodation for rent in London.

2. OPERATING PROFIT
The following items have been charged in arriving at operating profit:

Depreciation1,2 
Staff costs (including share based costs)1,2
Repairs and maintenance expenditure on investment properties1
Trade receivables impairment
Amortisation of intangibles2
Operating lease rentals payable1
Audit fees payable to the Group’s auditors3

1.  Charged to direct costs.
2.  Charged to administrative expenses.
3.  Services provided by the Group’s auditors – PricewaterhouseCoopers LLP.

Auditor’s remuneration:
Services provided by the Company’s auditors and its associates

Audit fees:
Audit of parent company and consolidated financial statements
Audit of subsidiary financial statements

Non-audit fees:
Audit related assurance services
Reporting work on Rights Issue
Reporting work on Retail Bond issue
Tax advisory, tax compliance and legal services
Other services

Total administrative expenses are analysed below:
Staff costs
Cash settled share based costs
Equity settled share based costs
Other

2013
£m

0.4
11.9
3.3
0.3
0.1
0.1
0.2

2013
£000

129
29

158

33
–
30
78
31

172

2013
£m

6.0
0.4
1.4
3.2

11.0

2012
£m

0.4
10.7
3.2
0.4
0.1
0.1
0.2

2012
£000

125
28

153

32
200
–
158
70

460

2012
£m

5.8
0.2
0.8
3.4

10.2

71

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100 
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

3. (LOSS)/PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES

Proceeds from sale of investment properties (net of sale costs)
Book value at time of sale (note 10)

Unrealised profit on sale of properties to joint ventures
Revaluation of deferred consideration

Pre-tax (loss)/profit on sale

2013
£m

19.6
(21.7)

(2.1)
(0.1)
–

(2.2)

2012
£m

8.8
(7.6)

1.2
–
(0.3)

0.9

£6.2m (2012: £nil) of the proceeds for the year were in the form of deferred consideration, of which £2.9m is 
outstanding at 31 March 2013 and is included in the Consolidated Balance Sheet under non-current and current trade 
and other receivables.

4. FINANCE INCOME AND COSTS

Interest income on bank deposits

Finance income
Interest payable on bank loans and overdrafts
Amortisation of issue costs of bank loans
Interest payable on finance leases
Capitalised interest on property refurbishments (note 10)

Finance costs
Change in fair value of financial instruments through the income statement

Net finance costs

5. EMPLOYEES AND DIRECTORS

Staff costs for the Group during the year were:
Wages and salaries
Social security costs
Defined contribution pension plan costs (see note 29)
Cash settled share based costs (see note 24)
Equity settled share based costs (see note 24)

The monthly average number of people (including Executive Directors) employed  
during the year was:  
Executive Directors
Head office staff
Estates and property management staff

2013
£m

0.2

0.2

(17.9)
(2.0)
(0.2)
0.6

(19.5)

1.1

(18.2)

2013
£m

8.6
1.0
0.5
0.4
1.4

11.9

2012
£m

0.2

0.2

(18.3)
(1.2)
(0.2)
0.4

(19.3)

(4.6)

(23.7)

2012
£m

8.3
1.0
0.4
0.2
0.8

10.7

2013
Number

2012
number

2
68
100

170

2
66
96

164

The emoluments and pension benefits of the Executive Directors is determined by the Remuneration Committee of  
the Board and are set out in detail in the Directors’ Remuneration Report on pages 45 to 60. These form part of the 
financial statements.

72

Workspace Group PLC Annual Report and Accounts 20136. TAXATION

Current tax:
UK corporation tax
Adjustments to tax in respect of previous periods

Total taxation charge/(credit)

2013
£m

(0.2)
0.2

–

2012
£m

(0.5)
–

(0.5)

The tax on the Group’s profit for the period differs from the standard applicable corporation tax rate in the UK (24%). 
The differences are explained below:

Profit on ordinary activities before taxation
Adjust gains from share in joint ventures

Tax at standard rate of corporation tax in the UK of 24% (2012: 26%)
Effects of:
REIT exempt income
Changes in fair value not subject to tax as a REIT
Chargeable gains adjustments
Share scheme adjustments
Contaminated land relief
Adjustments to tax in respect of previous periods
Losses brought forward

Total taxation charge/(credit)

2013
£m

76.4
(1.7)

74.7

17.9

(2.8)
(14.4)
–
(0.1)
(0.3)
0.2
(0.5)

–

2012
£m

48.5
(1.2)

47.3

12.3

(3.8)
(8.0)
0.8
0.2
(0.5)
–
(1.5)

(0.5)

The Group is a Real Estate Investment Trust (REIT). The Group’s UK property rental business (both income and capital 
gains) is exempt from tax. The Group’s other income is subject to corporation tax.

The Group currently has £4.2m (2012: £4.4m) of tax losses carried forward calculated at a corporation tax rate of 23% 
(2012: 24%) which is the rate substantively enacted at the Balance Sheet date. These have not been recognised as an 
asset as they are unlikely to be utilised in the foreseeable future. Further reductions, already announced, in the main rate 
of corporation tax to 21% by 1 April 2014 and 20% by 1 April 2015 are expected to be enacted in the future. If the 20% 
rate had been applied to tax losses at the Balance Sheet date it would have reduced losses by £0.5m.

7. DIVIDENDS

Ordinary dividends paid
For the year ended 31 March 2011:
Final dividend

For the year ended 31 March 2012:
Interim dividend
Final dividend

For the year ended 31 March 2013:
Interim dividend

Dividends for the year

Payment
date

Per
share

August 2011

5.33p

February 2012
August 2012

2.93p
5.86p

February 2013

3.22p

2013
£m

–

–
8.4

4.6

13.0

2012
£m

6.3

4.2
–

–

10.5

In addition the Directors are proposing a final dividend in respect of the financial year ended 31 March 2013 of 6.45p per 
ordinary share which will absorb an estimated £9.3m of revenue reserves and cash. If approved by the shareholders 
at the AGM, it will be paid on 2 August 2013 to shareholders who are on the register of members on 12 July 2013.  
The dividend will be paid as a normal distribution (non-PiD).

73

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

8. EARNINGS PER SHARE

Earnings used for calculating earnings per share:
Basic and diluted earnings
Change in fair value of investment property
Loss/(profit) on disposal of investment properties
Loss on disposal of property, plant and equipment
Movement in fair value of derivative financial instruments
Group’s share of EPRA adjustments of joint ventures

EPRA adjusted earnings

2013
£m

76.4
(59.0)
2.2
–
(1.1)
(0.6)

17.9

2012
£m

49.0
(35.6)
(0.9)
0.1
4.6
(0.7)

16.5

Earnings have been adjusted and calculated on a diluted basis to derive an earnings per share measure as defined by 
the European Public Real Estate Association (EPRA).

Number of shares used for calculating earnings per share:
Weighted average number of shares (excluding own shares held in trust)
Dilution due to share option schemes

Weighted average number of shares for diluted earnings per share

In pence:
Basic earnings per share
Diluted earnings per share
EPRA earnings per share

9. NET ASSETS PER SHARE

Net assets used for calculating net assets per share:
net assets at end of year (basic)
Derivative financial instruments at fair value

EPRA net assets

Number of shares used for calculating net assets per share:
Shares in issue at year-end
Less own shares held in trust at year-end

number of shares for calculating basic net assets per share
Dilution due to share option schemes

number of shares for calculating diluted adjusted net assets per share

EPRA net assets per share

2013
Number

2012
number

143,404,929
3,351,045

134,902,483
3,183,215

146,755,974

138,085,698

2013

53.3p
52.1p
12.2p

2013
£m

500.4
11.1

511.5

2013
Number

2012

36.3p
35.5p
11.9p

2012
£m

435.4
14.2

449.6

2012
number

144,936,155
(1,270,602)

143,665,553
3,448,522

147,114,075

144,091,418
(1,218,802)

142,872,616
3,304,176

146,176,792

2013

£3.48

2012

£3.08

net assets have been adjusted and calculated on a diluted basis to derive a net asset per share measure as defined by 
the European Public Real Estate Association (EPRA) to derive a net asset value (EPRA nAV) measure.

74

Workspace Group PLC Annual Report and Accounts 201310. INVESTMENT PROPERTIES

Balance at 1 April
Capital expenditure
Capitalised interest on refurbishments (note 4)
Disposals during the year
Change in fair value of investment properties

Balance at 31 March

2013
£m

759.3
28.7
0.6
(21.7)
59.0

825.9

2012
£m

713.4
17.5
0.4
(7.6)
35.6

759.3

Capitalised interest is included at a rate of capitalisation of 5.0% (2012: 5.2%). The total amount of capitalised interest 
included in investment properties is £4.2m (2012: £3.6m).

Investment property includes buildings under finance leases of which the carrying amount is £3.5m (2012: £3.5m). 
Investment property finance lease commitment details are shown in note 16(f).

VALUATION
The Group’s investment properties were revalued at 31 March 2013 by the external valuer, CBRE Limited, a firm of 
independent qualified valuers. The valuation is on the basis of market value, by reference to recent market evidence  
of transactions for similar properties and is undertaken in accordance with the Royal Institution of Chartered Surveyors 
Valuation – Professional Standards 2012.

The reconciliation of the valuation report total to the amount shown in the Consolidated Balance Sheet as non-current 
assets, investment properties, is as follows:

Total per CBRE valuation report
Deferred consideration on sale of property (note 13)
Head leases treated as finance leases under IAS 17

Total investment properties per balance sheet

11. PROPERTY, PLANT AND EQUIPMENT

Cost or valuation
Balance at 1 April 2011
Additions during the year
Disposals during the year

Balance at 31 March 2012
Additions during the year

Balance at 31 March 2013

Accumulated depreciation
Balance at 1 April 2011
Charge for the year

Balance at 31 March 2012
Charge for the year

Balance at 31 March 2013

Net book amount at 31 March 2013
net book amount at 31 March 2012

2013
£m

829.9
(7.5)
3.5

825.9

2012
£m

760.4
(4.6)
3.5

759.3

Owner
occupied
land
£m

Owner
occupied
buildings
£m

Equipment
and fixtures
£m

2.9
–
(2.9)

1.0
–
(1.0)

–
–

–

–
–

–
–

–

–
–

–
–

–

–
–

–
–

–

–
–

4.5
0.9
(0.1)

5.3
1.0

6.3

3.8
0.4

4.2
0.4

4.6

1.7
1.1

Total
£m

8.4
0.9
(4.0)

5.3
1.0

6.3

3.8
0.4

4.2
0.4

4.6

1.7
1.1

75

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

12. JOINT VENTURES
The Group’s investment in joint ventures represents:

Balance at 1 April
Cash investment
Unrealised surplus on sale of properties to joint venture
Share of gains
Distributions received

Balance at 31 March

The Group has the following joint ventures: 

31 March
2013
£m

31 March
2012
£m

12.3
7.7
(0.1)
1.7
(0.9)

20.7

6.7
4.8
–
1.2
(0.4)

12.3

BlackRock Workspace Property Trust
Enterprise House Investments LLP

BlackRock UK Property Fund
Polar Properties Ltd

Partner

Established

February 2011
April 2012

Ownership

20.1%
50%

BlackRock Workspace Property Trust is a Jersey property unit trust whose aim is to build a £100m fund of office  
and industrial property in and around London. The Group holds a 20.1% interest but is property manager with 
significant delegated powers including responsibility for asset management and recommending acquisitions and 
disposals. As a result there is shared control and so the joint venture has been equity accounted in the consolidated 
financial statements.

Enterprise House Investments LLP has been established to obtain mixed use planning consent and redevelop 
Enterprise House, Hayes, UB3 for new residential and commercial space. The Group sold this property to the joint 
venture in April 2012. 

The Group’s share of the joint ventures’ assets and liabilities is shown below:

Investment properties
Current assets
Current liabilities

net assets

Unrealised surplus on sale of properties to joint venture

Investment in joint venture

The Group’s share of the joint ventures’ revenues and expenses is shown below:

Revenue
Direct costs

net rental income
Administrative expenses
Change in fair value of investment properties

Profit before tax
Taxation

Profit after tax

76

31 March
2013
£m

31 March 
2012
£m

20.8
1.2
(0.8)

21.2

(0.5)

20.7

12.4
0.7
(0.4)

12.7

(0.4)

12.3

year ended
31 March
2013
£m

year ended
31 March
2012
£m

1.7
(0.5)

1.2
(0.1)
0.6

1.7
–

1.7

0.9
(0.3)

0.6
(0.1)
0.7

1.2
–

1.2

Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
 
13. TRADE AND OTHER RECEIVABLES

Non-current trade and other receivables
Deferred consideration on sale of investment property

2013
£m

6.1

2012
£m

4.6

The non-current receivable relates to deferred consideration arising on the sale of investment properties. The value of 
this receivable has been fair valued by CBRE Limited on the basis of market value as at 31 March 2013, using appropriate 
discount rates, and will be revalued on a regular basis. The change in value is charged/credited to operating profit in the 
income statement.

Current trade and other receivables
Trade receivables
Less provision for impairment of receivables

Trade receivables – net
Prepayments and accrued income
Bank facility rental income accounts
Deferred consideration on sale of investment property

2013
£m

2.5
(0.4)

2.1
2.1
7.4
1.4

13.0

2012
£m

2.5
(0.6)

1.9
2.0
6.7
–

10.6

There is no material difference between the above amounts and their fair values due to the short-term nature of the 
receivables. Trade receivables are impaired when there is evidence that the amounts may not be collectable under the 
original terms of the receivable. All the Group’s trade and other receivables are denominated in sterling.

Movements on the provision for impairment of trade receivables are shown below:

Balance at 1 April
Provision for receivables impairment
Receivables written off during the year

Balance at 31 March

As at 31 March 2013, the ageing of trade receivables past due but not impaired was as follows:

2013
£m

0.6
0.3
(0.5)

0.4

2012
£m

0.5
0.4
(0.3)

0.6

Up to 3 months past due
3 to 6 months past due
Over 6 months past due

Total
2013
£m

2.1
0.1
0.3

2.5

Impaired
2013
£m

(0.1)
(0.1)
(0.2)

(0.4)

Not
impaired
2013
£m

2.0
–
0.1

2.1

Total
2012
£m

1.8
0.3
0.4

2.5

Impaired
2012
£m

(0.2)
(0.1)
(0.3)

(0.6)

not
impaired
2012
£m

1.6
0.2
0.1

1.9

The trade receivables balance is deemed to be all past due as rental payments are due on demand. Trade receivables 
that are not impaired are expected to be fully recovered as there is no recent history of default or indications that 
debtors will not meet their obligations. Impaired receivables are provided against based on expected recoverability.

77

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

14. CASH AND CASH EQUIVALENTS

Cash at bank and in hand
Restricted cash – tenants’ deposit deeds

2013
£m

10.1
1.7

11.8

2012
£m

24.5
2.0

26.5

Tenants’ deposit deeds represent returnable cash security deposits received from tenants and are ring-fenced under 
the terms of the individual lease contracts.

Bank overdrafts are included within cash and cash equivalents for the purpose of the cash flow statement.

15. TRADE AND OTHER PAYABLES

Trade payables
Other tax and social security payable
Tenants’ deposit deeds (see note 14)
Tenants’ deposits
Accrued expenses and deferred income
Amounts due to related parties
Deferred income – rent and service charges

2013
£m

2.1
1.5
1.7
8.7
14.0
0.5
2.8

31.3

2012
£m

1.9
1.5
2.0
8.0
10.4
0.5
3.2

27.5

There is no material difference between the above amounts and their fair values due to the short-term nature of the 
payables.

16. BORROWINGS
(A) BALANCES

Current
Bank loans and overdrafts due within one year or on demand (secured)

Non-current
Bank loans (secured)
6% Retail Bond (unsecured)
Finance lease obligations (part secured)

2013
£m

–

–

277.8
56.4
3.5

337.7

337.7

2012
£m

–

–

333.8
–
3.5

337.3

337.3

The secured loans and overdraft facility are secured on investment properties with balance sheet values totalling 
£652.4m (2012: £741.1m).

78

Workspace Group PLC Annual Report and Accounts 2013(B) MATURITY

Repayable between two years and three years
Repayable between three years and four years
Repayable in five years or more

Less cost of raising finance

Finance leases 
Repayable in five years or more

(C) INTEREST RATE AND REPAYMENT PROFILE

2013
£m

280.0
–
57.5

337.5
(3.3)

334.2

3.5

337.7

2012
£m

68.0
270.0
–

338.0
(4.2)

333.8

3.5

337.3

Current
Bank overdraft due within one year  
or on demand

Non-current
Loan – Bayern LB
Loan – Royal Bank of Scotland (RBS)
6% Retail Bond

(D) DERIVATIVE FINANCIAL INSTRUMENTS
The following interest rate derivatives are held:

Interest rate swap*
Interest rate swap
Interest rate swap
Interest rate cap

Principal
£m

Interest
rate

Interest
payable

Repayable

–

Base +2.25%

Variable

On demand

200.0
80.0
57.5

LIBOR +2.25%
LIBOR +2.5%
6%

quarterly
quarterly
Half yearly

June 2015
June 2015
October 2019

Amount 
hedged
 £m

140.0
40.0
30.0
7.0

Rate payable 
(or cap 
strike rate) 

%

3.23%
2.46%
2.03%
5.00%

Rate
 Receivable
 %

3 month LIBOR
3 month LIBOR
3 month LIBOR
–

Term/expiry

June 2015
June 2015
June 2015
June 2015

*  These swaps comprise three derivatives with different providers but with identical rates, payment dates and end dates.

The above instruments are treated as financial instruments at fair value with changes in value dealt with in the income 
statement during each reporting period.

(E) FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial liabilities not at fair value through profit or loss
Bank loans
6% Retail Bond
Finance lease obligations

Financial liabilities at fair value through profit or loss
Derivative financial instruments:
Liabilities

2013
 Book Value 
£m

2013 
Fair Value 
£m

2012 
Book Value 
£m

2012 
Fair Value 
£m

277.8
56.4
3.5

337.7

277.8
59.0
3.5

340.3

333.8
–
3.5

337.3

333.8
–
3.5

337.3

11.1

11.1

14.2

14.2

The total change in fair value of derivative financial instruments recorded in the income statement was a profit of £1.1m 
(2012: loss of £4.6m). This is net of £2.1m (2012: £1.3m) paid in the year to settle/re-coupon some instruments.

79

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

16. BORROWINGS continued
The fair value of the Retail Bond has been established from the quoted market price at 28 March 2013 and is thus a 
Level 1 valuation as defined by IFRS7.

The fair values of all the Group’s financial derivatives have been determined by reference to market prices and 
discounted expected cash flows at prevailing interest rates and are Level 2 valuations as defined by IFRS 7. The total  
fair value calculated equates to 7.5p per share (31 March 2012: 9.7p).

The different levels of valuation hierarchy as defined by IFRS 7 are set out below:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the 
measurement date.
Level 2 – Use of a model with inputs (other than quoted prices included in Level 1) that are directly or indirectly 
observable market data.
Level 3 – Use of a model with inputs that are not based on observable market data.

(F) FINANCE LEASES
Finance lease liabilities are in respect of leased investment property.

Minimum lease payments under finance leases fall due as follows:
Within one year
Between two and five years
Beyond five years

Future finance charges on finance leases

Present value of finance lease liabilities

17. FINANCIAL RISk MANAGEMENT OBJECTIVES AND POLICY
The Group has identified exposure to the following financial risks:
Market risk
Credit risk
Liquidity risk
Capital risk

2013 
£m

0.2
0.9
21.5

22.6
(19.1)

3.5

2012 
£m

0.2
0.9
21.5

22.6
(19.1)

3.5

The policies for managing each of these risks and the principal effects of these policies on the results for the year are 
summarised below:

(A) MARkET RISk
Market risk is the risk that changes in market conditions will affect the Group’s interest rates. Borrowings at variable 
rates expose the Group to cash flow interest rate risk. Borrowings at fixed rates expose the Group to fair value interest 
rate risk.

The Group finances its operations through a mixture of retained profits and borrowings. The Group borrows at both 
fixed and floating rates of interest and then uses interest rate swaps and caps to generate the desired interest and risk 
profile. At 31 March 2013 79% (2012: 77%) of Group borrowings were fixed through the use of interest rate swaps.

All transactions entered into are approved by the Board and are in accordance with the Group’s treasury policy.  
The Board also monitors variances on interest rates to budget and forecast rates to ensure that the risk relating to 
interest rates is being sufficiently safeguarded against. Based upon year end variable rate loan balances, a reasonably 
possible interest rate movement of +/-0.5% would have increased or decreased net interest payable and equity by 
£0.4m (2012: £0.4m).

80

Workspace Group PLC Annual Report and Accounts 2013(B) CREDIT RISk
The Group’s main financial assets are cash and cash equivalents, deposits with banks and financial institutions and trade 
and other receivables.

Credit risk is the risk of financial loss if a tenant or a counterparty to a financial instrument fails to meet its contractual 
obligations. The Group’s exposure to this risk principally relates to the receivables from tenants, deferred consideration 
on the sale of investment property and cash and cash equivalent balances held with counterparties.

The Group’s exposure to credit risk in relation to receivables from tenants is influenced mainly by the characteristics of 
individual tenants occupying its rental properties. The Group has approximately 4,000 tenants over approximately 100 
properties. The largest 10 single tenants generate around 6% of net rent roll. As such, the credit risk attributable to 
individual tenants is low.

The Group’s credit risk in relation to tenants is further managed by requiring that tenants provide a deposit equivalent 
to three months rent on inception of lease as security against default. Total tenant deposits held are £10.4m  
(2012: £10.0m). The Group monitors aged debt balances and any potential bad debts every week, the information  
being reported to the Executive Committee every month as part of the performance monitoring process. The Group’s 
debtor recovery is consistently high and as such is deemed a low risk area.

Deferred consideration on the sale of investment property is contractual and valued regularly by the external valuer 
based on current and future market factors.

Cash and cash equivalents and financial derivatives are held with major UK high street banks or building societies and 
strict counterparty limits are operated on deposits.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk 
at the reporting date was:

Cash and cash equivalents (note 14)
Trade receivables – current (note 13)
Deferred consideration – current (note 13)
Deferred consideration – non current (note 13)

2013
 £m

11.8
2.4
1.4
6.1

21.7

2012 
£m

26.5
2.5
–
4.6

33.6

(C) LIQUIDITY RISk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group’s approach to managing liquidity is to ensure it will always have sufficient funds to meet obligations as they 
fall due. This is performed via a variety of methods including daily cash flow review and forecasting, monthly monitoring 
of the maturity profile of debt and the regular revision of borrowing facilities in relation to the Group’s requirements  
and strategy.

To ensure it can effectively manage its liquidity risk, the Group has an overdraft facility of £4m, a revolving loan facility 
of £55m and term loans. At 31 March 2013 headroom excluding overdraft was £45m (31 March 2012: £55m).

Cash flow is monitored formally on a monthly basis as part of internal performance monitoring with regular daily 
monitoring and forecasting undertaken to manage day-to-day cash flows and any balances which are ring-fenced by 
lenders. The Board reviews compliance with loan covenants which include agreed interest cover and loan to value 
ratios, alongside review of available headroom on loan facilities.

81

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

17. FINANCIAL RISk MANAGEMENT OBJECTIVES AND POLICY continued
The following is an analysis of the contractual undiscounted cash flows payable under financial liabilities, derivative 
financial instruments and trade and other payables existing at the balance sheet date. Contracted cash flows are  
based upon the loan balances and applicable interest rates payable on these at each year end.

31 March 2013

Financial Liabilities
Secured bank loans (note 16b)
6% Retail Bond
Interest payable on secured bank loans
Interest payable on 6% Retail Bond
Derivative financial instruments
Finance lease liabilities
Trade and other payables

31 March 2012

Financial Liabilities
Secured bank loans (note 16b)
Interest payable on secured bank loans
Derivative financial instruments
Finance lease liabilities
Trade and other payables
Bank priority fee

Carrying
 Amount 
£m

280.0
57.5
–
–
11.1
3.5
27.0

379.1

Carrying 
Amount 
£m

338.0
–
14.2
3.5
22.8
0.9

379.4

Due 
within 
1 year 
£m

Due 
between 
 1 and 2 years
 £m

Due 
between 
2 and 3 years
 £m

Due
 3 years and
 beyond
 £m

Total 
contracted 
cash flows 
£m

–
–
7.9
3.5
5.0
0.2
27.0

43.6

–
–
7.9
3.5
5.0
0.4
–

16.8

280.0
–
1.6
3.5
1.1
0.5
–

286.7

–
57.5
–
12.0
–
21.5
–

91.0

280.0
57.5
17.4
22.5
11.1
22.6
27.0

438.1

Due 
within
 1 year
 £m

Due 
between 
 1 and 2 years 
£m

Due 
between
 2 and 3 years
 £m

Due 
3 years and
 beyond 
£m

Total 
contracted 
cash flows 
£m

–
10.7
7.2
0.2
22.8
–

40.9

–
10.7
7.1
0.4
–
–

18.2

68.0
10.7
5.5
0.5
–
0.9

85.6

270.0
2.8
3.5
21.5
–
–

297.8

338.0
34.9
23.3
22.6
22.8
0.9

442.5

(D) CAPITAL RISk MANAGEMENT
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern,  
and monitor an appropriate mix of debt and equity financing.

Equity comprises issued share capital, reserves and retained earnings as disclosed in the consolidated statement of 
changes in equity. Debt comprises drawings against revolving and term loan facilities from banks, the Retail Bond less 
cash at bank and in hand.

At 31 March 2013 Group equity was £500.4m (2012: £435.4m), and Group net borrowings (debt less cash at bank and  
in hand) were £327.6m (2012: £312.8m). Group gearing at 31 March 2013 was 65% (2012: 72%).

Actions taken in the last few years in relation to borrowings and capital raising have enabled the Group to have  
sufficient headroom on financing and to ensure it is comfortably within all applicable loan to value covenants applied  
on borrowings which range between 65% to 75%.

82

Workspace Group PLC Annual Report and Accounts 201318. NOTES TO CASH FLOW STATEMENT
Reconciliation of profit for the period to cash generated from operations:

Profit before tax
Depreciation
Amortisation of intangibles
Loss/(profit) on disposal of investment properties
Loss on disposal of property, plant and equipment
net gain from change in fair value of investment property
Equity settled share based payments
Change in fair value of financial instruments
Finance income
Finance expense
Gains from share in joint ventures
Changes in working capital:
(Increase) in trade and other receivables
Increase in trade and other payables

Cash generated from operations

For the purposes of the cash flow statement, cash and cash equivalents comprise the following:

Cash at bank and in hand
Restricted cash – tenants’ deposit deeds

19. ANALYSIS OF MOVEMENT IN CASH AND CASH EQUIVALENTS AND BORROWINGS

2013 
£m

76.4
0.4
0.1
2.2
–
(59.0)
1.4
(1.1)
(0.2)
19.5
(1.7)

(0.5)
1.1

38.6

2013 
£m

10.1
1.7

11.8

2012 
£m

48.5
0.4
0.1
(0.9)
0.1
(35.6)
0.8
4.6
(0.2)
19.3
(1.2)

(0.7)
0.6

35.8

2012 
£m

24.5
2.0

26.5

Cash at bank and in hand
Restricted cash – tenants’ deposit deeds

Bank loans
6% Retail Bond
Less cost of raising finance
Finance lease obligations

Total

At 1 April 
2012 
£m

24.5
2.0

26.5

(338.0)
–
4.2
(3.5)

(337.3)

(310.8)

Cash flow 
£m 

non-cash
 items
 £m

At 31 March
 2013 
£m

(14.4)
(0.3)

(14.7)

58.0
(57.5)
1.1
–

1.6

(13.1)

–
–

 –

–
–
(2.0)
–

(2.0)

(2.0)

10.1
1.7

11.8

(280.0)
(57.5)
3.3
(3.5)

(337.7)

(325.9)

83

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

20. OTHER NON-CURRENT LIABILITIES

Bank priority fee

2013 
£m

–

2012 
£m

0.9

This fee was paid to Bank of Scotland in March 2013 on the repayment of the associated loan.

21. SHARE CAPITAL

Issued: Fully paid ordinary shares of £1 each

Issued: Fully paid ordinary shares of £1 each

Movements in share capital were as follows:
number of shares at 1 April
Issue of shares
Share consolidation

number of shares at 31 March

Balance at 1 April
Issue of shares

Balance at 31 March

22. OTHER RESERVES

Balance at 1 April 2011
Share based payments
Recycled to income statement

Balance at 31 March 2012

Share based payments

Balance at 31 March 2013

2013 
Number

144,936,155

2012 
number

144,091,418

2013 
£m

144.9

2012
 £m

144.1

2012 
number

1,152,731,338
288,182,842
(1,296,822,762)

144,091,418

2013 
Number

144,091,418
844,737
–

144,936,155

£m

144.1
0.8

144.9

Owner 
occupied 
property 
£m

Equity settled 
share based 
payments
 £m

Merger 
reserve
 £m

1.9
–
(1.9)

–

–

–

4.4
0.8
–

5.2

1.4

6.6

8.7
–
–

8.7

–

8.7

£m

115.3
28.8

144.1

Total 
£m

15.0
0.8
(1.9)

13.9

1.4

15.3

The merger reserve was created in 2009 following the raising of equity through a cashbox share placing structure.

23. INVESTMENT IN OWN SHARES
The Company has an Employee Share Ownership Trust (ESOT) to purchase shares in the market for distribution at a 
later date in accordance with the terms of the Executive Share Option Scheme and Long Term Equity Incentive Plan. 
The shares are held by an independent trustee and the rights to dividends on the shares have been waived except 
where the shares are beneficially owned by participants. no shares were purchased for the Trust during the year.  
At 31 March 2013 the number of shares held by the Trust totalled 1,218,802 (2012: 1,218,802). At 31 March 2013 the 
market value of these shares was £4.2m (2012: £2.9m) compared to a nominal value of £1.2m (2012: £1.2m).

The Company has also established in the year an employee Share Incentive Plan (SIP) which is governed by  
HMRC rules. 51,800 shares were purchased for the Plan at a cost of £0.2m. These are being held in a separate trust.

Balance at 1 April
Acquisition of ordinary shares

Balance at 31 March

84

2013
 £m

8.7
0.2

8.9

2012
£m

8.0
0.7

8.7

Workspace Group PLC Annual Report and Accounts 201324. SHARE-BASED PAYMENTS
The Group operates a number of share schemes:

I) LONG TERM EQUITY INCENTIVE PLAN (LTIP)
The LTIP scheme is a performance award scheme whereby shares are issued against three Group performance 
measures which are assessed over the three year vesting period. These are:
–   Absolute TSR
–   Relative TSR
–   Relative nAV

The shares are issued at nil consideration provided the performance conditions are met.

Under the 2012 LTIP scheme 886,774 performance and matching shares were awarded in June 2012 and 276,642 in 
november 2012 to Directors and senior management (2011 LTIP scheme: 953,009). 

Details of the movements for the LTIP scheme during the year were as follows:

At 1 April 2011
Granted
Lapsed

At 31 March 2012

Granted 
Exercised
Lapsed

At 31 March 2013

LTIP

number

6,127,951
953,009
(3,216,493)

3,864,467

1,163,416
(515,866)
(875,177)

3,636,840

The weighted average share price at the date of exercise of shares exercised during the year was £2.48 (2012: no 
exercises).

A binomial model was used to determine the fair value of the LTIP grant for the Absolute TSR and Relative TSR 
elements of the LTIP scheme.

Assumptions used in the model were as follows:

Share price at grant
Exercise price (pence)
Average expected life (years)
Risk free rate
Expected dividend yield
Average share price volatility
Fair value per option – Absolute TSR element
Fair value per option – Relative TSR element

2013
(Nov 2012)

2013
(June 2012)

306p
Nil
3
0.5%
4%
41%
249p
172p

227p
Nil
3
0.5%
4%
41%
125p
128p

2012

270p
nil
3
2%
4%
55%
177p
183p

The relative nAV is a non-market based condition and the intrinsic value is therefore the share price at date of grant  
of 229p (18 June 2012) and 305p (19 november 2012). At each balance sheet date, the Directors assess the likelihood  
of meeting the conditions under this element of the scheme. The impact of the revision to original estimates, if any,  
is recognised in the income statement with a corresponding adjustment to equity. The assessment at year end was  
that up to 50% of the relative nAV element will vest.

85

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

24. SHARE-BASED PAYMENTS continued
The expected Workspace share price volatility was determined by taking account of the daily share price movement 
over a three year period. The respective FTSE 250 Real Estate share price volatility and correlations were also 
determined over the same period. The average expected term to exercise used in the models has been adjusted, based 
on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural conditions 
and historical experience.

The risk free rate has been determined from market yield curves for government gilts with outstanding terms equal  
to the average expected term to exercise for each relevant grant. The expected dividend yield was determined by 
calculating the present value of expected future dividend payments to expiry.

II) EMPLOYEE SHARE OPTION SCHEMES
The Group operates a Save As you Earn (SAyE) share option scheme and an Executive Share Option Scheme (ESOS) 
for which there have been no grants since 2008. Grants under ESOS were normally exercisable between three and ten 
years from the date of grant and normally granted at the market price ruling at the date of grant.

Grants under the SAyE scheme are normally exercisable after three or five years saving. In accordance with UK 
practice, the majority of options under the SAyE schemes are granted at a price 20% below the market price ruling  
at the date of grant.

Details of the movements for the ESOS and SAyE schemes during the year were as follows:

Options outstanding

At 1 April 2011
Options granted
Options lapsed

At 31 March 2012

Options granted
Options exercised
Options lapsed

At 31 March 2013

ESOS

SAyE

number

306,172
–
(115,001)

191,171

–
–
(139,656)

51,515

Weighted
 exercise
 price

£10.46
–
£9.49

£11.05

–
–
£10.34

£12.97

number

444,211
39,475
(85)

483,601

193,992
(328,871)
(15,394)

333,328

Weighted 
exercise
 price

£1.20
£1.91
£8.89

£1.26

£1.93
£1.15
£1.55

£1.74

The exercise of all options, other than those obtained under the Group’s Save As you Earn scheme, was dependent 
upon the Group achieving specified performance targets.

The weighted average share price at the date of exercise for the SAyE options exercised during the year was  
£2.63 (2012: no exercises).

193,992 SAyE share options were granted in the year.

The fair value has been calculated using the Black-Scholes model. Inputs to the model are summarised as follows:

Weighted average share price at grant
Exercise price
Expected volatility
Average expected life (years)
Risk free rate
Expected dividend yield
Possibility of ceasing employment before vesting

2013 
SAyE 
3 year 

230p
193p
41%
3
0.5%
4%
25%

2013 
SAyE
 5 year

230p
193p
41%
5
0.5%
4%
25%

2012
SAyE
3 year

229p
191p
58%
3
2%
4%
25%

2012 
SAyE
 5 year

–
–
–
–
–
–
–

The expected life is the average expected period to exercise. The risk free rate of return is the yield on zero-coupon UK 
government bonds of a term consistent with the assumed option life. The expected dividend yield is based on the 
present value of expected future dividend payments to expiry.

86

Workspace Group PLC Annual Report and Accounts 2013Fair values per share of these options were:

SAyE – 3 year
SAyE – 5 year

2013

2013

2012

2012

Grant date

30 July 2012
30 July 2012

Fair value 
of award

68p
74p

Grant date

14 December 2011
–

Fair value 
of award

85p
–

III) SHARE INCENTIVE PLAN (SIP)
On 22 March 2013 all staff were granted £1,000 worth of shares. These shares are held in trust under an HMRC approved 
SIP. The shares can be exercised following three years of employment but must be held for a further 2 years in order to 
qualify for tax advantages. 51,800 shares were granted in the year.

The fair value of the SIP shares granted during the year has been calculated using the Black-Scholes model. Inputs to 
the model for the grants during the year are summarised as follows:

Weighted average share price at grant 
Exercise price
Expected volatility
Average expected life (years)
Risk free rate
Expected dividend yield
Possibility of ceasing employment before vesting 
Fair value of award (per share)

2013

344p
Nil
41%
3
0.5%
4%
25%
79p

2012

–
–
–
–
–
–
–
–

IV) YEAR END SUMMARY
At 31 March 2013 in total there were 4,073,483 (2012: 4,539,239) share awards/options exercisable on the Company’s 
ordinary share capital. These are analysed below:

Date of grant 
LTIP

12 June 2009
06 July 2010
04 August 2011
18 June 2012
19 november 2012

ESOS

30 June 2003
30 June 2004
17 June 2005
1 September 2005

SAyE

22 July 2008
21 July 2009
20 July 2010
20 July 2010
14 December 2011
30 July 2012
30 July 2012

SIP

22 March 2013

Total

Exercise 
Price

–
–
–
–
–

£8.25
£13.16
£17.81
£19.37

£8.89
£1.15
£1.66
£1.66
£1.91
£1.93
£1.93

Ordinary
 shares 
number

657,783
1,035,461
780,180
886,774
276,642

18,950
14,624
9,681
8,260

366
72,272
30,883
2,983
37,026
163,374
26,424

–

51,800

Vested and 
exercisable

657,783
–
–
–
–

Exercisable between

12.06.2012
06.06.2013
04.08.2014
18.06.2015
19.11.2015

12.06.2017*
–
–
–
–

Exercisable between

18,950 30.06.2006
30.06.2007
14,624
17.06.2008
9,681
01.09.2008
8,260

30.06.2013
30.06.2014
17.06.2015
01.09.2015

Exercisable between

–
–
–
–
–
–
–

–

01.09.2013
01.09.2014
01.09.2013
01.09.2015
01.02.2015
01.09.2015
01.09.2017

01.03.2014
01.03.2015
01.03.2014
01.03.2016
01.08.2015
01.03.2016
01.03.2018

Exercisable between

22.03.2016

22.03.2018

4,073,483

709,298

*  These shares were converted to nil cost options on 12 June 2012 and can be exercised at any time up to 12 June 2017.

87

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

24. SHARE-BASED PAYMENTS continued
The weighted average exercise price for vested and exercisable shares at 31 March 2013 is: LTIP – £nil (2012: £nil),  
ESOS – £13.22 (2012: £11.05).

The share awards/options outstanding at 31 March 2013 had a weighted average remaining contractual life of:  
LTIP – 1.1 years (2012: 1 year), ESOS – nil years (2012: nil years), SAyE – 2.2 years (2012: 1.1 years), SIP – 3 years.

V) CASH SETTLED SHARE BASED PAYMENTS
national Insurance payments due on the exercise of non-approved ESOS options and shares from the LTIP are 
considered cash settled share based payments.

The estimated fair value of the national Insurance cash settled share based payments have been calculated using the 
Black-Scholes model. At each balance sheet date the Group revises its estimates of the number of options that are 
expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement.

VI) SHARE BASED PAYMENT CHARGES
The Group recognised a total charge in relation to share based payments as follows:

Equity settled share based payments
Cash settled share based payments 

2013
 £m

1.4
0.4

1.8

2012
 £m

0.8
0.2

1.0

The total liability at the end of the period in respect of cash-settled share based schemes was £0.9m (2012: £0.6m).

25. RELATED PARTY TRANSACTIONS

Transactions year ended 31 March:
net investment into joint ventures (note 12)
Sale of property to joint ventures
Fee income and recharges to joint ventures
Distributions received from joint ventures (note 12)

Balances with joint ventures at 31 March:
Amounts payable to joint ventures (note 15)

2013
£m

7.7
3.2
0.9
0.9

2012 
£m

4.8
–
0.5
0.4

(0.5)

(0.5)

Key management for the purposes of related party disclosure under IAS 24 are taken to be the Executive Board 
Directors, the non-Board Executive Directors and the non-Executive Directors. Key management compensation is set 
out below: 

Key management compensation:
Salaries and short-term employee benefits
Pensions and other post-employment benefits
Share-based payments

2013 
£m

2.9
0.2
0.7

3.8

26. CAPITAL COMMITMENTS
At the year end the estimated amounts of contractual commitments for future capital expenditure not provided  
for were: 

Funding of joint venture
Purchases, construction or redevelopment of investment property

2013 
£m

1.7
18.2

2012 
£m

2.5
0.1
0.4

3.0

2012 
£m

7.9
5.9

88

Workspace Group PLC Annual Report and Accounts 201327. CONTINGENT LIABILITY
In December 2009 Workspace acquired full control of its former Workspace Glebe joint venture. The purchase was 
satisfied by a cash payment of £15m and a debt facility of £68m provided by the former lenders to the joint venture, 
with further amounts potentially payable under a proceed share arrangement. 

The proceed share provides for the former lenders to Workspace Glebe to share in net cash proceeds from disposals 
from the Glebe property portfolio once Workspace has received its priority return. The priority return at 31 March 2013 
is £92m. For proceeds up to £170m the lenders share is 50%, from £170m up to £200m it is 30% and nil thereafter.  
The maximum payable under this proceed share is £48m. All disposals are at the option of Workspace and there are  
no time limits. Cumulative cash proceeds from disposals to date are £nil. 

The total valuation of the Glebe portfolio at 31 March 2013 was £164m (March 2012: £136m). While a number of the 
assets have residential redevelopment potential a substantial part of the portfolio is comprised of investment properties 
that Workspace has no current plans to sell. These are currently valued at £81m. Properties with redevelopment 
potential are currently valued at £83m. If the redevelopment properties were sold for cash at the March 2013 valuation, 
there would be no liability under the proceed share. In the unlikely scenario that all the properties in the Glebe portfolio 
were sold there would be a potential liability net of costs of £32m (31 March 2012: £22m).

28. PRINCIPAL SUBSIDIARY UNDERTAkINGS
Except where indicated otherwise, the Company (incorporated in the UK) wholly owns the following active subsidiary 
undertakings incorporated in the UK, all of which are consolidated in the Group’s financial statements:

name

Workspace 11 Limited
Workspace 12 Limited*
Workspace 13 Limited
Workspace 14 Limited*
Workspace 15 Limited
Workspace 16 (Jersey) Limited†
Workspace Glebe Limited
Glebe Three Limited*
Workspace Holdings Limited
LI Property Services Limited
Workspace Management Limited
Anyspacedirect.co.uk Limited

nature of business

Property Investment
Property Investment
Property Investment
Property Investment
Property Investment
Investor in joint venture
Holding Company
Property Investment
Holding Company
Insurance Agents
Property Management
Website Service

*  The share capital of these subsidiaries is held by other Group companies.
†  Company registered in Jersey.

A full list of subsidiary undertakings at 31 March 2013 will be appended to the Company’s next annual return.

29. PENSION COMMITMENTS
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those 
of the Group in an independently administered fund. The pension cost charge for this scheme in the year was £0.5m 
(2012: £0.4m) representing contributions payable by the Group to the fund and is charged through operating profit.

The Group’s commitment with regard to pension contributions range from 6% to 16.5% of an employee’s salary and 
employee contributions range from 3% to 15%. The pension scheme is open to every employee after three months’ 
qualifying service. The number of employees in the scheme at the year end was 91 (2012: 98).

89

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE FINANCIAL STATEMENTS
CONTINUED

30. OPERATING LEASES
The following future minimum lease payments are due under non-cancellable operating leases:

Motor vehicles and office equipment:
Due within one year
Due between two and five years

2013
 £m

0.1
0.1

0.2

2012
 £m

0.1
0.1

0.2

The Group has determined that all tenant leases are operating leases within the meaning of IAS 17. The majority of the 
Group’s tenant leases are granted with a rolling three month tenant break clause. The future minimum non-cancellable 
rental receipts under operating leases granted to tenants are as follows:

Within one year
Between two and five years
Beyond five years

2013
 £m

21.2
1.5
0.6

23.3

2012
 £m

18.0
1.1
0.9

20.0

31. POST BALANCE SHEET EVENTS
In April 2013 the Group completed the sale of Phase 1 of the redevelopment of Bow Enterprise Park to Peabody 
Enterprises for consideration comprising £11.5m in cash, 15,000 sq. ft. of new industrial space and overage on the 
residential component. 

In May 2013 the Group secured two major mixed use planning permissions at Faircharm, Creekside and Tower Bridge 
Business Complex. The former is for a mixed use redevelopment of 148 apartments and 52,000 sq. ft. of new business 
space and the latter is for 800 residential units and 60,000 sq. ft. of new business space. 

On 10 June 2013 the Group agreed the refinancing of £325m of bank debt currently provided by the RBS and Bayern 
Clubs. On 1 July 2013 the existing secured bank debt will be replaced by £352.5m of unsecured debt provided by the 
issue of £157.5m private placement notes, £45m provided by a UK Fund and £150m of new bank debt.

90

Workspace Group PLC Annual Report and Accounts 2013INDEPENDENT AUDITORS’ REPORT 
TO THE MEMBERS OF WORKSPACE GROUP PLC
(PARENT COMPANy)

OPINION ON OTHER MATTERS PRESCRIBED BY THE 
COMPANIES ACT 2006
In our opinion:
–   the part of the Directors’ Remuneration Report to be 
audited has been properly prepared in accordance  
with the Companies Act 2006; and

–   the information given in the Report of the Directors  
for the financial year for which the Parent Company 
financial statements are prepared is consistent with  
the Parent Company financial statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT 
BY EXCEPTION
We have nothing to report in respect of the following 
matters where the Companies Act 2006 requires us to 
report to you if, in our opinion:
–   adequate accounting records have not been kept by 

the Parent Company, or returns adequate for our audit 
have not been received from branches not visited by  
us; or

–   the Parent Company financial statements and the part 
of the Directors’ Remuneration Report to be audited 
are not in agreement with the accounting records and 
returns; or

–   certain disclosures of Directors’ remuneration specified 

by law are not made; or

–   we have not received all the information and 

explanations we require for our audit.

OTHER MATTER
We have reported separately on the Group financial 
statements of Workspace Group PLC for the year ended 
31 March 2013.

BOWkER ANDREWS
(SEnIOR STATUTORy AUDITOR)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
11 June 2013

We have audited the Parent Company financial statements 
of Workspace Group PLC for the year ended 31 March 
2013 which comprise the Parent Company Balance Sheet 
and the related notes. The financial reporting framework 
that has been applied in their preparation is applicable law 
and United Kingdom Accounting Standards (United 
Kingdom Generally Accepted Accounting Practice).

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND 
AUDITORS
As explained more fully in the Statement of Directors’ 
Responsibilities set out on page 61, the Directors are 
responsible for the preparation of the Parent Company 
financial statements and for being satisfied that they give 
a true and fair view. Our responsibility is to audit and 
express an opinion on the Parent Company financial 
statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland). 
Those standards require us to comply with the Auditing 
Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared  
for and only for the Company’s members as a body in 
accordance with Chapter 3 of Part 16 of the Companies 
Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any 
other purpose or to any other person to whom this report 
is shown or into whose hands it may come save where 
expressly agreed by our prior consent in writing.

SCOPE OF THE AUDIT OF THE FINANCIAL 
STATEMENTS
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether  
the accounting policies are appropriate to the Parent 
Company’s circumstances and have been consistently 
applied and adequately disclosed; the reasonableness of 
significant accounting estimates made by the Directors; 
and the overall presentation of the financial statements.  
In addition, we read all the financial and non-financial 
information in the Annual Report and Accounts to  
identify material inconsistencies with the audited financial 
statements. If we become aware of any apparent material 
misstatements or inconsistencies we consider the 
implications for our report.

OPINION ON FINANCIAL STATEMENTS
In our opinion the Parent Company financial statements:
–   give a true and fair view of the state of the Company’s 

affairs as at 31 March 2013;

–   have been properly prepared in accordance with United 
Kingdom Generally Accepted Accounting Practice; and

–   have been prepared in accordance with the 
requirements of the Companies Act 2006.

91

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100PARENT COMPANy BALANCE SHEET
AS AT 31 MARCH

Fixed assets
Investments 

Current assets
Debtors
Cash at bank and in hand

Creditors: amounts falling due within one year

Net current assets

Total assets less current liabilities

Creditors: amounts falling due after more than one year

Capital and reserves
Called up share capital
Share premium account
Investment in own shares
Merger reserve
Share based payment reserve
Profit and loss account

Total shareholders’ funds

notes

C

D

E

F

G
G
G
G
G
G

H

2013 
£m

268.5

268.5

207.1
1.2

208.3
(88.2)

120.1

388.6

(56.4)

332.2

144.9
58.8
(8.9)
8.7
6.6
122.1

332.2

2012
 £m

263.3

263.3

142.0
23.0

165.0
(89.2)

75.8

339.1

–

339.1

144.1
59.2
(8.7)
8.7
5.2
130.6

339.1

The notes on pages 93 and 94 form part of these financial statements.

The financial statements on pages 92 to 94 were approved by the Board of Directors on 11 June 2013 and signed on  
its behalf by:

J HOPkINS
G CLEMETT
Directors

Workspace Group PLC
Registered number 2041612

92

Workspace Group PLC Annual Report and Accounts 2013NOTES TO THE PARENT COMPANy 
FINANCIAL STATEMENTS

A. ACCOUNTING POLICIES
Although the Group consolidated financial statements  
are prepared under IFRS as adopted by the EU, the 
Workspace Group PLC Company financial statements  
are prepared under UK GAAP. The principal accounting 
policies of the Company which have been applied 
consistently throughout the year are set out below:

B. PROFIT FOR THE YEAR
As permitted by the exemption in Section 408 of the 
Companies Act 2006, the profit and loss account of  
the Company is not presented as part of these financial 
statements. The profit attributable to shareholders, before 
dividend payments, dealt with in the financial statements 
of the Company was £4.5m (2012: £2.7m).

Auditors’ remuneration of £10,000 (2012: £10,000) has 
been borne by a subsidiary undertaking.

Proposed dividends are disclosed in note 7 to the 
consolidated financial statements.

C. INVESTMENTS
INVESTMENT IN SUBSIDIARY UNDERTAkINGS

Cost
Balance at 1 April 2012
Additions in the year 

Balance at 31 March 2013

Impairment
Balance at 1 April 2012
Reversal of impairment loss 

Balance at 31 March 2013

Net book value at 31 March 2013
net book value at 31 March 2012

£m

310.4
3.0

313.4

£m

47.1
(2.2)

44.9

268.5
263.3

The Directors believe that the carrying value of the 
investments is supported by their underlying net assets.

Refer to note 28 to the consolidated financial statements 
for the list of subsidiary undertakings.

D. DEBTORS

Amounts owed by subsidiary 
undertakings
Prepayments and accrued income
Corporation tax asset

2013
 £m 

206.3
–
0.8

207.1

2012
£m

141.5
0.2
0.3

142.0

Amounts owed by subsidiary undertakings are unsecured 
and repayable on demand. Interest is charged to 
subsidiary undertakings.

(A) BASIS OF ACCOUNTING
The financial statements are prepared on a going  
concern basis under the historical cost convention  
and in accordance with the Companies Act 2006  
and applicable accounting standards in the UK.  
FRS 29 Financial Instruments – Disclosure (the UK  
GAAP equivalent of IFRS 7 Financial Instruments – 
Disclosure) has been adopted by the Company, but  
the disclosure requirements are met in note 17 of the 
Group financial statements.

(B) CASH FLOW STATEMENT
The Company has taken advantage of the convention  
not to produce a cash flow statement as one is prepared 
for the Group financial statements.

(C) INVESTMENT IN SUBSIDIARY UNDERTAkINGS
Interests in subsidiary undertakings are carried in  
the Company’s balance sheet at cost less impairment. 
Impairment reviews are performed by the Directors when 
there has been an indication of potential impairment.
Impairment in subsidiaries is taken to the profit and  
loss account.

(D) SHARE BASED PAYMENT AND INVESTMENT IN 
OWN SHARES
Incentives are provided to employees under share option 
schemes. The Company has established an Employee 
Share Ownership Trust (ESOT) to satisfy part of its 
obligation to provide shares when Group employees 
exercise their options. The Company provides funding 
to the ESOT to purchase these shares.

The Company also established in the year an employee 
Share Incentive Plan (SIP) which is governed by  
HMRC rules. 

The Company itself has no employees. When the 
Company grants share options to Group employees  
as part of their remuneration, the expense of the  
share options is reflected in a subsidiary undertaking, 
Workspace Management Limited. The Company 
recognises this as an investment in subsidiary 
undertakings with a corresponding increase  
to equity.

The disclosure requirements of FRS 20 Share-based 
payment are met in note 24 of the Group financial 
statements. 

(E) BORROWINGS
Details of borrowings are described in note F to the Parent 
Company financial statements. Costs associated with the 
raising of finance are capitalised, amortised over the life  
of the instrument and charged as part of interest costs.

93

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100NOTES TO THE PARENT COMPANy 
FINANCIAL STATEMENTS
CONTINUED

E. CREDITORS: AMOUNTS FALLING DUE WITHIN  
ONE YEAR

H. RECONCILIATION OF MOVEMENTS IN 
SHAREHOLDERS’ FUNDS

Profit for the financial year
Dividends paid
Issue of shares (net of costs)
Investment in own shares
Share based payments

net movement in shareholders’ 
funds

Opening shareholders’ funds

Closing shareholders’ funds

2013 
£m

4.5
(13.0)
0.4
(0.2)
1.4

(6.9)

339.1

332.2

2012 
£m

2.7
(10.5)
63.0
(0.7)
0.8

 55.3

283.8

339.1

I. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption 
under FRS 8 Related Party Disclosures not to disclose 
related party transactions with wholly owned subsidiary 
undertakings.

Related party transactions are the same for the Company 
as for the Group. For details refer to note 25 of the 
consolidated financial statements.

Amounts owed to subsidiary 
undertakings
Taxation and social security 
Accruals and deferred income

2013 
£m

86.2
0.4
1.6

88.2

2012
£m

88.8
0.4
–

89.2

Amounts owed to subsidiary undertakings are unsecured 
and repayable on demand. Interest is paid to subsidiary 
undertakings.

F. CREDITORS: AMOUNTS FALLING DUE AFTER  
MORE THAN ONE YEAR

6% Retail Bond
Less cost of raising finance

2013
£m

57.5
(1.1)

56.4

2012 
£m

–
–

–

The 6% Retail Bond was issued on 9 October 2012.  
It is unsecured and repayable on 9 October 2019.

G. CAPITAL AND RESERVES
Movements and notes applicable to share capital, share 
premium account, investment in own shares, merger 
reserve and share based payment reserve are shown  
in notes 21 to 23 and in the consolidated statement of 
changes in equity of the consolidated financial statements.

Profit and loss account:
Balance at 1 April 2012
Profit for the year
Dividends paid

Balance at 31 March 2013

£m

130.6
4.5
(13.0)

122.1

94

Workspace Group PLC Annual Report and Accounts 2013FIVE-yEAR PERFORMANCE
2009 – 2013

Rents receivable
Service charges and other income

Revenue

Profit before interest including share of BWPT
net interest payable^

Trading profit after interest 

Profit/(loss) before taxation
Profit/(loss) after taxation
Basic earnings per share*
Dividends per share*
Dividends (total)

Investment properties
Other assets less liabilities
net borrowings

Net assets

Gearing
Gearing on EPRA net assets

Basic nAV per share*
EPRA nAV per share*

31 March
 2013 
£m

31 March 
2012 
£m

31 March
 2011 
£m

31 March 
2010 
£m

31 March
 2009 
£m

51.4
18.1

69.5

37.2
(19.3)

17.9

76.4
76.4
53.3p
9.67p
 13.9

825.9
2.1
(327.6)

500.4

65%
64%

£3.48
£3.48

50.2
17.1

67.3

35.1
(19.1)

16.0

48.5
49.0
36.3p
8.79p
12.6

759.3
(11.1)
(312.8)

435.4

72%
70%

£3.05
£3.08

52.0
16.8

68.8

36.3
(22.1)

14.2

52.8
53.5
45.4p
7.99p
9.5

713.4
(12.8)
(366.8)

333.8

110%
106%

£2.83
£2.86

49.8
16.7

66.5

35.3
(24.5)

10.8

26.0
24.2
21.8p
7.27p
8.6

713.2
(39.5)
(386.4)

287.3

134%
125%

£2.43
£2.59

54.2
15.6

69.8

38.4
(28.4)

10.0

(360.4)
(360.4)
(1,304.5)p
15.92p
7.8

664.1
(54.1)
(358.1)

251.9

142%
129%

£2.34
£2.58

* 

 Earnings per share, dividends per share and net assets per share have been restated to reflect adjustment for the Rights Issue, in July 2011 and 
share consolidation in August 2011.

^  Excludes exceptional items.

KEy PERFORMANCE INDICATORS

Workspace Group:
number of estates1
Lettable floorspace (m sq. ft.)n 1
number of lettable units1
Average unit size (sq. ft.)1
Rent roll of occupied units1
Average rent per sq. ft.1
Overall occupancy1
Enquiries (number)*
Lettings (number)*

BlackRock Workspace Property Trust (BWPT):
number of estates
Lettable floorspace (m sq. ft.)n
number of lettable units
Average unit size (sq. ft.)
Rent roll of occupied units
Average rent per sq. ft.
Overall occupancy

n  Excludes storage space
1  Excluding BWPT which is shown separately
* 

Including BWPT

31 March
 2010

105
5.5
5,156
1,067
£50.7m
£11.22
81.9%
12,109
1,203

31 March 
2009

106
5.0
4,546
1,099
£50.8m
£12.64
80.3%
10,515
1,035

31 March 
2013

31 March 
2012

31 March 
2011

86
4.7
4,626
1,011
£52.7m
£12.98
87.0%
12,440
1,014

31 March 
2013

16
0.5
435
1,260
£7.0m
£14.20
90.4%

92
5.0
4,668
1,070
£50.2m
£11.79
85.3%
12,103
981

96
5.1
4,856
1,049
£48.9m
£11.47
83.6%
11,535
1,051

31 March 
2012

31 March 
2011

11
0.4
313
1,407
£4.7m
£11.82
89.8%

8
0.3
281
1,147
£3.1m
£10.57
92.1%

95

Workspace Group PLC Annual Report and Accounts 2013Review of operations 01-26  Governance 27-61Financial statements 62-95 Shareholder information 96-100PROPERTy PORTFOLIO 2013

SOUTH AND WEST LONDON

Property Name
South
Canterbury Estate
Faircharm
Hamilton Road
Havelock Terrace
Kennington Park – Investment
Kennington Park – Refurbishment
Lombard
Mahatma Ghandi
Michael Manley
Morie Street
Parkhall
Pensbury
Rainbow
Riverside
Sundial Court
T Marchant
Thurston Road
The Biscuit Factory
The Biscuit Factory (including Tower Bridge Block F)
Wandsworth
Zennor Road

West
2 Cullen Way
10 Cullen Way
Acton Centre
Arches
Artesian Close
Artesian Land
Barratt Way
Canalot Studios
Chiswick Studios
Grand Union Centre
Ladbroke Hall
Littleton House
Maple
Pall Mall Deposit
Park Royal
Park Royal House
q West
The Barley Mow Centre
The Light Box
The Shaftesbury Centre
Westbourne Studios

96

Postcode

Category

Lettable
floor area
sq. ft.†

Net Rent Roll
 of occupied
 units
£000s

SE15 1nP
SE8 3Dx
SE27 9SF
SW8 4AS
SW9 6DE
SW9 6DE
CR0 3JP
SE24 0JF
SW8 4TU
SW18 1SL
SE21 8En
SW8 4TL
SW20 0JK
SW18 4Uq
KT5 9Rn
SE16 3DH
SE13 7SH
SE16 4DG
SE16 4DG
SW18 4Jq
SW12 0PS

Like for like
Redevelopment
Like for like
Like for like
Like for like
Refurbishment
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Redevelopment
Like for like
Redevelopment
Redevelopment
Like for like

18,893 
106,663 
23,531 
58,343
336,854 
36,384 
67,248 
16,750 
5,800 
21,696 
119,105 
19,971 
1,000 
99,341 
26,107 
51,984 
0 
276,249 
276,158 
0 
66,054 

199
399
141
698
4,631
735
459
154
73
310
801
257
410
956
241
332
0
1,944
1,163
0
454

ERV
£000s

195
641
210
783
5,048
1,026
598
189
76
333
1,013
278
411
1,001
261
305
561
2,619
1,269
1,320
537

1,628,131

14,357

18,674

Like for like
nW10 6JZ
Like for like
nW10 7JF
Like for like
nW10 6TD
UB2 4AU
Like for like
nW10 8RW Like for like
Like for like
nW10 8JP
Like for like
HA3 5TJ
Refurbishment
W10 5Bn
Like for like
W4 5Py
Redevelopment
W10 5AS
Like for like
W10 6AZ
Like for like
TW15 1UU
Like for like
TW13 7AW
Like for like
W10 6BL
Like for like
nW10 7Lq
Redevelopment
nW10 7JH
Like for like
TW8 0GP
Like for like
W4 4PH
Like for like
W4 5Py
Like for like
W10 6Bn
Like for like
W10 5JJ

1,562
10,304
50,361 
40,725 
15,815 
4,500 
47,294 
48,970 
14,253 
47,621 
15,219 
41,716 
18,210 
49,360 
30,347 
0 
39,980 
75,377 
70,958 
12,608 
55,758 

17
21
540
310
196
20
338
575
185
244
238
288
233
954
300
0
247
1,393
850
227
1,797

15
59
623
307
197
0
395
1,491
167
632
250
317
241
1,002
357
89
378
1,492
1,060
235
1,857

690,938

8,973

11,164

Workspace Group PLC Annual Report and Accounts 2013CENTRAL LONDON

Property Name
Central
Greville Street
Archer Street
Baldwins Gardens
Clerkenwell Workshops
E1 Business Centre
Enterprise House
Exmouth House
Metal Box Factory
Holywell Centre
Linton House
quality Court
Southbank House
The Leathermarket
Westminster
Whitechapel

NORTH AND EAST LONDON
North
Atlas
Belgravia Workshops
Bounds Green
ScreenWorks
Leroy House
Mallard Place
Parma House
quicksilver Place
Spectrum House
The Chocolate Factory
The Ivories
The Wenlock

East
Stratford Office Village
Bow Enterprise Park
Bow Exchange
Buzzard Creek
Cremer
Fairways
The Pill Box
Highway
Leyton
Mare Street Studios
Marshgate Centre
Poplar
Redbridge Enterprise Centre
Uplands

 Review of operations 
 Governance 
 Financial statements 
 Shareholder information 

01-26 
27-61
62-95
96-100

Postcode

Category

Lettable
floor area
sq. ft.†

Net Rent Roll
 of occupied
 units
£000s

EC1n 8SB
W1D 7AZ
EC1n 7RJ
EC1R 0AT
E1 6TD
SE1 9PG
EC1R 0JH
SE1 OHS
EC2A 4PS
SE1 0LH
WC2A 1HR
SE1 7SJ
SE1 3ER
SE11 5JH
E1 1DU

Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Refurbishment
Refurbishment
Like for like
Like for like
Like for like
Like for like
Like for like
Refurbishment
Refurbishment

10,961 
14,984 
43,396 
53,127 
40,184 
72,870 
52,907 
62,641 
21,796 
34,783 
16,981 
62,403 
125,291 
61,714 
38,424 

318
678
885
2,461
672
2,291
994
867
408
767
744
1,391
3,145
762
474

ERV
£000s

489
722
901
2,827
727
2,352
1,627
1,539
486
780
847
1,584
3,305
856
803

712,462

16,857

19,845

nW2 7HJ
n19 4nF
n11 2UL
n5 2EA
n1 3qP
n22 6TS
n22 6xF
n22 6xH
nW5 1LP
n22 6xJ
n1 2Hy
n1 7EU

E15 4EA
E3 3qy
E3 3qP
IG11 0EL
E2 8HD
E10 7qT
E2 6JL
E1 9HR
E10 7qP
E8 3qE
E15 2nH
E14 9RL
IG1 1Ty
E17 5qn

Like for like
Like for like
Like for like
Redevelopment
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like

152,412 
32,324 
123,272 
0 
46,685 
10,150 
35,040 
27,810 
46,489 
119,256 
24,811 
27,950 

952
311
664
0
809
83
280
135
586
853
346
641

1,142
362
838
1,550
905
83
343
177
564
1,109
469
686

646,199

5,660

8,228

Like for like
Redevelopment
Like for like
Like for like
Like for like
Like for like
Refurbishment
Like for like
Refurbishment
Like for like
Redevelopment
Like for like
Like for like
Like for like

52,055 
67,178 
36,962 
45,000 
41,364 
47,091 
0 
19,969 
87,930 
39,442 
92,673 
74,775 
20,020 
280,497 

570
269 
262
285
562
292
0
255
449
392
215
1,072
146
1,551

904,956

6,320

875
626 
289
317
609
362
1,030
273
551
443
478
1,271
227
1,580

8,931

97

Workspace Group PLC Annual Report and Accounts 2013PROPERTy PORTFOLIO 2013
CONTINUED

OUTSIDE LONDON

Property Name
Outside London
Clyde House
Harlow Enterprise Centre

BLACkROCk WORkSPACE JOINT VENTURE
Baden Place
Burford Road
Cam Road
Charles House
Chandelier Building
City Road
Europa
Horton Road
Kingsmill
Little London
Lloyds Avenue
Progress Park
Rudolph Place
Toplin House
Union Court
Windmill Place

Postcode

Category

SL6 8BR
CM20 2HS

Like for like
Like for like

SE1 1yH
E15 2ST
E15 2Sn
UB2 4BD
nW10 6RB
EC1V 1Jn
nW10 6nD
UB7 8JD
KT1 3AP
SE1 2BA
EC3n 3Ax
CR0 4xD
SW8 1RP
SW9 6BB
SW4 6JP
UB2 4nJ

Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Like for like
Redevelopment
Like for like
Like for like

Lettable
floor area
sq. ft.†

Net Rent Roll
 of occupied
 units
£000s

29,654 
51,851 

81,505 

25,472 
21,296 
38,502 
72,097 
46,175 
31,292 
25,826 
38,720 
40,151 
31,101 
34,764 
31,002 
14,712 
3,133 
67,711 
26,171 

192
327

519 

477
258
733
1,002
429
390
336
246
361
527
793
242
243
85
673
241

ERV
£000s

245
315

560

645
289
534
1,093
515
618
341
220
401
631
961
277
314
486
802
287

ENTERPRISE HOUSE INVESTMENTS LLP JOINT VENTURE
Enterprise House, Hayes

UB3 1DD

† 

 Excludes storage area

Property statistics as at 31 March 2013

548,125

7,036

8,414

79,518 

79,518 

191

191

86

86

98

Workspace Group PLC Annual Report and Accounts 2013 
 
 
 
 
 
 
INVESTOR INFORMATION

 Review of operations 
 Governance 
 Financial statements 
 Shareholder information 

01-26 
27-61
62-95
96-100

REGISTRAR
All general enquiries concerning ordinary shares  
in Workspace Group PLC, should be addressed to:

COMPUTERSHARE INVESTOR SERVICES PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: +44 (0) 870 707 1413

Alternatively, shareholders can contact Computershare 
online via their free Investor Centre facility. Shareholders 
have the ability to set up or amend bank details for direct 
credit of dividend payments, amend address details,  
view payment history and access information on the 
Company’s share price. For more information or to  
register please visit www.investorcentre.co.uk

WEBSITE
The Company has a corporate website, which holds, 
amongst other information, a copy of our latest annual 
report and accounts, a list of properties held by the  
Group and copies of all press announcements. The  
site can be found at www.workspace.co.uk.

REGISTERED OFFICE AND HEADQUARTERS
CHESTER HOUSE,
Kennington Park,
1-3 Brixton Road,
London, SW9 6DE.

Registered number: 2041612

Telephone:  +44 (0) 20 7138 3300
Facsimile:  +44 (0) 20 7247 0157
Web: www.workspace.co.uk
Email: info@workspace.co.uk

COMPANY SECRETARY
Carmelina Carfora

THE COMPANY’S ADVISERS INCLUDE:

INDEPENDENT AUDITORS
PRICEWATERHOUSECOOPERS LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London WC2n 6RH

JOINT SOLICITORS
NORTON ROSE
3 More London Riverside
London SE1 2Aq

SLAUGHTER AND MAY
One Bunhill Row
London EC1y 8yy

BANkERS
THE ROYAL BANk OF SCOTLAND
Corporate and Institutional Banking
280 Bishopsgate
London EC2M 4RB

FINANCIAL ADVISERS
N M ROTHSCHILD
new Court
St Swithins Lane
London
EC4n 8AL

JOINT STOCkBROkERS
ESPIRITO SANTO INVESTMENT BANk
10 Paternoster Square
London EC4M 7AL

INVESTEC
2 Gresham Street
London EC2V 7qP

99

Workspace Group PLC Annual Report and Accounts 2013GLOSSARy OF TERMS

BWPT BlackRock Workspace Property Trust, a joint 
venture property fund with the BlackRock UK Property 
Fund in which the Group holds a 20.1% interest.

Loan to value is the current loan balance divided by the 
current value of properties secured on the loan.

Cash rent roll is the current net rents receivable for 
occupied units.

Earnings per share (EPS) is the profit after taxation 
divided by the weighted average number of shares in  
issue during the period.

Employee Share Ownership Trust (ESOT) is the trust 
created by the Group to hold shares pending exercise  
of employee share options.

EPRA NAV is a definition of net asset value as set out by 
the European Public Real Estate Association. It represents 
net assets after excluding mark to market adjustments  
of effective cash flow hedges (financial derivatives) and 
deferred tax relating to revaluation movements, capital 
allowances and derivatives.

Equivalent yield is a weighted average of the initial  
yield and reversionary yield and represents the return  
a property will produce based upon the timing of the 
occupancy of the property and timing of the income 
receivable. This is approximated by the reversionary  
yield multiplied by the Group trend occupancy of 90%.

Estimated rental value (ERV) or market rental value is the 
Group’s external valuers’ opinion as to the open market 
rent, which on the date of valuation, could reasonably be 
expected to be obtained on a new letting or rent review.

Exceptional items are significant items of income or 
expense that by virtue of their size, incidence or nature  
are shown separately on the Income Statement to enable 
a full understanding of the Group’s financial performance.

Market rental values (see ERV).

Net asset value per share (NAV) is net assets divided by 
the number of shares at the period end.

Net bank debt is the amount drawn on bank facilities, 
including overdrafts, less cash deposits.

Net rents are rents excluding any contracted increases 
and after deduction of inclusive service charge revenue.

Occupancy percentage is the area of space let divided  
by the total net lettable area (excluding land used for  
open storage).

Open market value is an opinion of the best price at which 
the sale of an interest in the property would complete 
unconditionally for cash consideration on the date of 
valuation (as determined by the Group’s external valuers).

Profit/(loss) before tax (PBT) is income less all 
expenditure other than taxation.

Property Income Distribution (PID) a dividend generally 
subject to withholding tax that a UK REIT is required to 
pay from its tax-exempted property rental business and 
which is taxable for UK resident shareholders at their 
marginal tax rate.

REIT is a Real Estate Investment Trust as set out in the  
UK Finance Act 2006 Sections 106 and 107. REITs pay  
no corporation tax on profits derived from their property 
rental business.

Rent per sq. ft. is the net rent divided by the  
occupied area.

Gearing is the Group’s net debt as a percentage of  
net assets.

Rent roll (see cash rent roll).

Gearing on adjusted net assets is the Group’s net debt  
as a percentage of net assets excluding mark to market 
derivative adjustments.

Initial yield is the net rents generated by a property or  
by the portfolio as a whole expressed as a percentage  
of its valuation.

Interest cover is the number of times net interest payable 
is covered by operating profit.

IPD is the Investment Property Databank Ltd, a company 
that produces an independent benchmark of property 
returns.

Reversion/reversionary income is the increase in rent 
estimated by the Group’s external valuers, where the  
net rent is below the current estimated rental value. The 
increases to rent arise on rent reviews, letting of vacant 
space, expiry of rent free periods or rental increase steps.

Reversionary yield is the anticipated yield, which the initial 
yield will rise to once the rent reaches the estimated rental 
value. It is calculated by dividing the ERV by the valuation.

Small and medium sized enterprises (SMEs) are those 
businesses with a turnover of less than £1m p.a. or staff  
of less than 50. Most Workspace customers are SME 
businesses with staffing of up to 20.

IPD Universe is the IPD quarterly universe property fund 
benchmark of approximately 250 (£50bn) UK domestic 
property funds.

Total Shareholder Return (TSR) is the return obtained  
by a shareholder calculated by combining both share  
price movements and dividend receipts.

LIBOR is the British Bankers’ Association London 
Interbank Offer Rate.

Trading profit after interest is net rental income, joint 
venture trading income and finance income, less 
administrative expenses, less finance costs.

Like-for-like are those properties that have been held 
throughout a 12 month period and have not been subject 
to a refurbishment or redevelopment programme in the 
last 24 months.

Unique web visits is the number of unduplicated (counted 
only once) visitors to a website over the course of a 
specified time period.

100

Workspace Group PLC Annual Report and Accounts 2013 
OUR BUSINESS 

MODEL

WORKSPACE GROUP ONLINE

Workspace’s comprehensive website gives you fast, 
direct access to a wide range of Company information.

To fi nd out more go to www.workspace.co.uk

CUSTOMERS

Offi  ce
Light industrial
Studios
Workshops
Serviced offi  ces
Co-working
Investors

INVESTORS

About us
Corporate information
Corporate social responsibility
RnS announcements
Share price and information
Publications archive
Bonds

CO-WORkING

Club locations
Join Club
Our events
Hold a meeting
About Club

CONTENTS

REVIEW OF OPERATIONS

IFC  Our business model

01  2013 highlights

02  Strong momentum

04  Chairman’s Statement

06  Chief Executive Offi  cer’s Strategic Review

08  Our strategy 

10 

 Generating value

12  Portfolio potential

14  Corporate Social Responsibility

16  Business Review

26  Key Property Statistics

GOVERNANCE

28  Chairman’s Introduction 

30  The Board and Executive Committee

32  Report of the Directors

35  Corporate Governance Report

45  Directors’ Remuneration Report

61  Directors’ Responsibilities

FINANCIAL STATEMENTS

62 

 Independent Auditors’ Report to the 

Members of Workspace Group PLC

63  Consolidated Income Statement

63 

 Consolidated Statement of 

Comprehensive Income

64 

65 

 Consolidated Balance Sheet

 Consolidated Statement of 

Changes in Equity

66 

 Consolidated Statement of Cash Flows

67  Notes to the Financial Statements

91 

 Independent Auditors’ Report to the 

Members of Workspace Group PLC 

(Parent Company)

92  Parent Company Balance Sheet 

93 

 Notes to the Parent Company 

Financial Statements

95  Five-Year Performance

95  Key Performance Indicators

SHAREHOLDER INFORMATION

96  Property Portfolio

99 

Investor Information

100  Glossary of Terms

WHAT WE DO

Workspace provides business 

premises tailored to the needs 

of new and growing companies 

across London.

HOW WE DO IT 

Workspace understands the 

changing needs of these 

companies and actively adapts 

and manages its buildings to 

create an environment for growth.

WHERE WE DO IT

Workspace owns over 100 

properties in London providing 

5.2 million square feet of space 

and is home to some 4,000 

businesses employing more 

than 30,000 people.

HOW WE GENERATE VALUE

Workspace is growing through 

deep market knowledge, 

operational excellence and 

strong customer relationships.

Workspace is enhancing both core 

operational income and capital 

values by repositioning specifi c 

property assets.

Workspace provides the right 

properties to attract its customers 

and the right services to retain 

them and help them grow.

RELATED INFORMATION

OUR STRATEGY P.08

WORkSPAcE 

WORkSPAcE 

UNDERSTANDS 

UNDERSTANDS 

WORk SPAcE

WORk SPAcE

ANNUAL REPORT 

ANNUAL REPORT 

AND AccOUNTS 2013

AND AccOUNTS 2013

W
O
R
k
S
P
A
c
E
G
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O
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WORkSPAcE GROUP PLc
WORkSPAcE GROUP PLc
Chester house 
Chester house 
Kennington Park
Kennington Park
1-3 Brixton road
1-3 Brixton road
London
London
SW9 6DE
SW9 6DE

telephone: +44 (0) 20 7138 3300
telephone: +44 (0) 20 7138 3300
Web: www.workspace.co.uk
Web: www.workspace.co.uk
Email: info@workspace.co.uk
Email: info@workspace.co.uk

if you require information regarding 
if you require information regarding 
business space in London call 
business space in London call 
+44 (0) 20 7369 2390 or visit 
+44 (0) 20 7369 2390 or visit 
www.workspace.co.uk.
www.workspace.co.uk.

this report is printed on materials which 
are FSc® certifi ed from well-managed forests.

this report is printed on materials which 
are FSc® certifi ed from well-managed forests.

these materials contain EcF (Elemental 
chlorine Free) pulp and are 100% recyclable.

these materials contain EcF (Elemental 
chlorine Free) pulp and are 100% recyclable.

Designed by carnegie Orr 
(a Workspace Group customer)
+44 (0)20 7610 6140.
www.carnegieorr.com

Designed by carnegie Orr 
(a Workspace Group customer)
+44 (0)20 7610 6140.
www.carnegieorr.com