Workspace has published results for the year ended 31 March 2016. At the end of the period, the EPRA NAV per share was GBP9.23, an increase of 31.3% over the year. The Board is recommending an increase in the final dividend to 10.19p per share. This represents an increase in the total dividend for the year of 25% to 15.05p per share. Group net rental income was GBP74.1m, an increase of 28.4%, profit before tax was GBP391.3m, up 8.7% over last year and adjusted underlying earnings per share was up 55.8% to 26.8p (2015: 17.2p).
The like-for-like portfolio represents 62% of the Group’s total rent roll as at 31 March 2016. It comprises properties which have not been impacted over the last 24 months by either major refurbishment or redevelopment activity. Prior period comparatives have been restated for the industrial properties sold during the year, and properties transferred to and from the refurbishment and redevelopment categories. The like-for-like rent roll has continued to grow strongly, up 15.4% (GBP6.5m) in the year to GBP48.8m. The rental growth has come from the increases achieved in pricing with occupancy stable (averaging 91% through the year). Like-for-like rent per sq. ft. is up 16.4% to GBP22.37 in the year to 31 March 2016.
The refurbishment of Metal Box Factory, Bankside and the opening of the new business centre, The Light Bulb in Wandsworth Town Centre completed in the previous financial year. The upgrade of Cargo Works, Waterloo completed in April 2015. We have seen strong growth in rents each year at these buildings as the new and upgraded space has been let, and they are now reaching stabilised occupancy levels. The refurbishment of both Vox Studios, Vauxhall and The Print Rooms, Southwark completed in January 2016. Demand has been strong at these properties with overall occupancy reaching 79% by the end of May 2016. Grand Union Studios, a new business centre in Ladbroke Grove, opened in March 2016. Again, demand has been very strong and occupancy had reached 50% by the end of May 2016.
Four refurbishments are currently underway at an estimated total cost of GBP85m. This comprises The Record Hall in Hatton Garden, Holywell Centre in Shoreditch and Cremer Business Centre in Hoxton. In each case, the existing buildings are being demolished and replaced by new business centres. Theyare also refurbishing and adding new space at Barley Mow Centre, Chiswick. The rent roll at 31 March 2016 at these refurbishments was GBP2.4m, down GBP0.4m in the year as they obtained vacant possession at Holywell Centre ahead of demolition. There will be a further rent roll reduction of GBP0.7m in the current year as they obtain vacant possession at Cremer Business Centre. The short-term reduction in rent and income they are seeing at these properties will be replaced in due course by a significant uplift in rent as the buildings are completed and let. Assuming 90% occupancy at the estimated rental values at 31 March 2016 the rent roll at these four buildings would be GBP10.5m.
There are currently five mixed-use redevelopment projects underway. The buildings have been vacated and sold to residential developers for a consideration comprising of cash and, at two properties, new business centres (which will be built at no cost to Workspace). At the estimated rental values at 31 March 2016, and assuming 90% occupancy of the new business space, the rent roll would be GBP2.2m (31 March 2016: GBPnil).
Workspace acquired five properties for GBP101m with a rent roll at 31 March 2016 of GBP2.1m and completed the sale of eleven industrial properties during the year for GBP95m, with rent roll at the time of disposal of these properties of GBP5.4m.
WKP : Workspace achieves big improvements in NAV and earnings