Workspace Group PLC
Annual Report and Accounts 2023
HOME TO LONDON’S BRIGHTEST BUSINESSES
WHAT WE DO
Workspace owns and manages five million
sq. ft. of business space across 76 core
locations, home to thousands of London’s
brightest businesses.
ABOUT US
We believe that our distinctive oer, proven
track record and ownership of an extensive,
high-quality property footprint provide
a compelling investment case that will deliver
sustainable long-term growth.
ABOUT THIS REPORT
This report has been produced in landscape format
to optimise the reading experience online.
Go to www.workspace.co.uk/onlineannualreport2023
01
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
STRATEGIC REPORT
01
03 What drives performance
08 2023 highlights
10 Chair’s statement
12 Chief Executive Ocer’s statement
14 Our purpose
15 Our stakeholders
26 Our market
32 Our strategy
36 Sustainability
59 Our key performanceindicators
64 Our business model
69 Principal risks anduncertainties
77 Business review
87 Compliance statements
106 Governance driving long-term success
108 Chair’s introduction to Governance
113 Board leadership and company purpose
129 Division of responsibilities
141 Composition, succession and evaluation
159 Audit, risk and internalcontrol
172 ESG Committee report
178 Remuneration
212 Report of the Directors
215 Directors’ responsibility statement
OUR GOVERNANCE
106
FINANCIAL STATEMENTS
216
216 Independent auditor’s report
224 Consolidated income statement
224 Consolidated statement of comprehensive income
225 Consolidated balance sheet
226 Consolidated statement ofchanges in equity
226 Consolidated statement of cash flows
227 Notes to the financial statements
251 Parent Company balance sheet
252 Parent Company statement of changes in equity
252 Notes to the Parent Company financial statements
ADDITIONAL INFORMATION
255
255 Five-year performance
256 Property portfolio
258 Glossary of terms
259 Investor information
LOOK OUT FOR THESE
THROUGHOUT THE REPORT:
Reference to another page in the report
Reference to further reading online
Strong customer demand
allowed us to quickly recover
pre-Covid levels of occupancy
this year
Graham Clemett
CEO
Our wellbeing programme
has proved popular with both
customers and employees
Stacy Lyden-Sauppé
Events Manager
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
CONTENTS
It all starts
with the
customer.
Our target customers
Pages 4 to 7
Mirror Works,
Stratford
Our purpose is to give businesses the freedom to grow.
We believe that in the right space, teams can achieve
more. That in environments tailored to their business,
free from constraint and compromise, teams are best
able to collaborate, build their culture and realise their
potential together.
We build long-term relationships with our customers to
understand their evolving requirements and continually
enhance the customer experience.
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
WHAT DRIVES PERFORMANCE
Our space is a hub of sisterhood, innovation,
creativity. We want women to feel inspired
when they enter.
Treasure Tress was born out of my desire to
create a service I needed myself: I was tired
of paying ridiculous prices for curly haircare
products I couldn’t find in the UK.
We have built up a huge community of
subscribers and we know what they like. It’s
important that our space also represents the
ethos, passion and energy of our brand. It was
really important that our space felt like home.
The building has a great community of
business owners and brands who are all
looking out for each other – we love finding
ways to collaborate with our neighbours.
Jamelia Donaldson
Founder and CEO of Treasure Tress,
Parma House, Wood Green
Haircare product discovery box for women
with naturally curly hair
Financial Statements Additional InformationOur GovernanceStrategic ReportWorkspace Group PLC
Annual Report and Accounts 2023
04
You really are not limited by space or time at
Workspace, which allows me to create some
incredibly individual work.
Workspace allows me to be myself, which is
essential for my photography because of its
focus on diversity and inclusivity.
My priority is for the people who I am
photographing to feel welcome and
comfortable in the space, so that they too
can be themselves. This allows me to capture
the moment through the lens.
It’s my space to do with what I want, so I tend
to leave it bare so that I can dress it ad hoc for
shoots. I love using the massive windows for
natural light work. Another of my favourite
things about the space is that it is 24/7 and
I can come and go as I please.
Paul Nicholas Dyke
Founder of PND Photography,
Lock Studios, Bow
Headshot and portrait photographer
for the entertainment industry
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
It was really important to us that we
approached our studio in the same way we
build digital products: with inclusivity and
sustainability in mind.
Our meeting pods are made from recycled
fabrics, our paint is eco-friendly and most of
our furniture is second-hand – lots of it even
comes from other oces in the building.
We designed the space to accommodate all
our team’s needs, including private meeting
rooms, standing desks and a table for eating
lunch together.
And, of course, a comfy corner for our
oce dogs!
Sophie Aspden
People Lead at Planes,
Brickfields, Hoxton
A digital product design
and development studio
Financial Statements Additional Information
06
Our GovernanceStrategic ReportWorkspace Group PLC
Annual Report and Accounts 2023
We are kind of mavericks in the interior design
world: we do things our own way. We don’t go
for the open-plan style of working but prefer
individual areas so we can work uninterrupted.
The free space is really important to us – we
need to have lots of floor space and be able to
make a mess. Every Tuesday our team comes
together and we throw all of our materials on
the ground and look at the latest prints.
We love bringing people in and feeling proud
of the space – the building feels professional
and impressive and we love all of the natural
light from the skylights and large windows.
We first took a studio with Workspace in 2018,
and have upsized twice since, and plan to
expand again soon. Workspace made it so
easy to expand that it just made sense.
Kierra Campbell
Managing Director, Poodle & Blonde
The Chocolate Factory, Wood Green
Hand-designed luxury wallpaper and
homewares
07
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Additional InformationFinancial Statements
1. A reconciliation of basic and diluted earnings to trading
profit after interest is in note 8 to the financial statements.
Equivalent IFRS measure is profit before tax – 2023:
£(37.5)m, 2022: £124.0m, 2021: £(235.7)m.
2. Equivalent IFRS measures are basic net assets per share –
2023: £9.34, 2022: £9.94, 2021: £9.50 and diluted net
assets per share – 2023: £9.27, 2022: £9.89, 2021: £9.44.
Despite the economic challenges, we have
seen good momentum from rental growth,
with high levels of occupancy from resilient
customer demand from SMEs for our
flexible oer.
Our distinctive oer, proven operating
platform and track record, alongside
ownership of an extensive, high quality
property footprint across London position
us to capture more of the significant market
opportunity ahead of us.
London’s SME community
has remained resilient over
the past few years
Stephen Hubbard
Chair
NET RENTAL INCOME
£116.6m
EPRA NTA PER SHARE
2
£9.27
UNDERLYING PROPERTY VALUATION
-3.2%
TRADING PROFIT AFTER INTEREST
1
£60.7m
DIVIDEND PER SHARE
25.8p
PROPERTY VALUATION
£2.74bn
08
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
2023 HIGHLIGHTS FINANCIAL
2023
2022
2021
116.6
86.7
81.5
2023
2022
2021
60.7
46.9
38.7
2023
2022
2021
2.74
2.40
2.32
2023
2022
2021
9.27
9.88
9.38
2023
2022
2021
25.8
21.5
17.75
OPERATIONAL
GREEN FINANCING
£700m
SCOPE 1 AND 2 EMISSIONS
REDUCTION SINCE 2019/20
29%
RENEWABLE ELECTRICITY SOURCED
100%
DONATED TO SINGLE HOMELESS PROJECT
£110K
AVERAGE LETTINGS PER MONTH
109
LIKE-FOR-LIKE OCCUPANCY
89.1%
AVERAGE ENQUIRIES PER MONTH
798
NET ZERO CARBON BY
AVERAGE VIEWINGS PER MONTH
518
LIKE-FOR-LIKE RENT ROLL GROWTH
+7.1%
3
2
09
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
SUSTAINABILITY
2023
2022
2021
798
917
739
2023
2022
2021
89.1
89.6
81.6
2023
2022
2021
109
127
96
2023
2022
2021
518
598
328
2023
2022
2021
7.1
8.7
-23.9
Workspace’s business model has truly
been put to the test over the past three
years. I’m pleased to say that we have
emerged in an even stronger position.
Stephen Hubbard
Chair
£60.7m
TRADING PROFIT AFTER INTEREST
25.8p
DIVIDEND PER SHARE
10
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
CHAIR’S STATEMENT
CHAIR’S STATEMENT CONTINUED
This year has seen market volatility persist:
global growth has continued to slow amidst
the ongoing conflict in Ukraine, and in the UK
interest rates have risen to combat inflation.
Workspace, however, remains in a strong
position and has produced robust results.
While the UK has experienced little economic
growth this year, London, our core market,
has continued to grow by more than 4%
1
,
reflecting its enduring status as a global hub
for successful, innovative businesses. Indeed,
London’s SME community has remained
particularly resilient in the face of many
challenges over the past few years.
Our distinctive flexible oer, the scalable
operating platform, unique portfolio of
properties and robust balance sheet mean
we are well positioned to weather any further
challenging market conditions. This strong
position was illustrated by an excellent set of
full-year results, with net rental income up
34.5% to £116.6m, and our centres again full
of vibrant small businesses. Across real estate
markets globally, increasing interest rates
have resulted in yield expansion although
in the case of Workspace this has been
largely oset by our improved pricing, with
EPRA NAV per share decreased by 6.2% to
£9.27. I have confidence that, in time, this
strong performance will be reflected in our
share price.
We continued to make real strides in
dierentiating our brand from others in the
market, significantly enhancing visibility of our
brand across London and highlighting the key
benefits of taking space with us. The Your Space,
Your Way campaign emphasised the blank
canvas space we oer to our customers, 50%
of whom use their space for more than just a
desk. The campaign shines a light on how our
oer allows them to personalise and fit out their
space as they want – a component of our oer
that clearly dierentiates us from the serviced
oce brands we have sometimes been conflated
with. It’s great to see our brand work start to
correct these historic misconceptions –
although there is still work to be done.
One of the many reasons Workspace has
resonated with London’s small businesses is
the level of choice we oer to increasingly
discerning customers, who want a broad
range of options in their search for space,
location and community that’s right for them.
Last year, we added 20 core properties,
totalling almost one million sq. ft. of new space,
to our portfolio, significantly expanding that
range of choice to customers. Our teams have
done a fantastic job in integrating those new
buildings into Workspace, with a particular
focus on making our new London properties,
for example, Portsoken House, consistent with
the quality Workspace look and feel.
A key component of our strategy in acquiring
McKay was to dispose of the industrial
properties within the portfolio. Following year
end, I’m pleased that this has been
substantially completed, along with material
cost synergy savings well beyond our budget
and the successful novation of the Aviva debt,
avoiding a £13m budgeted break cost.
The Board has had another busy year, and
ESG has remained top of our agenda. Our
sector has a vital role to play in mitigating
climate change and we know that Governance
is key in driving real impact – accountability
should run through every level of the
Company. This is why our new ESG
Committee, comprising all eight members of
the Board, is tasked with closely monitoring
Workspace’s targets in its goals to become
net zero carbon by 2030.
We are confident that we are well ahead of
the curve thanks to Workspace’s inherently
sustainable model. I have also seen first-hand
just how passionate our teams are throughout
the Company in delivering sustainable results.
This enthusiasm and sense of responsibility is
also echoed by our eco-conscious customers
and is something we actively instil throughout
Workspace’s carefully selected partners and
supply chains.
The all-important social element of ESG has
also been an area where Workspace has made
real progress. We relaunched our ‘InspiresMe’
programme, oering career support to
underprivileged young people, and we
continued to develop our popular customer
and employee wellbeing programmes
throughout the year. Earlier in the year, our
Capital Market’s Day shone a light on our
environmental and social sustainability
strategy, demonstrating how sustainability
is embedded throughout our business. The
event highlighted how Workspace’s strategy
of breathing new life into old buildings creates
local hubs of economic activity that help
flatten London’s working map and deliver
employment-led regeneration.
Having served nine years on the Board, I will be
stepping down as Chair at the upcoming AGM.
I stepped into my role as Chair in July 2020,
just a few months after the start of the
pandemic, as Workspace’s business model
was truly put to the test. I’m pleased to say
that three years later we have emerged in an
even stronger position.
I am immensely grateful to everyone at
Workspace for helping to make my time on
the Board and as Chair so enjoyable. I am
especially thankful to the Executive team,
which has expanded over the last few years
into the strong team it is today.
It has been a pleasure being a part of
Workspace’s upbeat, dynamic culture and
working with all the diverse people who help
deliver the Company’s success. I have been
lucky enough to get to know many of
Workspace’s employees at my quarterly
Chair engagement sessions and their
honest feedback has helped drive a range
of improvements across the business.
One of the achievements I am most proud of
has been building a strong, supportive Board
who are a key part of the Workspace family.
One of the Board’s focuses this year has of
course been finding a Chair successor, and
I am absolutely delighted that the Board has
appointed Duncan Owen, whose more than
30 years’ experience in the real estate sector
will be an invaluable asset to Workspace.
I am confident that I am handing over to Duncan
with the Company and Board both in great
shape and I wish him every success in the role.
I am certain Workspace will continue to thrive,
driven by its strong sense of purpose, sustainable
business model and customer-first ethos.
Stephen Hubbard
Chair
It’s been a pleasure being part
of Workspace’s dynamic culture
Duncan Owen will be appointed as Chair in
July 2023. To read more about his appointment
go to page 146.
1. ONS, GDP first quarterly estimate, UK:
October to December 2022.
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
Our strong trading performance is
testament to our truly flexible oer and
a customer base of vibrant SMEs.
Graham Clemett
Chief Executive Ocer
£116.6m
NET RENTAL INCOME
89.1%
LIKE-FOR-LIKE OCCUPANCY
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
CHIEF EXECUTIVE OFFICER’S STATEMENT
We entered the year with good momentum
and strong levels of customer demand, and
occupancy at our like-for-like properties back
at pre-Covid levels of around 90%. The
resulting pricing tension has enabled us to
deliver a 9.4% increase in rent per sq. ft. over
the year, with many of our business centres
now back at, or ahead of, pricing levels last
seen in 2019. Even with prices increasing our
customers value our oer highly, and it was
great to see 88% stay with us on renewal.
We have also seen a good pace of occupancy
increase at recently completed projects. Most
notably, we have seen occupancy at our
refurbished Mare Street property in Hackney
move up 25% to 95% in the year, whilst Mirror
Works, our new building in Stratford, saw
occupancy increase 58% to 81%. These
successes highlight both the quality of our
buildings and the power of our marketing and
sales platform in attracting demand to a broad
range of locations and then converting this
demand into lettings.
Our extensive property portfolio across
London continues to provide us with a rich
opportunity to upgrade and reposition
buildings to meet both the changing needs
of our customers and higher environmental
standards. This sustainable regeneration, at
the heart of our business model, drives uplifts
in income and values producing very
attractive returns. We currently have a
pipeline of refurbishment and redevelopment
projects that will deliver around 1.3m sq. ft.
of new and upgraded space. Our existing
buildings are income earning, so we can
selectively decide on the optimal timing for
each project to ensure we can deliver as a
minimum our benchmark returns.
Our sustainability ambitions extend beyond
simply meeting environmental standards, and
we are proud of the regenerative impact of
our business model. As we breathe new life
into old buildings, we create hubs of economic
activity across the Capital, providing
significant employment and social benefits in
what are often historically deprived areas. We
hold our properties for the long term and our
engagement with local communities is crucial
to our social sustainability agenda. During the
year, we started major refurbishment schemes
at The Chocolate Factory in Wood Green, and
The Biscuit Factory in Bermondsey. The
scheme at Leroy House in Islington, which
started in summer 2021, is now well
progressed and we expect to complete this
project in spring 2024. We also completed the
sale of the residential component of our
mixed-use redevelopment at Riverside,
Wandsworth for £54m in March 2023, where
we obtained planning permission for 433 flats,
highlighting our opportunity to add value and
recycle capital.
In May 2022 we acquired the previously
publicly listed McKay Securities, adding good
quality assets across London and the South
East to our existing portfolio at a discount to
book value. We completed the operational
integration of the McKay portfolio in November
2022, and continue to make progress in our
plan to add significant value to the portfolio
by adapting the buildings to our multi-let
strategy and rolling out our flexible lease oer.
The market environment has unfortunately
slowed the planned sale of identified non-core
assets (principally light industrial and logistics
properties). We sold one asset for £7m in July
2022 and exchanged on the sale of a further
five in May 2023 for £82m.
Overall we have delivered a strong trading
performance in the year, with a 34% increase
in net rental income, an increase of 17% on
an underlying basis, and a 29% increase in
trading profit after interest. We maintained
tight control over discretionary costs and
while we saw an increase in interest costs
from the McKay acquisition, we benefitted
from the majority of our debt being at
fixed rates.
A resilient property valuation meant that
we saw a relatively small decline of 6% in our
net asset value per share to £9.27 over the
year. Outward yield movement was largely
oset by the increases in rental price levels,
with an underlying fall of just 3.2% in the
property valuation.
Our strong trading performance is a
testament to our business model:
– We have been championing flexibility in the
commercial real estate market for over 35
years and it is great to see that it has now
become firmly mainstream. Of course, it
covers many dierent oers, but what
makes ours stand apart is the complete
flexibility we give our customers – both in
terms of the leases we oer and the ability
to fit out their own space. We have always
understood the merits of giving our
customers lease flexibility, achieving strong
retention by providing an unmatched
quality of service rather than tying them
into long leases. The other aspect of
flexibility, the ability for customers to fit out
their space to suit their individual needs, is
sometimes overlooked. This freedom to
personalise their space and to create their
own identity is incredibly important. In fact,
around half of our customers use their
space in a very dierent way to a traditional
oce occupier, meeting the needs of a
diverse range of businesses such as fashion
design, video production, etc.
– Our focus is on creative and service-based
SMEs, which we estimate represent some
21% of the working population in London.
These SMEs are in a very broad range of
business sectors and represent a dynamic
and exciting opportunity for us. We
estimate Workspace is home to around 3%
of this fragmented market, so we still have
plenty to go for.
– We have a well-recognised brand, a scalable
and technically advanced operating platform
and an experienced and committed
in-house team that provides a high level of
service and support to customers. On that
note, I would like to thank everyone at
Workspace for their tremendous eorts
through the year and congratulate them
on the delivery of a great set of results.
– With the strong improvement in trading
performance and confidence in the longer
term prospects of the Company, the Board
is recommending a final dividend of 17.4p
per share, taking the full-year dividend to
25.8p which is up 20% on last year.
Lastly, I would like to thank our Chair Stephen
Hubbard, who steps down at this year’s AGM
having served as a Non-Executive Director for
nine years, the last three as Chair. He has been
a fantastic ambassador and champion of our
business. On behalf of everyone at Workspace,
I would like to thank him for his contribution to
the business over the past nine years and wish
him all the very best for the future.
Graham Clemett
Chief Executive Ocer
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Our property portfolio
continues to provide rich
opportunity to upgrade
and reposition buildings
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
Our purpose is to give businesses the
freedom to grow
1
We deliver our purpose by actively
listening to our stakeholders to
understand what matters most…
2
We believe that in the right space, teams
can achieve more. We provide customers
with a blank canvas to create their own
unique space – liberating them to express
their identity and culture in a space, building
and location that is right for them.
We work hard to continually enhance and
refine the customer experience, so that
customers have the freedom to focus on
growing their businesses.
Our purpose has created a culture that puts
our stakeholders first. The conversations we
have with our customers, people, investors,
partners and communities, both in person
and by collecting real-time data, directly
inform our day-to-day decisions, help us to
improve our oer and drive the growth of
the business.
How this drives our culture
Pages 21 and 22
Stakeholder engagement
Pages 15 to 25
…and put this at the heart of our
strategy…
3
…while giving customers the space to
grow sustainably
4
Our strong sense of purpose places an
emphasis on delivering exceptional customer
service. Ownership of our buildings, an
extensive portfolio, a continual pipeline of
upgrades ensures we provide an unparalleled
customer oer, cementing our position as
home to London’s brightest businesses.
We know that our customers share the same
values as us and prioritise sustainability. For
them, it is important that their oce
provider is responsible; it is only by working
together that we can meet our 2030 net zero
carbon target.
Our purpose driven strategy
Pages 32 to 35
Sustainability
Pages 36 to 58
OUR PURPOSE PUTS OUR STAKEHOLDERS AT THE HEART OF THE WAY WE DO BUSINESS OUR INVESTMENT PROPOSITION
We know London SMEs
No one knows London SMEs – and how
and where they want to work – better than
Workspace.
Pioneers of flex
We’ve been doing this for 35 years.
We helped create the London flex market.
It’s a great time to be theleader
Our market is expanding, and we plan
to capture more of the significant market
opportunity ahead of us.
We’re a great neighbour
Our model is to repurpose distinctive
buildings, revitalise local areas and have
a positive environmental social impact
in the areas weoperate.
We’re not done until our customers are
Our quality, in-person service oers daily
face-to-face access and creates close
relationships with strongretention.
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
WE ARE WELL POSITIONED IN A GROWING MARKET
OUR STAKEHOLDERS
Listening to our
stakeholders so
we make the
right decisions.
Our purpose – to give businesses the freedom to grow –
has helped us create a culture that puts our stakeholders
at the heart of the business. We listen both in person and
by collecting real-time data, directly informing the way
we make decisions.
1 Our customers
Page 16
2 Our people
Page 21
3 Our investors
Page 23
4 Our partners and suppliers
Page 23
5 Our communities
Page 25
6 The environment
Page 25
Section 172(1) Statement
Our Section 172(1) Statement sets out
how the Board has had regard to its
stakeholders and other section 172(1)
matters during the year.
Page 125
The Biscuit Factory,
Bermondsey
STAKEHOLDER ENGAGEMENT
We gather feedback and insight from all of
our stakeholders so that we understand what
matters most.
15
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
OUR STAKEHOLDERS
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Stakeholder:
Our customers
How we engage
We maintain a continual dialogue with
businesses from the moment they make an
enquiry. Once customers have moved in, our
centre teams foster close relationships with
them. We also collect scheduled feedback
from our 4,000 customers twice in the year.
Our Customer Insight Manager collates and
evaluates this mix of informal and formal
feedback, aiming to enhance our customer
service and building management, and
ultimately informing our growth strategy,
such as our refurbishments and acquisition
decisions.
How the Board engaged
– Reviewed our brand and marketing
campaigns
– Reviewed customer experience initiatives
– Considered the results of the customer
survey
– Evaluated key monthly customer metrics
Significant topics raised
– Range of location choices – central and
non-central
– Strong performance of individual members
of centre teams (over 800 formal ‘shout-
outs’)
– Social and environmental responsibility
of Workspace
– Satisfaction regarding Wi-Fi and
Connectivity Services
– Rent renewal process
– Breakout areas, meeting rooms and phone
booths
– Frequency of events programmes
– Points of contact when taking a lease
– Quality of cafés
Activity in the year
– Created a feedback box
– Delivered over 400,000 sq. ft. of new and
upgraded space
– Integrated McKay properties to our
portfolio
– Rolled out Inclusive Billing to 37 buildings
– Launched formal feedback box
– Company-wide customer service training
– Invested in Wi-Fi upgrade programme
– Added 10 new meeting rooms
– Hosted 71 customer events with 2,500
attendees, including four popular London’s
Brightest Businesses panel discussions
– Further simplified the customer journey,
reducing number of steps involved in taking
a lease and streamlined renewals process
– Launched three new in-house Coee Bars
84%
OUR CUSTOMER SATISFACTION SCORE
62%
BRAND AWARENESS
#1
FIRST CHOICE FOR SMEs
LOOKING TO MOVE OR EXPAND
ATTRACTING CUSTOMERS WITH OUR LATEST ADVERTISING CAMPAIGN
Listen to our latest
customer advertising
campaign
Giandonato Rosa,
Hospitality Manager,
oversees our
Workspace Coee Bars
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OUR STAKEHOLDERS CONTINUED
Our quarterly brand-tracker survey asks 300
London SME business leaders and decision
makers what their priorities are when
selecting a work space. We’ve analysed this
data alongside our in-house customer survey
results and identified 12 key priorities for SMEs.
These are all areas for which we receive
positive feedback from our customers.
Of these 12, we have highlighted three key
priority areas over the following pages:
– Customisation, page 18
– Location, page 19
– Flexible leases, page 20
RESPONDING TO THE NEEDS OF OUR CUSTOMERS
100%
OWNERSHIP OF OUR BUILDINGS PUTS
US IN A UNIQUE POSITION WHEN
RESPONDING TO CUSTOMER DEMAND
FLEXIBLE OFFER
Flexible lease
Aordable
Blank canvas
TYPE OF PROPERTY
Location
Environmental credentials
Natural light/ventilation
QUALITY OF SERVICE
On-site support
Wi-Fi/connectivity
Comfort/amenities
SOCIAL ENGAGEMENT
Networking and community
environment
Events
Local community
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OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
What do our customers have in common?
They tend to have creative minds and are
deeply passionate, especially the ones I see
in my East London buildings. They’re often
architects, designers and video producers.
Why is blank canvas space important?
They want to stamp their own brand on the
space. They also want to set it up in a way
that works for how their team works – one
thing that’s become popular is for customers
to create their own phone booths. It’s
important they can welcome clients and
showcase their space.
Do you have any favourite fit-outs?
At Mare Street Studios, The Fellas podcasters
have created a variety of colourful sets that
serve as backdrops for recording their social
media videos, and wellbeing company Sweet
Tees house massage and yoga studios as well
as cinema rooms.
When new customers are first shown around
the buildings, I can see that they’re often
inspired by these other fit-outs and start to
picture what they can potentially do to their
own space.
What customer feedback do you receive?
The business owners I speak with every day
are very vocal about being able to brand
their own space, and often say it is one of the
reasons they chose Workspace. Those who
put the time into making their space feel like
home, tend to stay with us for longer and
continue to expand over the years.
How does Workspace help customers
personalise their space?
Firstly, we work with the customer to find
the right space in the right location. Next,
we review the customers’ fit-out proposals,
looking at all elements of the works, while
also considering health and safety, building
regulations and sustainability. The customer
then has free reign to create the space they
like, either using one of our suggested
contractors or one of their own.
RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
Ability to customise
Customers value blank
canvas space they can
make their own
Luisa Milazzo
Centre Manager at Mare Street Studios
and Brickfields
Q&A
Luisa Milazzo, Centre Manager at Mare Street Studios and Brickfields
Planes Studio built wooden phone booths
at their space in Brickfields, Hoxton
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OUR CUSTOMERS CONTINUED
RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
Location
In your experience, what do customers
prioritise in their search for space?
I spend 90% of my time out with prospective
customers on viewings. What I’ve seen is that
our oer appeals to such a diverse range of
businesses that they are often looking for
something slightly dierent – and usually
very specific.
For some customers, it’s important they have
the right style of building and breakout space.
For others, it’s about the right community of
neighbours, or being close to transport links
or where they live. This means they need as
much choice as possible. And, of course,
dierent buildings and areas each have their
own characteristics, and so we’ll often show
them two or three buildings in an area.
How do we cater to that desire for choice?
We are always expanding and improving
what we oer. Just this year, we added seven
new high-quality buildings to our London
portfolio from the purchase of McKay. This
means our customers now have 63 London
buildings to choose from.
Our pipeline of refurbishments will also
give customers even more options, creating,
for example, more meeting rooms, better
breakout areas, improved cafés and
additional bike storage. We strategically
select properties for refurbishment based
on the areas where my sales team is seeing
the most customer demand.
How do those new refurbishments aect
pricing?
They are beautifully designed and extremely
popular – so this means we can lift pricing.
For instance, our recent, relatively light-touch
refurbishment at Metal Box Factory in
London Bridge has seen a 30% increase
in rents at the business centre.
Our continually expanding
portfolio of buildings is
designed to oer the greatest
spread of choice possible
Charlie Fraser
Head of Sales
Q&A
Charlie Fraser, Head of Sales
Exmouth House,
Clerkenwell
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OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
Flexibility
What sort of leases do our customers want?
Our SME customers are ambitious and often
in a state of change, especially those with
their sights set on rapid growth. Our typical
two-year leases with a six-month rolling break
clause give our customers both certainty and
flexibility to scale up or down as they need to.
How do you and your Leasing team work
with customers?
This year, we’ve worked closely with over
500 customers to oer them flexibility, as
they chose to either expand into larger space,
take additional space, or in some instances,
contract into something smaller.
Overall, it’s been a really strong year, with
more than 380 expansions and 700 renewals.
How are we developing our leasing oer?
Our customers want to be free of
unnecessary admin. The easier we make our
leasing and expansion process, the freer our
customers are to focus on the key task at
hand: running their business.
We are continually striving to improve
the customer journey. For example, the
introduction of a new inclusive, transparent
billing structure, wrapping energy, Wi-Fi
costs and rent and service charge under a
single monthly payment, has proved popular
with customers.
Next year, we also plan to launch a new online
customer checkout that will make the
onboarding and moving process for our
customers even smoother.
Customers need flexibility as
they expand and contract
Simon Webb
Head of Leasing
Q&A
Simon Webb, Head of Leasing
Chiswick Auctions in Barley Mow,
a customer that has expanded this year
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OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
How our Board monitors culture
Page 120
Stakeholder:
Our people
How we engage
Employee feedback tells us that our strong
culture and set of values are well received by
our people, though we know there are always
areas where we can improve. While we carry
out an annual survey, which saw an 86%
response rate, we also gather feedback from
a series of face-to-face and virtual events
throughout the year. Our quarterly Wrap Live
town hall broadcasts provide a forum to hear
from teams across the business. This year we
introduced a bi-monthly Wrap on Tour, where
our leadership team visits clusters of buildings
to catch up with centre teams and gather
informal feedback.
How the Board engaged
– Reviewed and discussed our new
recruitment policies
– Reviewed our new company value ‘Make
It Fun’
– Our Chair hosted two employee engagement
sessions with a mix of centre and head oce
sta providing feedback
Significant topics raised
– Communication from senior leaders
– Diversity and inclusion, especially around
recruitment
– Intra-company collaboration and
information sharing
– Career development
– Evolving our values
– Recognition
– Social activities
– Health and wellbeing
Activity in the year
– Enhanced recruitment processes,
encouraging more internal hires and greater
diversity
– Six Wrap Live town halls – mix of in-person
and virtual events
– Launched Wrap On Tour events
– Increased frequency of Wrap newsletters
and Sharepoint intranet articles to shine
a spotlight on teams across the business
– Launched employee suggestions scheme
– Increased frequency of internal recognition
‘shout-out’, via informal and formal
communications
– Launched Diversity & Inclusion Networking
Group
– Delivered Unconscious Bias and Harassment
training for all employees
– Career Pathway programme for Relief
Managers, Centre Coordinators and
Assistant Centre Managers
– New FM team restructure, creating clearer
career structure and development
opportunities
– Charity, Wellbeing & Social Committee
hosted frequent events, including the Tour
de Workspace, Christmas Family Day and
Carnival in the Car Park.
Know your stu
We like people who
are serious about
their subject; those
who are open-
minded, interested
and ask questions.
Show we care
We value great
social skills and
those who
instinctively build
strong
relationships. We
think hard about
how to give back to
our communities.
Find a way
We look for those
who are persistent
and have the
confidence to move
things forward
when it is dicult.
Flexibility and
adaptability are key,
but so are focus
and determination.
Make it fun
We depend on
the imagination
and creativity of all
our people. We like
people who thrive
on injecting
enjoyment and
colour into the
day-to-day.
Our values are central to our business and
guide how we should treat each other, our
customers and our partners.
In our 2022 employee survey, people told us
they felt the name of our Be A Little Bit Crazy
value didn’t feel like the right fit. We launched
an internal competition and chose a simple,
aspirational replacement – Make It Fun – a
reminder for us to be creative, spontaneous
and enjoy what we do.
Our quarterly Workspace Winners awards
celebrate those who have lived these values.
OUR STAKEHOLDERS CONTINUED
EVOLVING OUR VALUES
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OUR STAKEHOLDERS CONTINUED
OUR PEOPLE CONTINUED
5.
6.
7.
8.
9.
11.
10.
12.
13.
14.
15.
18.
21.
17.
19.
20.
16.
3.
1.
2.
4.
RESPONDING TO THE NEEDS OF OUR PEOPLE
Diversity and inclusion
Why is diversity important at Workspace?
Our success depends on our people. Having
that breadth of experience and perspective
helps us attract and retain talent and
improves our decision making, customer
focus and employee satisfaction.
Why has it become a priority now?
It has always been a priority but we wanted
to further strengthen our diversity and
inclusivity. It was great to see this reinforced
by our annual employee survey, with people
telling us that they are invested in the
diversity of our Company.
What steps have we taken to better
understand our diversity?
In response to the survey, we launched a
project to gather data from our sta to start
benchmarking our diversity. I was delighted
to see our sta so engaged on the topic,
with more than 90% completing our request
for data.
The data itself showed that we are more
diverse than the national average, which we
are extremely proud of. However, we know
there are areas where we can improve.
How do we plan to improve diversity?
Our Recruitment Manager is ensuring all
internal and external candidates have the
same opportunities. Pulling from a mix of
social media, job boards and agencies, we
have widened our external recruitment pool
to boost diversity and attract the best
candidates.
We have also launched a new internal
Diversity & Inclusion Networking Group. The
feedback for the first two sessions has been
really positive – people have welcomed a
forum to discuss their personal challenges
in a safe space. Read more on page 149.
OUR STAKEHOLDERS CONTINUED
OUR PEOPLE CONTINUED
Our people value diversity
and inclusion in the workplace
Claire Dracup
Director of People & Culture
Q&A
Claire Dracup, Director of People & Culture
The annual sta ‘Workspace Walk’
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Stakeholder:
Our investors
How we engage
– We regularly engage with existing and
prospective shareholders through an active
investor relations programme around our
financial results and corporate activity. The
Board reviews a detailed bi-monthly investor
relations report which includes notable
views expressed by shareholders as well as
wider market participants, alongside share
register movements, broader sector and
peer news and progress on various investor
relations initiatives.
How the Board engaged
– Approved the sale of the residential
component of Riverside Business Centre
– Approved the appointment of Duncan
Owen as Chair
– Attended the AGM
– Reviewed and discussed the monthly
IR reports
– Approved results statements
– Approved payment of the interim and
full-year dividend
Significant topics raised
– Financial and trading performance
– Our future financing options
– Growth strategies
– Sale of McKay assets
– Our sustainability approach
– Brand and marketing capability
Activity in the year
– 150 investor meetings (in-person and
virtual)
– 19 sell-side analyst and buy-side investor
site tours
– Six real estate conferences attended
globally
– Sustainability Capital Markets Day
– AGM
OUR STAKEHOLDERS CONTINUED
Stakeholder:
Our partners and suppliers
How we engage
– We work with a broad range of long-term
partners and have a strong track record of
refurbishments and redevelopments where
strong relationships with local government,
communities and contractors are integral.
These relationships are based on stringent
ethical and sustainability standards. We
always provide direct feedback to suppliers
so that they can improve their products
and services.
How the Board engaged
– Approved modern slavery statement
– Reviewed new supplier code of conduct
Significant topics raised
– Creating sustainable buildings
– Compliance with building regulations and
neighbourhood plans
– Access for all user groups
– Urban regeneration
– Recycling and waste practices
– London Living Wage
Activity in the year
– Introduced a new supplier code of conduct
– Ensured suppliers and partners working
on Workspace premises pay Real London
Living Wage
– Encouraged supply chain to use
environmentally friendly products
– Promoted recycling and sustainable waste
practices
100%
CONSTRUCTION & FACILITIES PARTNERS
PAID REAL LONDON LIVING WAGE
Leroy House, Islington
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6.
7.
8.
9.
11.
10.
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15.
18.
21.
17.
19.
20.
16.
3.
1.
2.
4.
RESPONDING TO THE NEEDS OF OUR INVESTORS
Transparency
How have we helped the investor
community better understand our business?
This year we’ve focused on more clearly
articulating Workspace’s equity story to the
wider market. In particular, we’ve made great
progress in highlighting the importance of
our unique customer proposition, outlining
how our scale portfolio and ownership
provides our customers with the only flexible
space and lease option for London’s SMEs.
We also set out how our sustainable buildings
help drive income growth whilst also
positively influencing capital values over the
longer term.
How have we brought this story to life?
Our communications have been enhanced
by new materials designed specifically for
investor engagement, which include
photography showing our vast range of
properties and how our customers use
their space.
How have we been engaging with the
investor community?
We have had a busy year engaging more
regularly with analysts and investors,
increasing our attendance at conferences,
hosting more site tours and meeting and
speaking to more decision makers across
the market.
What did the Capital Markets Day focus on?
We hosted a very well-received sustainability
market update early in our financial year,
highlighting our inherently sustainable
business model and how we are well ahead
of the curve with our net zero pathway, EPC
upgrade plans and social impact strategy.
A panel discussion with leaders from across
Workspace demonstrated how sustainability
is embedded within our business.
Our investors value
transparency and clear
communication
Paul Hewlett
Director of Strategy & Corporate
Development
Q&A
Paul Hewlett, Director of Strategy & Corporate Development
Capital Markets Day,
Exmouth House,
Clerkenwell
OUR STAKEHOLDERS CONTINUED
OUR INVESTORS CONTINUED
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[Building Name, Building Location]
Stakeholder:
Our communities
How we engage
– A key element of our strategy is creating
a flatter, fairer London. By providing
high-quality, aordable space, we bring
employment into the local areas and help
create community hubs. We strongly believe
in giving something back to the communities
where we have a presence, which is why we
oer employment-focused support to
disadvantaged young people.
How the Board engaged
– Reviewed updates from our Social, Charity
& Wellbeing Committee
– Our Chair discussed social sustainability
initiatives at his employee engagement
sessions
Significant topics raised
– Identifying community partners, such as
local churches, schools, village halls, for our
InspiresMe work experience programme
– Fund raising opportunities for our charity
partner, Single Homeless Project
– Employment inequality
Activity in the year
– Re-launched InspiresMe programme,
including work experience for local students
at The Chocolate Factory, Kennington Park,
Mare Street Studios, Brickfields and Cargo
Works centres
– Assessed social value contribution (see
page 56)
– Hosted consultation events with local
residents and businesses around
development projects
– Raised £110,000 for Single Homeless
Project
Stakeholder:
The environment
How we engage
– We recognise that there is a climate
emergency which requires drastic action
from our industry. We have committed to
becoming net zero carbon by 2030 and our
focus on refurbishing buildings means we
can significantly reduce embodied carbon.
Our in-house operating platform ensures
we have access to live data on operational
energy usage. Engaging directly with
customers to enhance the sustainability
of our buildings ultimately drives higher
satisfaction scores and retention.
How the Board engaged
– Reviewed and approved updates to our net
zero strategy from our Head of Sustainability
– ESG Committee is chaired by six Non-
Executive Directors
Significant topics raised
– Energy management for customers
– Natural light and ventilation
– Solar panels
– Sustainable transport
– Measuring and monitoring air pollution and
energy consumption
Activity in the year
– Reduced scope 1 and 2 emissions by 11%
across like-for-like portfolio
– Recycling rate of 79%
– Optergy energy management platform
rolled out to a further seven buildings
– Electric Vehicle charging points used
3,000 times
£110K
RAISED FOR SHP
The Tour De Workspace fundraiser
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OUR STAKEHOLDERS CONTINUED
OUR MARKET
A clearly
dierentiated
customer oer
in a growth
market.
Our target market comprises 138,000 London SMEs with
more than one employee. With some 4,000 customers,
we currently let space to 3% of this market.
This target market continues to expand each year
1
. As the
demand for flexibility grows, we see significant long-term
opportunity to increase our market share.
1. BEIS Business Population Estimates 2022.
Brickfields,
Hoxton
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1
3
4
2
2010 2012 2013 20142011 2015 2016 2017 2018 2019 2021
2022
2020
270
150
170
190
210
230
250
1
3
2
4
6
5
9
10
11
8
7
12
LEASE
USE OF SPACE
High flexibilityLow flexibility
Low flexibility High flexibility
OUR MARKET A GROWTH MARKET
OUR DISTINCTIVE FLEXIBLE OFFER NUMBER OF LONDON SMES (1-249 EMPLOYEES) (000’s)
Trends aecting our market
We have helped pioneer the flexible work space market for more than 35 years, and we continually
evolve our oer to respond to changing market trends and customer requirements. Our unique
in-house operating platform means we directly interact with our customers on a daily basis,
giving us rich, live data on how customers’ expectations are changing.
Attracting a diverse customer portfolio
Our customers are owners and managers of
ambitious SMEs, often creators, makers or
innovators from a diverse range of sectors.
Expressing their business’ individuality and
personality is essential to them.
1. Information, Communication & Technology 14%
2. Wholesale & Retail 14%
3. Professional, Technical & Consultancy Services 13%
4. Arts, Entertainment & Recreation 11%
5. Marketing 7%
6. Financial Services 6%
7. Construction & Property 5%
8. Design 5%
9. Not For Profit 4%
10. Administrative & Support Services 4%
11. Travel, Hospitality & Leisure 3%
12. Other 14%
Trends
1. SMEs have remained resilient in the
face of mounting economic
pressures
Page 28
2. SMEs and their employees are more
selective than ever
Page 29
3. Net zero carbon targets are now a
priority to both landlords and
customers
Page 30
4. London remains a global hub for
businesses and an increasingly
creative SME community
Page 31
4,000+
CUSTOMERS ACROSS
A BROAD RANGE
OF SECTORS
THE WORKSPACE OFFER
Traditional oer
Large floor plates
Unfurnished
Turn-key oer
Large floor plates
Fully fitted
Serviced oer
Oces/co-working
Fully furnished
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OUR MARKET CONTINUED
Market trend 1:
SMEs have remained resilient
in the face of mounting
economic pressures
While the London economy has outperformed
the UK as a whole
1
, growth across the UK is
expected to slow during the financial year
2022/23
2
. Rising energy costs and inflation
have put pressure on consumers and
businesses, exacerbated by strike action
across rail and postal services. Despite these
conditions, SMEs remain optimistic
3
.
What this means for Workspace
Despite the challenging market conditions,
we have seen strong demand throughout
the year, having completed 1,312 deals. Our
diverse customers have demonstrated time
and again that they are agile, innovative
and resilient.
We have a track record of successfully
managing our business through economic
cycles by dynamically adapting our space,
oer and pricing. In challenging times, we can
flex pricing to recover occupancy where
needed. Outside of those challenging periods,
we are able to drive pricing.
Equally, our strong balance sheet, distinctive
flexible oer and freehold ownership model
means we are well positioned to weather any
further market uncertainty.
OUR MARKET CONTINUED
700+
RENEWALS
380
EXPANSIONS
Mirror Works,
Stratford
1. ONS, GDP first quarterly estimate, UK:
October to December 2022.
2. OBR Economic outlook March 2023.
3. FSB UK Small Business Index Q1 2023.
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Market trend 2:
SMEs and their employees are
more selective than ever
The UK has seen demand for flexible space
rise 22% in just one year
1
, with more choice
and greater flexibility in how teams work. To
attract and retain talent, business owners
need to provide high-quality space that
competes not just with other work space
providers but with employees’ homes.
What this means for Workspace
Our scale, ownership model, customer service
and truly flexible oer, developed over more
than 35 years, set us apart from other
providers in the market. Our centre teams
build relationships with our customers and
take the time to understand their
expectations, informing improvements to our
oer, buildings and the continuous pipeline of
refurbishments and redevelopments.
Crucially, we know that businesses value more
than just flexible leases – they want control
and the freedom to express their own identity,
making a home for their business. Our
distinctive oer allows them tailor their own
space for their teams and how they work. The
ability to personalise their space creates a
significant draw for attracting and retaining
talent. Our range of 76 buildings allows
customers to choose a location, community
and building that feels right to them, and they
have the capability to easily scale up or down,
or move elsewhere in our portfolio. Our
ongoing investment in our brand and
advertising campaigns continue to highlight
these benefits and clearly position Workspace
in the market.
OUR MARKET CONTINUED
5 mins
AVERAGE WALK FROM
A STATION TO OUR
BUILDINGS
Leather Market,
London Bridge
1. UK Flex Market Review, Instant Oce, July 2022.
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Market trend 3:
Addressing climate change
is a priority to both landlords
and customers
The built environment has improved its energy
eciency by 27% over the past 10 years
1
.
While newly constructed buildings are more
energy ecient, it is estimated that 80% of
buildings in 2050 will already have been built
by now
1
. The impact of these buildings is
therefore far greater than new builds, and so
the industry must prioritise decarbonising
existing buildings.
Despite rising energy prices, public support
for pursuing net zero carbon emission remains
high. Our quarterly brand tracker survey of
London SME decision makers saw 85% say
sustainability is important to their business
while more than 20% choose an oce
provider based on sustainability credentials.
What this means for Workspace
Workspace’s model is inherently sustainable:
we repurpose and preserve old buildings. For
instance, at our Leroy House refurbishment,
we will achieve this by retaining the building’s
structure, using recycled construction
materials and natural ventilation, installing
state-of-the-art solar panels, and replacing gas
boilers with air-source heat pumps.
We keep our operational energy intensity
across the portfolio, 129 kWhe/m
2
well below
the industry benchmark, 160 kWhe/m
2
, and
have reduced our scope 1 and 2 by 29% since
2019. For example, at new schemes we optimise
glazing ratios to balance solar gains, reduce
heat losses and maximise daylight levels.
OUR MARKET CONTINUED
1. UKGBC Whole Life Carbon Roadmap, 2022.
20%
OF SMEs CHOOSE
THEIR OFFICE BASED
ON SUSTAINABILITY
CREDENTIALS
Leroy House,
Islington
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Market trend 4:
London remains a global
hub for businesses, with an
increasingly broad range
of SME sectors
London ranks first among top global cities
for entrepreneurial success thanks to its
supportive ecosystem for early-stage
businesses
1
. The capital generates an eclectic,
thriving assortment of SMEs, with a keen
focus on creation and innovation. This year,
Workspace has seen strong demand from a
diverse range of sectors, with the likes of
fashion and digital video production prevalent
alongside tech and digital sectors.
What this means for Workspace
We have a deep, long-term knowledge of
London and we are well positioned as the ideal
home to the capital’s diverse SME population.
The blank canvas space we oer means we
can cater to the eclectic uses of space they
require. This is reflected in the fact that 50%
of our customers use their space for more
than just desk-based working – for example,
video production, photography, fashion
showrooms, AI and VR production,
architecture, food production, clothing
storage, and more.
The scope and scale of our properties oers
a wide range of choice to London’s diverse,
selective SMEs, enabling them to find the right
space and community for their business.
OUR MARKET CONTINUED
50%
OF OUR CUSTOMERS
USE OUR SPACE FOR
MORE THAN JUST DESK-
BASED WORKING
Westbourne Studios,
Ladbroke Grove
1. Oberlo’s Top Cities For Entrepreneurial Success, 2021.
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Driven by our
purpose and
understanding
what our
stakeholders
want.
Our strategy creates value for our
customers, people and communities.
OUR STRATEGY
Driving customer-led growth
Our vision is to be the home to London’s
brightest businesses and our growth plans
are dependent on the strong SME demand for
our flexible oer and the customer experience
we deliver.
Page 33
Delivering operational excellence
Our in-house platform means we have a
uniquely scalable business. We actively
manage our portfolio to deliver returns
through like-for-like growth, projects,
acquisitions and disposals, while maintaining
a prudent approach to financing.
Page 34
Being sustainable
We view every aspect of our business through
a sustainability lens. Our aim is to create a
climate-resilient portfolio, to continue to
prioritise and look after our people and to have
a positive impact on our local communities.
Page 35
Key performance indicators
There are clear links between our KPIs and
our strategy. Regular measurement of our
KPIs ensures we maintain discipline in
strategic decisions.
Page 59
Principal risks and uncertainties
Risk management is an integral part of all
our activities. We focus on key risks that could
impact the achievement of our strategic goals.
Page 69
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OUR STRATEGY
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TO GROW.
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London’s Brightest Businesses
events for customers
We hosted four of our London’s
Brightest Businesses panel events
throughout the year, boasting an
average turnout of 100 customers.
The first event of the year saw TV
personality Ben Fogle moderate
a discussion on how innovative
SMEs are helping make everyday
lives more sustainable. Our Head
of Sustainability, Sonal was joined
on the panel by Workspace
customers, Decent Packaging,
a compostable packing supplier,
and Buzzbike, a bicycle share
scheme, as well as sustainability
consultant Anthesis.
Events later in the year covered
topics including wellbeing and
building a brand in a social world,
moderated respectively by Love
Island’s Dr Alex George and
customer and influencer Grace
Beverley.
Glowing feedback has highlighted
how customers value the insight
and tips they can take away from
the sessions and apply to their
own businesses.
Relevant KPIs
Financial performance:
1, 5, 6
Non-financial performance:
1, 2
Relevant principal risks
and uncertainties
1, 2
Market trends
1, 2, 4
Strategic pillar:
Driving customer-led growth
CEMENT OUR POSITION AS HOME
TO LONDON’S BRIGHTEST
BUSINESSES
CONTINUALLY ENHANCE
CUSTOMER EXPERIENCE
LEADING IN LONDON’S FLEXIBLE
OFFICE MARKET
Key priorities
– Reinforce our dierentiated
customer proposition to capture
demand and grow market share
– Raise our profile amongst target
customers and stakeholders
Key priorities
– Continue to improve our flexible
oer and service to retain
customers and support occupancy
– Focus on customer service, with
centre teams creating vibrant
communities
Key priorities
– Grow our portfolio of historic and
character properties in the right
locations
2022/23 key achievements
– Continued to evolve brand
marketing to raise awareness of our
dierentiated oer, including digital
and out-of-home advertising
– 1,312 deals, almost at pre-Covid
levels
– 1,070 customer renewals and
expansions
– Significantly expanded our
customer events programme
2022/23 key achievements
– Continued to improve the customer
journey, including enhancements to
the renewal processes and
communications
– Created 10 new meeting rooms,
fitted with state-of-the-art video
conferencing
– Improved cafés across the portfolio,
including three new Workspace
coee bars
– Delivered 71 customer events, with
2,500 attendees
2022/23 key achievements
– Completed latest refurbishments
phases of Pall Mall Deposit and
Barley Mow Centre in West
London, and Metal Box Factory
in London Bridge
– Integration of 20 London and
South East assets following the
McKay acquisition
2023/24 aims
– Continue to invest in our brand to
enhance our visibility and profile
– Grow our community across social
media
2023/24 aims
– Continue to enhance the customer
journey, including a new online
customer portal
– Ongoing improvement to cafés
2023/24 aims
– Drive occupancy across our new
refurbishments and acquisitions
– Ongoing roll out of Workspace’s
visual branding to our core new
buildings
OUR STRATEGY CONTINUED
4
PANEL EVENTS
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Wi-Fi upgrades
We have invested to significantly
improve Wi-Fi connectivity
across 23 sites this year, which
means our customers are now
able to connect to superfast
internet via the latest Wi-Fi 6
technology.
The new service provides four
times the capacity of the usual
network, allowing customers
seamless connectivity even in the
more densely populated parts of
our buildings, such as the café
and breakout areas.
We are starting to explore 5G
in-building solutions, which will
give customers more choice in
how they like to work, opting for
either Wi-Fi or mobile network
throughout our buildings.
Relevant KPIs
Financial performance:
1, 5, 6
Non-financial performance:
1, 2
Relevant principal risks
and uncertainties
1, 2
Market trends
1, 2, 4
Strategic pillar:
Delivering operational excellence
ACTIVE PORTFOLIO MANAGEMENT EFFICIENT, SCALABLE OPERATING
PLATFORM
PRUDENT FINANCING AND STRICT
INVESTMENT CRITERIA
Key priorities
– Continue to execute our rolling
pipeline of refurbishment and
redevelopment projects
– Proactively identify opportunities
to acquire
– Selectively recycle capital through
disposals
Key priorities
– In-house capability and expertise
drives income growth
– Focus on innovation, technology
and customer experience
– Ability to scale without significant
cost growth
Key priorities
– Maintain strong balance sheet
– Strict focus on returns
– Disciplined approach to gearing
2022/23 key achievements
– Upgraded over 400,000 sq. ft.
of space across the portfolio,
including Metal Box Factory in
London Bridge, Barley Mow in
Chiswick and Park Hall in Dulwich
– Sold Riverside Business Centre
in Wandsworth
– Sold Strawberry Hill Medical Centre
in Newbury and Great Brighams
Mead in Reading
2022/23 key achievements
– Expanded our new Customer
Experience team, dedicated to
reviewing and improving the
customer service
– Integrated Asset Management,
Development, FM and Sustainability
teams to drive strategic,
operational, design and
sustainability improvements
– Rolled out inclusive billing across
majority of portfolio
2022/23 key achievements
– Refinanced the ESG-linked
Revolving Credit Facility
– Put in place acquisition facility
for McKay
– Reported on our allocation of
assets under our Green Finance
Framework
2023/24 aims
– Obtain planning consent for
Havelock Terrace in Battersea
and Shaftesbury Centre in
Ladbroke Grove
– Complete Leroy House in Islington
– Progress refurbishments pipeline,
including Buswork in Islington,
Salisbury House in Moorgate,
Kennington Park in Oval
2023/24 aims
– Continue to upgrade Wi-Fi across
the portfolio to enhance customer
connectivity
– Optimise digital marketing capability
2023/24 aims
– Improve credit metrics
– Recycle capital to reduce gearing
OUR STRATEGY CONTINUED
23
LOCATIONS WHERE WE
DOUBLED WI-FI SPEEDS
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How our approach to
sustainability enhances
customer engagement
Sustainability is important to our
customers. They are
performance-driven and care
about a range of issues, such as
how much energy we use in our
buildings and how we manage
our waste. They also share our
passion for supporting local
communities and driving local
economic and social impact
through our business operations.
Our approach to engaging with
customers on sustainability helps
build long-term customer
relationships, resulting in higher
customer satisfaction scores,
engagement and retention.
This year’s ESG Advocacy Score
is at 71%, an increase of 5% year
on year, reflecting our increased
focus on ESG across the business
and alignment with customer
interests. We have seen that there
is a strong correlation between
ESG score and overall Customer
Advocacy scores.
Relevant KPIs
Financial performance:
1, 5, 6
Non-financial performance:
1, 2
Relevant principal risks
and uncertainties
1, 2
Market trends
1, 2, 4
Strategic pillar:
Being sustainable
DELIVERING A CLIMATE-
RESILIENT PORTFOLIO
LOOKING AFTER OUR PEOPLE SUPPORTING OUR COMMUNITIES
Key priorities
– Reduce energy consumption across
the portfolio and reduce greenhouse
gas emissions in line with our net
zero carbon pathway
– Reduce waste generation across
the portfolio
– Achieve high environmental
standards across all development
and refurbishment activities
Key priorities
– Support and enhance the wellbeing
of our employees and customers
– Improve diversity across all levels
of business and embed inclusive
behaviours into our culture
– Support professional development
and career progression of our
people
Key priorities
– Enhance the impact of our work
with Single Homeless Project (SHP)
– Roll out our local skills and
employment programme,
InspiresMe, in partnership with
our customers
– Create a social impact framework
to monitor and enhance social
value generated
2022/23 key achievements
– 5% reduction in average energy
intensity across the portfolio
– 27% reduction in greenhouse gas
emissions from gas consumption
– 12% increase in spaces with A/B
EPC ratings
– 100% renewable electricity procured
2022/23 key achievements
– 57 wellbeing events hosted,
benefitting 1,600 customers
– Voluntarily paid Living Wage across
the portfolio, including suppliers
2022/23 key achievements
– 620 employee hours dedicated
to volunteering for SHP
– 180 students benefitted from
our InspiresMe programme
– 17 food bank collections
– Created our social value
framework and targets
– £110k raised for SHP
– Delivered a £600k equivalent
of social value
2023/24 aims
– Drive further improvement in energy
eciency
– Further decarbonise heat
– Enhance greenery and biodiversity
credentials
– Gain better visibility of water
consumption
2023/24 aims
– Improve diversity and inclusion
across the business
– Champion responsible and inclusive
recruitment
– Evolve our wellbeing oering in
response to employee needs
2023/24 aims
– Scale up InspiresMe in partnership
with our customers
– Roll out a place-based community
impact programme across each
of our centres
– Evolve our SHP partnership
OUR STRATEGY CONTINUED
71%
ESG CUSTOMER
ADVOCACY SCORE
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Sustainability is inherent to
Workspace and informs everything
we do. Our environmental and social
achievements this year demonstrate
our performance-driven mindset
and undeterred commitment to
maximising stakeholder value.
Sonal Jain
Head of Sustainability
SUSTAINABILITY
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Highlights
2022/23
2021/22
2020/21
79%
75%
73%
2022/23 (lfl)
2021/22
2019/20 (baseline)
9,227,509*
12,586,574*
13,888,908*
SUSTAINABILITY CONTINUED
Ratings
81
Real Estate Assessment Score
96
Development Assessment Score
A
Public Disclosure Score
A-
GOLD
EPRA Sustainability Best Practice
Recommendations Award
AA
MSCI ESG rating
Low Risk
Sustainalytics ESG Risk Rating
Membership
RATINGS AND MEMBERSHIPS
27%
YEAR ON YEAR REDUCTION IN FOSSIL
FUEL CONSUMPTION (LIKE-FOR-LIKE
PORTFOLIO)
12%%
OF THE TOTAL PORTFOLIO’S FLOOR
AREA WAS UPGRADED TO EPC A/B
71%
CUSTOMER ESG ADVOCACY SCORE
1,600
CUSTOMERS BENEFITTED FROM
OUR WELLBEING OFFERING
120
SUSTAINABILITY
EVENTS DELIVERED
70
ELECTRONIC DEVICES
DONATED TO LOCAL
CHARITY PARTNER
79%
RECYCLING RATE
180
STUDENTS AND 12 CUSTOMERS
PARTICIPATED IN THE INSPIREME
PROGRAMME ACROSS FIVE CENTRES
£110K
RAISED FOR SHP
620
EMPLOYEE HOURS DEDICATED
TO VOLUNTEERING FOR SHP
£600K
SOCIAL VALUE GENERATED
Highlights
* kWh of gas used.
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SUSTAINABILITY CONTINUED
Our approach
We have embedded sustainability throughout
our business, driving how we design and
operate our buildings and informing every
strategic decision we take.
Our three-pillar sustainability strategy –
(1) Delivering a Climate-Resilient Portfolio,
(2) Looking After Our People, (3) Supporting
Our Communities – allows us to continually
improve our environmental and social impact,
whilst adding value to all our stakeholders. We
have also mapped our strategy against the UN
Sustainable Development Goals (SDGs) to
ensure our objectives and targets are aligned
with global ambitions.
With a view to enhance the transparency of
our reporting and adding to our existing
annual publication of the EPRA report, we are
now reporting on our environmental and
social performance in accordance with the
Global Reporting Initiative (GRI) 2021 and in
line with the Sustainability Accounting
Standards Board (SASB) guidelines (learn
more in the Environmental Performance
section of our investor website).
Governance
The highest level of responsibility for our
sustainability strategy lies with our Chief
Executive Ocer, and together with the rest
of the Workspace Board, the group acts as a
guardian of the strategy. In addition, an ESG
Board Committee (refer to page 172) has
been established to bolster our sustainability
governance and drive further integration across
business decisions. The Board is supported
by the Executive Committee in setting and
delivering our sustainability strategy.
At an operational level, we have committees
dedicated to both environmental sustainability
and social sustainability, comprising senior
representatives from across the business.
The two committees are responsible for
operationalising the delivery of our strategy.
Progress is reported to the Board and Executive
Committee monthly. We also have a number
of sustainability champions across the business
who help mobilise ground-up support.
OUR THREE-PILLAR SUSTAINABILITY STRATEGY
DELIVERING A
CLIMATE-RESILIENT
PORTFOLIO
1
Future proofing our
business by minimising our
environmental impact and
transitioning to net zero
carbon by 2030.
Relevant SDGs
Read more
Pages 41 to 49
LOOKING AFTER
OUR PEOPLE
2
Looking after our people
through our focus on
wellbeing, responsible
business practices, skills
and employment.
Relevant SDGs
Read more
Pages 50 to 53
SUPPORTING OUR
COMMUNITIES
3
Creating lasting value for
our communities through
employment-led
regeneration and
meaningful partnerships
with local community
groups and charities.
Relevant SDGs
Read more
Pages 54 to 57
This year our sta
took on the Three
Peaks Challenge
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IMPACT ON WORKSPACE
IMPORTANCE TO EXTERNAL STAKEHOLDERS
Energy and
carbon management
Pages 41–49
Health and safety
Page 90
Ethics and Conduct
Pages 90–91
Regulatory
compliance
Page 75
Sustainable
building design
Pages 43, 46
Waste
Page 44
Stakeholder
engagement
Page 25
Diversity and
inclusion
Page 52
Nature and
biodiversity
Page 45
Sustainable and
responsible
procurement
Page 43
Water
Page 45
Sustainable
transport
Page 45
Risk
management
Pages 69, 171,
92–105
Wellbeing
Pages 51, 53
Charitable
giving
Pages 54–56
Skills and
employment
Pages 51, 57
Climate change
adaptation
Page 45
Human rights and
fair pay
Page 51
Local social and
economic impact
Page 56
SUSTAINABILITY CONTINUED
Defining what matters most
Materiality assessment
Our materiality assessment helps us
understand the issues that matter most to
our internal and external stakeholders.
We identified and assessed a number of
environmental, social and governance issues
to refine our approach.
Stakeholder engagement
We consulted with our internal and external
stakeholders, including customers and
employees through our bi-annual surveys
and ongoing interactions with our suppliers
to confirm our material issues, as shown on
the matrix.
Our response
Our sustainability strategy covers all issues
identified as material to our business.
Subsequent sections in the report highlight
how we are positively impacting these issues.
The process we followed:
Step 1 Identify key stakeholders
List material issues
Step 2 Consult stakeholders
– Social Sustainability
Committee
– Environmental Sustainability
Committee
– Employees
– Customers
– Suppliers
Step 3 Analyse consultation outputs
– Importance to stakeholders
– Significance of impacts
– Ability of the business
to influence
Step 4 Prioritise issues and refine
our strategy
OUR MATERIALITY MATRIX – KEY SUSTAINABILITY ISSUES
Significant
Very significant
Very significant
Significant
Environmental issue
Social issue
Governance issue
GRI reference
Refer to the sustainability performance section
on our investor website
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SUSTAINABILITY CONTINUED
Alignment to UN SDGs
The aim of our sustainability strategy is to maximise value for all our stakeholders – our people, our customers, our suppliers, our investors and the environment.
Our strategy is also aligned with several of the UN Sustainable Development Goals (SDGs)
AFFORDABLE
AND CLEAN ENERGY
SUSTAINABLE CITIES
AND COMMUNITIES
CLIMATE ACTION GENDER EQUALITY QUALITY EDUCATION
Relevant stakeholders:
CUSTOMERS
PARTNERS AND SUPPLIERS
THE ENVIRONMENT
Relevant stakeholders:
CUSTOMERS
COMMUNITIES
Relevant stakeholders:
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
THE ENVIRONMENT
Relevant stakeholders:
PEOPLE
COMMUNITIES
Relevant stakeholders:
CUSTOMERS
PEOPLE
COMMUNITIES
We invest in on-site renewable
energy by installing roof-mounted
solar panels across our portfolio,
ensuring we generate clean power.
We also source 100% of our
electricity from renewable sources,
through our REGO certified green
contract.
As custodian of some ofLondon’s
most iconic buildings, we work to
reduce the environmental impact
of London’s built environment and
build resilience for the long term.
This is delivered through sustainable
design, construction and the way
we operate all of our buildings.
The delivery of our 2030 net zero
carbon commitment ensures we are
decarbonising our business swiftly
and thus playing our part in limiting
global warming to 1.5°C.
Our people practices actively
support gender equality, including
the use of gender-neutral language
in all our policies and recruitment
material. All our people have been
trained on unconscious bias and
we strive to create a truly inclusive
work environment. We work hard
to identify and address gaps within
existing workplace policies, as well
as oering professional development
opportunities to all our employees.
Through our InspiresMe
programme, we work alongside our
customers toprovide inspiration,
knowledge, support and experience
to individuals within our communities
who are most at risk of NEET
(Not in Education, Employment
or Training) and help them to reach
their full potential.
INDUSTRY, INNOVATION
AND INFRASTRUCTURE
RESPONSIBLE
CONSUMPTION
AND PRODUCTION
GOOD HEALTH
AND WELL-BEING
DECENT WORK AND
ECONOMIC GROWTH
REDUCED INEQUALITY
Relevant stakeholders:
PARTNERS AND SUPPLIERS
THE ENVIRONMENT
Relevant stakeholders:
PARTNERS AND SUPPLIERS
THE ENVIRONMENT
Relevant stakeholders:
CUSTOMERS
PEOPLE
Relevant stakeholders:
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
Relevant stakeholders:
CUSTOMERS
PEOPLE
COMMUNITIES
By investing inclean technology
and materials we are reducing
ourenvironmental impact while
driving innovation in the industry.
Investment in energyecient
equipment and eective
management ensures our energy
consumption is optimised. We also
work hard to reduce waste in
operations and construction, aiming
to divert 100% from landfill.
Provision of safe and healthy
workplaces for our employees and
customers is paramount. We do this
by ensuring health and wellbeing
considerations are fully
incorporated into our building
design. We also run an extensive
wellbeing support programme for
all our employees and customers.
We provide quality flexible space
for SMEs across London. Our model
also creates hubs of economic
activity that benefit entire
communities through employment-
led regeneration of the area. We are
also an accredited Living Wage
Employer, ensuring that all our
employees and contractors are paid
at Real London Living Wage.
Our InspiresMe programme aims
to tackle youth unemployment and
the ethnicity gap by building
relationships with schools and youth
organisations across London to
oer work experience placements,
career talks, CV workshops and
interview practices.
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SUSTAINABILITY CONTINUED
Strategic pillar:
1
Delivering a climate resilient portfolio
In 2019, we made a commitment to delivering
a net zero carbon portfolio by 2030, covering
all scopes of carbon. We also signed the
Better Buildings Partnership’s (BBP) Climate
Commitment and published our net zero
pathway, quantifying our emissions and
outlining our decarbonisation trajectory for
both our operational and embodied carbon.
To make sure this goal is robust and in line
with a 1.5°C future, we have aligned our
emissions reduction trajectory with approved
Science-based Targets (SBT), requiring:
– 42% reduction in scope 1 emissions by
2030, from a 2019/20 base year
– 20% reduction per square foot of Net
Lettable Area (NLA) in scope 3 emissions
from capital goods by 2030, from a
2019/20 base year
– Sourcing of 100% renewable electricity
through to 2030
Like-for-like performance
(Workspace portfolio excluding major
projects)
Investment in energy eciency and
decarbonisation of our portfolio has driven
significant progress on our net zero carbon
pathway. For our like-for-like Workspace
portfolio, we reduced our scope 1 emissions
by 32% and our scope 2 emissions by 28%
in 2022/23 against our 2019/20 baseline.
Going forward, we aim to go beyond our
SBTs and eliminate our operational emissions
as much as we can across the entire portfolio,
with minimal reliance on carbon osetting.
A significant proportion of our scope 3
emissions is attributed to our refurbishment
and development activities. This means
reducing the embodied carbon of our
development projects is a priority for us.
Our refurbishments are on average designed
to achieve a 60%–70% reduction in embodied
carbon when compared to current industry
benchmarks of 1,000 kgCO
2
/m
2
.
Whole portfolio performance
(Workspace portfolio + McKay)
Following the acquisition of McKay Securities,
we have integrated emissions from the
acquired properties into our greenhouse gas
reporting this year. The absolute emissions
reported for the 2022/23 period are therefore
not comparable to the emissions covering the
2019/20 baseline period or previous years,
as those only covered emissions from the
historic Workspace portfolio. A detailed
breakdown of our absolute greenhouse gas
emissions can be found on page 101.
Enhancing accountability
This year, we have made
great progress in increasing
the accuracy of our energy
data, notably through an
accelerated roll-out of smart
Building Energy Management
Systems (BEMS) across the
portfolio.
This has enabled our facilities
managers to better
understand energy usage
across the properties and
target reduction initiatives
that are most eective.
To further drive action, we
have embedded energy and
carbon targets into various
team’s objectives. This drove
collective eort and
streamlined collaboration
between various teams, all
working towards a common
goal of energy and carbon
reduction.
Relevant UN SDGs
29%
SCOPE 1 AND 2 REDUCTION
IN LIKE-FOR-LIKE PORTFOLIO
SINCE 2019/20
28
PROPERTIES EQUIPPED
WITH BUILDING ENERGY
MANAGEMENT SYSTEMS
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
OUR GREENHOUSE GAS EMISSIONS
As a signatory to BBP’s Climate Commitment
and Science Based Targets initiative, we
disclose progress against our net zero pathway
annually. We have reported our absolute
greenhouse gas emissions in line with the
GHG Protocol Guidelines. Our scope 1 and 2
categories encompass emissions where we
have operational control and therefore include
tenant consumption where we procure gas,
electricity or heat on their behalf. Although
our electricity is REGO-backed, we report
scope 2 emissions using a location-based
methodology.
We strive to reduce the
carbon intensity of our
portfolio by phasing out gas
heating and implementing
energy eciency measures
Ariane Ephraim
Sustainability Manager
WORKSPACE PORTFOLIO
LOCATION BASED SCOPE 1, 2, 3 GHG EMISSIONS (tCO
2
e)
Scope 1
2,358
Scope 2
5,142
Scope 3
6,614
SCOPE 1 GHG EMISSIONS (tCO
2
e)
2022/23
2021/22
2020/21
2019/20 (baseline)
2,358
3,221
2,877
3,451
SCOPE 2 GHG EMISSIONS (tCO
2
e)
2022/23
2021/22
2020/21
5,142
5,229
4,719
2019/20 (baseline) 7,144
MCKAY PORTFOLIO
LOCATION BASED SCOPE 1, 2, 3 GHG EMISSIONS (tCO
2
e)
Scope 1
830
Scope 2
1,295
Scope 3
9,998
WHOLE PORTFOLIO
LOCATION BASED SCOPE 1, 2, 3 GHG EMISSIONS (tCO
2
e)
Scope 1
3,188
Scope 2
6,437
Scope 3
16,612
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
ESG TARGETS
Target
Relevant
material issue
Relevant
UN SDG Status Performance commentary
Reduce energy
intensity by 5%
Energy & carbon
management
Achieved
Like-for-like Workspace portfolio
We achieved a 5% reduction in average energy intensity across the portfolio, compared to last year. This was mainly driven by
significant reduction in gas use across the portfolio, which oset a 3.6% increase in electricity consumption due to higher
operational activity across our sites. We invested over £8m this year on various energy eciency initiatives across the portfolio,
including LED lighting, presence detection sensors, smart building management systems, secondary glazing and heat pumps.
We also ran extensive customer engagement campaigns to reduce whole building energy consumption including our
successful participation to the CUBE UK energy savings competition.
Whole portfolio
Our portfolio is inherently energy ecient when compared to industry benchmarks. The average energy intensity across our
combined portfolio is 129 kWhe/m
2
/year, which is 19% better than current UK Green Building Council energy performance
target for net zero carbon buildings.
Reduce scope 1
emissions by 5%
across the portfolio
Energy & carbon
management
Achieved
Like-for-like Workspace portfolio
We achieved a significant reduction of 27% in gas related emissions across the portfolio. This was primarily driven by roll out of
smart Building Energy Management Systems across a number of buildings, optimisation of temperature set points and timing
controls and implementation of over 70 HVAC upgrade projects. Currently over 30% of our portfolio is fossil fuel free (all
electric or served by district heating).
All new developments
and refurbishments
designed to be net
zero carbon, aiming
to achieve embodied
carbon of less than
500 kgCO
2
/m
2
Energy & carbon
management
Responsible
procurement
Achieved
Like-for-like Workspace portfolio
We continue to implement our sustainable development framework across all major constructions and refurbishments. This
framework ensures all our projects meet the net zero carbon brief. We also undertake whole-life carbon analysis at key design
stages to help us further reduce embodied carbon by optimising design and material choices. Estimated embodied carbon of
our current projects at Leroy House, Havelock Terrace, Riverside and Chocolate Factory is 230 kgCO
2
/m
2
, 504 kgCO
2
/m
2
,
469 kgCO
2
/m
2
and 291 kgCO
2
/m
2
respectively. Overall, we achieved a 51% reduction in greenhouse gas emissions from capital
goods per sq. ft. from a 2019/20 base year.
Increase renewable
energy supply and
source 100%
renewable electricity
Sustainable
procurement
Achieved
Like-for-like Workspace portfolio
12 sites are equipped with solar panels and generated 191,629 kWh of green electricity in the past year, equivalent to the annual
electricity usage of 64 typical UK households. Three additional solar projects are currently being implemented, amounting to
an annual generation capacity of 78,543 kWh once installed. We also continue to source 100% renewable electricity from our
utility provider (REGO-backed).
Whole portfolio
14 sites have solar panel installations.
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Target
Relevant
material issue
Relevant
UN SDG Status Performance commentary
Increase the % of EPC
A and B rated areas in
the portfolio by 10%
Energy & carbon
management
Achieved
Like-for-like Workspace portfolio
This year we upgraded 620k sq. ft. of our portfolio to A/B rated energy performance certificates (EPC) by installing high
eciency lighting and HVAC systems. Overall we increased A/B rated areas by 15%, bringing 43% of our portfolio holding to
an A or B EPC rating.
Whole portfolio
Following the energy eciency upgrades, over 43% of our core portfolio is rated EPC A/B.
All development
projects to be
BREEAM Excellent
and EPC A (B for
refurbishments)
Energy & carbon
management
Not
applicable
Like-for-like Workspace portfolio
A total of 20 buildings are BREEAM certified in our portfolio. No new projects were completed this year. All projects in the
pipeline are being designed to achieve an ‘Excellent’ BREEAM certification and A rated EPC (B for refurbishments).
Achieve recycling rate
of >76%, divert 100%
waste from landfill
and remove single use
plastics from cafés
Waste and
recycling
Achieved
Like-for-like Workspace portfolio
We achieved an average recycling rate of 79% across the portfolio. A total of 2,825 tons of waste was generated across the
portfolio, comprising of 68% post consumer waste, 21% general waste, 6% food and 5% bottom ash.
SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
ESG TARGETS CONTINUED
Our approach to sustainable waste management
Sustainable management of waste is both a priority for us and our customers. To ensure our people follow the right
behaviours on waste management we ran 16 awareness events in 2022/23 and continued to advocate correct recycling via
signage, posters and email communications, resulting in a significant increase in our recycling rate across our centres to 79%.
We have also teamed up with FareShare, a charity redistributing surplus food from the UK’s top food companies to charities
and community groups. For every food waste collection, a meal is donated via FareShare to those most in need. So far 1,300
meals have been donated.
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Target
Relevant
material issue
Relevant
UN SDG Status Performance commentary
Benchmark water
consumption and
drive reduction in use
Water
Roll
forward
Like-for-like Workspace portfolio
Our average water consumption intensity (where we have visibility) across the historic portfolio is within GRESB standard
practice. We will continue to roll out water meters across the sites where we don’t have visibility with a view to accurately
benchmarking our portfolio water consumption.
Increase greenery and
biodiversity across the
portfolio, targeting at
least 15% improvement
in biodiversity net gain
on development
projects
Nature and
biodiversity
Achieved
Like-for-like Workspace portfolio
We have reviewed industry guidance and developed a biodiversity policy setting out our approach to nature and biodiversity.
We will be updating the document in line with TNFD guidance this coming year. Driven by our sustainable development
framework, we will significantly enhance Biodiversity Net Gain (BNG) across our two development projects – Havelock Terrace
(100% BNG) and Shaftesbury (74% BNG).
Refine climate risk
assessment and create
adaptation plans for
assets exposed to
hazards
Climate change
adaptation and
resilience
Achieved
Whole portfolio
We have reassessed our core portfolio’s exposure to physical climate risk using latest climate models and used probabilistic
models to assess value at risk to business. We have also reviewed transition risk to business taking into account the acquisition
of the McKay portfolio. Find more detail in our TCFD section along with an explanation of our mitigation strategy on page 92.
Enhance green travel
infrastructure across
the portfolio
Sustainable
transport
Achieved
Whole portfolio
We have a total of 32 EV charging points across the portfolio, which were utilised over 3,000 times in the past year, saving
23 tCO
2
e. We have also upgraded site facilities to encourage green transport and have installed an additional 25 showers and
50 cycling racks across the portfolio.
SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
ESG TARGETS CONTINUED
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
The redevelopment of
Chocolate Factory is a perfect
example of how preserving the
heritage of a building goes
hand in hand with enhancing
its environmental performance
Bryony Gerega
Head of Development
CASE STUDY
Redeveloping Chocolate Factory in Wood Green
THE CHOCOLATE FACTORY IN NUMBERS
38,000 sq. ft.
OF REFURBISHED SPACE
Excellent
TARGETING BREEAM EXCELLENT RATING
291 kgCO
2
e/m
2
NLA
EMBODIED CARBON (71% LESS THAN
INDUSTRY BENCHMARKS)
39%
EXPECTED IMPROVEMENT ON
PART L ENERGY STANDARDS FOR
REFURBISHED SPACE
The Chocolate Factory,
Wood Green
Bryony Gerega
Head of Development
Like many of Workspace’s
buildings, Chocolate Factory has
a long and rich history. Whilst it
is now home to 40 customers,
with activities ranging from
luxury wallpaper designers to
streetwear brands and artists,
the site was a sweets
manufacturing facility towards
the end of the 19th century.
Chocolate Factory is now one of
Workspace’s main redevelopment
projects, and will upgrade 38,000
sq. ft. of business space. Careful
design considerations led us to
preserve most of the old
structure and give a second life
to unique features such as the
historic façade, exposed bricks
and ironwork.
These design choices both
preserve the site’s heritage but
also drastically reduce the
project’s carbon emissions.
The current design is estimated
to emit 291 kCO
2
/m
2
in embodied
carbon, a significant reduction
from the defacto option which
entailed the demolition of an old
water tower, an industrial-era
enclosed bridge and low-rise
storage buildings. All of these
building elements will now be
repurposed into meeting spaces
and site amenities. Operational
energy and carbon reduction is
also central to the project’s
design, which will include high
performing windows and internal
insulation, as well as decarbonised
heating through the installation
of heat pumps.
The project is part of the wider
mixed-use regeneration scheme
at this location, including 230
residential units and 72 aordable
housing units with a new public
square and significant
landscaping improvements.
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PROPERTIES
0
300
250
200
150
100
50
SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
APRIL 2022 TO MARCH 2023 ENERGY USE INTENSITY (kWhe/m
2
NLA)
Driving energy reduction is a key priority
for the business and we have invested over
£8m this year in ecient lighting, presence-
detection sensors, smart Building Energy
Management Systems and heat pumps to
remove reliance on gas boilers. We have
closely monitored each property’s energy
performance and optimised temperature
controls and timers. As a result, we have
decreased our portfolio energy intensity by
5% across the like-for-like Workspace portfolio.
Taking into account the acquisition, the
average energy intensity of our core portfolio
is 129 kWhe/m
2
. This represents a 7.5%
increase from last year’s average energy
intensity due to high energy consumption
associated with some of the properties we
have recently acquired. We have also
witnessed increased occupational activity
across our centres compared to the last two
years of the pandemic, which has also
contributed to an increase in electricity use
in customer occupied areas.
Following integration of the McKay portfolio,
we are creating a targeted energy reduction
programme for the high consuming buildings
which will be rolled out this coming year. We
expect to see a significant drop in the energy
intensity profile of these properties as a result.
The graph shows the energy intensity of all
properties in the oce portfolio. All buildings
but 15 meet the 2020 UKGBC energy
performance target for net zero carbon
buildings (depicted by yellow line) and 30
buildings already meet 2030 target (depicted
by blue line).
DRIVING ENERGY REDUCTION ACROSS THE PORTFOLIO
Electricity intensity (kWhe/m
2
)
2025 UKGBC NZC target (kWhe/m
2
NLA)
2030 UKGBC NZC target (kWhe/m
2
NLA)
2035 UKGBC NZC target (kWhe/m
2
NLA)
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
At every building I manage,
I always look for the small
operational improvements that
will make a dierence in
reducing energy consumption.
Every kWh saved helps us to
stay on track with our
sustainability targets
Domenico Pallucci
Facilities Manager
CASE STUDY
Significantly reduced energy intensity at Edinburgh House
One of our flagship buildings in
South London, Edinburgh House,
formerly a 1960s housing block,
was redeveloped in 2019 into a
bright and open business centre,
home to 78 businesses.
Whilst it achieved a BREEAM
Very Good certification and a
B rated Energy Performance
Certificate, it showed an
unusually high energy intensity
at the start of 2022.
As a result, our Facilities
Management team amended
the heating and cooling controls
strategy and operational
schedules so as to precisely meet
occupants’ needs and avoid
superfluous out-of-hours energy
consumption. For instance, the
building’s chiller and boilers are
respectively isolated in winter
and summer months and are
only operating when necessary,
responding to seasonality and
building occupancy patterns.
These measures drove an 11%
reduction in energy intensity
across the building.
This is a great example of how
eective operational energy
reduction initiatives can be.
Whilst significant retrofit
investments are sometimes
essential, cost-free operational
optimisations on pre-existing
equipment can also prove to be
very powerful energy savers.
EDINBURGH HOUSE IN NUMBERS
11%
REDUCTION IN ENERGY INTENSITY
SINCE THE START OF THE YEAR.
34%
REDUCTION IN GAS CONSUMPTION IN
2022/23 VERSUS 2021/22.
Edinburgh House,
Vauxhall
Domenico Pallucci
Facilities Manager
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE RESILIENT PORTFOLIO CONTINUED
EPC R ATINGS
Whilst our portfolio is already compliant with
the current Minimum Energy Eciency
Standards (MEES) regulation, requiring all
units to hold a valid EPC with a minimum
rating of E, the UK Government is planning
to increase requirements to a minimum rating
of B by 2030.
We are working towards an annual increase
of A/B rated space of 10% to 2030.
This year, following an investment of over £8m
in HVAC equipment, lighting upgrades and
insulation works across 41 properties, we have
increased the proportion of A/B rated spaces
from 28% to 43%.
Based on the projects we have already
delivered, we estimate the total investment
needed to upgrade our portfolio to EPC A/B
by 2030 will be c.£45-60m (c.£7-8m each
year). However, the actual additional
investment needed each year will be lower
as part of this expenditure is covered by
our ongoing maintenance capex.
43%
A/B RATED PROPERTIES
£8m
INVESTED IN 2022/23
IN EPC UPGRADES
EPC SCHEDULE WORKSPACE PORTFOLIO
A 14%
B 29%
C 31%
D 23%
E 3%
EPC SCHEDULE McKAY PORTFOLIO
A 16%
B 29%
C 22%
D 26%
E 7%
EPC SCHEDULE WHOLE PORTFOLIO
A 15%
B 28%
C 28%
D 25%
E 4%
Print Rooms
EPC C to B
21,000 sq. ft. project
Phasing out our buildings’ reliance on gas
boilers is core to our decarbonisation strategy.
At Print Rooms, our teams removed the gas
fired heating system and installed a Variable
Refrigerant Flow (VRF) system using heat
pumps to provide decarbonised heating and
cooling to the building.
LED lights were also installed across the
building in order to further reduce electricity
demand.
Leather Market
EPC C to B
2,800 sq. ft. project
A small but ambitious project, the
refurbishment of the third floor in the Lafone
House building at Leather Market is a great
example of energy eciency improvements.
Our team entirely removed the gas heating
system to install heat pumps. LED lighting
was also installed along with presence
detection sensors.
Operational optimisation is as important
as ecient equipment. Our teams have
therefore enhanced the metering
infrastructure and added new automatic
meters as part of Building Energy
Management System installation.
CASE STUDY
EPC upgrades
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SUSTAINABILITY CONTINUED
Strategic pillar:
2
Looking after our people
As an employer of 280 people, client of over
800 suppliers and oce space provider for
over 4,000 customers, we have a responsibility
to create a culture that fosters fairness,
wellbeing, inclusion and diversity, and to
support people to perform at their best.
Our culture
Change starts at home. Whilst our employees
believe in our commitment to sustainability
and our core values, our business is
committed to delivering continuous
improvement and fostering a cohesive
culture, where everyone feels valued and
knows how they can contribute to the
Company’s goals. Initiatives such as town hall
meetings and regular business unit updates,
Executive Committee site visits, internal
shadowing days, employee suggestion
scheme and employee support networks are
all contributing to a positive company culture.
Diversity
Our diversity is our strength and the first step
to improving on diversity is to measure it.
90% of our employee base provided personal
diversity data, and we have now published
our first gender pay gap report. As part of
our ongoing eorts, we continued to roll out
our unconscious bias and anti-harassment
training and have launched an employee
support network. Building on our equal
opportunities hiring policy, we are
implementing inclusive recruitment practices
(such as anonymised CVs) and utilising
alternative hiring channels to widen access to
profession. A breakdown of the number of
directors, senior managers and all employees
by gender is set out on pages 151 and 152.
Wellbeing
Workspace strive to provide spaces where
people can thrive and enjoy coming to work.
This applies both to our customers and our
employees. From oering outstanding
physical and mental health benefits to our
sta, to delivering a bespoke programme of
wellbeing themed events to our customers
(ranging from puppy therapy to financial
wellbeing and mindfulness awareness), we go
above and beyond to support the wellbeing
of our people.
Listening to our people
Whilst we gather employee
feedback via an annual
survey, our People Team have
also launched an employee
suggestion scheme to
encourage feedback and
idea sharing all year long.
To keep delivering the best to
our customers, we keep our
ear to the ground and collect
formal feedback twice a year.
This helps us evolve our oer
to best meet our customer
needs. We have also
introduced a customer
feedback policy to ensure
our customers have a direct
line to communicate with us.
Through this policy, we aim
to cater to customer needs
in a timely and consistent
manner.
Relevant UN SDGs
69%
FAVOURABLE
ENGAGEMENT SCORE
80%
WORKSPACE INCLUSIVITY SCORE
1,600
CUSTOMERS BENEFITTED FROM
WELLBEING INITIATIVES
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SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
ESG TARGETS
Target
Relevant
material issue
Relevant
UN SDG Status Performance commentary
Support and enhance
the wellbeing of our
employees and
customers
Wellbeing
Achieved
A total of 23 employee wellbeing events and initiatives were delivered, reaching a total of 600 attendees. Over 160 employees
utilised our wellbeing cash back programme, with total claims value of c.£28k. We received an average employee wellbeing
score of 79%, based on our annual employee survey. A number of wellbeing questions were included in the survey to gain a
holistic understanding of employee expectations. These included questions on satisfaction with our wellbeing oering, work
load management, stress management and managerial support.
A total of 57 customer wellbeing events were hosted centrally (including 50 wellbeing events and seven sessions on financial
wellbeing), benefitting over 1,600 customers. All events received very positive feedback with average score 4.9/5 star score.
In addition, the centre teams partnered with local gyms and businesses to host a further 37 wellbeing focused initiatives. Based
on insights from our mid-year customer survey, customers who attended wellbeing events were 15% more likely to be brand
promoters.
Improve diversity
across all levels of
business and embed
inclusive behaviours
into our culture
Diversity and
inclusion
Achieved
A key initiative for us this year was to better understand the diversity of our existing employees. Over 90% of our employees
provided personal data which enabled us to benchmark our performance. We also published our first gender pay gap report
and created an action plan to address the gap. We continued to roll out unconscious bias and harassment training to a total
of 105 employees. Throughout the year we celebrated dierent cultures and launched our first employee network to support
people with caring responsibilities. We were pleased to receive an inclusivity score of 80% in our recent employee survey.
Champion compliance
with living wage and
modern slavery across
the supply chain
Human rights
and fair pay
Achieved
Workspace are an accredited Living Wage employer and both our employees and contractors are paid at London Living Wage
levels. This year we ensured new contractors that were onboarded as part of the McKay acquisition were also paid the living
wage. To drive compliance, Workspace’s new supplier code of conduct is mandated across all contracts and formally included
in our supplier on-boarding procedure. We also worked with a third party to conduct a modern slavery audit of our cleaning
supplier.
Support professional
development and
career progression of
our people
Skills and
employment
Achieved
We supported over 17 employees to complete accredited training, including 10 employees who were sponsored for our newly
launched Leadership and Management programme. In total we delivered 363 hours of professional training to our employees
(women – 232 hours and men – 131 hours), including over 100 hours of Chartered Institute of Personal and Development
coaching and people skills training.
Widen access to
profession and drive
local employment
within our operations
and across our supply
chain
Skills and
employment,
Diversity and
Inclusion
Achieved
As part of our new recruitment policy, we are implementing a number of inclusive recruitment practices (such as hiring
managers training, anonymised CVs and utilising alternate recruitment channels). We also engaged with our charity partner
Single Homeless Project (SHP) and supported the successful hiring of one of their clients with our cleaning contractor. This
previously unemployed person is now permanently employed on our portfolio as a member of the cleaning team. We
continued our engagement with SHP and delivered a successful employability workshop to support their clients with
employability skills. Throughout the year we continued our engagement with our suppliers on employment related
opportunities. We are pleased to see that a total of 23 apprentices are employed as part of our supply chain contracts.
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CASE STUDY
Creating a diverse and inclusive business
SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
We celebrate dierent
experiences and perspectives
Satpreet Dhariwal
Senior HR Manager
We are very proud of our
business values and welcoming
culture. We strongly believe that
the success of our business
depends on our people and are
committed to providing a
working environment which is
inclusive of all cultures, where
everyone feels welcome, and
in which we celebrate dierent
experiences and perspectives.
We have launched a series of
initiatives to support diversity
and inclusion:
– All our employees have
completed unconscious bias
training and we are rolling out
anti-harassment training.
– Our first diversity network
called ‘Supporting Others’ was
launched, providing a safe
space for colleagues to
support each other and share
their experience on balancing
work and caring
responsibilities.
– We published our first gender
pay gap report (see investor
website).
– We implemented inclusive
recruitment practices including
anonymised CVs and hiring
manager training.
We are always striving to do
better and build on current
initiatives. To start monitoring
our diversity performance and
set a diversity and inclusivity
improvement plan, it was
important to get a deeper
understanding of the diversity of
our workforce. This year, for the
first time, we collected additional
data from our employees to
better understand our diversity.
Although this was entirely
voluntary, we achieved a 90%
response rate which is a
testament to our employees’
desire to support a strategy
towards more diversity and
inclusion within the business.
31%
FIRST GENERATION
OF THEIR FAMILY
TO GO TO
UNIVERSITY
11%
50+ YEARS OF AGE
30%
UNDER 30 YEARS
OF AGE
28%
WITH CARING
RESPONSIBILITIES
24%
ENGLISH NOT AS
A FIRST LANGUAGE
23%
NATIONALITY
OTHER THAN
BRITISH
30%
IDENTIFY AS BAME
6.5%
IDENTIFY AS LGBTQ
57%
IDENTIFY
AS FEMALE
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CASE STUDY
Our approach to
employee wellbeing
CASE STUDY
Our approach to
customer wellbeing
SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
We prioritise the health and wellbeing of our
employees. We are proud to oer a wide
range of benefits, including Health Shield,
which subsidises wellbeing treatments. Over
160 employees utilised Health Shield, with a
total claims value of c.£28k.
We continue to oer seminars on mental and
physical health, financial wellbeing, and
stress management. A total of 23 employee
wellbeing events and initiatives were
delivered, reaching a total of 600 attendees.
Building on last year’s success, we have
continued to deliver a series of wellbeing
events for our customers. Our puppy therapy
events were once again extremely popular.
We have also diversified our oer to include
more hands-on wellbeing sessions, which we
call ‘wellbeing’, including pottery workshops
and terrarium building, that have been
shown to significantly reduce stress.
On average, our ‘wellbeing’ events received
5/5 star ratings from participants.
EMPLOYEE WELLBEING IN NUMBERS
79%
EMPLOYEES AGREE THAT WORKSPACE
CARES ABOUT THEIR WELLBEING
23
WELLBEING EVENTS ATTENDED BY
600 EMPLOYEES
CUSTOMER WELLBEING IN NUMBERS
5/5
POST EVENT STAR RATING AWARDED
BY PARTICIPANTS
57
CUSTOMER WELLBEING EVENTS
REACHING 1,600 PEOPLE
Creating an environment that
fosters wellbeing is in our DNA.
We are proud of the stellar
reviews our customers give
following each wellbeing event
Stacy Lyden-Sauppé
Events Manager
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SUSTAINABILITY CONTINUED
Driving positive social
impact
As a major provider of oce
space to over 4,000 of
London’s brightest
businesses, Workspace is in
a unique position to address
some of the most pressing
social issues in the capital.
Thanks to our provision of
high quality work space in all
parts of London, we support
local employment
opportunities for many SMEs.
We also support independent
businesses and enhance local
economic activity through
our operations and customer
footfall.
In London, homelessness has
increased by 47% in the past
10 years, and the proportion
of NEET
1
young people aged
16-17 has reached 3.4%.
This is why we are committed
to using our centres as hubs
for driving positive social
impact amongst local
communities, through a focus
on skills and education and
homelessness prevention.
1. Not in education, employment
or training.
Relevant UN SDGs
Strategic pillar:
3
Supporting our
communities
Social impact is inherent to Workspace’s
business model. We support employment-
led regeneration of London by investing in
some of the most deprived areas of the
capital, enabling employment opportunities
for local people and boosting local spend.
We have a strong culture of charitable giving
and volunteering. Working closely with our
charity partner Single Homeless Project, we
have made significant impact in alleviating
homelessness across London.
In London, we manage over 60 sites across
15 boroughs. Through our centre teams, we
aim to build meaningful relationships with
local communities and charities. We work
closely with our customers to implement
engagement initiatives that support the
local communities.
£ 600K
SOCIAL VALUE GENERATED
620
VOLUNTEERING HOURS
180
BENEFICIARIES OF SKILLS
AND EMPLOYMENT
PROGRAMME
Joe raised £985 for SHP as
part of a skydiving challenge
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ESG TARGETS
Target
Relevant
material issue
Relevant
UN SDG Status Performance commentary
Roll out our
community skills
and employment
programme
InspiresMe across
five centres
Skills and
employment
Local social and
economic impact
Achieved
We successfully launched InspiresMe across five centres. These included Kennington Park, Brickfields, Mare Street, Cargo
Works and Chocolate Factory. Over 160 students benefitted through our CV workshops and career sessions and 20 students
were hosted for work placements. A total of 12 customers participated in the InspiresMe programme. The responses from
school partners and customers were extremely positive with 100% of the schools who took part agreeing they were keen to
continue with this initiative next year.
Works in partnership
with SHP to prevent
homelessness in
London
Skills and
employment
Charitable giving
Achieved
We raised over £110,000 for SHP, including providing funding for a full-time employability coordinator. A number of our
employees supported SHP throughout the year and delivered over 620 volunteering hours. This year we also hosted an
employability workshop for SHP clients where we ran a daylong session on business and IT skills.
Support local food
banks and charities
across our centres
to drive greater
community impact
Local social and
economic impact
Charitable giving
Achieved
We ran 38 community engagement initiatives across our centres in partnership with local charities, including 17 food bank
collections which were hugely popular with our customers. We also partnered with local charity, Community TechAid, and
supported them with the donation of over 70 pieces of electronic equipment. Overall, we contributed £162k through our
lettings in kind programme, providing free space and meeting rooms to local charities.
Assess and enhance
social value generated
across our portfolio
Local social and
economic impact
Charitable giving
Wellbeing
Skills and
employment
Diversity and
Inclusion
Human rights
and fair pay
Achieved
We have created a social value framework that helps us align our activities to issues that are most material to the business.
The framework also enables us to adopt a stakeholder value approach, ensuring we positively impact our employees, our
customers, our suppliers and our local communities.
To help us baseline our current performance, we worked with Social Value Portal to assess our social value contribution. In total
we generated over £600k of direct social value across our material issues – wellbeing, responsible business practices, local
community and charity partnerships, employment and skills and customer stewardship. We also worked with our suppliers and
customers to drive additional social value (i.e. our indirect impact) worth £280k, mainly through our outreach on employment
and skills. We plan to further enhance our social value in the coming year by setting actionable goals under each of the material issues.
We really enjoyed participating in InspiresMe
and spending time to pass on knowledge.
It was great to see how it had benefitted the
students by the end of the week
Customer at Kennington Park
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
1
2
3
4
5
STRATEGIC FOCUS
LOOKING AFTER OUR PEOPLE SUPPORTING OUR COMMUNITIES
Employees Customers CommunitySuppliers Charity
IMPACT BENEFICIARIES
IMPACT THEMES
Responsible and
Inclusive practices
Employment
and skills
Wellbeing
Charity and
community support
SOCIAL VALUE WE HAVE CREATED
1. Responsible and Inclusive Practices £206,608
2. Charity and Community Support £188,447
3. Wellbeing £1 07,828
4. Innovation – Customer Stewardship £88,476
5. Skills and Employment – Direct £13,388
This is the first year we have worked with
Social Value Portal to quantify the social
value we create. The National TOMs
Framework has been used to calculate the
financial value associated with each of our
initiatives, which is deemed ‘additional’ to
business as usual. The table provides a
breakdown of various initiatives and social
value created by our direct business activities.
Separately, we have also calculated the
indirect value generated through our
collaboration with our suppliers and customers.
Picture caption
SOCIAL VALUE CREATED – £604,747
WORKSPACE – SOCIAL VALUE FY 22/23
Area Social Value Created
Wellbeing – £65.8k invested to deliver wellbeing events for customers (including event manager’s time)
– £16.5k invested to deliver wellbeing campaigns for sta (including Charity, Wellbeing and Social Committee members’ time)
– £25.5k delivered through all employees having access to a comprehensive wellbeing programme (Thrive, Health Shield, etc.)
Responsible and Inclusive Practices – 33 employees received the unconscious bias training and 175 employees received the harassment training (£64.9k social value delivered)
– 24 employees benefitted from funding for further studies (£0.5k social value delivered)
– £1.2m spent with non-profit organisations as suppliers (£141k social value delivered)
Charity and Community Support – 45 hours of skilled volunteering (SHP employability workshop, procurement training) – £4.5k social value delivered
– 624 hours of unskilled volunteering – £10.6k social value delivered
– 693 hours of CMs’ time spent to support the local community (foodbanks, fundraisers) – £11.7k social value delivered
– £161.6k in-kind contributions (lettings, business rates, room bookings, electronic equipment, SHP donation)
Innovation – Customer Stewardship – £88.5k invested to deliver four London’s Brightest Businesses breakfasts and seven master classes (including event manager’s time)
Skills and Employment – Direct – 10 weeks of InspiresMe work placement supported by Workspace (£1.9k social value delivered)
– 676 sta hours invested in delivering InspiresMe (£11.4K social value delivered)
Skills and Employment – Indirect – £211k social value delivered through key suppliers hiring of homeless, NEET, ex-oenders and people with disabilities
– 261 weeks of apprenticeships delivered by our key suppliers (£65.7k social value delivered)
– 10 weeks of InspiresMe work placements with customers (£1.9k social value generated)
WORKSPACE – SOCIAL VALUE FY 22/23
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
CASE STUDY
SHP employability workshop
CASE STUDY
InspiresMe
In October 2022, we were delighted to
support the hiring of one of Single Homeless
Project’s (SHP) clients by our cleaning
contractor, Olivers Mill. We hope this success
story is the first of many, and we are
continuing to focus several of our SHP
volunteering opportunities around
employability skills.
In November 2022, 11 Workspace employees
took part in an employability workshop with
SHP clients. The aim of the session was to
help SHP clients with creation of CVs and
interview skills.
Building from a positive initial feedback from
SHP clients, our charity committee are
looking to organise more employability
workshops in the coming year.
InspiresMe is Workspace’s community
outreach programme, focused on skills and
employment. The aim of the programme is
to work alongside our customers to provide
inspiration, knowledge, support and
experience to individuals within our
communities who are most at risk of NEET
(Not in Education, Employment or Training)
and to help them to reach their full potential.
As a provider of oce space to a diverse
range of SMEs, we are in a unique position to
broker a partnership between local schools
and our customers in order to improve the
employability skills of underprivileged young
Londoners. The programme gives our
customers the opportunity to deliver CV
workshops, interview training sessions,
participate in career fairs and host work
experience placements throughout the year.
In the last year we launched InspiresMe
across five centres in various London
Boroughs – 180 secondary school students
benefitted from the programme and 12
customers participated.
INSPIRESME IN NUMBERS
4.3/5
SATISFACTION SCORE
FROM STUDENTS
4.3/5
SATISFACTION SCORE
FROM SCHOOLS
100%
CUSTOMER ENGAGEMENT
SCORE
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
Looking ahead
Q&A
Sonal Jain
Head of Sustainability
Q: What has been your biggest achievement?
I am incredibly proud of the progress we have
made this year. We have reduced our total
greenhouse gas emissions by 16% across our
like-for-like portfolio, upgraded over 12% of our
portfolio to EPC A/B, boosted our customer
ESG advocacy score and delivered significant
social value through our wellbeing and skills
and employment programme. However, for
me personally the biggest highlight was
collective ownership of our sustainability
agenda. Right at the start of the year we set
a number of business-wide sustainability
targets, which were then translated into
individual objectives. Each of our teams have
worked with undeterred determination to
achieve these targets. I am so pleased by the
way each Workspace employee has embraced
a sustainability mindset.
Q: What are your plans for the coming year?
Our inherently sustainable business model
gives us an advantageous position in the
industry, whether it’s our lower energy use
intensity, lean embodied carbon
refurbishments and the positive socio-
economic impact we generate through our
focus on employment led regeneration.
However, we realise we need to continue to
deliver high performance in order to maintain
our market leadership position.
To this end, we will continue to roll out an
accelerated programme of refurbishment and
ensure our portfolio is decarbonised and
future proofed ahead of the 2030 deadline.
Energy and carbon management continues to
be our top priority and we will be focusing our
eort to further reduce our energy intensity.
With the launch of our social impact framework
focused on social issues that are material to
the business, we have set ourselves a number
of actionable targets that will help us deliver
enhanced social value in the coming year.
This includes a key focus for us to champion
skills and employment across our value chain.
We are fortunate to be Home to London’s
Brightest Businesses, many of them are in the
green economy sector themselves. We realise
our duty of care towards our customers,
ensuring they have a productive and
sustainable workspace. We ran a successful
customer engagement programme this year
and plan to further enhance it. In addition,
we will actively explore collaboration
opportunity with our customers to jointly
deliver on sustainability programmes across
the portfolio.
As a team, we always think
twice when it comes to energy,
all our electricals have automatic
standby mode, our oce lights
are always turned o when the
unit is not in use, and we open
our windows before the aircon
gets considered
Owen O’Neill, founder at Uni Compare,
winner of the energy savings competition
at Frames
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
2023
2022
2021
116.6
86.7
81.5
2023
2022
2021
60.7
46.9
38.7
2023
2022
2021
9.27
9.88
9.38
Financial performance
Why this is important to Workspace
Net rental income is the rental income receivable after
payment of direct property expenses, including service charge
costs and other direct unrecoverable property expenses. It is
important to Workspace because it measures our operating
performance. It is a key driver of trading profit, which in turn
determines dividend growth.
Movement in 2022/23
Net Rental Income increased by 34.5% (£29.9m) to £116.6m.
Underlying net rental income was up 17.4% (£14.6m), reflecting
the strong increase in rent per sq. ft. achieved in the year, higher
average occupancy resulting in a reduction in empty rates,
other non-recoverable costs and unrecovered service charge.
The net impact of acquisitions and disposals in the current and
prior years was a £15.2m increase in net rental income.
£116.6m
Why this is important to Workspace
Trading profit after interest is net rental income, less
administrative expenses and finance costs but excluding
exceptional finance costs. It is a key measure for Workspace
and determines dividend growth, and so the returns we
provide to our shareholders. It measures the underlying
performance of the business. The Executive Directors are
incentivised on trading profit after interest.
Movement in 2022/23
Trading profit after interest increased by 29% (£13.8m) to
£60.7m. The main driver was the £29.9m growth in net rental
income. Total administrative expenses increased by £2.2m to
£21.5m which includes £2.1m in respect of the McKay business
acquired in the year and a £0.2m reduction in share based
costs, leaving a £0.3m underlying increase in administration
costs. Net finance costs increased to £34.4m in the year,
reflecting the increased level of debt following the McKay
acquisition and the increase in SONIA during the period.
£60.7m
Why this is important to Workspace
EPRA NTA per share is a definition of net tangible assets as
set out by the European Public Real Estate Association. It
represents net assets minus any intangible assets and financial
derivatives and excluding deferred taxation relating to
valuation movements and derivatives, divided by the number
of shares in issue. It is important to Workspace as it provides
stakeholders with information on our net asset value. It is a key
external measure for property companies and is used to
benchmark against share price.
Movement in 2022/23
Our EPRA NTA per share decreased by 6.2% (£0.61) to £9.27.
This was driven by the underlying decrease in the valuation of
our portfolio, dividends paid and share issue, oset by trading
profit in the year.
£9.27
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OUR KEY PERFORMANCE INDICATORS
1. NET RENTAL INCOME 2. TRADING PROFIT AFTER INTEREST 3. EPRA NTA PER SHARE
Link to strategy Link to strategy Link to strategy
Driving
customer-led
growth
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Being
sustainable
2023
2022
2021
25.8
21.5
17.75
2023
2022
-23.9
7.1
8.7
2021
2023
2022
2021
89.1
89.6
81.6
Why this is important to Workspace
This is the dividend payment per share in issue. Dividend per
share is a key measure of the returns we are providing to our
investors. It is important to Workspace because we aim to
provide good returns for our shareholders, and also to work
within our REIT requirements for income distribution.
Movement in 2022/23
The increase of 20% (4.3p) in dividend per share was due
to the increased trading profit in the year.
25.8p
Why this is important to Workspace
Like-for-like properties are those with stabilised occupancy,
excluding recent acquisitions and buildings impacted by
significant refurbishment or redevelopment activity. Rent roll is
the current annualised net rent receivable for occupied units at
the date of reporting. Monitoring rent roll growth on the
like-for-like portfolio is an important measure of the underlying
performance of the business and a key driver of future net
rental income. We monitor the like-for-like rent roll on a weekly
basis in management meetings and it is also a key performance
indicator in our monthly Board reporting.
Movement in 2022/23
The like-for-like rent roll has increased by 7.1% (£6.5m) in the year,
driven by a 9.4% uplift in rent per sq. ft. from £37.12 to £40.61.
+7.1%
Why this is important to Workspace
Like-for-like occupancy is the area of let space within the
like-for-like portfolio divided by the net lettable area of the
like-for-like portfolio. It is important as it gives us vital
information on the performance of our core properties. It
drives pricing and operational decisions and can be a measure
of customer demand for the space. Again, this is monitored on
a weekly basis in management meetings and it is also a key
performance indicator in our monthly Board reporting.
Movement in 2022/23
Like-for-like occupancy stable at 89.1%.
89.1%
Financial performance continued
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OUR KEY PERFORMANCE INDICATORS CONTINUED
4. DIVIDEND PER SHARE 5. LIKE-FOR-LIKE RENT ROLL GROWTH 6. LIKE-FOR-LIKE OCCUPANCY
Driving
customer-led
growth
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Being
sustainable
Link to strategy Link to strategy Link to strategy
2023
2022
2021
2,741
2,402
2,324
2023
2022
-5.86
1.10
6.49
2021
2023
-12.3
2021
-34.0
2022
8.6
Why this is important to Workspace
Our properties are critical to our business and the valuation
demonstrates the value we are delivering to our shareholders
and a measure of how well we are managing our buildings and
driving rental income. The property portfolio is independently
valued, currently by CBRE. We aim to enhance the value of
our properties through active asset management, including
refurbishment and redevelopment schemes. The movement
in property valuation is a key driver in our EPRA NTA per
share measure.
Movement in 2022/23
There was an underlying reduction of 3.2% (£91m) in our
property valuation, taking the valuation to £2,741m. This was
mainly driven by an outward shift in valuation yields oset by
increases in estimated rental values. See Property Valuation
section of the Business Review on page 81 for more detail.
£2,741m
Why this is important to Workspace
Total Property Return is the return for the year combining the
valuation movement on our portfolio and the income achieved
in the year. This figure is produced by MSCI, an independent
Investment Property Databank (‘IPD’), and is compared to a
benchmark group so that we can see how we are performing
relative to similar companies. Total Property Return, and
performance against the benchmark, form part of the bonus
objectives for the Executive Directors and LTIPs for all people
in schemes.
Movement in 2022/23
The decrease in total returns in the year was driven by
the decrease in the property valuation, although income
returns increased, we have significantly out performed
the IPD benchmark demonstrating the resilience of
our property portfolio.
1.10%
Why this is important to Workspace
Total Shareholder Return is the return obtained by a
shareholder, calculated by combining both share price
movements and dividend receipts. This is important to
Workspace because it shows the value that our shareholders
receive from investing in Workspace shares. We aim to create
maximum value for our shareholders, and as such this measure
forms part of the performance criteria within our LTIP schemes.
Movement in 2022/23
Total Shareholder Return has decreased due to a reduction in
the share price over the year, oset by dividends paid in the year.
-34.0%
Financial performance continued
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OUR KEY PERFORMANCE INDICATORS CONTINUED
7. PROPERTY VALUATION 8. TOTAL PROPERTY RETURN 9. TOTAL SHAREHOLDER RETURN
Driving
customer-led
growth
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Being
sustainable
Link to strategy Link to strategy Link to strategy
2023
2022
2021
798
917
739
2023
2022
2021
518
598
328
2023
2022
2021
315
322
247
Non-financial performance
Why this is important to Workspace
Customer enquiries represent the number of enquiries we
receive for our space. Enquiries come through our website, via
brokers, via phone, from walk-ins or existing customers looking
to expand, contract or move locations. Measuring enquiries
helps us to assess the customer demand for our product. Our
internal marketing platform generates enquiries, and by
increasing marketing activity we can drive enquiries, for
example around the launch of a new building.
Movement in 2022/23
There was an average of 798 monthly enquiries over the year,
with an average of 932 monthly enquiries in the final quarter.
798
Why this is important to Workspace
This is the number of viewings of individual units by new
or existing customers looking for new or additional space.
Viewings are important because they provide an opportunity
to get customers into our centres to see first-hand the quality
of our space, and to drive lettings. It is important to monitor
the conversion of enquiries to viewings and then of viewings
to oer letters.
Movement in 2022/23
There was an average of 518 monthly viewings over the year,
with a good conversion rate from enquiry to viewing and,
as with enquiries, a strong final quarter.
518
Why this is important to Workspace
Once they have completed a viewing, if they are interested in
the space, prospective customers can request an oer letter
containing pricing information and lease terms. Tracking the
number of oer letters is important as it allows us to assess
the success of our viewings and the demand for our product.
Movement in 2022/23
On average 315 oer letters were issued each month in the
year, which represents 61% of viewings.
315
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OUR KEY PERFORMANCE INDICATORS CONTINUED
1. CUSTOMER ENQUIRIES 2. VIEWINGS 3. OFFER LETTERS
Driving
customer-led
growth
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Being
sustainable
Link to strategy Link to strategy Link to strategy
2023
2022
2021
109
127
96
2023
2022
2021
61
15
13
2023
2022
2021
78
68
10
Why this is important to Workspace
This is the number of lettings that we complete. It is a key
measure for Workspace because lettings drive our net rental
income and therefore trading profit. Lettings set the tone
for estimated rental values, and so impact our property
valuation too.
Movement in 2022/23
We saw a good level of lettings, reflecting customer demand
in the year. This, alongside strong renewal activity, drove rental
pricing growth in the year.
109
Why this is important to Workspace
This is the number of lease renewals we sign with existing
customers per month. These are important as they
demonstrate how sticky our customers are, track customer
retention and allow us to capture reversion within our portfolio.
Movement in 2022/23
The average number of renewals per month increased from
15 in the prior year to 61. This helped drive the uplift in rent roll
in the year.
61
Why this is important to Workspace
This is the number of days that our employees spent
volunteering or fundraising for our selected charities.
Supporting our communities is a key part of our sustainability
strategy and it is important for our employees to get involved.
Movement in 2022/23
The number of volunteering days increased significantly from
68 to 78. We worked closely with our charity partner Single
Homeless Project. For example, we delivered a range of
employability sessions, support for local foodbanks and
upgrades to hostel accommodation.
78
Non-financial performance continued
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Annual Report and Accounts 2023
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OUR KEY PERFORMANCE INDICATORS CONTINUED
4. LETTINGS 5. RENEWALS 6. EMPLOYEE VOLUNTEERING DAYS
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Being
sustainable
Link to strategy Link to strategy Link to strategy
OUR SIX KEY STRENGTHS
1 Unique portfolio
Owning and actively manage a
predominantly London-based portfolio
of high-quality assets.
Page 65
2 Customer proposition
Providing SMEs with blank canvas spaces
in dynamic London locations.
Page 65
3 Talented people
Our teams have the right skills and
experience to deliver an excellent
customer experience.
Page 65
4 A sustainable approach
Creating high-quality, energy-ecient
buildings that have a positive
environmental and social impact.
Page 66
5 Prudent financing
Managing our balance sheet and
focusing on generating sustainable,
long-term income.
Page 66
6 Operating platform
Managing all interactions with customers
through our proprietary platform.
Page 66
THE VALUE WE CREATE
Customer value
Page 67
Broader value creation
Page 68
Six key
strengths help
deliver our
purpose and
stakeholder
value
Our sustainable business model creates a flatter, fairer,
more sustainable London. Our business model is inherently
sustainable: we invest across the capital, breathing new life
into old buildings and creating hubs of economic activity
that help flatten London’s working map.
Metal Box,
Southwark
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OUR BUSINESS MODEL
UNIQUE PORTFOLIO
Built up over more than 35
years, we own a predominantly
London-based portfolio of
high-quality assets. Generally
distinctive, low-rise buildings of
30,000 sq. ft. or more, they are
well located around major
transport hubs and vibrant
neighbourhoods, and are often
landmarks in their areas.
We actively manage the
portfolio to generate value over
the long term. We target 90%
occupancy on our like-for-like
properties and, as occupancy
rises, we can enhance pricing.
Our ownership model gives us
the flexibility to enhance the
quality of space and implement
the latest sustainability features.
We achieve this through our
refurbishment and
redevelopment pipeline,
expanding our footprint and
driving rental uplift. We also
continue to grow our pipeline
through strategic acquisitions,
drawing on our deep knowledge
of the London property market to
help accelerate our growth plans.
TALENTED PEOPLE
Our employees are the drivers
of our success. We have a
vibrant, diverse and inclusive
culture, underpinned by a clear
purpose and set of values, which
continue to score well amongst
our sta in annual surveys.
Our dynamic culture helps
attract and retain people who
align with these values and have
a broad range of skills,
experience and backgrounds. In
2022/23, we introduced a range
of initiatives to directly address
employee feedback to improve
communications, collaboration,
diversity and wellbeing. For
example, we launched informal
face-to-face engagement
sessions between our
Leadership team and small
groups of centre sta, where
they can provide direct feedback.
We are always looking for ways
to upskill our teams, having
rolled out customer-first training
across the business this year.
We are starting to trial a
Government-sponsored Career
Pathway programme to help
junior centre sta develop
their careers.
How we deliver long-term
stakeholder value
Customer value
Our purpose is to give businesses the freedom
to grow. Owning our buildings means we are
able to oer customers real freedom – to
personalise and flex their space as required.
Because we believe that in the right space,
teams can achieve more.
Broader value creation
We repurpose iconic buildings, invest in
revitalising communities and prioritise the
wellbeing of our customers and people.
Shareholder value
We drive capital appreciation and rental growth
from our expertise in urban regeneration in
London and active asset management.
400k+
SQ. FT. OF NEW AND
UPGRADED SPACE
Record Hall,
Hatton Garden
CUSTOMER PROPOSITION
We provide companies with
blank canvas space on flexible
terms within inspiring buildings
in dynamic London locations.
We cater to customers who are
creative, passionate owners of
SMEs, and being able to express
their individuality and
personality is part and parcel
of their business.
We continually enhance and
refine the customer experience:
this year we rolled out inclusive
pricing, created a smoother
customer journey and upgraded
the quality of space across over
400,000 sq. ft. of our portfolio.
We dedicate around 30% of
our buildings to attractive
well-designed communal space,
including meeting rooms,
showers, cycle storage and cafés.
Our ongoing brand campaign,
refreshed on a quarterly basis,
clearly articulates our oer
and highlights our position as
home to London’s brightest
businesses, with brand
awareness at 62%.
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
OUR BUSINESS MODEL CONTINUED
PRUDENT FINANCINGA SUSTAINABLE APPROACH
We are focused on generating
sustainable, long-term income,
which we reinvest in enhancing
the portfolio and return to
shareholders as dividends.
We prudently manage our
balance sheet and maintain low
levels of gearing. The balance
sheet includes a mixture of bank
debt, private placements and
loans and a corporate bond.
Most of our debt is long-term,
unsecured and bears interest at
fixed rates. We are committed
to maintaining conservative
leverage, which we expect to
reduce further through our
disposals programme, and we
have significant headroom to
our financial covenants.
Our continuous programme
of refurbishments and
redevelopments drives rental
growth and enhances
valuations. It is this combination
of income and capital value
growth that makes Workspace
a compelling investment. Our
ecient and scalable platform
enables us to grow the business
over time without significantly
increasing operating costs.
Through our inherently
sustainable business model
we create a flatter, fairer, more
sustainable London.
We repurpose historic buildings,
breathing new life into them and
future proofing them for
generations to come. This results
in significantly lower embodied
carbon, while also installing the
most ecient systems to reduce
operational carbon.
We play a key role in the
employment-led regeneration
of areas across London: our
buildings become hubs of
economic activity, flattening
London’s working map and
bringing prosperity into
emerging areas. We also oer
employment-focused support
to disadvantaged young people.
We prioritise the wellbeing of
our customers and people, and
work closely with them to drive
more sustainable behaviours
in our centres.
OPERATING PLATFORM
Our proprietary, in-house
marketing operating platform
enables us to manage a huge
volume of customer activity
in-house, from enquiries and
viewings through to lettings,
facilities management, billing
and renewals. Direct
relationships with our customers
means we can work with them
to enhance the sustainability
of our buildings.
These ongoing interactions,
as well as our regular surveys
provide real-time market
intelligence. This year we have
introduced new customer
touchpoint surveys to generate
more regular feedback.
Our platform is scalable which
means we can grow our portfolio
without incurring significant
operating cost growth, as shown
by our recent purchase of
McKay. This platform gives us
a major competitive strength
and insight on the SME market.
Dealing with such high levels of
customer activity requires a
dynamic culture and first-class
in-house expertise.
Metal Box,
Southwark
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OUR BUSINESS MODEL CONTINUED
CREATING CUSTOMER VALUE
Location
Fuel Tank, Deptford
How have you made your space your own?
As a Scandinavian homeware business, it
was important for us to the make the space
feel homely and cosy. We designed the
space ourselves, wanting clients to see our
space and envisage how their home could
look. We painted the walls, laid down
herringbone floors, added soft furniture and
used rugs to create small living room set ups.
Why did you choose this space?
We needed a space large enough to show
o our many products – everything from
vases and lamps to curtains and rugs.
We liked the fact we could easily mould
the space and move things around when,
for example, new ranges arrive.
We also loved the way you can enter our
showroom via three glass doors from the
ground floor, which gives o an air of
professionalism.
Was the location important?
Both my co-founder and I live locally in south
east London and love being a stone’s throw
from Greenwich Village and Deptford. It’s
home to so many artists and creative types
and felt like a perfect fit for us.
Att Pynta at Fuel Tank,
Deptford
We love the fact we can easily
mould the space
Kai Price
Co-founder & Director, Att Pynta
FUEL TANK IN NUMBERS
83%
CUSTOMER
ADVOCACY SCORE
15 MWh
ELECTRICITY SAVED
B
EPC R ATING
95%
OCCUPANCY LEVEL
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OUR BUSINESS MODEL CONTINUED
CREATING BROADER VALUE
Founder of Bokit’la French food
kiosk, opposite Kennington Park
Location
St Mary’s Churchyard, opposite Kennington
Park business centre
How have you seen Bokit’la grow in Oval?
We’ve had a food stall in this area selling our
French Caribbean food for 11 years. We’ve
built a great niche of customers who know
and love our food. We considered other
London locations but we’ve decided to focus
on Oval as it’s such a growing, vibrant area.
Do you receive custom from Workspace’s
centre?
Our new position, located between Oval
Station and Workspace’s Kennington Park
business centre, means lots of people walk
past our stall on the way to work – a fair
amount of our week-day footfall comes from
Workspace’s centre. We know other local
businesses value the contribution the centre
makes to the livelihood of the area.
What is next for Oval?
The Kennington Park centre has contributed
to growing a small economy in Oval and I
think it will now continue to become an even
more vibrant area. We love sharing our
cuisine and I am confident about Bokit’la’s
growth within the area.
We know local businesses
value Workspace’s contribution
to the local area
Nicolas Baptise
Founder of Bokit’la, French-Caribbean
street-food vendor
KENNINGTON PARK IN NUMBERS
85%
CUSTOMER ADVOCACY SCORE
91.1%
OCCUPANCY LEVEL
13 MWh
ELECTRICITY GENERATED
BY SOLAR PANELS
945
ELECTRIC VEHICLE CHARGERS
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OUR BUSINESS MODEL CONTINUED
Risk management is an integral part of all
Workspace activities. Our culture drives us to
consider the risks and opportunities of any
new business decision. We focus on key risks
which could impact the achievement of our
strategic goals and therefore on the
performance of our business. Risks are
considered at every level of the business
including when approving corporate
transactions, property acquisitions and
disposals and whenever undertaking
refurbishment and redevelopment projects.
We have created a positive culture within
Workspace which encourages open
communication and engagement. This enables
sta from all areas of the business to feel free
to raise risks or opportunities, no matter how
small, to their managers and teams. This
culture means that information is communicated
across the business well. We make every
eort to engage sta with risk-related issues,
particularly those which are new and emerging
so that we are managing our lower-level risks
as well as the more strategic ones.
The Board assesses and monitors the principal
risks of the business and considers how these
risks could best be mitigated, where possible,
through a combination of internal controls and
risk management. The financial year has seen
a period of political uncertainty and
challenging macroeconomic conditions with
high inflation and increasing interest rates.
Whilst the combination of these factors
presents an increased risk of recession and
potential adverse impact on property values
and construction costs, the key risks that
could aect the Group’s medium-term
performance and the factors which mitigate
these risks, have not materially changed from
those set out in the Group’s Annual Report
and Accounts 2022.
Workspace recognises that climate change
will have an impact on our business. Our
properties are at risk from physical climate
related issues and as a business, we are also at
risk from the transition to a net zero economy
in the form of increasing regulation and
changes in customer demand. While we have
a portfolio that is well-positioned to withstand
the impact of climate change, we are actively
managing our climate change risk and have
put in place mitigation measures for the most
material impacts.
EMERGING RISKS
Emerging risks are discussed monthly and
promptly escalated to the Board as required.
Emerging risks considered during this year
included: employee recruitment and
retention; the war in Ukraine; the
macroeconomic environment including
inflation, rising interest rates and potential
impact on property valuations and operating
performance; the acquisition and integration
of the McKay estate; political disruption
caused by instability within the UK
government and ongoing industrial strikes
across the UK.
FINANCIAL POSITION
During the year the Group continued to
control costs and manage capital
expenditure to protect its strong financial
position. Management regularly reviewed
performance reports and forecasts to
understand the impact on cash flows and
debt covenants.
Following the acquisition of McKay Securities
in May 2022, the Group amended two
existing McKay facilities, a £65m loan from
Aviva and a £135m bank revolving credit
facility(‘RCF’). This £135m McKay RCF and
the Group’s existing £200m RCF were both
extended by one year in December 2022
further strengthening our financial position
and leaving no material debt maturities until
June 2025.
As of 31 March 2023, the Group had cash
and undrawn credit facilities of £148m along
with substantial headroom on its financial
covenants and met all loan covenants
throughout the year.
CLIMATE CHANGE
Workspace recognises that climate change
is having, and will continue to have an
increasing impact on our business. Similar
to other owners of real assets, our properties
are at risk from physical climate-related
issues including changes in temperature
extremes leading to increased cooling and
heating loads, changes in precipitation
leading to flash flooding, and physical
damage to buildings from extreme weather
events, which in turn can lead to greater
stresses on our properties.
It is now widely recognised that climate
change issues present a financial risk to the
global economy. To improve transparency,
the Task Force on Climate-related Financial
Disclosures (TCFD) framework provides
guidance to companies on how to improve
reporting on climate-related financial risks
and opportunities. Workspace supports the
TCFD recommendations and is committed
to implementing them.
The TCFD framework includes risk
management. A separate risk register for
climate change-related risks is managed by
the Head of Sustainability. Details of the risks
considered are provided on pages 96 to 99.
EMPLOYEES
The health, safety and well-being of our
employees remain a top priority. For the
majority of our employees, we are able to
oer a flexible working environment to
enable a healthy work-life balance alongside
a competitive benefits package for all.
Our risk management framework
Pages 170 to 171
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PRINCIPAL RISKS AND UNCERTAINTIES
IMPACT
PROBABILITY (POST-MITIGATION)
ProbableUnlikely
Low Severe
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
KEY: PRINCIPAL RISKS
1. Customer demand Page 70
2. Financing Page 71
3. Valuation Page 71
4. Acquisition pricing Page 72
5. Customer payment default Page 73
6. Cyber security Page 73
7. Resourcing Page 74
8. Third-party relationships Page 75
9. Regulatory Page 75
10. Climate change Page 76
Impact
Severe
Probability (post-mitigation)
Possible
Change from last year
No change, however, this may be impacted
by other ongoing economic factors including
the war in Ukraine, inflation and interest
rate rises
Risk appetite
Medium
Link to strategy
CHANGES TO PRINCIPAL RISKS CUSTOMER DEMAND
Relevant KPIs
Financial
1, 2, 5, 6, 8
Non-financial
1, 2, 3, 4, 5
Principal risk
Opportunities for growth could be missed
without a clear branding strategy to meet the
changing demands of flexible working models.
Whilst the uncertainty from the Covid
pandemic has significantly reduced there are
other macroeconomic factors including the
war in Ukraine, weak economic growth,
current levels of inflation and interest rate rises
that could also impact potential customers.
Risk impact
– Fall in occupancy levels at our properties
– Reduction in rent roll
– Reduction in property valuation
Mitigation
– Broad mix of buildings across London with
dierent oce experiences at various price
points to match customer requirements
– Pipeline of refurbishment and
redevelopments to further enhance
the portfolio
– Weekly meeting to track enquiries, viewings
and lettings to closely track customer trends
and amend pricing as demand changes
– Centre sta maintain ongoing relationships
with our customers to understand their
requirements and implement change to
meet their needs
– Business plans are stress tested to assess
the sensitivity of forecasts to reduced levels
of demand and implement contingency
measures
– Marketing campaigns maintain awareness
of Workspace’s oer and content and
messaging are regularly reviewed to remain
relevant and appealing
There have been two significant changes to the principal risks over the course of the last year,
the disclosure of climate change as a separate principal risk (previously included in ‘Regulatory’)
and the removal of specific references to Covid following full removal of Government restrictions.
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
6
9
8
2
No change
Increase
New risk
1
4
3
7
5
10
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Impact
Severe
Probability (post-mitigation)
Unlikely
Change from last year
No change
Risk appetite
Low
Link to strategy
Impact
High
Probability (post-mitigation)
Possible
Change from last year
No change, with the risk impact from inflation
and interest rate rises remaining elevated
Risk appetite
Medium
Link to strategy
FINANCING VALUATION
Relevant KPIs
Financial
2, 4, 9
Relevant KPIs
Financial
3, 5, 7, 8, 9
Principal risk
Macroeconomic uncertainty, increasing
costs or rising interest rates could have an
impact on asset valuations, whereby property
yields increase and valuations fall. This may
result in a reduction in return on investment,
project viability and negative impact on
covenant testing.
Risk impact
– Financing covenants linked to loan to value
(‘LTV ’) ratio
– Impact on share price
Mitigation
– Market-related valuation risk is largely
dependent on independent, external
factors. We maintain a conservative
LTV ratio which can withstand a severe
decline in property values without
covenant breaches
– We monitor changes in sentiment in the
London real estate market, yields and
pricing to track possible changes in
valuation. CBRE, a leading full-service real
estate services and investment organisation,
provides twice yearly valuations of all
our properties
– Typically our building or unit refurbishment
projects are completed within short time
frames, giving us good visibility on costs,
expected rents and property values at
completion. We continually assess the
viability of our refurbishment and
development projects for optimal timing
and cost management opportunities, and
have flexibility on when to commence
development. Alternative use opportunities,
including mixed-use developments, are
actively pursued across the portfolio
Principal risk
There may be a reduction in the availability
of long-term financing due to an economic
recession, which may result in an inability to
grow the business and impact Workspace’s
ability to deliver services to customers.
Risk impact
– Inability to fund business plans and invest
in new opportunities
– Increased interest costs
– Negative reputational impact amongst
lenders and in the investment community
Mitigation
– We regularly review funding requirements
for business plans, and we have a wide
range of options to fund our forthcoming
plans. We also prepare a five-year business
plan which is reviewed and updated
annually. Further detail is provided in the
Viability Statement on page 87
– We have a broad range of funding
relationships in place and regularly review
our refinancing strategy. We also maintain
a specific interest rate profile via the use of
fixed rates on our loan facilities so that our
interest payment profile is stable
– Loan covenants are monitored and reported
to the Board on a monthly basis and we
undertake detailed cash flow monitoring
and forecasting
– During the first six months of 2022/23 we
refinanced the McKay RCF and Aviva loan
providing further certainty over our funding
position going forwards
– During the second half of the year we
extended the maturity of the McKay RCF
and the Group’s existing RCF by a further
year, providing the Group with adequate
funds for future plans
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2 3
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Impact
High
Probability (post-mitigation)
Possible
Change from last year
No change
Risk appetite
Medium
Link to strategy
ACQUISITION PRICING
Relevant KPIs
Financial
3, 7, 8, 9
Principal risk
Inadequate appraisal and due diligence of
a new acquisition could lead to paying above
market price leading to a negative impact on
valuation and rental income targets.
Risk impact
– Negative impact on valuation
– Impact on overall shareholder return
Mitigation
– We have an acquisition strategy determining
key criteria such as location, size and
potential for growth. These criteria are
based on the many years of knowledge
and understanding of our market and
customer demand
– A detailed appraisal is prepared for each
acquisition and is presented to the
Investment Committee for challenge and
discussion prior to authorisation by the
Board. The acquisition is then subject to
thorough due diligence prior to completion,
including capital expenditure and risks
associated with ESG concerns
– Workspace will only make acquisitions that
are expected to yield a minimum return and
will not knowingly overpay for an asset
– For all corporate acquisitions, we undertake
appropriate property, financial and tax due
diligence including a review of ESG
Mirror Works,
Stratford
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4
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Driving
customer-led
growth
Driving
customer-led
growth
Delivering
operational
excellence
Delivering
operational
excellence
Being
sustainable
Being
sustainable
Impact
High
Probability (post-mitigation)
Possible
Change from last year
No change
Risk appetite
Low
Link to strategy
Impact
High
Probability (post-mitigation)
Possible
Change from last year
Probability increased due to the level and
sophistication of cyber-attacks increasing
Risk appetite
Low
Link to strategy
CUSTOMER PAYMENT DEFAULT CYBER SECURITY
Relevant KPIs
Financial
1, 2, 4, 8, 9
Relevant KPIs
Financial
2, 4, 8, 9
Non-financial
4, 5
Principal risk
There remains a risk of an economic downturn
given the broader geopolitical climate,
inflation and interest rate rises. This could
result in pressure on rent collection figures
with a prolonged period of companies failing,
leading to a decline in occupancy and an
increase in oce vacancies.
Risk impact
– Negative cash flow and increasing
interest costs
– Breach of financial covenants
Mitigation
– Rent collections have improved following
removal of Government restrictions on rent
collection introduced in response to Covid,
however the economic environment
remains challenging
– The risk continues to be mitigated by strong
credit control processes and an experienced
team of credit controllers, able to make quick
decisions and negotiate with customers for
payment. In addition, we hold a three-month
deposit for the majority of customers
– Centre sta maintain relationships with
customers and can identify early signs
of potential issues
Principal risk
A cyber attack could lead to a loss of access
to Workspace systems or a network disruption
for a prolonged period of time. This could
damage Workspace’s reputation and inhibit
our ability to run the business.
Risk impact
– Inability to process new leases
and invoice customers
– Reputational damage
– Increased operational costs
Mitigation
– Cyber security risk is managed using a
mitigation framework comprising network
security, IT security policies and third-party
risk assessments. Controls are regularly
reviewed and updated and include technology
such as next-generation firewalls, multi
layered access control through to people
solutions such as user awareness training
and mock-phishing emails
– Assurance over the framework’s performance
is gained through an independent maturity
assessment, penetration testing and network
vulnerability testing, all performed annually
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Impact
High
Probability (post-mitigation)
Low
Change from last year
No Change
Risk appetite
Medium
Link to strategy
RESOURCING
Relevant KPIs
Financial
1, 2, 4, 5, 6, 8, 9
Non-financial
1, 2, 3, 4, 5, 6
Principal risk
Ineective succession planning, recruitment
and people management could lead to limited
resourcing levels and a shortage of suitably
skilled individuals to be able to achieve
Workspace objectives and grow the business.
Inadequate resourcing may also result in
management being spread too thinly and
a decline in eectiveness.
Risk impact
– Increased costs from high sta turnover
– Delay in growth plans
– Reputational damage
Mitigation
– We have a robust recruitment process
to attract new joiners and established
interview and evaluation processes with a
view to ensuring a good fit with the required
skill set and our corporate culture
– Various incentive schemes align employee
objectives with the strategic objectives of
the Group to motivate employees to work
in the best interests of the Group and its
stakeholders. This is supported by a formal
appraisal and review process for all
employees
– Our HR and Support Services teams run
a broad training and development
programme designed to ensure employees
are supported and encouraged to progress
with learning and study opportunities
We have a strong internal culture which encourages independent thought and initiative which
is articulated in our four key values:
COMPANY VALUES
Know your stu Show we care Find a way Make it fun
Mirror Works,
Stratford
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
Impact
High
Probability (post-mitigation)
Low
Change from last year
No change
Risk appetite
Low
Link to strategy
Impact
Medium
Probability (post-mitigation)
Low
Change from last year
No change
Risk appetite
Low
Link to strategy
THIRD-PARTY RELATIONSHIPS REGULATORY
Relevant KPIs
Financial
1, 2, 4, 5, 6, 8, 9
Non-financial
2, 4, 5
Relevant KPIs
Financial
2, 4, 9
Non-financial
4, 5
Principal risk
Poor performance from one of Workspace’s
key contractors or third-party partners could
result in an interruption to or reduction in the
quality of our service oering to customers
or could lead to significant disruptions
and delays in any refurbishment or
redevelopment projects.
Risk impact
– Decline in customer confidence
– Increase project or operational costs
– Fall in customer demand
– Weaker cash flow
– Reputational damage
Mitigation
– Workspace has in place a robust tender and
selection process for key contractors and
partners. Contracts contain service level
agreements which are monitored regularly
and actions are taken in the case of
underperformance
– For key services, Workspace maintains
relationships with alternative providers so
that other solutions would be available if the
main contractor or third party was unable to
continue providing their services. Processes
are in place for identifying key suppliers and
understanding any specific risks that require
further mitigation
– Workspace is London Living Wage
compliant for all service providers since
April 2022
Principal risk
A failure to keep up to date and plan for
changing regulations in key areas such as
health and safety could lead to fines or
reputational damage.
Risk impact
– Increased costs
– Reputational damage
Mitigation
– Health and safety are one of our primary
concerns, with strong leadership promoting
a culture of awareness throughout the
business. We have well-developed policies
and procedures in place to help ensure that
any workers, employees or visitors on site
comply with strict safety guidelines and we
work with well-respected suppliers who
share our high-quality standards in health
and safety
– Health and safety management systems are
reviewed and updated in line with changing
regulations and regular audits are
undertaken to identify any potential
improvements
– Sustainability requirements have an
increasing importance for the Group
and it is a responsibility we take seriously.
We have committed to a net zero Carbon
target of 2030 and we are implementing the
TCFD recommendations. We manage our
properties to ensure they are compliant with
or exceed the Minimum Energy Eciency
Standards (MEES) for EPCs
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Driving
customer-led
growth
Delivering
operational
excellence
Being
sustainable
CLIMATE CHANGE
Impact
High
Probability (post-mitigation)
Possible
Change from last year
New Principal Risk
Risk appetite
Low
Link to strategy
Relevant KPIs
Financial
2, 4, 5, 6, 8, 9
Non-financial
1, 2, 4, 5
Principal risk
A failure to recognise that climate change
presents a financial risk to our business
alongside changes to our customers’
expectations could lead to a significant
impact on the business.
Risk impact
– Loss of rent roll
– Negative impact on value
– Reduced occupancy levels
– Reputational damage
Brickfields,
Hoxton
Mitigation
The inherent risk from climate change
is universal, with a high likelihood of risk
materialising in the near future resulting in
potentially significant impact on businesses
in general. For Workspace, our risk is lower
when compared to many other real estate
businesses, in particular our exposure to
physical risk. However, transition risk is an
industry-wide risk and is impacting all real
estate businesses due to the significant
environmental impact associated with the
sector. In response to this, Workspace has
been proactively managing its risk exposure.
Our mitigation strategy includes:
– Annual assessment of our climate risk
exposure, using climate modelling to inform
our risk management plan
– Ongoing review of control measures and
their eectiveness by our Risk Management
Group and Environmental Sustainability
Committee
– Active management of acute physical risks
such as floods and storms across the
portfolio through emergency preparedness,
site maintenance surveys and business
continuity planning
– Delivery of an accelerated net zero and
EPC upgrade plan across the portfolio
to manage transition risk
– Introduction of climate objectives linked with
remuneration, to incentivise focused action
– Long-term energy contracts in place
to hedge price and availability risk
– Stretching carbon targets for our
development projects to minimise reliance
on raw materials and exposure to increasing
oset costs
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
£140.1m
TOTAL RENT ROLL
£60.7m
TRADING PROFIT AFTER INTEREST
£2.7bn
PROPERTY VALUATION
Brickfields, Hoxton
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BUSINESS REVIEW
Customer activity
We have seen resilient demand over the year
with an average of 109 lettings per month,
despite the extreme hot weather over the
summer and disruption caused by tube and
rail strikes. Good activity levels have
continued into the first quarter of 2023/24.
Monthly average
Q4
22/23
Q3
22/23
Q2
22/23
Q1
22/23
Enquiries 932 724 780 757
Viewings 589 479 495 508
Lettings 114 110 106 108
Alongside our new lettings, we have seen
strong renewal activity in the year, with over
700 customers renewing at a retention rate
of 88%.
Rent roll
Total rent roll, representing the total
annualised net rental income at a given date,
was up 6.5% to £140.1m at 31 March 2023.
Rent Roll
£m
At 31 March 2022
1
131.6
Like-for-like portfolio 6.5
Completed projects 3.4
Projects underway and design stage (1.2)
McKay – London 0.8
McKay – South East 0.1
McKay – Non-core 0.7
Disposals (1.8)
At 31 March 2023 140.1
1. Adjusted for McKay portfolio acquired in May 2022.
The total Estimated Rental Value (ERV) of the
portfolio, comprising the ERV of the like-for-
like portfolio and those properties currently
undergoing refurbishment or redevelopment
(but only including properties at the design
stage at their current rent roll and occupancy)
was £194.6m at 31 March 2023.
Like-for-like portfolio
The like-for-like portfolio represents 70% of the
total rent roll as at 31 March 2023. It comprises
38 properties with stabilised occupancy
excluding recent acquisitions, buildings
impacted by significant refurbishment or
redevelopment activity or contracted for sale.
As occupancy levels have stabilised, we have
been able to move pricing forward across our
like-for-like portfolio with rent per sq. ft.
increasing by 9.4% in the year to £40.61.
Like-for-like occupancy was marginally down
by 0.4% to 89.1% in the year, with an overall
increase in like-for-like rent roll of 7.1% (£6.5m)
to £97.7m.
We have seen ERV per sq. ft. increase by 13.6%
in the year and if all the like-for-like properties
were at 90% occupancy at the CBRE estimated
rental values at 31 March 2023, the rent roll
would be £116.7m, £19.0m higher than the
actual rent roll at 31 March 2023.
Completed projects
There are ten projects in the completed
projects category, with overall rent roll
increasing by 36.5% (£3.4m) in the year to
£12.8m, with rent per sq. ft. up 19.7% and
occupancy up 10.3% to 80.2%.
If the buildings in this category were all at 90%
occupancy at the ERVs at 31 March 2023, the
rent roll would be £17.2m, an uplift of £4.4m.
Six months ended
Like-for-like
31 Mar 23 30 Sep 22 31 Mar 22
Occupancy 89.1% 89.6% 89.5%
Occupancy change (0.5%) 0.1% 3.8%
Rent per sq. ft. £40.61 £38.59 £37.12
Rent per sq. ft. change 5.2% 4.0% 2.8%
Rent roll £97.7m £94.5m £91.2m
Rent roll change 3.4% 3.6% 6.4%
The Light Bulb, Wandsworth
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Projects underway – refurbishments
We are currently underway on three
refurbishment projects that will deliver
210,000 sq. ft. of new and upgraded space.
As at 31 March 2023, rent roll was £1.7m,
down £0.4m in the year.
Assuming 90% occupancy at the ERVs at
31 March 2023, the rent roll at these three
buildings once they are completed would
be £7.8m, an uplift of £6.0m.
Projects at design stage
These are properties where we are planning
a refurbishment or redevelopment that has
not yet commenced. As at 31 March 2023 the
rent roll at these properties was £5.8m.
McKay Securities
In May 2022, we completed the acquisition
of the McKay portfolio. As at 31 March 2023
the rent roll at these properties was £22.0m,
an underlying increase of £1.6m since
acquisition. The integration is now complete
with all operational activity utilising the
Workspace platform.
As at 31 March 2023 the rent roll at the seven
London assets was £8.2m, an increase of
£0.8m since acquisition with occupancy at
72.6%. A number of these properties are being
refurbished, including sub-division to adapt to
the Workspace multi-let model. We have seen
ERV per sq. ft. increase by 8% since acquisition
and assuming 90% occupancy at the ERVs at
31 March 2023, the rent roll at these seven
buildings, would be £11.6m, an uplift of £3.4m.
As at 31 March 2023 the rent roll of the
South-East oce and business park portfolio,
comprising thirteen buildings, was £8.5m,
an increase of £0.1m since acquisition with
occupancy steady at 88.3%. Assuming 90%
occupancy (or current occupancy if higher) at
the ERVs at 31 March 2023 the rent roll would
be £11.2m, an uplift of £2.7m.
We are progressing with the disposal of the
nine non-core light industrial and logistics
assets with the timing dependent on market
conditions. Contracts have been exchanged
for the sale of five of these properties in May
2023. Overall occupancy across these sites
at 31 March 2023 was 87.7% with a rent roll of
£5.2m, an increase of £0.7m since acquisition.
Assuming 90% occupancy (or current
occupancy if higher) at the ERVs at 31 March
2023, the rent roll at these buildings, would
be £6.5m, an uplift of £1.7m.
Disposals
In July 2022 we completed the sale of a
medical centre in Newbury, which had rent roll
of £0.2m, from the McKay portfolio for £7.2m
(£1.1m ahead of the March 2022 valuation).
In March 2023 we completed on the sale
of the Riverside residential component in
Wandsworth for £54m (in line with the
September 2022 valuation) and expect to
commence the construction of the new
commercial buildings (comprising 153,000 sq.
ft. of workshop and oce space), at our cost,
on a phased basis in the second half of 2023.
Profit performance
Trading profit after interest for the year was up
29.4% (£13.8m) on the prior year to £60.7m.
£m
31 Mar
2023
31 Mar
2022
Net rental income 116.6 86.7
Administrative expenses
– underlying (18.0) (17.7)
Administrative expenses
– acquisitions (2.1) –
Administrative expenses
– share based costs
1
(1.4) (1.6)
Net finance costs (34.4) (20.5)
Trading profit after
interest 60.7 46.9
1. These relate to both cash and equity settled costs.
Net rental income was up 34.5% (£29.9m)
to £116.6m.
£m
31 Mar
2023
31 Mar
2022
Underlying rental income 110.7 97.9
Unrecovered service
charge costs (4.0) (4.4)
Empty rates and other
non-recoverable costs (8.3) (10.4)
Services, fees,
commissions and
sundry income – 0.7
Underlying net
rental income 98.4 83.8
Rent discounts
and waivers – 0.3
Expected credit losses (1.1) (1.5)
Acquisitions 18.5 1.2
Disposals 0.8 2.9
Net rental income 116.6 86.7
The £12.8m increase in underlying rental
income to £110.7m reflects the strong increase
in average rent per sq. ft. achieved over the
last year.
With energy costs hedged until October 2024
and higher average occupancy levels compared
to the prior period there was a decrease of
£0.4m in unrecovered service charge costs.
Higher average occupancy has also
contributed to a reduction in empty rates
with non-recoverable costs decreasing by
£2.1m to £8.3m. Net revenue from services,
fees, commissions and sundry income
decreased by £0.7m driven by the cost of
our enhanced customer events programme.
Rent collection for the year has remained
strong with 98% of rent collected to date with
the charge for expected credit losses reducing
to £1.1m in the year.
9 Greyfriars Road, ReadingBiscuit Factory, Bermondsey (CGI)
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Growth in net rental income included a £18.5m
contribution from recent acquisitions, primarily
the McKay portfolio acquired in May 2022.
Underlying administrative expenses remained
under tight control, increasing by £0.3m to
£18.0m, which included inflationary pay rises
of 3% but with higher increases in more junior
roles Administrative expenses also included
£2.1m in respect of the McKay business,
with synergies realised ahead of original
expectations. Share based costs decreased by
£0.2m to £1.4m driven by lower vesting levels
and assumptions.
Net finance costs increased by £13.9m to
£34.4m in the year reflecting the increased
level of debt following the McKay acquisition
and the increase in SONIA during the period.
The average net debt balance over the year
was £281m higher than the prior year, whilst
the average interest cost increased from 3.1%
to 3.7%.
Loss before tax was £37.5m compared to
a profit of £124.0m in the prior year.
£m
31 Mar
2023
31 Mar
2022
Trading profit
after interest 60.7 46.9
Change in fair value of
investment properties (93.1) 68.7
(Loss)/gain on sale of
investment properties (0.7) 7.8
Exceptional costs (4.3) –
Other items (0.1) 0.6
(Loss)/profit before tax (37.5) 124.0
Adjusted underlying
earnings per share 31.7p 25.8p
The change in fair value of investment
properties, including assets held for sale, was
£93.1m compared to an increase of £68.7m
in the prior year.
The loss on sale of investment property of
£0.7m resulted from costs associated with
the disposal of the residential scheme at
Riverside, Wandsworth and the profit on
disposal of the medical centre at Newbury
from the McKay portfolio.
Exceptional costs include one-o items relating
to the acquisition and integration of McKay,
including the cost of buying-out the McKay
pension scheme, and implementation of a new
finance and property management system.
Adjusted underlying earnings per share, based
on EPRA earnings adjusted for non-trading
items and calculated on a diluted share basis,
was up 22.9% to 31.7p.
Dividend
Our dividend policy is based on trading
profit after interest, taking into account our
investment and acquisition plans and the
distribution requirements that we have as a
REIT, with our aim being to ensure the total
dividend per share in each financial year is
covered at least 1.2 times by adjusted
underlying earnings per share.
With the strong improvement in trading
performance and confidence in the longer
term prospects of the Company, the Board
is recommending a final dividend of 17.4p per
share, taking the full year dividend to 25.8p
(2022: 21.5p), to be paid on 4 August 2023
to shareholders on the register at 7 July 2023.
The dividend will be paid as a REIT Property
Income Distribution (PID) net of withholding
tax where appropriate.
Clerkenwell Workshops, Clerkenwell
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WALTHAM
FOREST
REDBRIDGE
HARINGEY
BARNET
BRENT
CAMDEN
EALING
NEWHAM
GREENWICH
LEWISHAM
SOUTHWARK
LAMBETH
WANDSWORTH
RICHMOND
UPON THAMES
TOWER HAMLETS
HACKNEY
ISLINGTON
CITY OF
LONDON
CITY OF
WESTMINSTER
HAMMERSMITH
AND
FULHAM
KENSINGTON
AND
CHELSEA
ENFIELD
HOUNSLOW
EARLS COURT
PADDINGTON
BATTE R S E A
VICTORIA
WATERLO O
KENNINGTON
BETHNAL
GREEN
LONDON
BRIDGE
KING’S
CROSS
OLD
STREET
SHOREDITCH
ISLINGTON
STRATFORD
FARRINGDON
CANARY
WHARF
Like-for-like
Refurbishments
Mixed-use redevelopments
Acquisition
Property valuation
At 31 March 2023, our property portfolio was
independently valued by CBRE at £2,741m,
an underlying decrease of 3.2% (£91m) in the
year. The main movements in the valuation
are set out below:
£m
Valuation at 31 March 2022 2,402
Capital expenditure 56
Acquisitions 434
Disposals (60)
Revaluation – H1 8
Revaluation – H2 (99)
Valuation at 31 March 2023 2,741
There was an underlying revaluation decrease
of 3.5% (£99m) in the second half of the year
compared to an increase of 0.3% (£8m) in the
first half. A summary of the full year valuation
and revaluation movement by property type
is set out below:
Like-for-like properties
There was a 0.3% (£6m) underlying decrease
in the valuation of like-for-like properties to
£1,887m. This was driven by a 13.6% increase
in the ERV per sq. ft. (£216m) reflecting the
pricing of recent lettings and renewals, oset
by a 55bps outward shift in equivalent yield
(£222m). This outward shift typically ranged
from 25bps to 90bps depending upon location.
31 Mar
2023
31 Mar
2022 Change
ERV per sq. ft. £48.00 £42.23 13.6%
Rent per sq. ft. £40.61 £37.12 9.4%
Equivalent Yield 6.2% 5.6% 0.6%
1
Net Initial Yield 4.7% 4.2% 0.5%
1
Capital Value
per sq. ft. £698 £679 2.8%
1. Absolute change.
Revaluation increase/(decrease)
£m
Valuation
31 Mar
2023 Full year H2 H1
Like-for-like properties 1,887 (6) (21) 15
Completed projects 265 12 12 –
Refurbishments 172 (25) (14) (11)
Redevelopments 33 (17) (10) (7)
McKay – London 154 1 (11) 12
McKay – South East 114 (13) (21) 8
McKay – Non-core 116 (41) (34) (7)
Sold – (2) – (2)
Total 2,741 (91) (99) 8
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A 5% increase in ERV would increase the
valuation of like-for-like properties by
approximately £94m whilst a 50bps increase
in equivalent yield would decrease the
valuation by approximately £140m.
Completed projects
There was an underlying increase of 4.7%
(£12m) in the value of the ten completed
projects to £265m. The overall valuation metrics
for completed projects are set out below:
31 Mar
2023
ERV per sq. ft. £34.36
Rent per sq. ft. £28.70
Equivalent Yield 6.5%
Net Initial Yield 4.3%
Capital Value per sq. ft. £475
Current refurbishments and redevelopments
There was an underlying decrease of 12.7%
(£25m) in the value of our current
refurbishments to £172m and a reduction
of 34.0% (£17m) in the value of our current
redevelopments to £33m.
The most significant movements in this
category are a decrease of £8.4m at our light
industrial property Havelock Terrace, Battersea,
reflecting the outward movement in industrial
yields and a £8.1m decrease at Rainbow
Industrial Park, Raynes Park, reflecting the
outward movement in industrial yields and
reduction in expected residential values.
McKay
We completed the acquisition of McKay
Securities PLC on 6 May 2022 for a total
consideration of £267.6m, comprising £191.1m
in cash and 10.5m Workspace shares, and
£9.4m transaction costs, representing a 14%
discount to NTA acquired (after seller’s
transaction costs) of £310.5m.
There was an underlying decrease of 12.1%
(£53m) in the valuation of the McKay portfolio,
compared to the acquisition cost. A summary
of the full year valuation and underlying
movements for the McKay portfolio from
acquisition is set out below:
£m
Valuation
(£m)
Change
(£m)
Equivalent
Yield
Movement
ERV
Movement
London 154 1 +25bps +8%
South
East 114 (13) +80bps +5%
Non-
core 116 (41) +235bps +6%
Total 384 (53)
The valuation metrics for the McKay portfolio
are set out below:
As at 31 March 2023
London South East Non-core
No. properties 7 13 10
ERV per sq. ft. £44.36 £26.67 £10.13
Rent per sq. ft. £38.80 £21.68 £10.59
Equivalent Yield 6.9% 9.1% 6.4%
Net Initial Yield 4.3% 6.8% 4.3%
Capital Value
per sq. ft. £528 £257 £176
Refurbishment activity
A summary of the status of the refurbishment
pipeline at 31 March 2023 is set out below:
Our adaptive re-use of existing buildings for
refurbishments delivers up to 70% reduction
in embodied carbon compared to new
build schemes.
We are on-site at Leroy House, Islington where
we are delivering a refurbished and extended
58,000 sq. ft. business centre which we
expect to complete in spring 2024. We have
recently commenced major upgrades and
extensions at The Chocolate Factory, Wood
Green and at The Biscuit Factory, Bermondsey.
Projects
Number
Capex
spent
Capex to
spend
Upgraded and new
space (sq. ft.)
Underway 3 £14m £56m 210,000
Design stage 7 – £251m 438,000
Design stage (without planning) 7 – £382m 577,000
Chocolate Factory, Wood Green (CGI) Leroy House, Islington
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Redevelopment activity
Many of our properties are in areas where there
is strong demand for mixed-use redevelopment.
Our model is to use our expertise, knowledge
and local relationships to obtain a mixed-use
planning consent and then typically to agree
terms with a residential developer to undertake
the redevelopment and construction at no cost
and limited risk to Workspace. We receive back
a combination of cash, new commercial space
and overage in return for the sale of the
residential scheme to the developer.
A summary of the status of the redevelopment
pipeline at 31 March 2023 is set out below:
No. of
properties
Residential
units
New commercial
space (sq. ft.)
Design
stage 3 539 77,000
The three schemes at design stage at The
Chocolate Factory, Wood Green, Poplar and
Rainbow, Raynes Park all have planning consent.
Sustainability
We have an inherently green property
portfolio with energy intensity already
19% lower than the industry best practice
standard. Further improving the energy
eciency of our buildings is key in helping
us to achieve our target of being a net zero
carbon business by 2030. The Workspace
portfolio is currently 43% EPC A and B rated,
an increase of 12% in the year, and we are on
track to upgrade the remainder of our portfolio
to these categories by 2030. We are also
targeting a reduction in Scope 1 gas emissions
by a minimum of 5% each year, whilst continuing
to procure 100% renewable electricity (REGO
backed). In the year we also achieved a 5%
reduction in operational energy intensity and
a 27% reduction in gas use.
Cash Flow
The Group generates strong operating cash
in line with trading profit. A summary of cash
flows are set out below:
There is a reconciliation of net debt in note 16(b)
to the financial statements.
The overall increase of £344m in net debt
reflects the acquisition of McKay in May 2022
for cash consideration of £201m (including
fees) and net debt acquired of £162m.
Rent collection remains robust with 98% of
rent due for the year collected to date. The
majority of the amounts still outstanding are
covered by rent deposits or by the provision
for doubtful debts.
£m
31 Mar
2023
31 Mar
2022
Net cash from operations after interest
1
70 58
Dividends paid (44) (43)
Capital expenditure (60) (31)
Purchase of investment properties (201) (88)
Net debt acquired (162) –
Property disposals and cash receipts 49 122
Other 4 (11)
Net movement (344) 7
Opening debt (net of cash) (558) (565)
Closing debt (net of cash) (902) (558)
1. Excludes £8.8m of VAT receipts relating to sale of Riverside included in ‘Other’.
Poplar Business Centre, Poplar (CGI) The Frames, Shoreditch
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Net assets
Net assets decreased in the year by £13m to
£1,787m. EPRA net tangible assets (NTA) per
share at 31 March 2023 was down 6.2% (£0.61)
to £9.27:
EPRA NTA
per share £
At 31 March 2022 9.88
Adjusted trading profit after interest 0.31
Exceptional costs (0.02)
Property valuation deficit (0.48)
Share issue (0.19)
Dividends paid (0.23)
At 31 March 2023 9.27
The calculation of EPRA NTA per share is set
out in note 9 of the financial statements.
Total Accounting Return
The total accounting return for the full year
was (3.8)% compared to 8.0% in the year
ended March 2022. The total accounting
return comprises the growth in absolute EPRA
net tangible assets per share plus dividends
paid in the year as a percentage of the
opening EPRA net tangible assets per share.
The calculation of total accounting return is
set out in note 9 of the financial statements.
Financing
As at 31 March 2023, the Group had £12m of
available cash and £136m of undrawn facilities:
Drawn
amount
£m
Facility
£m Maturity
Private
Placement
Notes 300.0 300.0
2025-
2029
Green Bond 300.0 300.0 2028
Secured loan 65.0 65.0 2030
Bank facilities 249.0 385.0
2023-
2025
Total 914.0 1,050.0
The majority of the Group’s debt comprises
long-term fixed-rate committed facilities
comprising a £300m green bond, £300m of
private placement notes, and a £65m secured
loan facility.
Shorter term liquidity and flexibility is
provided by floating-rate bank facilities
totalling £385m which were £249m drawn as
at 31 March 2023. The bank facilities comprise
£335m of sustainability-linked Revolving Credit
Facilities (RCFs) and a £50m acquisition
facility put in place for the acquisition of
McKay. During the year, our RCF bank facility
maturities were extended, with £135m now
maturing in April 2025 and £200m in
December 2025, with both facilities having
the potential to extend by a further year. The
£200m RCF also has the option to increase
the facility amount by up to £100m, subject
to lender consent.
All facilities, other than the Secured loan,
are provided on an unsecured basis with
an average drawn debt maturity of 4.1 years
(31 March 2022: 4.2 years).
At 31 March 2023, the eective interest rate
was 4.0% based on SONIA at 4.2%, with 73%
of the net debt (£665m) at fixed rates. The
average interest cost of our fixed rate
borrowings was 2.9% and our floating-rate
bank facilities had an average margin of 1.78%
over SONIA. A 1% increase in SONIA would
increase the eective interest rate by 0.3%
(at current debt levels).
At 31 March 2023, loan to value (LTV) was
33% (31 March 2022: 23%) and interest cover,
based on net rental income and interest paid
over the last 12 month period, was 3.8 times
(31 March 2022: 4.8 times), providing good
headroom on all facility covenants.
The Chocolate Factory, Wood Green
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Financial outlook for 2023/24
Over the last year we have seen stable
like-for-like occupancy and continued rental
growth driven by good levels of customer
demand. Rental income in 2023/24 will be
underpinned by the 7.1% growth in like-for-like
rent roll we have seen over the last year. We
continue to see good demand and expect to
see further pricing growth. Rental income
growth will also be supported by the letting
up of recently completed projects and the
letting up of refurbished and vacant space
in the McKay portfolio.
The current high levels of inflation will impact
on both our service charge and administrative
costs. In relation to service charge costs, where
the majority of the cost is passed on to our
customers, we have been able to limit the
impact on customers by the hedging of our
energy costs in October 2021. Sta costs are
the most significant driver of our administrative
expenses and, whilst we have limited
inflationary salary increases to 6% for sta
earning more than £50,000, we have given
higher increases for those on lower salary levels.
The proceeds from the recently announced
exchange for sale of five McKay non-core
assets for £82m will be used to repay our
short-term floating rate debt which currently
has an eective interest rate of 6%. The
disposal will result in a reduction in rent roll
of £3.6m, a reduction in net debt of £82m and
a net reduction of around £5m per annum in
interest costs. On a proforma basis this sale
reduces LTV by 2% to 31%, increases the
percentage of fixed-rate debt to 80% and
reduces our average cost of debt to 3.8% and
extends the average maturity of drawn debt
to 4.4 years. We are progressing with the sale
of the remaining non-core assets valued at
£34m as at 31 March 2023.
We expect capital expenditure of around
£60m over the next year as we progress
with a range of planned asset management
projects, including the refurbishments of
Leroy House, The Chocolate Factory and The
Biscuit Factory. This investment incorporates
the spend of some £10m per annum to meet
our 2030 environmental commitments.
Barley Mow, Chiswick
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Property statistics
Half Year ended
31 Mar
2023
30 Sep
2022
31 Mar
2022
30 Sep
2021
Workspace portfolio
Property valuation £2,741m £2,863m £2,402m £2,271m
Number of locations 86 87 57 58
Lettable floorspace (million sq. ft.) 5.2 5.4 4.0 3.9
Number of lettable units 4,910 4,901 4,482 4,234
Rent roll of occupied units £140.1m £134.7m £111.0m £102.1m
Average rent per sq. ft. £32.86 £30.03 £33.26 £32.28
Overall occupancy 81.5% 84.0% 84.3% 81.2%
Like-for-like number of properties 38 38 39 39
Like-for-like lettable floor space (million sq. ft.) 2.7 2.7 2.8 2.9
Like-for-like rent roll growth 3.4% 3.6% 6.4% 2.1%
Like-for-like rent per sq. ft. growth 5.2% 4.0% 2.5% (2.1%)
Like-for-like occupancy movement (0.5%) 0.1% 4.0% 3.7%
1. The like-for-like category has been restated in the current financial year for the following:
– The transfer out of Riverside to the sold category.
2. Like-for-like statistics for prior years are not restated for the changes made to the like-for-like property portfolio in the
current financial year.
3. Overall rent per sq. ft. and occupancy statistics includes the lettable area at like-for-like properties and all refurbishment and
redevelopment projects, including those projects recently completed and also properties where we are in the process of
obtaining vacant possession.
The Strategic Report on pages 1 to 105 was approved by the Board of Directors on 6 June 2023
andsigned on its behalf by:
Graham Clemett Dave Benson
Chief Executive Ocer Chief Financial Ocer
Brickfields, Hoxton
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Assessment of prospects
The Group assesses its prospects primarily
through the annual Strategic Review process
which involves a debate of the Group’s
strategy and business model, consideration
of the Group’s principal risks and a review of
the Group’s five-year plan. Particular attention
is given to existing refurbishment and
redevelopment commitments, long-term
financing arrangements, compliance with
financing and REIT covenants and existing
macroeconomic factors.
The most recent strategy day was held
in October 2022 and the Board reviewed
the business plan for the five years to
31 March 2027.
Macroeconomic and political issues, including
the war in Ukraine, high levels of inflation and
increased interest rates continue to give rise
to concerns around the UK economy meaning
there is continuing risk of an economic
downturn. Consideration has been given
to a number of downside scenarios covering
the period to 31 March 2028.
The scenarios modelled include a severe
but realistically possible downside scenario
based on the following key assumptions:
– A stalling of the UK economy, with low
levels of GDP growth and inflationary
pressure, resulting in a reduction in
customer demand over the next two years,
compared to current levels
– Like-for-like occupancy reduces by c.5%
to 85% over the next two years, with
associated increase in void costs and
downward pressure on pricing of new
lettings, and thereafter a gradual recovery
to c.90% by 31 March 2028
The Group’s activities, strategy and
performance are explained in the Strategic
Report on pages 1 to 105.
Further detail on the financial performance
and financial position of the Group is provided
in the financial statements on pages 224 to 250.
The Directors have conducted an extensive
review of the appropriateness of adopting the
going concern basis. More details can be
found on page 227. Following this review and
having made appropriate enquiries, the
Directors have a reasonable expectation that
the Group and the Company have adequate
resources and sucient headroom on the
Group’s bank loan facilities to continue in
operational existence. For this reason, the
Directors believe that it is appropriate to
continue to adopt the Going Concern basis
in preparing the Group’s accounts.
– New lettings at below the average price per
sq. ft. of vacating customers resulting in an
overall reduction in average rent per sq. ft.
until like-for-like occupancy levels return
to c.90%
– Elevated levels of counterparty risk, with
bad debt significantly higher than pre-
pandemic levels
– Continued elevated levels of cost inflation
– Further increases in SONIA rates impacting
the cost of variable rate borrowings
– Estimated rental value reduction in-line with
the decline in average rent per sq. ft. and
outward movement in investment yields
resulting in a lower property valuation
The Group’s activities, strategy and
performance are explained in the Strategic
Report on pages 1 to 105, including a description
of the Group’s strategy and business model on
pages 32 to 35 and 64 to 68.
Assessment of time period
The Board has selected a review period
of five years for the following reasons:
a) The Group’s strategic review covers
a five-year period.
b) Our current project pipeline spans five
years, covering the time for the currently
planned major refurbishments and
redevelopments to progress from initiation
to completion.
c) The average period to maturity of the
Group’s committed facilities is 4.1 years.
Although financial performance is assessed
over a period of five years, the strategy and
business model are considered with the
longer-term success of the Group in mind.
The Directors believe they have no reason
to expect a significant adverse change in the
Group’s viability immediately following the
end of the five-year assessment period.
Assessment of viability
The Board has considered the key risks and
mitigating factors that could impact the
Group, details of which can be found on pages
69 to 76. Those risks that could have an
impact on the ongoing success of the Group’s
strategy, particularly in light of the current
geopolitical situation, were identified and the
resilience of the Group to the impact of these
risks in severe, yet plausible downside
scenarios has been evaluated.
Sensitivity analyses have been prepared to
understand the impact of the identified risks
on solvency and liquidity. The specific risks
which were evaluated are shown in the
following table.
GOING CONCERN VIABILITY STATEMENT
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COMPLIANCE STATEMENTS
RISK SENSITIVITY ANALYSES
Specific risk Risk category Sensitivity analysis
Demand for space falls dramatically
impacting occupancy and pricing levels,
or customer defaults increase leading
to a breach of loan covenants.
– Customer demand
– Valuation
At the point in the severe scenario modelled where ICR is at its lowest, net rental income would need to reduce
by 36% compared to the year to 31 March 2023. This represents a 30% reduction from the net rental income
included in the severe scenario modelled.
Property values are adversely impacted
by the uncertainty in the economy
leading to a breach of covenants.
– Valuation At the point in the severe scenario modelled that LTV is at its highest, the property valuation would need to fall
by 42% compared to the valuation as at 31 March 2023.
Changes in the economic UK
environment result in further increases
in SONIA rates.
– Financing At the point in the severe scenario modelled where ICR is at its lowest, SONIA rates would need to increase
by 760bps compared to 31 March 2023.
Changes in the economic and regulatory
UK environment impact the availability
and pricing of debt.
– Financing £885m of the Group’s debt facilities expire within the viability period – see note 16 of the Financial Statements.
Under the scenario modelled, the Group would need to either refinance these facilities when they expire or
implement other mitigating strategies to ensure full repayment.
Risk sensitivity analyses
The Group benefits from a largely freehold
property portfolio and a flexible business
model that allows the business to adapt
to changing requirements of its customer
base. This, coupled with a strong balance
sheet, means the Group can withstand
a significant downturn in the economy
and demand.
In the scenarios tested, the most significant
impact on the viability of the Group would
be to liquidity headroom resulting from an
inability to refinance both existing debt
facilities. To mitigate this risk, the Group
regularly reviews funding requirements and
maintains a close relationship with existing
and potential funding partners to facilitate
the continuing availability of debt finance.
The maturity of debt facilities is spread over
a number of years to avoid a concentration of
risk in one period and gearing is relatively low
with LTV of 33% as at 31 March 2023.
There are a number of mitigating factors that
were not considered in the scenarios tested
but which could be actioned:
– Additional asset disposals
– Cancellation or significant reduction
in dividend
– Reduction in refurbishment programme
Conclusion
The sensitivity and stress analyses outlined
above indicate that the Group would have
adequate means to maintain headroom in its
facilities and covenants to continue operations
for the period under review. Taking into
account the Group’s position and principal
risks, the Board has assessed the prospects of
the Group and has a reasonable expectation
that the Group will be able to continue in
operation and meet its liabilities as they fall
due over the five-year period stated above.
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The table below, and the information it refers to, sets out our position on non-financial reporting requirements in accordance with Sections 414CA and 414CB of the Companies Act 2006 as well
as other key compliance areas. The time periods for reporting on the matters set out below have been informed by applicable law and prevailing market practice, taking into account the Group’s
particular circumstances and the nature of its business. The description of our business model can be found on pages 64 to 68 and the description of our non-financial key performance indicators
can be found on pages 62 to 63.
Policies and due diligence Outcomes of policies and impacts of activities
Related principal risks
(Pages 69 to 76)
Climate and
environmental
matters
– Our Sustainability strategy sets out our commitment to operating
responsibly in all our dealings with our stakeholders. This is supported
by an Environmental Policy and a Climate Change Policy which sets out
our objectives and our commitment to a co-ordinated approach to
improving the overall environmental performance of our portfolio
– Our net zero carbon pathway sets out our roadmap to becoming a
net zero carbon business by 2030 and our sustainable development
brief sets minimum requirements for our development and
refurbishment projects on energy, carbon, waste, water, materials,
nature and wellbeing
– We disclose our climate-related risks and opportunities, targets and
KPIs and management processes in line with the TCFD recommendations
– Our climate and environmental policies inform all
our sustainability activities. See our Sustainability
report on pages 36 to 58 for details of our
commitment to environmental matters, including
our net zero carbon pathway
– See our ESG Committee Report on pages 172 to 177
for further details on our policies and how they
support the implementation of our ESG strategies
– Our TCFD disclosure can be found on pages 92 to 105
– Our green finance framework, along with the
allocation report, is on our website
Risk 10 – Climate change
Social matters – Our Sustainability strategy sets out our approach to supporting our
employees, customers and suppliers
– Our social impact programme demonstrates our commitment to
supporting communities in need across London
– We pay our direct employees the London Living Wage and in April 2022
we also brought all third-party contractors onto the Living Wage
– See pages 50 to 58 for details on how we are
focusing on social matters, including our real Living
Wage commitment, our social impact programme
and the community and charity projects we have
supported during the year
Social matters are not deemed
to be a principal risk for the Group;
however, we are continuing to focus
on social matters through our
Sustainability strategy (see pages
50 to 58 for more details)
Employees – Our Code of Conduct, approved by the Board, sets out the standards
of behaviour expected of Group employees and stakeholders on
behalf of the Board and demonstrates the Group’s commitment to
maintaining the highest standard of ethical conduct and behaviour
in our business practice
– We are committed to diversity and inclusion at all levels of our
business. See pages 22, 52 and 149 for more details on our Equal
Opportunities and Dignity at Work Policy
– The Group’s Health & Safety Committee meets twice per year. The
Board receives regular reports and reviews our health and safety
processes at least annually, and the Executive Committee receives
monthly reports. See page 90 for more details on our health and safety
policies and procedures
– In July 2021, we introduced a Hybrid Working Policy in recognition
of the importance of work-life balance
– See pages 21 and 50 to 53 for details of how
we looked after our employees during the year,
including how we listened to them during the year,
our health and wellbeing initiatives, our diversity
and inclusion initiatives and our training and
development initiatives
– Employees receive induction training and regular
reminders on the Code of Conduct
Risk 7 – Resourcing
Non-financial information statement
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Policies and due diligence Outcomes of policies and impacts of activities
Related principal risks
(Pages 69 to 76)
Health & safety – Our Health & Safety Policy lays out our commitment to the health and
safety of our employees, customers, visitors and others who may be
aected by our activities and to fully comply with all health and safety
legislation applicable to our business, by implementing HSG65
– All our site sta and facilities managers, as well as some key head oce
personnel, use a compliance monitoring tool which is a proven software
system that enables us to monitor statutory compliance and routine
maintenance across the entire portfolio
– We train our employees so that they are competent and confident to
carry out their jobs in a safe and professional manner. Each new starter
is given in-house induction training targeted to the health and safety
responsibilities they will hold, with ongoing training provided via toolbox
talks and regular formal meetings with managers
– We undertake a series of formal internal health and safety audits every
year to review our controls and to ensure they are suitable and sucient
to manage risk in the business. Evaluations of the results from these
audits are used to facilitate individual site safety improvements and
to identify areas where we can enhance our safety procedures across
the portfolio
– We closely manage our contractors’ activities and the associated risks
to the health and safety of customers and visitors, particularly where
building works are being carried out in close proximity to common parts
and customer-occupied areas
– Our Health & Safety Policy was formally reviewed
by our Health & Safety Committee twice in the year
to ensure it remains appropriate and up-to-date
– We have carried out a substantial amount of health
and safety training, including, IOSH Managing
Safely, NEBOSH Certificate and specific training
around asbestos, water hygiene, fire safety and the
Construction Design and Management Regulations
– For the seventh consecutive year, there have been
no contractor-related accidents or incidents that
have aected our customers
– We monitored and reviewed our health and safety
systems to promote continued compliance with
HSE standards and best practice
Risk 9 – Regulatory
Human rights
and modern
slavery
– Our Anti-Slavery Policy reflects our commitment to upholding human
rights and eliminating all forms of forced, slave, bonded or involuntary
labour both within our business and our supply chain. All new
employees are given training on our Anti-Slavery Policy during
inductions and our Employee Code of Conduct reinforces the message
that we expect all of our sta to work with us to uphold our commitment
to preventing modern slavery in our business and supply chains
– We publish a Supplier Code of Conduct on our website, which sets out
our expectations of our suppliers, including in respect of modern slavery
and human rights. As part of our due diligence process, all new suppliers
are expected to read and to abide by the Supplier Code of Conduct
– We care about, respect and support internationally proclaimed human
rights. We consider the risk of modern slavery and human tracking to
be very low in our business, however, we regularly monitor and review
our risk profile and emerging regulatory guidance and we will take any
necessary actions to improve and to strengthen our practices
– Our modern slavery statement is approved by the Board and published on
our website annually and it is available at https://www.workspace.co.uk/
investors/sustainability/our-policies. Our modern slavery statement sets
out the steps the Group has taken and is taking to help prevent slavery
and human tracking in our business and supply chains
– We take a zero-tolerance approach to modern
slavery and other breaches of fundamental
human rights
– All sta onboarding suppliers are aware of the
requirement for suppliers to abide by the Supplier
Code of Conduct
– During the year we completed a modern slavery
audit of our cleaning contractor. For more details,
see page 51
– No incidences of human rights abuse or modern
slavery have been identified (2022: Nil)
Risk 7 – Resourcing
Risk 9 – Regulatory
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Policies and due diligence Outcomes of policies and impacts of activities
Related principal risks
(Pages 69 to 76)
Anti-bribery
and corruption
– Our Anti-Bribery and Corruption Policy, which is reviewed by the Audit
Committee annually, sets out the responsibilities and expectations of
our employees for the prevention, detection and reporting of bribery
and other forms of corruption. The Policy also contains our Gifts and
Hospitality Policy, which requires employees to seek approval whenever
oered or oering a gift or hospitality valued over £20 (whether they
are accepted or refused)
– We make suppliers aware of our zero-tolerance approach to bribery
and we undertake due diligence on suppliers to confirm that they are
committed to the prevention of bribery and corruption
– Our Code of Conduct further reinforces these messages
– It is our policy to conduct all of our business in
an honest and ethical manner. We take a zero-
tolerance approach to bribery and corruption
and we are committed to implementing and to
enforcing eective systems to counter bribery
– All sta receive training on the Anti-Bribery
and Corruption Policy, including the Gifts and
Hospitality Policy, as part of their induction
and thereafter with annual refresher training
– No incidences of bribery or corruption have
been identified (2022: Nil)
Risk 9 – Regulatory
Political and
charitable
donations
– Our policy is not to make any political donations. We only make
charitable donations that are legal and ethical. Any charitable donations
are made with the prior approval of the Company Secretary
– The Group did not make any political donations
or incur any political expenditure during the year
(2022: Nil)
Risk 9 – Regulatory
Data privacy – We take our obligations under the retained EU law version of the
General Data Protection Regulation (UK GDPR), the Data Protection Act
2018 and other applicable data privacy legislation very seriously. We
monitor guidance and practice in this area and continue to embed data
privacy into the heart of the business
– We have a Data Protection Policy, as well as ancillary policies in specific
areas (including security, data breaches, subject rights, appointment
of data processors and data privacy impact assessments). We continue
to monitor compliance with our policies and procedures and to review
and update them where appropriate to reflect developing guidance
and practice
– The Board continues to place high value on data
privacy, and privacy is embedded throughout the
organisation. Regular reports are provided to the
Executive Committee and the Board
– Sta are aware of their duties in relation to data
privacy. Mandatory data protection training is
provided to all sta at induction and on an annual
basis. We also provide more tailored, role-specific
training to sta where appropriate
– Data privacy is a key consideration whenever new
projects are contemplated or changes to existing
arrangements are proposed
Risk 9 – Regulatory
Conflicts
of interest
– In accordance with HR policies and the Code of Conduct, employees
are required to notify the Company of any conflicts of interest. The
Board is also subject to these policies and is regularly reminded of their
duty to notify us of any interest in an existing or proposed transaction
with the Group
– All conflicts are recorded on a central register and we have 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 the Group, they are
required to notify the Board in writing or verbally
at the next Board meeting
– During the year, no Director had any beneficial
interest in any contract significant to the Group’s
business, other than a contract of employment
(2022: Nil)
Risk 9 – Regulatory
Whistleblowing – We have a Whistleblowing Policy which provides employees with
information on how they can report, anonymously if they wish, any
concerns about impropriety or wrongdoing within the business
– Employees have access to an independent telephone line for
anonymous reporting of concerns
– The Whistleblowing Policy is reviewed annually, and the Board receives
updates from the Company Secretary on the operation of the
whistleblowing system
– During the year under review, we did not receive
any whistleblowing messages (2022: Nil)
Risk 7 – Resourcing
Risk 9 – Regulatory
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NON-FINANCIAL INFORMATION STATEMENT CONTINUED
TCFD
Workspace considers climate change as a
principal risk and a material issue. In line with
the ‘Task Force on Climate-related Financial
Disclosures’ (TCFD) recommendations, since
2019 Workspace has provided information to
stakeholders on its climate-related risks and
opportunities, in turn helping them to make
informed decisions.
This year we have re-assessed our material
climate risks and opportunities, and their
potential impact using a number of climate
change scenarios. This assessment has provided
us with an in-depth view of the levels of risks
across the portfolio and helped us test the
resilience of our strategy. We also have a more
robust understanding of the opportunities to
Workspace, arising from the transition to a low
carbon economy. We have used the findings
of this assessment to update our approach to
risk management, implement a strategy to
mitigate material risks and maximise the
opportunity. Aligned to this is our 2030 net
zero carbon commitment, which ensures we
are closely managing our transition risks and
building resilience within the business.
The following section includes our
comprehensive TCFD disclosures, including
details on climate change scenarios and
how they may aect our business in the
short and long term. As required by the
Listing Rules (LR 9.8.6R), we confirm that
this report is consistent with all of the TCFD
recommendations and recommended
disclosures (four TCFD recommendations
and 11 recommended disclosures).
TCFD pillar and
recommendation Recommended disclosures
Compliance
status Progress to date 2023/24 objectives
1. Governance
Disclose the
organisation’s
governance around
climate-related risks
and opportunities
– Describe the Board oversight of climate-
related risks and opportunities
Achieved
– Board ESG Committee
established to oversee
climate-related risks,
opportunities and goals
– Executive ownership of
climate-related objectives,
with performance linked
to their remuneration
– Board ESG Committee
to continue monitoring
climate-related risks and
opportunities
– Stretching carbon related
goals to be included in
everyone’s objectives,
including senior management
and linked to remuneration
– Describe management’s role in assessing
and managing climate-related risks and
opportunities
Achieved
2. Strategy
Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy
and financial
planning where
such information
is material
– Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and long term
Achieved
– In-depth assessment of
climate-related risks and
opportunities undertaken
against 4°C and 1.5°C
global temperature rise
scenarios (page 95)
Disclosure on potential
impact and resilience of
strategy on page 96
– Analysis on exposure to
climate risk and resilience
of business strategy to be
re-assessed annually taking
into account any new
changes in drivers
– Describe the impact of climate-related risks
and opportunities on the organisation’s
businesses, strategy and financial planning
Achieved
– Describe the resilience of the organisation’s
strategy, taking into consideration dierent
climate-related scenarios, including a 2°C
or lower scenario
Achieved
3. Risk
management
Disclose how the
organisation
identifies, assesses,
and manages
climate-related risks
– Describe the organisation’s processes for
identifying and assessing climate-related
risks
Achieved
– Risks identified using
climate models, academic
research and expert advise
– Based on probability and
impact scale, risk level
assessed as low, moderate
or high.
– Utilising enterprise risk
management framework
to capture, document and
manage risks
– Climate risk is identified
as a principal risk and will
continue to be assessed
as part of the overall risk
management framework,
including periodic review
of eectiveness of controls
– Describe the organisation’s processes
for managing climate-related risks
Achieved
– Describe processes for identifying,
assessing, and managing climate-related
risks and integrating them into the
organisation’s overall risk management
Achieved
4. Metrics and
targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-
related risks and
opportunities where
such information is
material
– Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy
and risk management process
Achieved
– Annual publication of
energy consumption,
renewable energy
generation and
procurement, carbon
emissions (from fuels,
waste, water), recycling
rates, EPC split, voluntary
green certifications,
energy eciency projects,
portfolio flood exposure
– Key metrics will be tracked
on a monthly basis and
presented to Board
– Science-based carbon
emissions reduction targets
to be updated to reflect
newly on-boarded properties
– Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhouse gas
(GHG) emissions and the related risks
Achieved
– Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets
Achieved
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GOVERNANCE STRATEGY
The role of the Board
Our Chief Executive Ocer has the highest
level of responsibility for climate-related risks
and opportunities and together with the rest
of the Workspace Board, ensures we maintain
close oversight of climate-related issues.
An ESG Committee comprising of six
independent Non-Executive Directors, the
Chief Executive Ocer and the Chief Financial
Ocer is set up to assist the Board in
incorporating climate-related considerations
in business strategy and decision making.
Ultimately, ensuring the long-term sustainable
success of the business. The ESG Committee
receives a detailed update on our
sustainability and climate-related goals three
times a year, from members of the Executive
Committee and the Head of Sustainability.
The update from the Committee and any
associated recommendations are then put
forward to the Board for consideration.
During the year, the Board received updates
from the ESG Committee three times and
considered the following climate-related
issues: alignment of McKay properties with the
2030 net zero target, assessment of revised
budget to deliver on the commitment,
compliance with changes to Minimum Energy
Eciency Standard (MEES) and eectiveness
of our climate-related policies. See page 172
for further details of climate-related topics
considered by the Board and its Committees
(including Audit and Remuneration
Committees). The Board also received a
technical briefing on three topics as part of
the ongoing upskilling drive, including climate
risk assessment, renewable procurement and
evolving sustainability reporting requirements.
Following detailed deliberation, the Board
made a decision to elevate climate risk as
a principal business risk and reviewed the
Climate change risk and opportunity
As a responsible business, we consider
climate-related risks and opportunities across
our portfolio and business wide activities.
We have identified the physical and transition
risks arising from climate change and are
committed to actively managing these risks.
Due to the nature of our business model,
Workspace is also in a position to capture
several opportunities arising from the
transition to a low carbon economy.
We have worked with Willis Tower Watson
(WTW) to identify and assess the impact of
climate-related risks through quantitative and
qualitative scenario analysis, considering
short-term (to 2025), medium-term (2025–
2030) and long-term (to 2050 and beyond)
time horizons. This short-term and medium-
term time horizons align with our portfolio
strategy and financial planning. Our portfolio
strategy categorises projects that are live and
will be completed in the short term (1-2 years)
and a medium-term development pipeline
that extends out to 2030. We accordingly do
our budgeting for short and medium term.
We are also working on a rapid
decarbonisation of the business over the
medium term, as reflected in our 2030 net
zero target. Anything longer than 2030 is
considered long term given the regulatory
and market uncertainty involved. The
assessment we have conducted is based on
two pre-defined climate scenarios – a 4°C
global temperature rise scenario in line with
the Intergovernmental Panel on Climate
Change (IPCC) Representative Concentration
Pathway (RCP 8.5) and a 1.5°C global
temperature rise scenario in line with RCP 2.6.
mitigation strategy and eectiveness of
controls as part of the principal risk register
review. This information is provided to the
Board and the Executive Committee via the
Risk Management Group, comprising of senior
members from dierent parts of the business.
The Risk Management Group meets monthly
and is responsible for monitoring and
implementing risk management activities,
including climate risk.
We have also linked sustainability and
climate-related performance measures to the
Executive Directors’ remuneration, accounting
for 24% of their bonus weighting. These
targets are also incorporated into wider team
objectives. The Board received a monthly
report tracking progress against these goals.
See page 204 for further details.
Management responsibility
The Head of Portfolio Management is the
Executive owner of our climate strategy. He is
supported by the Head of Sustainability and
members of the Sustainability Committee in
the day-to-day management and delivery of
climate-related initiatives. The Sustainability
Committee is made up of cross-functional
members who head up various business
departments, such as development, asset
management, facilities management,
investment and support functions. The
Committee includes a number of other
Executive Committee members, which
ensures senior level ownership and oversight
of implementation plans and also streamlines
communication to the wider Executive team
and the Board. The Sustainability Committee
meets monthly and is responsible for setting
and operationalising our climate-related
objectives, and hence is well positioned to
manage, report, communicate and inform
our approach on climate-related issues.
The 4°C warming scenario assumes that
the markets, governments and society will
continue business as usual with increasing
adoption of energy and resource intensive
lifestyles and abundant exploitation of fossil
fuels. There will be limited action taken to
mitigate climate change in this scenario and
hence as a result in the period after 2030, the
physical eects of climate change will begin
to intensify rapidly.
The 1.5°C warming scenario assumes
proactive and sustained action to reduce
carbon emissions over the next 30 years to
build a low-carbon economy, in the form of
stringent Government policies on stricter
energy eciency building codes and carbon
taxes. There will also likely be significant
public and private sector investment in low
emissions technologies to help the global
economy achieve net zero goals by 2050.
Overall, this scenario would result in higher
transition risk in the short and medium term.
Given the warming over pre-industrial levels
is going to be limited, the extent of physical
risk will only be slightly higher than it is today.
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TCFD CONTINUED
1 2
Our assessment considered all plausible climate-related risks and opportunities that are
applicable for real estate businesses. These are identified in the table below. The impact of
physical risks is mainly in the form of direct damage to property, business interruption or supply
chain disruption. Impact of transition risks is mainly in the form of increased cost of business,
property obsolescence or failure to meet customer expectations.
RISKS RELATED TO THE PHYSICAL IMPACTS OF CLIMATE
Acute Climate Risks Chronic Climate Risks
Winter storm Heat stress
Tornado Precipitation
River flood Drought
Flash flood Fire weather
Coastal flood Sea level rise
Hailstorm
Lightning
RISKS AND OPPORTUNITIES RELATED TO THE TRANSITION TO A LOWER-CARBON ECONOMY
Policy and Legal Risks/Opportunities – Pricing of GHG emissions
– MEES requirements (EPC B by 2030)
– Climate Change litigation
– Enhanced emissions reporting obligations
– Increasingly stringent planning
requirements
Technology Risks/Opportunities – Substitution of existing technology to lower
emissions options
Market Risks/Opportunities – Change in customer demands
– Increased cost of raw materials
– Increased cost and availability of electricity
– Cost of capital
– Emissions oset
Reputation Risks/Opportunities – Investment risk
– Employee risk
WTW conducted an asset by asset exposure
analysis for a range of climate risks (as shown
in the table) at the present day, as well as for
future years under the selected scenarios.
Data used for the analysis includes state of
the art models and databases within the
insurance industry (including WTW Global
Peril Diagnostic, MunichRe hazard database,
SwissRe CatNet amongst others), climate
models, published research and information
from IPCC. The assessment was further
supplemented with local information and
data that we hold on the assets.
To assess the transition risks, we conducted
scenario analysis using the guidance issued
by TCFD. The scenario used for the analysis
aligns with projections to keep global
warming below 1.5°C above pre-industrial
temperatures and it was constructed based
on a variety of sources including RCP 2.6
scenario from IPCC, International Energy
Agency (IEA) and the Network for Greening
the Financial System (NGFS). NGFS has also
been used as a primary source for carbon
price estimates. Potential transition risks to
Workspace were identified and articulated
using academic research and discussions with
Workspace teams (as shown in the table).
All the identified risks were assessed in terms
of impact and probability via a series of
subject matter expert interviews with
Workspace teams (such as finance,
investment, technology, legal, development,
HR and leasing). Where the risk criteria
allowed for quantification, financial impacts
were estimated using assumptions and
likelihood assessed and aligned to our
Enterprise Risk Management (ERM) risk
rating criteria (details of our ERM framework
can be found on page 97). This helped us
narrow down the material risks and
opportunities applicable to Workspace as
shown on page 95, along with risk levels.
Our analysis showed that all of London and
the South East could be exposed to a mix
of acute and chronic climate risks such as
flooding, windstorm, drought and heat stress,
thereby aecting our properties as well. The
analysis showed that the chronic risk would
become more evident in the long term, but the
impact level will still be low and manageable
under 1.5°C scenario. The impact level is
deemed moderate under 4°C scenario,
arising from failure to transition. Acute risk,
on the other hand, could be felt today. Using
catastrophe models such as Property
Quantified and KatRisk, we simulated
thousands of acute climate events to estimate
the level of impact in terms of property
damages and business interruption. Taking
this probabilistics view and accounting for
actual vulnerability of our locations have
further provided rigour to our risk level
projections. Overall, we estimate the level
of impact from acute risks (such as flooding,
flash floods and wind storms) is low.
On transition risk, the impact is evident
even now, and could be significant under
the 1.5°C warming scenario due to stringent
policy requirements, increasing customer
expectations and expected raw materials
price increases. We have estimated the risk
level to be moderate, considering impact
in terms of increased cost, property
obsolescence and customer demand.
However, through our sustainable business
model we hold an advantage over our peers
and have committed to a 2030 net zero
target (two decades earlier than UK’s
commitment in Climate Change Act 2008
(2050 Target Amendment) Order 2019),
thereby minimising our risk. We are also
we1ositioned to capture the transition
opportunities, such as operational cost
eciencies, lower cost of capital and
changing customer demands.
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The table below shows the summary of material risks and opportunities, applicable to Workspace, across the various time horizons and considering the two warming scenarios.
Short term (to 2025) Medium term (2025-2030) Long term (to 2050+)
1.5°C scenario Moderate transition risk resulting from:
– MEES requirements for all commercial
buildings to be EPC B by 2030, requiring
investment in energy eciency upgrades
across the portfolio
– Changing customer demands on
sustainability, requiring swift adaptation
of our older buildings to meet high
sustainability standards
Moderate transition risk resulting from:
– Continued MEES requirements
– Increase in planning requirements, resulting
in higher upfront investment in energy
eciency or osetting
– Increased costs of raw materials
– Increased costs associated with osetting
of scope 3 emissions
Low transition risk in the long term,
assuming the UK economy has already
transitioned to a low carbon world
Transition opportunity arising from:
– Operational cost savings and eciencies
from upgraded EPCs and implementation
of low carbon technologies
– Enhanced customer attractiveness due
to our ability to meet their expectations
on sustainability across many of our new
and refurbished buildings
– Access to green finance
Transition opportunity continues to exist
due to operational cost savings, customer
expectations and access to green finance
Low transition opportunity in the long
term, assuming the UK economy has
already transitioned to a low carbon world
Low physical risk
– Existing exposure to windstorm across
the portfolio (unrelated to changing
temperature). The impact in terms of
physical damage and business disruption
is low considering asset vulnerability
– Flood risk exposure at six buildings and risk
of localised flash flooding due to heavy
precipitation across 11 buildings. The impact
in terms of physical damage and business
disruption is low considering asset
vulnerability
Low physical risk with no significant changes
to current risks profile, other than the already
existing exposure to windstorm and flood risk
Low physical risk, mainly due to smaller
manageable changes in chronic risks such
as drought and heat stress. The main impact
from droughts is water scarcity and impact
on green areas. Heat stress can impact
running costs and customer wellbeing. On
acute risk, windstorm continues to pose risk
and eight properties become exposed to
flood risk. However, the impact in terms of
physical damage and business disruption is
low considering asset vulnerability
4°C scenario Transition risk non-existent in this scenario,
in the short term
Transition risk non-existent in this scenario,
in the medium term
Moderate physical risk arising from failure
to transition:
– Continued exposure to windstorm, flood
risk at nine buildings and localised flash
flooding across 11 buildings
– Increased drought risk across all buildings
– Increased heat stress across all buildings
Low physical risk, due to already existing
exposure to windstorm (unrelated to changing
temperature), flood risk at six buildings and
localised flash flooding across 11 buildings.
The impact in terms of physical damage and
business disruption is low considering asset
vulnerability
Low physical risk with no significant changes
to current risks profile, other than the already
existing exposure to windstorm and flood risk
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RISK MANAGEMENT
Enterprise risk management framework
Risk management continues to be an integral
part of all our activities. Risks and
opportunities are considered in every business
decision we make. We specifically focus on
key risks which could impact on the
achievement of our strategic goals and
therefore on the performance of our business.
We have an established Risk Management
Framework in place to help us capture,
document and manage risks facing our
business. The Audit Committee along with the
full Board have overall responsibility for risk
management. See our Risk Management
Framework on page 171.
Our aim is to manage each of our risks and
mitigate them so that they fall within the risk
appetite level we are prepared to tolerate for
each risk area. Risk appetite reflects the
overall level of risk acceptable with regards
to our principal business risks. The Board is
responsible for deciding the amount of risk it
is willing to take. High risk, after considering
the controls we have in place to mitigate risks,
is not generally tolerated. We work towards
a moderate to low risk profile, ensuring
that we have mitigating actions in place to
bring each risk down to within the agreed
risk appetite.
Our Risk Management Framework is
underpinned by close working relationships
between the Executive Directors, senior
management and other employees, which
enhances our ability to eciently capture,
communicate and action any risk issues
identified.
Strategy and financial planning
Our sustainability strategy has a key focus
on climate change mitigation and adaptation,
ensuring we are minimising the environmental
impact of our portfolio and building resilience
for the long term. We are delivering on this
ambition by embedding climate considerations
across the property life cycle: Development,
Investment and Asset Management and the
services we deliver to our customers.
Development: As a business, our primary
focus is on repurposing old buildings to
higher standards and hence inherently our
activity is less carbon intensive than some of
our peers. However, we continue to focus on
further minimising our environmental and
carbon impact, ensuring what we build is fit
for the future. Our sustainable development
brief requires all our development and
refurbishment projects to meet high energy
and carbon specifications, thereby minimising
our exposure to risks such as MEES, stringent
planning requirements, raw material costs
and increased customer demands. We also
ensure that we test our design brief against
physical risks such as heat stress and flooding.
Investment: Climate considerations inform
all our investment decisions, whether it’s
spending capex on building upgrade or
acquiring new properties. We conduct
sustainability due diligence, taking into
account a number of warming scenarios,
prior to acquisition to assess climate-related
risks associated with the building and forward
plan the investment and interventions
required to mitigate any material risks.
Asset management: Our flexible business
model allows us to implement a rolling
programme of refurbishments across the
existing portfolio, to ensure we continue to
improve the energy and carbon performance
of all our buildings and remain compliant with
legislation. Our flood risk assessment has also
helped us prioritise adequate defences
and mitigation plans for exposed assets.
Services to customer: Climate considerations
are fully embedded in our operational platform,
ensuring our site teams are delivering
customer services sustainably. This includes
initiatives to manage whole building energy
consumption, raising awareness with our
customers to reduce carbon and manage our
waste sustainably. We are also actively
upgrading our portfolio to be more sustainable,
in line with changing customer expectations.
Financial planning: Climate considerations
inform our business financial reporting and
planning. The Board deem no material impact,
considering valuation of properties, going
concern and viability of Group and the capital
expenditure required. The Board have
approved a comprehensive investment plan
to transition our portfolio to net zero carbon
and upgrade EPC to A and B (see page 49)
and this has enabled us to forward plan
investments on interventions such as energy
eciency technology, decarbonising heat,
onsite renewables and sustainable materials
and construction practices. To ensure we have
access to capital at competitive rates, we have
also linked our financing to climate-related
criteria (£300m Green Bond, £335m ESG-
linked revolving credit facility and a £65m
loan from Aviva).
Resilience of strategy
The climate scenario assessment undertaken
has revealed that our overall exposure to
climate-related risks is moderate, mainly
arising from transition risk under 1.5°C
scenario (see table on page 95). The
geographic concentration of our portfolio
in London and low vulnerability of assets to
acute risks, such as windstorm and flooding,
means that the overall exposure to physical
climate risks is low.
Our transition risks whilst ranked moderate,
are manageable because of our sustainable
business model, whereby our carbon and
energy intensity is lower compared to the
industry average. Our focus on repurposing
older buildings to meet high sustainability
and performance standards ensures we are
building in resilience to climate factors across
the portfolio. Our robust operational platform
and onsite management control, allows us
to proactively manage environmental
performance of our assets and mitigate both
physical and transition risks.
Given our long-term approach, coupled with
our flexible lease model which allows us to
invest across our portfolio in a timely manner
and actively address climate risks, we are
confident that our strategy is resilient against
plausible climate scenarios. Further, our
pathway to become net zero carbon by 2030
(see pages 41 and 42), ensures we are
aligning our business to a 1.5°C warming
scenario and mitigating any potential risks.
Our 2030 net zero carbon
pathway ensures we are
aligning our business to a
1.5°C warming scenario and
mitigating any potential risks
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3
IMPACT
LIKLIHOOD
Almost certain
Low Severe
Identifying and assessing risk
Overall, we identify risks across two key areas:
Principal Business (Strategic) risks and
Operational risks. Climate-related risks have
been factored in both these categories.
The low, moderate, high risk severity score is
determined using the following calculation:
Impact x Impact x Probability, which provides
a weighted impact scoring. The impact is
determined on a scale from 1 (low) to 4
(severe) based on revenue, property valuation,
health and safety and reputational
consequences. Probability is determined on
a scale from 1 (unlikely) to 4 (almost certain),
considering the likelihood of the risk
materialising within a five-year period.
The scenario analysis conducted with WTW
helped us assess the level of exposure to
climate risk, its likelihood (taking into account
both existing and emerging regulatory and
market risks), and determine its financial
materiality using a structured template (see
impact criteria on the right) to capture any
impact on revenue, costs or property
valuation. This allowed us to map our risk
levels as low, moderate or high, using our risk
scoring matrix. In our case, we observed no
significant change in risk profile between
various time horizons and hence the
mitigation strategy is focused on short to
medium term actions, covering our response
out to 2030, including delivery of our net zero
carbon commitment.
Depending on the extent of planned
mitigation measures in place, as already
captured in our net zero pathway and existing
business processes, we were able to narrow
down the material risks which had a level of
residual impact (as listed on page 95) that we
will continue to manage eectively. These are
captured in the table opposite along with
current mitigation strategy for the two climate
scenarios we have assessed.
Risk scoring matrix
4
3
2
1
1 2 3 4
Impact criteria
Impact 1 – Low 2 – Medium 3 – High 4 – Severe
Revenue/Cash Revenue <£2m
Cash <£1m
Revenue £2m-£15m
Cash £1m-£5m
Revenue 15m-£25m
Cash £5m-£15m
Revenue >£25m
Cash >£15m
Property valuation <2% unexpected
reduction
2-5% unexpected
reduction
5-10% unexpected
reduction
>10% unexpected
reduction
Hazard/Health & Safety Minor injury/first aid
required
Minor reportable injury/
RIDDOR report required
Major reportable injury Large scale injuries
Reputational Third-party
communications with
no lasting impact on
reputation
Adverse local media
attention which could lead
to a small number of
complaints and damage
the brand locally
Adverse national publicity
resulting in short-term
damage to public and/or
political confidence
Adverse sustained
national publicity resulting
in loss of public and/or
political confidence
Likelihood scale
The following criteria should be used, considering the likelihood of the
risk materialising within a five-year period.
Likelihood
4 – Almost certain >80%
3 – Likely 50 -79%
2 – Possible 21-49%
1 – Unlikely <20%
Unlikely
Risk level:
Low
Moderate
High
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Risk Evaluation of residual risk Mitigation strategy
Transition risks and opportunities in the short and medium term – 1.5°C warming scenario
Policy and Legal – EPC
rating requirements
– 28% of the Workspace portfolio is rated C and 29% is rated D and E.
Additional investment of £45–60m will be required to meet EPC A/B across
the portfolio by 2030 (c.£7-8m annually)
– However, taking into account the annual maintenance capex for ongoing
refurbishments throughout the year, the actual additional investment
required will be much lower than £5m
– Opportunity: There will be an opportunity arising from higher operational
savings due to upgraded environmental performance
– Target set to upgrade a significant proportion portfolio to EPC A/B each year.
We successfully upgraded 12% of portfolio to EPC A/B this year.
– A rolling programme of EPC and net zero audits are being undertaken to
identify asset level upgrade plans and a process is in place to upgrade a unit
once vacant
– A detailed investment plan is created for annual budgeting purposes
– Central register created to track EPC compliance status monthly
Policy and Legal –
Increasingly stringent
planning requirements
– Workspace is able to meet London Plan requirement of 35% emissions
reduction over Part L
– If the requirements were to get more stringent in future (say 50% reduction
or inclusion of osetting for upfront carbon at planning stage), we would
need to design buildings dierently, which could raise project costs
– By implementing our net zero design brief, we are able to achieve over 35%
reduction at minimal incremental cost
– Continual tracking of planning requirements to inform our design brief
– Strategy in place to minimise whole life carbon through responsible design
and material choices
Market – change in
customer demands
– Based on a recent survey, nearly 20% of our customers factor in
sustainability as one of the top criteria in their choice of oce space
– By 2030, our portfolio will be net zero carbon, ensuring we are well placed
to meet changing customer expectations and capture more market share
by being ahead of our peers
– In the interim, there is some risk to our older properties which are not in the
top tier of energy/carbon performance and are awaiting upgrades
– Opportunity: There will also be an opportunity from increased customer
demands (i.e. successful lettings, high occupancy) for our newly refurbished
or developed buildings that meet high sustainability standards
– Our net zero pathway ensures we continue to enhance our portfolio to meet
changing customer demands
– Through continual collection of customer preferences and data, we intend
to proactively manage customer expectations
– Improved communications with customers on our sustainability eorts further
strengthen customer satisfaction
Market – increased cost
of raw materials
– We expect the costs of carbon intensive raw materials (such as cement,
steel) will increase in the future
– The resulting impact will depend on our build activity in a year and the
percentage of cost passed on by suppliers
– Our focus on repurposing limits our exposure to raw materials and associated
cost increased
– Continued eorts to explore new materials and technologies will help further
reduce embodied carbon of our developments
Market – emissions oset – Our current emissions footprint is around 26,000 tonnes of CO
2
. We expect
our net zero pathway to reduce our scope 1 and 2 emissions by at least 90%
with osetting for the residual emissions only
– Applying UCL projected cost of carbon at $50 per tonne*, this could cost us
up to £700k annually (assuming worst case scenario for scope 3 reduction)
– Continue to drive progress on our net zero pathway to eliminate scope 1 and 2
emissions
– Continued eorts to explore new materials and technologies to reduce
embodied carbon of our developments and hence limit osetting needed
for scope 3 emissions
* Source: https://www.ucl.ac.uk/news/2021/jun/ten-fold-increase-carbon-oset-cost-predicted
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Risk Evaluation of residual risk Mitigation strategy
Physical risks in the short and medium term – 1.5°C warming scenario
Windstorm – Most of our buildings could be exposed to risk of windstorm and missile
impact from flying debris. However, given the solid facade and relatively
lower height of our buildings, we estimate level of impact in property
damages and business interruption to be low (less than £1m, assuming worst
case scenario). The risk profile will likely remain within the current levels of
variability, with changing temperatures
– Business continuity and emergency response planning measures in place
to minimise potential impact in case of storm warnings
– Protection against portable and not secured items in building vicinity is being
incorporated
River flood – Flood defences provide an adequate level of protection however, there are
some local areas at risk which exposes six of our buildings (eight buildings
become exposed by 2050). The impacts could be water ingress, damage in
lower floor and some level of interruption to the business. Taking into
account our flood mitigation strategy and emergency preparedness plans,
we estimate level of impact in property damages and business interruption
to be low (less than £2m, assuming worst case scenario). The risk profile only
moderately changes with time or changing temperatures
– Comprehensive flood risk management plans created for exposed assets
– Business continuity and emergency response planning measures put in place
in case of flooding
– Flood mitigation measures being incorporated in design of new projects
– Insurance protection in place in case of physical damage or interruption
Localised flash flooding – Whilst the precipitation stress due to heavy rainfall is likely to stay the same,
a handful of our buildings could be exposed to localised flash flooding due
to local terrain features which could cause water ingress and damage in
lower floors. A deeper dive of these buildings has revealed lower
vulnerability to localised flash flooding and hence we estimate level of
impact in property damages and business interruption to be low (less than
£1m, assuming worst case scenario). The risk profile is not likely to change
with time or changing temperatures
– Comprehensive flash flood risk assessment being undertaken across the
portfolio
– Business continuity and emergency response planning measures put in place
to minimise impact in case of high precipitation warning
– Regular drainage survey being undertaken across select buildings to ensure
sucient water attenuation on site
– Flood mitigation measures being incorporated in design of new projects,
including blue roofs and rain water harvesting systems
Physical risks in the long term – 4°C warming scenario*
Drought – Under this climate scenario, London and the South East of the UK could
be exposed to drought stress, aecting all our properties in the long term.
Whilst our water consumption is not material, this would result in slightly
increased utility costs and impact on green areas.
– We are installing water ecient fittings across our buildings
– Our landscaping has been designed to bear warmer climates in mind
Heat stress – In this scenario, by the end of the century, London and the South East of the
UK could be exposed to medium level of exposure to heat stress resulting in
the number of heatwave days increasing to 20 days per year, thereby
aecting all our properties. On average, there will be an increase in our
cooling demand. The scenario will also result in milder winters, which would
in turn reduce our heating demand on average. In the short term, heat stress
will not be a significant issue despite slight increase in heatwave days
– A rolling programme of air conditioning is being implemented across
the portfolio to ensure customers are comfortable in high temperatures
– Additional measures such as outdoor greenery and shade being incorporated
to provide ‘refuges’ in hotter weather conditions
– Review of current heating and cooling usage being undertaken to ensure
we continue to optimise consumption, in response to outdoor temperatures
* Note: Under the 4°C warming scenario – windstorm, flood risk and flash flood risk will exist as well, and potentially could edge further. However, the risk profile will not change significantly. The mitigation strategy listed above will continue to be eective .
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METRICS AND TARGETS
Kennington Park,
Oval
Metrics used to assess climate-related risks
and opportunities
To understand our climate-related impact and
performance we report on a wide range of
consumption and intensity metrics relating to
energy, carbon, waste and water, such as:
– Total energy consumption (page 101)
– Total electricity consumption, including
proportion generated from renewables
(page 101)
– Proportion of electricity sourced from
renewable sources (page 43)
– Total fuel consumed on site (page 101)
– Building emissions intensity by floor area
(page 101)
– Total emissions from water consumption
(page 101)
– Total emissions from waste, waste recycled
and diverted from landfill (page 101)
– EPC split of the portfolio by floor area
page 49)
– Number of buildings with sustainability
certification (page 44)
– Number of energy eciency projects
implemented and associated capital
expenditure (page 49)
– Number of buildings exposed to flooding
(page 95)
– ESG metrics linked to remuneration and
performance against these (page 204)
Pages 43 to 45 provide further detail on
targets we have set against all climate-related
metrics and progress made to date.
Scope 1, 2, 3 GHG emissions and related risks
Carbon emissions represent one of our largest
environmental impacts and we are actively
working to reduce our sources of carbon
where possible (see our net zero carbon
pathway on page 41). Significant contributors
to our operational carbon emissions are the
electricity and gas consumed within our
buildings and by improving the energy
eciency of our buildings and electrifying the
heating systems we aim to reduce our overall
carbon footprint. Following an in-depth
analysis of our scope 3 emissions, we now
have a much better understanding of the
emissions associated with our development
and refurbishment activities which make up
a significant portion of our scope 3 emissions.
Refer to page 101 for our scope 1, 2 and 3
greenhouse gas emissions data and year on
year changes (calculated using GHG protocol).
Targets used to manage climate-related risks
and opportunities
To reduce our carbon emissions, we continue
to focus on designing low-carbon buildings
and implementing energy eciency initiatives
throughout the portfolio, whilst actively
engaging with both our site sta and customers.
Our main target is to deliver a net zero carbon
business by 2030 (see page 41 for the scope
of our commitment). This is underpinned by
the following emissions reduction targets:
– Reduce scope 1 and 2 emissions by at least
90% by 2030 (Note: it’s our intention to go
beyond our science-based targets, requiring
only 42% reduction in scope 1 emissions)
– Decarbonise heating from our portfolio
by 2030
– Source 100% energy from renewable sources
– Undertake whole life carbon assessment of
all development and refurbishment projects
– Reduce scope 3 emissions from capital
goods by 20% per square foot of net lettable
area by 2030, from a 2020 base year
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4
GREENHOUSE GAS (‘GHG’) EMISSIONS AND ENERGY USE DATA FOR STREAMLINED ENERGY & CARBON REPORTING (SECR)*
Source of emissions
2019/20
(baseline Year) 2021/22
2022/23
LfL portfolio
2022/23
Whole portfolio
2022/23 vs 2021/22
% change
2022/23 vs 2021/22
LfL portfolio
Scope 1 (Direct) 3,451 3,221 2,358 3,188 -1% -27%
Gas (tCO
2
e) 2,620 2,305 1,684 2,336 +1% -27%
Fugitive Emissions (tCO
2
e) 828 916 674 852 -7% -26%
Vehicle Emissions (tCO
2
e) 3 – – – – –
Scope 2 (Energy Indirect) 7,144 5,229 5,142 6,437 +23% -2%
Electricity (location based) (tCO
2
e) 7,021 5,069 5,005 6,300 +24% -1%
Electricity (market based) (tCO
2
e) – – – – – –
Purchased Heat (location based) (tCO
2
e) 123 160 137 137 -14% -14%
Total Scope 1 & 2 (location based) 10,595 8,450 7,500 9,625 +14% -11%
Energy consumption used to calculate above emissions (kWh) 42,430,031 37,400,667 35,913,161 46,183,607 +23% -4%
Intensity Ratio: Net Lettable Area tCO
2
e/sq. ft. 0.00181 0.00209 0.00194 0.00183 -13% -7%
Intensity Ratio: Gross Internal Area tCO
2
e/sq. ft. 0.00177 0.00144 0.00140 0.00137 -5% -3%
Scope 3 (Other Indirect) 21,264 8,398 6,614 16,612 +98% -21%
Purchased Electricity Transmission & Distribution (tCO
2
e) 596 449 458 576 +28% +2%
Customer Direct Energy (tCO
2
e) 3,515 2,015 1,581 3,296 +64% -22%
Water Supply (tCO
2
e) 91 29 29 34 +16% 0%
Water Treatment (tCO
2
e) 187 53 53 61 +16% 0%
Waste Management (tCO
2
e) 82 59 55 64 +9% -6%
Heat – Transmission & Distribution (tCO
2
e) 6.5 8 7 7 -10% -10%
Embodied carbon in development projects (tCO
2
e) 8,982 1,642 4,430 5,744 +250% +170%
Purchased goods and services (tCO
2
e) 7,647 4,013 not available 6,511 +62% N/A
Employee Commuting (tCO
2
e) 84 130 not available 288 +121% N/A
Business Travel (tCO
2
e) 74 0.5 not available 31 +5,567% N/A
Total Scope 1, 2 & 3 (tCO
2
e) 31,860 16,848 14,114 26,238 +56% -16%
Total gas use – whole building (kWh) 15,617,931 13,956,418 10,597,353 16,137,792 +16% -24%
Total electricity use – whole building (kWh) 38,801,849 31,480,001 32,764,485 46,475,822 +48% +4%
Total purchased heat – whole building (kWh) 700,922 939,261 805,247 805,247 -14% -14%
Total energy consumption – whole building (kWh) 55,120,702 46,375,680 44,167,085 63,418,861 +37% -5%
Self generated renewable electricity (kWh) 129,533 160,976 191,629 191,629 +19% +19%
* Note: All figures reported relate to emissions and energy consumed in the United Kingdom.
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Performance
In addition to our operational emissions,
of which the boundaries are explained above,
we have voluntarily reported our like-for-like
portfolio GHG performance, which excludes
the 30 properties acquired from McKay
Securities in May 2022. We achieved a 27%
reduction in scope 1 emissions on this like-for-
like portfolio, which is a result of investment
in high eciency heat pump installation
across a number of properties and
optimisation of system controls and setpoints.
We also rolled out a number of energy
eciency upgrades across the portfolio such
as LED lighting, presence detection sensors,
smart BEMS and ran several energy awareness
campaigns with customers. Due to these
measures our electricity consumption
remained stable (scope 2 decreased slightly
by 2%), despite significantly higher levels of
occupancy in our buildings compared to the
2021/22 period where oce working patterns
were still impacted by the pandemic.
Overall, Workspace procured energy
consumption reduced by 4% across the
like-for-like portfolio, thanks to granular
energy data analysis, continued roll out of
smart BEMS and investment HVAC and
lighting upgrades.
Following the acquisition of McKay Securities
in May 2022, our portfolio has increased by
1,400,000 sq. ft. which has resulted in a
sizeable increase in our GHG emissions. Hence
the numbers reported for the whole portfolio
are not comparable with the previous years.
Our market-based electricity figure is zero
because all of the electricity we purchase is
now on a renewable energy contract backed
by Renewable Energy Guarantees of Origin
(REGOs).
Energy eciency actions taken during
2022/23
We have proactively identified and delivered
a range of energy eciency projects across
our portfolio (invested £8m across 41
properties), such as LED and PIR lighting
upgrades, installation of secondary glazing
and a rolling programme of high eciency
heat pumps. We have also benefitted from
improved data management and customer
engagement initiatives across a number of
our buildings.
We have continued to roll out our Building
Energy Management System (BEMS), Optergy,
which is a smart metering technology that has
enabled real-time energy monitoring at the
building level right down to individual plant
equipment. The data provided by the BEMS
is used by our in-house Facility Management
teams to improve energy management
practices and reduce GHG emissions. The
Optergy portal is now live at 28 sites and
enables us to view and monitor our energy
consumption profiles, down to the unit level.
REPORTING FRAMEWORK
Reporting period:
1 April 2022 – 31 March 2023
Reporting Frequency – Annual, aligned with
financial reporting
Regulatory:
Part 7 of The Companies Act 2006
(Strategic Report and Directors’ Report)
Regulations 2013.
Boundary:
Our GHG emissions have been prepared
using the ‘operational control’ approach,
in compliance with the Greenhouse Gas
Protocol guidance. Scope 1 and 2 emissions
include tenant consumption where we
procure gas, electricity or heat on their
behalf. Where electricity is directly purchased
by our tenants (c.64% of NLA), we have
estimated usage and corresponding
emissions have been included under our
scope 3 reporting. Following the acquisition
of McKay Securities in May 2022, our
portfolio now comprises 86 properties
(whole portfolio), covering 5,300,000 sq. ft.,
representing a 1,400,000 sq. ft. increase from
our previous reporting period. We have
reported environmental performance for
Workspace like-for-like portfolio and
Workspace whole portfolio (including McKay).
In cases where a property has been acquired
or sold during the reporting period, we report
its greenhouse gas emissions up to the sale
date or from the acquisition date. We exclude
properties from greenhouse gas reporting for
the duration of any major refurbishment or
construction project.
Reporting standards:
World Resources Institute/World Business
Council for Sustainable Development
Greenhouse Gas Protocol: A Corporate
Accounting and Reporting Standard, Revised
Edition (the GHG Protocol). World Resources
Institute/World Business Council for
Sustainable Development Greenhouse Gas
Protocol: Corporate Value Chain (scope 3).
We have also aligned our reporting with:
– EPRA ‘Sustainability Best Practice
Recommendations’ (sBPR). Published
in the sustainability performance section
of our investor website
– Sustainability Accounting Standards
Board (SASB) real estate metrics.
Pages 104 and 105
– Global Reporting Initiative (GRI) 2021
Standard. Published in the sustainability
performance section of our investor website
Verification:
Accenture were appointed for independent
third-party verification of our carbon data.
The verification has been performed to the
international standard ISO 14064-3:2019
Specification. Limited level of assurance,
based upon a 5% materiality threshold. The
full assurance statement can be found in the
sustainability performance section of our
investor website. Further, our social value
data has been verified by Social Value Portal.
Other:
When reporting totals, the location-based
emissions are used. All market-based
emissions are backed by Renewable Energy
Guarantees of Origin (REGOs).
Any questions about the reported
information, please contact:
info@workspace.co.uk
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COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
Method for data collection
We collect utility data across our operational
portfolio from manual meters, automated
meters and invoices, which are all collated on
our energy reporting and billing platform. Our
site teams are responsible for reading manual
meters and log consumption data onto our
energy and billing management platform on
a monthly basis. To remove reliance on manual
meter reading, we continuously look at
upgrading to automatic meters, which are
currently in place across the majority of our
main incomers. An in-house energy analyst
role was created to review the accuracy of
energy reporting and to analyse monthly
performance trends and prioritise properties
for energy eciency improvements.
Due to increased data availability and reliable
information on heating source types, a small
proportion of energy consumption previously
reported under gas (scope 1) has now been
reported under heat (scope 2).
We estimate electricity consumption data
where tenants have their own utility supplier.
Where this relates to units in a building
where we otherwise have access to energy
consumption, we estimate ‘tenant direct’
electricity usage based on the energy usage
of the rest of the building, using a floor area
pro rating method. Where this relates to a
single-let building, energy consumption is
estimated based on the average energy usage
of the portfolio. Whilst our ‘tenant direct’ gas
consumption is very low, this year we have
included estimations for gas consumption
where we have been made aware of tenants
managed gas supplies, and added
corresponding GHG emissions to the 2019/20
and 2021/22 reported GHG figures. GHG
emissions calculated from ‘tenant direct’
electricity and gas consumption are included
in our scope 3 reporting.
Fugitive emissions stem from the use of
refrigerants and have been calculated based
on refrigerant leak event schedules provided
by our air conditioning contractors.
Vehicle emissions are calculated from the
expense schedule listing car mileage claims
by employees using their personal vehicles
for business purposes.
Waste data is captured by our waste
contractor, who weighs recycled and general
waste across the portfolio at each waste
collection and provides us with a monthly
tonnage report.
Embodied carbon in development projects
relates to GHG emissions stemming from our
construction and refurbishment activities.
Since 2021, we systematically carry out
whole-life carbon analysis for all developments
and major refurbishment projects, and
therefore have project specific embodied
carbon data on our most recent projects.
Whilst there is no standardised carbon
emission factor for calculating embodied
carbon emissions from buildings, embodied
carbon factors advised by our consultant’s
research team have allowed us to estimate
embodied carbon emissions for projects
carried out prior to 2021, representative of
standard market practice (770 kgCO
2
e/m
2
for oce construction, 480 kgCO
2
e/m
2
for
logistics construction, 196 kgCO
2
e/m
2
for
oce retrofits involving heat decarbonisation,
77kgCO
2
e/m
2
for light oce retrofits). The
2019/20 and 2021/22 embodied carbon
calculations have been updated in line with
these carbon factors. We have also restated
the 2019/20 and 2021/22 embodied carbon
figures to include light refurbishment projects.
Purchased goods and services relate to the
upstream emissions from the business’ use
of products and services. Emissions were
calculated using a spend-based method,
applying carbon factors from the EPA
database. Where in previous years, we had
only included our capital spend in emissions
calculations, we are now also including
operational spend, explaining the change in
2019/20 and 2021/22 reported emissions
figures. We intend to move towards an
activity-based method for our upstream
emissions as more supply chain data becomes
available. This will provide greater accuracy of
the purchased goods and services emissions.
Business travel data includes journeys in our
company cab and plane journeys used for
business travel for all direct employees.
Emissions from commuting include carbon
emissions from homeworking in addition to
oce commuting. Following our flexible
working policy implementation, we assumed
the Head Oce employees to be working in
the oce three days a week and at home two
days a week. All site employees are assumed
to be working on-site five days a week.
Assumption on modes of transportation used
by commuters came from the Department of
Transport statistics.
With the exception of embodied carbon and
purchased goods and services, GHG emissions
were calculated using DEFRA (Department for
Environment, Food & Rural Aairs) 2022 factors.
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COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
Topic Accounting Metric Code Comment
Energy Management Energy consumption data coverage as a
percentage of total floor area, by property
subsector
IF-RE-130a.1 The energy consumption reported on page 101, falling within our scope 1 and 2 emissions, cover 36%
for our portfolio’s total nettable floor area and corresponds to the areas where Workspace have
operational control.
Energy data falling outside of our procurement control is estimated and corresponding carbon
emissions are reported under scope 3 on page 101. Majority of this consumption is associated with the
industrial assets in the portfolio which are on FRI lease.
(1) Total energy consumed by portfolio area
with data coverage
(2) percentage grid electricity
(3) percentage renewable, by property
subsector
IF-RE-130a.2 (1) See ‘Energy Consumption used to calculate above emissions (kWh)’ on page 101.
(2) 99% of electricity consumed was purchased from the grid, the rest was self-generated by on-site
solar panels.
(3) 100% of electricity procured was from certified renewable sources (REGO-backed). Additionally
we have 12 sites that are equipped with solar panels. Refer to page 43 for more information on our
renewable electricity procurement.
Like-for-like percentage change in energy
consumption for the portfolio area with data
coverage, by property subsector
IF-RE-130a.3 Refer to Ele-LfL, Fuel-LfL and DH&C-LfL metrics in our EPRA report.
Percentage of eligible portfolio that
(1) has an energy rating and
(2) is certified to ENERGY STAR, by property
subsector
IF-RE-130a.4 Refer to Cert-Tot metric in our EPRA report. Energy Performance certificates (EPCs) and BREEAM
certification have been used as the relevant UK alternative to ENERGY STAR.
Description of how building energy
management considerations are integrated
into property investment analysis and
operational strategy
IF-RE-130a.5 Energy management is identified as one of the key material issues for the business and underpins
the delivery of our net zero carbon pathway. As a result, stretching energy reduction targets directly
influence Executive remuneration. Refer to pages 43, 47, 49, 96 in this report for more information
on our strategy and approach to energy management, along with impact delivered.
Water Management Water withdrawal data coverage as a
percentage of
(1) total floor area and
(2) floor area in regions with High or
Extremely High Baseline Water Stress,
by property subsector
IF-RE-140a. (1) Our water consumption data coverage amounts to 75% of our portfolio’s floor area.
(2) 100% of our oce properties and 85% of our logistics properties are located in areas classified
as under high water stress according to the World Resource Institute’s (WRI) Water Risk Atlas tool.
15% of our logistics properties are located in a medium-high water stress zone.
(1) Total water withdrawn by portfolio area
with data coverage and
(2) percentage in regions with High or
Extremely High Baseline Water Stress,
by property subsector
IF-RE-140a.2 (1) Refer to Water-Abs metric in our EPRA report.
(2) 100% of our oce properties and 82% of our logistics properties are located in areas classified
as under high water stress according to the World Resource Institute’s (WRI) Water Risk Atlas tool.
18% of our logistics properties are located in a medium-high water stress zone.
Like-for-like percentage change in water
withdrawn for portfolio area with data
coverage, by property subsector
IF-RE-140a.3 Refer to Water-LfL metric in our EPRA report.
Description of water management risks and
discussion of strategies and practices to
mitigate those risks
IF-RE-140a.4 We include emissions associated with water supply and water treatment in our scope 3 footprint
and intend to address it as part of our net zero carbon pathway. Our climate risk assessment also
indicated water stress as a key risk in the long term and we have put in place a mitigation strategy
in the form of water ecient design brief and adaptive landscaping around our sites (page 99).
We are also rolling out metering to gain better coverage of our water data.
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COMPLIANCE STATEMENTS CONTINUED
SASB SUSTAINABILITY ACCOUNTING STANDARD – REAL ESTATE METRICS
Topic Accounting Metric Code Comment
Management of Tenant
Sustainability Impacts
(1) Percentage of new leases that contain a
cost recovery clause for resource
eciency related capital improvements
(2) Associated leased floor area, by property
subsector
IF-RE-410a.1 Our new leases are inclusive of rent and all bills, including utilities. A responsible energy consumption
clause has been included in those leases, which allows us to charge an excessive usage fee in
instances of consistent high energy consuming behaviour. Those inclusive leases represented
46% of our total sales volume in 2022/23.
(1) Percentage of tenants that are separately
metered or submetered for grid
electricity consumption
(2) Percentage of tenants that are separately
metered or submetered for water
withdrawals, by property subsector
IF-RE-410a.2 (1) 63% of tenant spaces on the like-for-like Workspace portfolio (which represent 74% of the whole
portfolio) are submetered for grid electricity consumption. Submetering coverage for the newly
acquired McKay portfolio is yet to be confirmed.
(2) Customers are billed for water usage on a floor area pro rating basis. A small number of tenants
manage their own water meter (gyms and restaurant units) in addition to single-let properties’
tenants.
Discussion of approach to measuring,
incentivising, and improving sustainability
impacts of tenants
IF-RE-410a.2 Our operational platform allows us to maintain a close working relationship with our customers and
collaborate on whole building initiatives. We have a multi-faceted customer engagement strategy
on sustainability, whereby we send quarterly sustainability newsletters to tenants of each of our
properties, share building-level sustainability performance data, and guidance on how to operate
buildings sustainably. This year we delivered 120 sustainability-themed customer events ranging
from energy savings awareness to and recycling and zero-waste workshops.
Climate Change
Adaptation
Area of properties located in 100-year flood
zones, by property subsector
IF-RE-450a.1 1,356,640 sq. ft. lettable area of oces and 356,687 sq. ft. of industrial spaces are located in a 100-year
flood zone according to the Environment Agency flood map.
Description of climate change risk exposure
analysis, degree of systematic portfolio
exposure, and strategies for mitigating risks
IF-RE-450a.2 Refer to the TCFD section of this report on pages 92 to 100.
Activity Metric Code Comment
Number of assets, by property subsector IF-RE-000.A 74 oces
11 industrial assets
1 other (leisure)
Leasable floor area, by property subsector IF-RE-000.B 4,524,063 sq. ft. of oces
648,800 sq. ft. of industrial assets
98,255 of leisure assets
Percentage of indirectly managed assets, by property subsector IF-RE-000.C 0% of oce space floor area is indirectly managed
71% of industrial floor area is indirectly managed
Average occupancy rate, by property subsector IF-RE-000.D 85% average occupancy rate across oces
87% average occupancy rate across industrial properties
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COMPLIANCE STATEMENTS CONTINUED
SASB SUSTAINABILITY ACCOUNTING STANDARD – REAL ESTATE METRICS
LENGTH OF TENURE FOR THE BOARD
AS AT 31 MARCH 2023
Year joined 2007 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Graham Clemett
Dave Benson
Stephen Hubbard
Rosie Shapland
Lesley-Ann Nash
Duncan Owen
Manju Malhotra
Nick Mackenzie
50-59
6
70-79
60-69
1
1
BOARD SKILLS AND EXPERIENCE BOARD DIVERSITY
AGE DIVERSITY OF THE BOARD
AS AT 31 MARCH 2023
BOARD INDEPENDENCE
The Board and its Committees continue to have a strong mix of experienced individuals who
are not only able to oer anexternal perspective on the business, but also provide constructive
challenge to review the Group’s strategy.
Executive
and
Leadership
Property
and Real
Estate Financial
Corporate
Governance
Customer
and
Marketing People ESG
Executive Directors
Graham
Clemett
Dave
Benson
Non-Executive Directors
Stephen
Hubbard
Rosie
Shapland
Lesley-Ann
Nash
Duncan
Owen
Manju
Malhotra
Nick
Mackenzie
1
NON-EXECUTIVE CHAIR
2
EXECUTIVE DIRECTORS
5
INDEPENDENT NON-EXECUTIVE
DIRECTORS
A Board made up of people with
a wide range of backgrounds
and experiences, combined
with our culture of openness
and respect will contribute to
our long-term success
Stephen Hubbard
Chair
We recognise that a group that is diverse in
nature, irrespective of gender, ethnicity, skills,
experience andbackground, is able to provide
diering perspectives and challenge to
debates and decisions.
GENDER DIVERSITY OF THE BOARD
AS AT 31 MARCH 2023
3 Female
37.5%
5 Male
62.5%
ETHNIC DIVERSITY OF THE BOARD
AS AT 31 MARCH 2023
6 White
75%
2 Minority ethnic
25%
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GOVERNANCE DRIVING LONG-TERM SUCCESS
2022/23 HIGHLIGHTS BOARD ACTIVITIES
Our
customers
Our
people
Our
investors
Our partners
& suppliers
Our
communities
The
environment
More
information
1. Strategy Annual strategic review Page 118
Sustainability agenda
Page 118
2. Operations Asset management
Page 118
Portfolio valuation
Page 118
Portfolio growth
Page 119
3. Purpose,
values and
culture
Purpose
Page 119
Values
Page 119
Culture
Page 119
4. Stakeholders Investor engagement
Page 121
Employee engagement
Page 122
Business relationship engagement
Page 123
Community and environment engagement
Page 123
5. Finance Structure, forecasts, budgets
Page 123
Refinancing
Page 123
Dividend payments
Page 123
6. Reporting Full, half-year and trading statements
Page 123
Viability and Going Concern statements
Page 123
7. Risks Principal risks
Page 123
Emerging risks
Page 123
8. Succession Appointment of new Chair
Page 124
9. Governance Board eectiveness review
Page 124
Gender pay gap
Page 124
Regulatory and legal updates
Page 124
Committee membership and terms of reference
Page 124
Workforce policies and practices
Page 124
DIVIDEND PER SHARE
2022–2023
25.8p
2023
2022
2021
25.8
21.5
17.75
BOARD MEETINGS
2022–2023
7
REMUNERATION POLICY REVIEW
2022–2023
12 shareholders engaged
SHAREHOLDER ENGAGEMENT
2022–2023
304
institutional investors
engaged
2023
2022
2021
304
264
292
RIVERSIDE DISPOSAL
2022–2023
£54m
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GOVERNANCE DRIVING LONG-TERM SUCCESS CONTINUED
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Our approach to corporate
governance aims to preserve
and strengthen stakeholder
confidence in our business
integrity and provide a working
foundation of accountability.
Stephen Hubbard
Chair
QUICK LINKS
Chair’s introduction to governance Page 108
Board leadership and company purpose Page 113
Division of responsibilities Page 129
Composition, succession and evaluation Page 141
Audit, risk and internal control Page 159
ESG Committee report Page 172
Remuneration Page 178
Report of the Directors Page 212
Statement of Directors’ responsibilities Page 215
CHAIR’S INTRODUCTION TO GOVERNANCE
Dear shareholder,
This will be my last message as Chair as I will
be stepping down from the Board in July
2023. I have very much enjoyed being on the
Workspace Board for the last nine years.
When I took over as Chair three years ago,
one of my objectives was to strengthen the
Board and plan for my succession. In this
regard, I am delighted that this has been
successful with Duncan Owen taking over
the Chair role. To read more about his
appointment process see page 146.
Our Purpose
Our purpose – to give businesses the freedom
to grow – runs through every part of our
business, starting with our people and how
they live our values, right up to how our Board
delivers good governance. Throughout the
year, our people supported our purpose,
ultimately driving greater long-term
sustainable success. During the year we
approved a new company value, which
had been introduced following employee
feedback. For more details see page 21.
Environmental, Social and Governance (ESG)
We recognise the importance that our
stakeholders place on ESG, and our
commitment to delivering a climate-resilient
portfolio, looking after our people and
supporting our communities. This commitment
is led by our Board and lived by our people
every day.
We have a fully embedded approach to
sustainability, covering both our portfolio and
all business-wide strategic decisions. An ESG
Board Committee has been established to
provide added focus and drive further
integration across business decisions. We
receive regular monthly updates from around
the business against our ambitions. For more
details, see page 172.
Stakeholder Engagement
We recognise that stakeholder engagement is
critical to the long-term success of our business.
We have continued with our practice of
considering stakeholder voices in discussions
and decision making, not only at Board level,
but across the Company. For examples of how
we have done this, please see pages 15 to 25
and 121 to 123. We support and encourage our
senior managers in their relationships with
respective stakeholder groups.
This strong sense of purpose has created a
culture that puts our stakeholders front and
centre. A large proportion of our decision
making is informed by listening to our
stakeholders, both at the Board level and
across the Company.
Our Section 172(1) Statement, which can
be found on page 125 demonstrates how the
Board’s engagement with stakeholders has
aected decision making.
Our People and Culture
Our people are essential to the delivery of
our strategic objectives and our continued
success. It is vital that we provide a work
environment where everyone feels valued,
motivated and able to thrive. We continue
with our Board supported initiatives to
support the wellbeing of our people and
embrace diversity as a core value. For the past
two years, employee survey feedback has
shown that our teams strongly believe in our
culture and clear set of values. We monitor
employee engagement and satisfaction
through annual surveys. I have also carried out
in person engagement sessions with sta, a
forum in which candid feedback is provided.
This year, the Board has been particularly
mindful of the impact of the cost-of-living
crisis on our sta. Sta salaries were increased
by at least 6% from 1 April 2023. Further
details can be found on page 181.
Future Outlook
The Board strongly believes that good
governance is a key part of the strength of
our business and that by continually reviewing
and monitoring our existing practices we can
ensure that our governance continues to
evolve and is aligned to our business.
I would like to take this opportunity to wish
the Board and all Workspace sta success
for the future.
Stephen Hubbard
Non-Executive Chair
6 June 2023
CHAIR APPOINTED
Duncan Owen, who joined the Board in July
2021, to become the newly appointed Chair
with eect from 6 July 2023
Chair succession
Page 146
BOARD EFFECTIVENESS
Board and Committee eectiveness review
carried out by the Chair and Company
Secretary with the assistance of Fidelio
Board evaluation
Page 155
ESG COMMITTEE CREATED
Creation of the ESG Committee to help
progress the Group’s ESG plans and further
integrate ESG across the business
REMUNERATION POLICY REVIEW
Review of the Company’s Remuneration
Policy, including engagement with
shareholders
Remuneration Policy
Page 190
RISK REVIEW
Assessment of the Group’s principal and
emerging risks with particular reference to
climate change.
Principal risks and uncertainties
Page 69
We have fully embedded our
approach to sustainability,
covering both our portfolio
and business-wide strategic
decisions
GOVERNANCE HIGHLIGHTS
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CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
Compliance statement
The Board confirms that, for the year ended
31 March 2023, we have complied with all of
the provisions of the UK Corporate
Governance Code 2018 other than Provision
32 of the Code. Lesley-Ann Nash was
appointed as Chair of the Remuneration
Committee with eect from 10 September
2021 and on appointment had served nine
months as a member of the Remuneration
Committee. While we note the requirement
of Provision 32 that remuneration committee
chairs should have served on a remuneration
committee for at least 12 months prior to
their appointment, Lesley-Ann has now
served on the Remuneration Committee for
over two years and the Board continues to
have every confidence that Lesley-Ann has
the skills and experience to carry out the role.
The application of the Code’s Principles is
evidenced throughout the Annual Report
and the table overleaf shows how the
Governance section has been structured
around the Code Principles (A to R).
Further information on the Code can be
found on the Financial Reporting Council’s
website at www.frc.org.uk.
About this report
The Governance section has been structured
around the Code Principles (A to R).
I am excited about taking up
the position of Chair from July
2023. Workspace is in a great
position and it’s an exciting
time for everyone in the
business
Duncan Owen
Chair elect
Chair succession
Page 146
Stephen Hubbard pictured with
Chair elect, Duncan Owen
Principles of the UK Corporate
Governance Code 2018
More
information
Board leadership and
company purpose
111
Division of responsibilities 111
Composition, succession
and evaluation
112
Audit, risk and internal control
112
Remuneration 112
UK CORPORATE GOVERNANCE CODE 2018
110
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CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
Pages 129 to 140
Principle F
The chair leads the board and is responsible for
its overall eectiveness in directing the company.
The chair should demonstrate objective judgement
throughout their tenure and they should promote
a culture of openness and debate. In addition, the
chair facilitates constructive board relations and the
eective contribution of all non-executive directors,
and the chair ensures that directors receive accurate,
timely and clear information.
Board roles and
responsibilities
Page 130
Chair’s governance letter
Page 109
Board evaluation
Page 155
Principle G
The board should include an appropriate combination
of executive and non-executive (and, in particular,
independent non-executive) directors, such that no
one individual or small group of individuals dominates
the board’s decision making. There should be a clear
division of responsibilities between the leadership of
the board and the executive leadership of the
company’s business.
Board roles and
responsibilities
Page 130
Non-Executive Directors
Page 133
The relationship between
the Board and the
Executive Committee
Page 135
Principle H
Non-executive directors should have sucient time to
meet their board responsibilities. They should provide
constructive challenge, strategic guidance, oer
specialist advice and hold management to account.
Board roles and
responsibilities
Page 130
Non-Executive Directors
Page 133
Principle I
The board, supported by the company secretary,
should ensure that it has the policies, processes,
information, time and resources it needs in order
to function eectively and eciently.
Our governance framework
Page 132
Information flow
to the Board
Page 139
Pages 113 to 128
Principle A
A successful company is led by an eective and
entrepreneurial board, whose role is to promote
the long-term sustainable success of the company,
generating value for shareholders and contributing
to wider society.
Our Board
Page 114
Chair succession
Page 146
Board evaluation
Page 155
Principle B
The board should establish the company’s purpose,
values and strategy, and satisfy itself that these and its
culture are aligned. All directors must act with integrity,
lead by example and promote the desired culture.
Our purpose
Page 14
Our strategy
Page 32
Sustainability
Page 36
Principle C
The board should ensure that the necessary resources
are in place for the company to meet its objectives and
measure performance against them. The board should
also establish a framework of prudent and eective
controls, which enable risk to be assessed and managed.
Our business model
Page 64
Our governance framework
Page 132
Principal risks and
uncertainties
Page 69
Principle D
In order for the company to meet its responsibilities
to shareholders and stakeholders, the board should
ensure eective engagement with, and encourage
participation from, these parties.
Our stakeholders
Pages 15 and 121
Section 172(1) statement
Page 125
Principle E
The board should ensure that workforce policies and
practices are consistent with the company’s values and
support its long-term sustainable success. The workforce
should be able to raise any matters of concern.
Our purpose
Page 14
Sustainability
Page 36
Whistleblowing Policy
Page 91
BOARD LEADERSHIP AND COMPANY PURPOSE DIVISION OF RESPONSIBILITIES
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HOW WE COMPLY WITH THE UK CORPORATE GOVERNANCE CODE 2018 CONTINUED
Pages 141 to 158
Principle J
Appointments to the board
should be subject to a formal,
rigorous and transparent
procedure, and an eective
succession plan should be
maintained by the board and
by senior management. Both
appointments and succession
plans should be based on merit
and objective criteria and, within
this context, should promote
diversity of gender, social and
ethnic backgrounds, cognitive
and personal strengths.
Chair succession
Page 146
Inclusion and
diversity
Page 148
Principle K
The board and its committees
should have a combination of
skills, experience and knowledge.
Consideration should be given to
the length of service of the board
as a whole and membership
regularly refreshed.
Board
composition
Page 148
Principle L
Annual evaluation of the board
should consider its composition,
diversity and how eectively
members work together to
achieve objectives. Individual
evaluation should demonstrate
whether each director continues
to contribute eectively.
Board evaluation
Page 155
Pages 178 to 211
Principle P
Remuneration policies and
practices should be designed to
support strategy and promote
long-term sustainable success.
Executive remuneration should be
aligned to company purpose and
values, and be clearly linked to
the successful delivery of the
company’s long-term strategy.
Remuneration
Committee
Chair’s letter
Page 181
Remuneration
at a glance
Page 185
Our remuneration
policy
Page 190
Principle Q
A formal and transparent
procedure for developing policy
on executive remuneration and
determining director and senior
management remuneration
should be established. No
director should be involved in
deciding their own remuneration
outcome.
Remuneration
Committee
Chair’s letter
Page 181
Our remuneration
policy
Page 190
Principle R
Directors should exercise
independent judgement and
discretion when authorising
remuneration outcomes, taking
account of company and
individual performance, and
wider circumstances.
Remuneration
Committee
Chair’s letter
Page 181
Our approach
to fairness and
wider workforce
considerations
Page 198
Pages 159 to 171
Principle M
The board should establish
formal and transparent policies
and procedures to ensure
the independence and the
eectiveness of internal and
external audit functions. The
board should satisfy itself on
the integrity of financial and
narrative statements.
Audit Committee
Report
Page 159
Principle N
The board should present a fair,
balanced and understandable
assessment of the company’s
position and its prospects.
Fair, balanced and
understandable
assessment
Page 167
Principle O
The board should establish
procedures to manage risk,
to oversee the internal control
framework, and to determine
the nature and the extent of the
principal risks the company is
willing to take in order to achieve
its long-term strategic objectives.
Our governance
framework
Page 132
Audit Committee
Report
Page 159
Principal risks and
uncertainties
Page 69
AUDIT, RISK AND INTERNAL CONTROLCOMPOSITION, SUCCESSION AND EVALUATION REMUNERATION
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The Board provides strong
leadership and support to the
Executive Committee as it delivers
the Group’s strategic aims.
Graham Clemett
Chief Executive Ocer
QUICK LINKS
Our Board Page 114
Board and Committee membership Page 117
The Board comprises the CEO, the CFO and Non-Executive Directors and it is
chaired by Stephen Hubbard. Details of individual attendance at Board meetings
held during the year are set out below. More information on the skills and the
experience of the Board members can be found on pages 115 to 116.
Board Audit Remuneration Nominations ESG
Stephen Hubbard 7/7 – 6/6 3/3 2/2
4
Graham Clemett 7/7 – – – 2/2
4
Dave Benson 7/7 – – – 2/2
4
Rosie Shapland 7/7 4/4
3
6/6 3/3 2/2
4
Lesley-Ann Nash 7/7 4/4
3
6/6 3/3 2/2
4
Duncan Owen
1
7/7 – – 2/3
5
2/2
4
Manju Malhotra 7/7 4/4
3
– 3/3 2/2
4
Nick Mackenzie 6/7
6
– – 3/3 2/2
4
Damon Russell
2
3/3 – – 1/1 –
1. Duncan Owen was appointed as Chair of the ESG Committee on 21 April 2022.
2. Damon Russell stepped down from the Board with eect from the close of the Company’s AGM on 21
July 2022.
3. The Audit Committee meeting in January 2023 was a joint meeting with the ESG Committee.
4. The ESG Committee meeting in January 2023 was a joint meeting with the Audit Committee.
5. Duncan Owen did not attend the Nominations Committee meeting where his appointment as Chair
was discussed.
6. Nick Mackenzie did not attend the September 2022 Board meeting due to pre-existing commitments.
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BOARD LEADERSHIP AND COMPANY PURPOSE
1
64
2
75
3
8
Led by our Chair, Stephen Hubbard, the Board
provides the leadership of the Company. The Board
is collectively responsible and it is accountable to
shareholders for the Company’s long-term success,
strategy, values, culture, control and management.
Stephen Hubbard
Non-Executive Chair
Duncan Owen
Non-Executive Director
Rosie Shapland
Non-Executive Director
Graham Clemett
Chief Executive Ocer
Manju Malhotra
Non-Executive Director
Lesley-Ann Nash
Non-Executive Director
Dave Benson
Chief Financial Ocer
Nick Mackenzie
Non-Executive Director
Our Board
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
CHAIR
STEPHEN HUBBARD
INDEPENDENT
NON-EXECUTIVE DIRECTOR
1
Committee membership
REMUNERATION
NOMINATIONS (CHAIR)
ESG
Appointed
Board: July 2014
Chair: July 2020
Current external appointments
Stephen is a member of the advisory board
of Redevco, a pan-European property
holding company, and a Non-Executive
Director of AustralianSuper where he is their
representative on the board of the BL/Aus
Super JV for Canada Water.
Relevant skills, business experience
and contribution
Stephen has many years’ experience of
operating within the property sector. He was
previously Chair of CBRE UK until he retired
in December 2019, having joined Richard
Ellis in 1976 and held the position of Head of
EMEA and UK Capital Markets from 1998 to
2012. He was also previously Non-Executive
Chair of LXI REIT PLC. He has an outstanding
track record in the investment market and
has advised on several landmark transactions
involving international capital. Stephen has
a broad range of knowledge and experience
at board level, including leadership and
executive management, operation of public
companies, regeneration and development
projects, as well as strong financial skills.
EXECUTIVE DIRECTOR
GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
2
Committee membership
ESG
EXECUTIVE (CHAIR)
INVESTMENT (CHAIR)
DISCLOSURE (CHAIR)
Appointed
Board: July 2007
CEO: September 2019
Current external appointments
Graham is the Senior
Independent Non-Executive Director
at The Restaurant Group PLC.
Relevant skills, business experience
and contribution
Graham has detailed knowledge of the
Company’s operations and extensive
experience of the property sector gained
through his fifteen years’ experience with the
Group, having joined as CFO in 2007. Prior to
joining the Group, he was Finance Director
for UK Corporate Banking at RBS Group plc
and before that spent eight years at Reuters
Group plc, latterly as Group Financial
Controller. Graham has extensive experience
in leadership and management, strong
commercial, strategic and communication
skills, extensive investor relations experience
and strong financial skills with significant
experience of financing and capital raising.
He is a Chartered Accountant.
EXECUTIVE DIRECTOR
DAVE BENSON
CHIEF FINANCIAL OFFICER
3
Committee membership
ESG
EXECUTIVE
INVESTMENT
DISCLOSURE
Appointed
April 2020
Current external appointments
Dave does not have any current external
appointments.
Relevant skills, business experience
and contribution
Prior to joining Workspace, Dave was the
Corporate Finance Director of Whitbread
PLC. He previously held senior finance roles
at Kier Group plc and Keller Group plc,
having qualified as a Chartered Accountant
with Deloitte. He has strong financial skills,
having gained experience in a series of
dynamic businesses as well as a good
understanding of technology and its
commercial applications plus strong
communication and leadership skills. He
has experience in strategy development,
infrastructure and development projects,
corporate transactions, acquisitions and
integrations, investor relations and detailed
knowledge of risk management and internal
control systems.
NON-EXECUTIVE DIRECTOR
ROSIE SHAPLAND
SENIOR INDEPENDENT NON-EXECUTIVE
DIRECTOR
4
Committee membership
REMUNERATION
NOMINATIONS
AUDIT (CHAIR)
ESG
Appointed
November 2020
1
Current external appointments
Rosie is a Non-Executive Director at Foxtons
Group plc, where she is Senior Non-Executive
Director, Chair of their Audit Committee,
and a member of their Remuneration,
Nomination and ESG Committees and
PayPoint plc, where she is Chair of their
Audit Committee and a member of their
Nomination and Remuneration Committees.
Relevant skills, business experience
and contribution
Rosie is a Chartered Accountant and was
previously an audit partner at PwC. She has
many years’ experience of operating within
the finance sector as well as a broad range
of public company board experience, in
addition to experience of governance, risk
management, investment and corporate
transactions and strong financial skills.
1. Rosie was appointed Senior Independent Director
in February 2022 and Chair of the Audit Committee
in July 2021.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
NON-EXECUTIVE DIRECTOR
NICK MACKENZIE
INDEPENDENT NON-EXECUTIVE DIRECTOR
8
Committee membership
NOMINATIONS
ESG
Appointed
January 2022
Current external appointments
Nick is CEO at Greene King, the pub retailer
and brewer.
Relevant skills, business experience
and contribution
Prior to joining Greene King, Nick spent
17 years at Merlin Entertainments plc, most
recently as Managing Director of Midway
Attractions, the largest division within the
group, having started his career in pubs at
Bass and Allied. He was also previously a
Non-Executive Director at Daniel Thwaites
PLC. He has significant expertise in strategy,
real estate and business development and
experience of public company boards. Nick
currently sits on the board of the BBPA and
is also an advisory board member of WiHTL.
NON-EXECUTIVE DIRECTOR
MANJU MALHOTRA
INDEPENDENT NON-EXECUTIVE DIRECTOR
7
Committee membership
NOMINATIONS
AUDIT
ESG
Appointed
January 2022
Current external appointments
Manju is CEO at Harvey Nichols, the luxury
department store, a Non-Executive Director
at abrdn UK Smaller Companies Growth
Trust plc and a Non-Executive Director at
London & Partners, an international trade
and investment agency for London.
Relevant skills, business experience
and contribution
Manju joined Harvey Nichols in 1998 and
progressed through various roles, including
CFO and co-COO, before her appointment
as CEO. She has extensive experience in
customer-focus, developing a values-led
culture, strategy, operations, finance and
technology. She is a Chartered Accountant.
NON-EXECUTIVE DIRECTOR
DUNCAN OWEN
INDEPENDENT NON-EXECUTIVE DIRECTOR
6
Committee membership
NOMINATIONS
ESG (CHAIR)
Appointed
July 2021
1
Current external appointments
Duncan is the Chair of Sellar, the large scale
London oce developer of schemes such as
the Shard and Paddington Square.
Relevant skills, business experience
and contribution
Duncan has over 30 years’ experience in
the real estate investment and development
sector. He has a deep understanding of the
central London Oce sector and listed capital
markets, including leadership of IPOs and
corporate acquisitions. He was previously a
director of LaSalle Investment Management,
on the board of Insight Investment, CEO of
Invista Real Estate Investment Management
plc, Global Head of Real Estate at Schroders
PLC, and then the CEO of Immobel Capital
Partners until 31 March 2023. He was also
previously a Governor of the board of the
Church Commissioners. He is a member of
the Royal Institution of Chartered Surveyors,
sat on the policy committee of the BPF
(British Property Federation) for 14 years
and studied at INSEAD.
NON-EXECUTIVE DIRECTOR
LESLEY-ANN NASH
INDEPENDENT NON-EXECUTIVE DIRECTOR
5
Committee membership
REMUNERATION (CHAIR)
NOMINATIONS
AUDIT
ESG
Appointed
January 2021
1
Current external appointments
Lesley-Ann is a Non-Executive Director of
St. James’s Place plc, where she is a member
of their Risk and Remuneration Committees.
She is also a member of the boards of
Homes England and London First.
Relevant skills, business experience
and contribution
Lesley-Ann was previously a Director in
the Cabinet Oce of HM Government and
a Managing Director at Morgan Stanley, as
well as having previously worked at UBS and
Midland Bank. She has deep global capital
markets experience on both buy and sell
sides, extensive knowledge of central and
local government and experience of policy
development, procurement and major
programme delivery and a track record
of promoting inclusion and diversity and
delivering meaningful cultural change, as
well as public company board experience.
She also has deep financial fluency gained
as a fellow of the Chartered Institute of
Management Accountants (CIMA). She was
also previously on the board of North
London Hospice.
1. Lesley-Ann was appointed Chair of the Remuneration
Committee in September 2021.
1. Duncan was appointed Chair of the ESG Committee
in April 2022.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
Board
Nominations
Committee
Audit
Committee
Remuneration
Committee
ESG
Committee
Executive
Committee
Investment
Committee
Disclosure
Committee
Chair
Stephen Hubbard
Non-Executive Chair
Executive Directors
Graham Clemett
Chief Executive Ocer
Dave Benson
Chief Executive Ocer
Non-Executive Directors
Rosie Shapland
Senior Independent Non-Executive Director
Lesley-Ann Nash
Non-Executive Director
Duncan Owen
Non-Executive Director
Manju Malhotra
Non-Executive Director
Nick Mackenzie
Non-Executive Director
Members of the Executive Committee
Will Abbott
Chief Customer Ocer
Carmelina Carfora
Company Secretary
Claire Dracup
Director of People and Culture
Paul Hewlett
Director of Strategy & Corporate Development
Leo Shapland
Head of Portfolio Management
Richard Swayne
Investment Director
COMPANY SECRETARY
CARMELINA CARFORA
Appointed
March 2010
Carmelina is Secretary to the Board and
its Nominations, Remuneration, Audit and
ESG Committees, she monitors compliance
with procedures and provides advice on
governance matters. At the direction of the
Chair, she is responsible for making sure the
Board receives accurate, timely and relevant
information. She also co-ordinates the
induction of new Board members and the
provision of ongoing training and
development of the Board. Carmelina’s
other responsibilities include corporate
governance, compliance with legislation
and the administration of share schemes.
BOARD AND COMMITTEE MEMBERSHIP
AS AT 31 MARCH 2023
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
Board activities 2022/23
1. Strategy Page 118
2. Operations Pages 118 to 119
3. Purpose, values
and culture
Pages 119 to 120
4. Stakeholders Pages 121 to 123
5. Finance Page 123
6. Reporting Page 123
7. Risks Page 123
8. Succession Page 124
9. Governance Page 124
STRATEGY
ANNUAL STRATEGIC REVIEW
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
The Board held its annual strategic review
in September 2022 to approve the five-year
plan. External speakers and members of the
Executive Committee joined the Board to
stimulate discussion in a number of areas,
including the Group’s sustainability ambitions,
people and culture and operational priorities.
Following the strategy day, several ideas and
initiatives were developed for incorporation
into the business plan.
Our strategy
Pages 32 to 35
SUSTAINABILITY AGENDA
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
The Board established a Board ESG
Committee in April 2022 to provide a
dedicated forum for discussion of ESG-
related matters. During the year, discussions
included ESG strategy and governance,
progress against our science-based targets
to transition to net zero carbon and the
addition of climate change as a principal
risk to the Group.
Throughout the year the Board also
requested updates from the sustainability
team on the Group’s sustainability activities.
Sustainability
Pages 36 to 58
OPERATIONS
ASSET MANAGEMENT
Relevant stakeholders
CUSTOMERS
INVESTORS
PARTNERS AND SUPPLIERS
The Board receives regular updates on asset
management and leasing activities. This year,
the focus has been on the integration of the
McKay portfolio, improving the overall
portfolio oering and improving the
customer experience, through targeted
customer surveys, the results of which are
used to drive improvements in our customer
processes. Read more about our engagement
with customers on pages 16 to 20 and 123.
PORTFOLIO VALUATION
Relevant stakeholders
INVESTORS
The Board reviewed and approved the full
and half-year valuations of the Group’s
property portfolio in May and November
2023 respectively.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
1 2
PURPOSE, VALUES AND CULTURE
PURPOSE
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
Our purpose is to give businesses the
freedom to grow. Our purpose provides
the framework for making decisions and for
engaging with our stakeholders. The Board
sets the Group’s strategy and makes
decisions through the lens of our purpose.
The Board has continued to monitor how
our purpose is articulated and understood
by our customers, employees, investors and
other stakeholders, and how our values are
embedded throughout our business. This is
achieved through regular engagement with
our stakeholders, more information on which
can be found on pages 121 to 123. The Board
also approves the Group’s key policies and
practices so that they underpin our purpose.
The Executive Committee is responsible for
communicating these policies throughout
our business.
CULTURE
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
Our culture is one of integrity, transparency
and openness, where independent thought
and taking initiative are encouraged. The
Board recognises the importance of our
culture to the business of the Group and sets
the ‘tone from the top’ by demonstrating
and encouraging values-driven behaviour.
This is underpinned by our compliance
policies and Code of Conduct, which are
reviewed by the Board annually.
The Board is keen to recognise employees
who exemplify our culture. Our Workspace
Winners scheme rewards sta who live our
values throughout their role at Workspace.
Spotlight on culture
Page 120
VALUES
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
Our purpose informs our values: ‘know your
stu’, ‘show we care’, ‘find a way’ and ‘make
it fun’.
The Board encourages all employees to live
our values in their work for the Group and
especially in their dealings with each other
and our other stakeholders. Graham Clemett,
CEO, sits on the judgement panel for our
employee recognition programme,
Workspace Winners, where employees are
given awards and prizes for demonstrating
one or more of our values.
Our values
Page 21
2. OPERATIONS CONTINUED
PORTFOLIO GROWTH
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
During the year the Board also approved
the disposal of the residential component
of its Riverside mixed-use redevelopment
in Wandsworth for £54 million. Read more
on page 128.
The Board is also provided with regular
updates on planned refurbishment and
development projects. This year, key
development projects have included
The Chocolate Factory and Leroy House.
Read more about these projects on
pages 30 and 46.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
3
Chair breakfast sessions
Stephen Hubbard meets with sta in his role
as Non-Executive Director for employee
engagement and reports back to the Board
Diversity & inclusion
The Board and the Nominations Committee
regularly monitor diversity at Workspace,
including reviewing our first gender pay gap
report, published in March 2023
‘Town hall’ events
Our CEO, CFO and members of the Executive
Committee lead ‘town hall’ events to provide
business updates to employees, with the
opportunity for sta to ask questions
Remuneration
The Remuneration Committee reviews
the Group’s employee pay structures and
their alignment with our purpose, values
and strategy
Site visits
Members of the Board regularly visit our
business centres and engage with our centre
sta during site visits
Whistleblowing reports
Our Whistleblowing Policy, applicable to
all sta, encourages openness in reporting
misconduct. Any reports made would be
investigated and reported to the Board.
No reports were made during the year
Annual employee survey
Seeks detailed feedback from sta in
a wider range of areas. Results from the
survey are reviewed and discussed by the
Board and progress on actions arising
from the feedback is tracked
Informal feedback
Any significant informal sta feedback
is reported to the Board by the Executive
Committee
Sta suggestion board
This year we introduced an online sta
suggestion board, allowing our employees to
share ideas and feedback for improvements
to our business
HOW OUR
BOARD MONITORS
CULTURE
HOW OUR BOARD MONITORS CULTURE
The Board sets the ‘tone from the top’
and uses a variety of tools to assess
and monitor the Group’s culture.
86%
RESPONSE RATE TO 2023
EMPLOYEE SURVEY
74%
FAVOURABLE ENGAGEMENT
SCORE FROM 2023 SURVEY
2
CHAIR BREAKFAST SESSIONS
12
WORKSPACE WINNERS
6
TOWN HALL EVENTS
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
STAKEHOLDERS
INVESTOR ENGAGEMENT
Relevant stakeholders
INVESTORS
Market engagement
We regularly engage with existing and
prospective shareholders through an active
investor relations programme. The Board
reviews a detailed bi-monthly investor
relations report which includes notable views
expressed by shareholders as well as wider
market participants, alongside share register
movements, broader sector and peer news
and progress on various investor relations
initiatives.
Our Investor Relations team manages a
comprehensive calendar of engagements,
including formal announcements, AGM,
results presentations, results roadshows,
ad hoc equity and debt investor meetings
(including institutional, private client and
retail investors), equity sales team meetings,
conferences, financial analyst and investor
site tours, capital market days, business
media, industry events, as well as ad hoc
outreach contact with stakeholders to ensure
our strategy and value creation are well
understood by the market and wider
stakeholder community. See page 23 for
details of the topics raised by investors.
During 2022/2023 we engaged with 304
institutional investors via one-to-one and
group meetings; most in person,
supplemented by virtual meetings. Investor
meetings are attended by various senior
executives, including the CEO, CFO, Chair
and Executive Committee members, as well
as the Investor Relations Analyst and Group
Financial Controller. Key investor engagement
during the year included the following:
– 150 investor meetings (in-person and virtual)
– 19 site tours
– 6 real estate conferences attended globally
– Sustainability Capital Markets Day
– Annual General Meeting
In May 2022, we held a Capital Markets Day
for investors and analysts focusing on our
ESG strategy. The event was hosted by our
Head of Sustainability, CEO and CFO and
included a live Q&A. It was attended by 22
investors and analysts.
Our investor website is www.workspace.co.
uk/investors. It contains our Annual Reports,
half and full-year results presentations and
our financial and dividend calendar for the
upcoming year. Our website also outlines our
company strategy, business model, property
portfolio and has a detailed section covering
our ESG activities.
Lesley-Ann Nash, as Chair of the
Remuneration Committee, engaged with
shareholders in respect of our proposed
changes to our Remuneration Policy
this year. For further details see page 190.
All Committee Chairs are available to engage
with shareholders as appropriate.
If shareholders have any concerns, which
the normal channels of communication to the
CEO, the CFO or the Chair have failed to
resolve, or for which contact is inappropriate,
then our Senior Independent Director, Rosie
Shapland, is available to address them.
Contact details for our Investor Relations
team, Company Secretary and Company
Registrars can be found at the back of this
Report as well as on our website.
INVESTOR RELATIONS CALENDAR OF EVENTS
2022/23 Events
Investor
Meetings
Investor
Tours
April – Q4 Business update
May – Capital Markets Day
June – Full-year results
– Investor roadshow
July – AGM & Q1 Business Update
August
September – Global real estate conference
October – Q2 Business Update
November – Half-year results
– Investor roadshow
December – UK investor conference
January – Q3 Business Update
– UK investor conference
February
March – Year end
– Global real estate conference
Apr-22 17
May-22
8
Jun-22
101
Jul-22
2
Aug-22
2
Sep-22
2
Oct-22
0
Nov-22
106
Dec-22
33
Jan-23
9
Feb-23
6
Mar-23
18
INVESTOR MEETINGS
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
4
4. STAKEHOLDERS CONTINUED
EMPLOYEE ENGAGEMENT
Relevant stakeholders
PEOPLE
The Board recognises the crucial importance
of our employees to the success of the
Group. Throughout the year the Board meets
and receives feedback from a wide range of
employees across the business, including
reviewing results from our annual employee
survey. The Board and the Executive
Committee review and approve key policies,
practices and strategic decisions, making
sure that they reflect our culture and align
to the Group’s key values and purpose.
Stephen Hubbard is our designated Non-
Executive Director responsible for employee
engagement, as the Board considers this
the most eective method to ensure the
employee voice is heard at the very top of
the organisation. Stephen held two breakfast
sessions with sta during the year. See
pages 21 and 139 for further details of the
Chair breakfast sessions and topics raised.
Stephen reports back to the Board after
every session to ensure the feedback gained
from our sta is eectively communicated
to the Board as a whole.
Employees are also invited to town hall
sessions led by the CEO or other members
of the Executive Committee. During the
year there were site tours arranged for our
Non-Executive Directors to visit our business
centres and to meet employees.
Employee engagement
Pages 21 to 22
Chair’s breakfast,
Brickfields, Hoxton
INVESTOR ENGAGEMENT CONTINUED
Relevant stakeholders
INVESTORS
Annual Report and Website
Our Annual Report is available to all
shareholders. Shareholders can opt to receive
a hard copy in the post or PDF copies via
email or from our website. Additionally, if a
shareholder holds their shares via a nominee
account and that shareholder encounters
diculty receiving our Annual Report via
their nominee provider, they are welcome to
contact the Company Secretary to request
a copy.
Our investor website is www.workspace.co.uk/
investors. It contains our Annual Reports,
half- and full-year results presentations and
our financial and dividend calendar for the
upcoming year. Our website also outlines our
company strategy, business model, property
portfolio and it has a detailed section
covering our ESG activities.
AGM
Our 2022 AGM was held on 21 July 2022 and
all resolutions passed with over 90% of votes
in favour. Our 2023 AGM will be held at the
Company’s registered oce at Canterbury
Court, Kennington Park, 1-3 Brixton Road,
London SW9 6DE on Thursday 6 July 2023
at 11.00am and we look forward to welcoming
our shareholders there. The Notice of
Meeting, together with an explanation of
the business to be dealt with at the Meeting,
is included as a separate document sent to
shareholders who have elected to receive
hard copies of shareholder information and
it is also available on the Company’s website.
Following shareholder engagement, since
2019 we have sought approval for a resolution
authorising political donations up to £20,000
in aggregate, which was a lower amount than
we had sought in previous years. This year we
are again proposing a resolution with an
upper limit of £20,000 in aggregate. This
resolution is proposed as a precaution to
prevent the Company’s normal business
activities being inadvertently caught by
the broad definitions used in the relevant
provisions of the Companies Act 2006. It
remains the policy of the Company not to
make political donations or to incur political
expenditure within the ordinary meaning of
those words and the Board has no intention
of using the authority for that purpose.
In addition, and in line with the resolution
approved at last year’s AGM, the Directors
are again proposing a single resolution
disapplying pre-emption rights for the 2023
Annual General Meeting that would apply
only in very limited circumstances. The
proposed disapplication resolution is limited
to allotments and/or sales: (i) in connection
with pre-emptive oers and oers to holders
of equity securities other than ordinary
shares (if required by the rights of those
securities or as the Directors otherwise
consider necessary); and (ii) in connection
with the terms of any employees’ share
scheme for the time being operated by
the Company.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
FINANCE REPORTING4. STAKEHOLDERS CONTINUED RISKS
STRUCTURE, FORECASTS, BUDGETS
Relevant stakeholders
INVESTORS
The Board regularly reviews the Group’s
financial structure and rolling forecasts. The
Board approved the Group’s 2022/23 budget.
REFINANCING
Relevant stakeholders
INVESTORS
The Board reviewed refinancing
arrangements related to two McKay loan
facilities, and the extension of the McKay
£135m RCF and the Group’s existing £200m
RCF. See page 34 for further details.
DIVIDEND PAYMENTS
Relevant stakeholders
INVESTORS
The Board recommended the payment of
the final dividend paid to shareholders in
August 2022 and it approved the payment
of the interim dividend paid to shareholders
in February 2023.
FULL, HALF-YEAR AND TRADING
STATEMENTS
Relevant stakeholders
INVESTORS
The Board reviewed and approved the full
and half-year results and trading statements.
VIABILITY AND GOING CONCERN
STATEMENTS
Relevant stakeholders
INVESTORS
The Board conducted a review of the
Company’s viability over the next five-year
period and it approved the viability
statement and going concern statement.
Viability statement
Page 87
Going concern statement
Page 87
PRINCIPAL RISKS
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
The Board reviewed the Group’s principal
risks which could impact the implementation
of the Group’s strategy. See pages 69 to 76
for details of our principal risks and
uncertainties.
The Board requested updates from the Chair
of the Audit Committee on the key areas of
risk discussed during the year.
EMERGING RISKS
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
The Board heard updates from the Chair
of the Audit Committee on emerging risks
which have been highlighted and debated
during meetings of the Committee.
Principal risks and uncertainties
Page 69
BUSINESS RELATIONSHIP ENGAGEMENT
Relevant stakeholders
CUSTOMERS
PARTNERS AND SUPPLIERS
Positive relationships with our customers,
suppliers and other business partners are
essential to the Group’s ongoing success.
Customer-facing teams provide daily
feedback from customers while views from
suppliers and partners are captured by
dialogue with the relevant business team.
These views from our customers, suppliers
and partners are collated and fed back to the
Board, and incorporated into decision making.
Business relationship engagement
Pages 16 to 20 and 23
COMMUNITY AND ENVIRONMENT
ENGAGEMENT
Relevant stakeholders
COMMUNITIES
ENVIRONMENT
The Board remains committed to reaching
our target of becoming a net zero carbon
business by 2030. All new Board members
receive an induction on the Group’s
approach to sustainability. This year, a
Board-level ESG Committee was introduced,
providing a forum for the Board to dedicate
discussion to our progress with our
sustainability objectives and to review
updates from our sustainability team.
The Board is also regularly updated on our
community and social impact work and our
fundraising activities for our charity partner,
Single Homeless Project.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
765
GOVERNANCESUCCESSION
BOARD EFFECTIVENESS REVIEW
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
The Board has progressed the
recommendations made following the internal
Board eectiveness review facilitated by
Fidelio last year. Read more about how the
recommendations from last year’s external
evaluation have been progressed during
the year on pages 157 to 158.
Internal Board eectiveness review
Pages 155 to 156
GENDER PAY GAP
Relevant stakeholders
PEOPLE
INVESTORS
The Board reviewed and approved the
Company’s first gender pay gap report, which
was published on 30 March 2023 and can be
found on our website at www.workspace.
co.uk/investors/about-us/governance/
our-policies/gender-pay-gap-report-2023.
REGULATORY AND LEGAL UPDATES
Relevant stakeholders
INVESTORS
The Board discussed legal updates and
advice from the Company’s legal advisers.
The Board also reviewed regular legal and
governance updates from the Company
Secretary.
COMMITTEE MEMBERSHIP AND TERMS
OF REFERENCE
Relevant stakeholders
INVESTORS
During the year, the Board reviewed the
structure of its Committees. For more
information on changes to the Committee
structure and membership see page 157.
The Board also reviewed the schedule of
matters reserved to the Board (see page 135)
and the terms of reference applicable to
each Committee.
WORKFORCE POLICIES AND PRACTICES
Relevant stakeholders
PEOPLE
The Board reviews and approves all key
policies and practices which could impact
our employees and influence their
behaviours. Policies are reviewed to check
that they are aligned with the Group’s
purpose, culture and values. The Board
recognises that eective and honest
communication is essential to maintain our
business values, and we encourage our
employees to speak out if they witness any
wrongdoing. This stance is reinforced in our
whistleblowing procedures and in our Code
of Conduct. Further information on the
Group’s key compliance policies can be
found on pages 89 to 91.
All policies are available to employees and
are published on the Group’s intranet. All
new employees are provided with training
on our policies at induction sessions and we
provide annual refresher training to all sta
in key areas.
APPOINTMENT OF NEW CHAIR
Relevant stakeholders
CUSTOMERS
PEOPLE
INVESTORS
PARTNERS AND SUPPLIERS
COMMUNITIES
ENVIRONMENT
During the year the Board approved the
appointment of Duncan Owen to succeed
Stephen Hubbard as Chair of the Board.
Recruitment process
Page 146
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2022/23 CONTINUED
98
A
The likely
consequences
of any decision
in the long term
D
The impact of
the Company’s operations
on the community and
the environment
F
The need to act
fairly as between
members of the
Company
E
The desirability
of the Company
maintaining a reputation
for high standards
of business conduct
B
The interests
of the Company’s
employees
C
The need to foster the
Company’s business
relationships with suppliers,
customers and others
Section 172(1) statement
RELEVANT DISCLOSURES
The Board of Workspace Group PLC
(‘the Board’) is required to act in good faith
to promote the long-term success of the
Company (and its Group) for the benefit of
its shareholders, while having due regard to
the matters set out in Section 172(1) of the
Companies Act 2006.
The Board has identified the Company’s key
stakeholders to be its shareholders, employees,
customers, suppliers, debt financiers and local
communities. The Board also considers the
impact of operations on the environment to
be of key importance.
A
The likely consequences of any
decision in the long term
Our purpose Page 14
Our business model Pages 64 to 68
Our strategy Pages 32 to 35
Dividend Page 80
C
The need to foster the Company’s
business relationships with suppliers,
customers and others
Customer proposition Page 65
Customer and supplier
engagement
Pages 16 to 20, 23
and 123
Anti-bribery & corruption
and modern slavery
Page 91
E
The desirability of the Company
maintaining a reputation for high
standards of business conduct
Compliance policies Pages 89 to 91
Culture and values Page 21
Whistleblowing Page 91
Internal controls Page 170
B
The interests of the Company’s
employees
Employee engagement Pages 21 to 22
and 122
Looking after our people Pages 50 to 53
Diversity and inclusion Pages 148 to 154
D
The impact of the Company’s
operations on the community and
the environment
Supporting our
communities
Pages 54 to 58
Sustainability Pages 36 to 58
TCFD Pages 92 to 103
F
The need to act fairly as between
members of the Company
Shareholder engagement Pages 23 and 121
AGM Page 122
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD INFORMATION
BOARD DISCUSSION AND DECISION MAKING
MONITORING
– All members of the Board are aware of the Board’s responsibilities and their individual
duties as Directors and the need to consider Section 172(1) factors is embedded in the
Matters Reserved to the Board and Committee terms of reference
– The Board receives regular updates from the sustainability team on ESG matters
(see pages 118 and 172 to 177)
– The Board directly engages with employees and investors, and it receives feedback
from the CEO and CFO on meetings with investors and analysts (see pages 121 to 122)
– The Board receives regular reports from the Executive Committee and external advisers
on engagement with other stakeholders such as customers, suppliers and the wider
community (see page 123)
– Decision making is informed by the information received by the Board, with
consideration given to Section 172(1) factors relevant to the decision at hand
– Sustainability matters are considered in each decision the Board makes
– A Board strategy day is held each year where the Board discusses long-term strategy
(see page 118)
– The Board regularly considers the Group’s purpose, values and policies related
to business conduct (see pages 119 to 120)
– The Board monitors the short, medium and long-term impact of key decisions through
regular updates from the Executive Committee
– Stephen Hubbard, Chair of the Board, holds focus groups with employees in his role
as the designated Non-Executive Director for employee engagement (see page 122)
– A stakeholder impact analysis, setting out the expected impacts of the proposed
decision on dierent stakeholder groups and how any negative impacts might be
mitigated, is conducted and that analysis feeds into the Board’s discussions when
key strategic decisions are proposed
– The Board and the Audit Committee oversee the Company’s risk management
framework and the actions that are in place to mitigate risk in the short, medium
and long term (see page 171)
– The Board considers stakeholder interests when determining the level of dividend
– Feedback and engagement from stakeholder groups is collated and used to inform
future decision making
HOW THE BOARD CONSIDERS SECTION 172(1) MATTERS
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
SECTION 172(1) STATEMENT CONTINUED
Key Board decisions in 2022/23
Some of the key decisions considered by
the Board in 2022/23, and how the Board
had regard to Section 172(1) matters when
discussing them, are outlined to the right
and on the following page.
INTEGRATION OF McKAY
Description Following completion of the acquisition of McKay in May 2022,
during the year the Board monitored the successful integration
of the McKay business into the Group’s operations
Relevant Section 172(1)
decision criteria
A, B, C, D, E, F
Relevant stakeholders – Employees
– Customers
– Suppliers
– Investors
– Communities
– Debt finance providers
Decision-making process – The Board was aware that the integration of the McKay
business into the Group would impact upon multiple
stakeholder groups and be essential to delivering long-term
value from the acquisition for all stakeholders
– The Board requested regular reports from management on
progress with the integration plan, focusing on aligning the
McKay operations
– Areas of focus included a review of security and health & safety
policies and processes to ensure the safety of employees,
customers, suppliers and visitors to McKay buildings, and
integrating building, finance and customer data and processes
into the Group’s systems to promote synergies
– In particular, the Board considered progress with collation of
information related to sustainability matters and the creation
of a net zero transition plan for the McKay portfolio
– The Board reviewed updates on sta communications relating
to the acquisition and the integration plan
– The Board reviewed proposals for amendments to financing
arrangements with lenders
Values
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A: The likely consequences of any decision
in the long term.
B: The interests of the Company’s employees.
C: The need to foster the Company’s
business relationships with suppliers,
customers and others.
D: The impact of the Company’s operations
on the community and the environment.
E: The desirability of the Company
maintaining a reputation for high
standards of business conduct.
F: The need to act fairly as between
members of the Company.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
DISPOSAL OF RIVERSIDE RESIDENTIAL SCHEMECUSTOMER EXPERIENCE
Description During 2022, the Board reviewed and
considered updates on the progress of the
Group’s customer experience project. The
project is focused on collating customer
feedback and using that feedback to
improve the experience of our customers
Relevant
Section 172(1)
decision
criteria
A, C, E
Relevant
stakeholders
– Customers
– Investors
Decision-
making
process
– The Board recognises that, as well as
improving the experience of customers as
a stakeholder group, continually improving
the customer experience is vital to the
long-term success of the Group
– During the year, the Board reviewed
and discussed feedback collated from
customers and the proposed areas
of focus for improvements
– The Board monitored progress on the
areas of focus, which included the
introduction of a new complaints policy,
changes to streamline the processes for
renewals, moving within Workspace and
licences to alter, and adjustments to the
responsibilities of centre managers to free
up more time for them to focus on customers
– The Board was updated on provision of
‘Customer First’ training to all sta, designed
to support the above initiatives, underline
the importance of a positive customer
experience and understand how sta can
contribute within their individual roles
Values
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Make
it fun
Description The Board approved the disposal of the
residential component of the Group’s
Riverside property
Relevant
Section 172(1)
decision
criteria
A, B, C, D, E, F
Relevant
stakeholders
– Employees
– Customers
– Suppliers
– Investors
– Communities
Decision-
making
process
– In March 2023, the Group completed
the sale of the residential component
of the Group’s Riverside mixed-use
redevelopment in Wandsworth for
£54 million
– The scheme is an example of the Group’s
mixed-use regeneration approach, and the
Group will construct a new major business
centre providing 153,000 sq. ft. of net
lettable space – creating employment
opportunities and delivering on the
Group’s strategy of employment-led
regeneration in the areas in which
it operates
– The new residential and commercial space
will be built to the highest sustainability
standards and with significant landscaping
and public realm enhancements, benefitting
residents and the local community
– Further information can be found on
page 13
Values
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Description The Board approved the appointment of
Duncan Owen to succeed Stephen Hubbard
as Chair of the Board with eect from the
close of the Company’s AGM in 2023
Relevant
Section 172(1)
decision
criteria
A, B, C, D, E, F
Relevant
stakeholders
– Employees
– Customers
– Suppliers
– Investors
– Communities
Decision-
making
process
– As Stephen Hubbard was approaching
nine years’ tenure on the Board, the
Nominations Committee had for some
time been considering succession planning
– The Committee was conscious of the
significance of the Chair’s role in leading
the Group and the potential for the
decision to impact on all the Group’s
stakeholders
– Duncan Owen’s appointment as Non-
Executive Director in July 2021 formed
part of that succession planning, with the
role specification being created with a
view to identifying candidates who could
be suitable for the Chair role when it
became vacant
– The Board formally approved Duncan’s
appointment as Chair in February 2023,
on the recommendation of the
Nominations Committee
– Further information can be found on
page 146
Values
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CHAIR SUCCESSION
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
KEY BOARD DECISIONS IN 2022/23 CONTINUED
Our strong governance framework
and clear delineation of Board
roles enables the Chair and
Non-Executive Directors to provide
oversight and constructive challenge
as the Executive Committee
continues to deliver our strategy.
Carmelina Carfora
Company Secretary
QUICK LINKS
Board roles and responsibilities Page 130
Our governance framework Page 132
How we govern Page 133
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DIVISION OF RESPONSIBILITIES
Board roles and responsibilities
The roles and responsibilities of the Chair and
the Chief Executive Ocer are separate, with
a clear division of responsibilities between
them. The Chair is responsible for the
leadership of the Board, and the Chief Executive
Ocer manages and leads the business.
Our governance framework can be found
on page 132. In addition, the role specifications
described on the right set out the clear
division of responsibility between Executive
and Non-Executive members of the Board.
NON-EXECUTIVE
CHAIR:
STEPHEN HUBBARD
Leading the eective operation and
governance of the Board
– Setting agendas which support ecient
and balanced decision making
– Ensuring that the Board plays a full and
constructive part in the development of
the Group’s strategy and making sure that
there is sucient time for boardroom
discussion
– Ensuring eective Board relationships
and fostering a culture that supports
constructive debate
– Facilitating the eective contribution
of the Non-Executive Directors and
monitoring that all Directors receive
accurate, timely and clear information
– Overseeing the annual Board evaluation
and identifying key actions required
– With the Nominations Committee,
monitoring that the Board remains
appropriately balanced to deliver the
Group’s strategic objectives and ensuring
that the Nominations Committee meets
the requirements of good corporate
governance
– Promoting eective engagement with
the Group’s shareholders and other
key stakeholders
– Leading initiatives to assess the culture
across Workspace and ensuring that the
Board sets the correct tone
– Reviewing, with the Board, diversity and
inclusion initiatives
The Chair is not involved in an executive
capacity with any of the Group’s activities.
DESIGNATED NON-EXECUTIVE DIRECTOR FOR
EMPLOYEE ENGAGEMENT:
STEPHEN HUBBARD
– Representing the Board in discussions with
employees and communicating Board
decisions on specific matters
– Developing, implementing and feeding
back on employee engagement initiatives
in conjunction with management
– Communicating to employees the
outcomes and the developments made
by the Board on specific matters
SENIOR INDEPENDENT DIRECTOR:
ROSIE SHAPLAND
– Being available and providing an
alternative communication channel for
shareholders and other stakeholders, if
required, and being available to meet with
investors on request
– Providing a sounding board for the Chair
– If necessary, deputises for the Chair in his
absence and counsels all Board colleagues
– Acts as an intermediary for Non-Executive
Directors when necessary
– At least annually, leads a meeting of the
Non-Executive Directors without the
Chair present, to appraise the Chair’s
performance and to address any other
matters which the Directors might wish to
raise. The outcomes of these discussions
are then conveyed to the Chair
INDEPENDENT NON-EXECUTIVE DIRECTORS:
ROSIE SHAPLAND, LESLEY-ANN NASH,
DUNCAN OWEN, MANJU MALHOTRA
AND NICK MACKENZIE
– Constructively challenging and assisting
in the development of strategy
– Scrutinising, measuring and reviewing
the performance of the Executive
Directors and senior management against
agreed performance objectives
– Promoting the highest standards of
integrity and corporate governance
– Reviewing the succession plans for the
Board and key members of senior
management
– Determining appropriate levels of
remuneration for the senior executives
– Reviewing the integrity of financial
reporting and the systems of risk
management and financial controls
– Serving on or chairing various Committees
of the Board
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DIVISION OF RESPONSIBILITIES CONTINUED
EXECUTIVE
CHIEF EXECUTIVE OFFICER:
GRAHAM CLEMETT
– Proposing and directing the delivery of strategy as agreed
by the Board through leadership of the Group’s Executive
Committee
– Responsible for leading and managing the business and
accountable to the Board for the financial and operational
performance of the Group
– Leading the Group Executive Committee in the day-to-day
running of the Group’s business in order to execute
objectives successfully
– Regularly reviewing the Group’s organisational structure
and recommending changes as appropriate
– Setting overall policies for recruitment, management,
sta development and succession planning and providing
updates to the Remuneration Committee
– Overseeing employee initiatives, diversity and inclusion,
and employee wellbeing
– Together with the Chair and the CFO, representing the
Company to its customers, suppliers, shareholders and
other stakeholders
– Leading on the Group’s sustainability strategy and the
Group’s net zero carbon pathway
– Corporate communications and the IR strategy
CHIEF FINANCIAL OFFICER:
DAVE BENSON
– Supports the CEO in developing the strategic direction of
the Group and works closely with the CEO and the Board
to develop and implement the Group’s strategy
– Provides financial leadership to the Group and aligns the
Group’s business and financial strategy and management
of the Company’s capital structure
– Responsible for financial planning and analysis, treasury
and tax
– Leads and monitors the eectiveness of the key finance
functions and facilitates the appropriate development
of the finance team
– Responsible for the IT function and co-ordinates and
delivers IT projects to support the growth and strategic
priorities of the Group
COMPANY SECRETARY:
CARMELINA CARFORA
– Secretary to the Board and to the Board’s Committees
– Responsible for ensuring compliance with Board
procedures and for supporting the Chair
– Advising and keeping the Board updated on corporate
governance developments
– Ensuring that the Board has high-quality information,
adequate time and the appropriate resources
– Considering the Board’s eectiveness in conjunction with
the Chair
– Facilitating the Directors’ induction programmes and
assisting with their professional development
– Providing advice, services and support to all Directors
as and when required
– Responsible for organising the Annual General Meeting
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DIVISION OF RESPONSIBILITIES CONTINUED
BOARD ROLES AND RESPONSIBILITIES CONTINUED
The Board delegates certain matters to its four principal committees.
SUPPORTING COMMITTEES
The Executive Committee operates a number of supporting committees that provide oversight on key business activities and risk.
BOARD OF DIRECTORS
The role of the Board is to promote the long-term success of Workspace by setting a clear purpose and the Group’s strategy
for delivering the long-term value to our shareholders and other stakeholders.
NOMINATIONS COMMITTEE
Chaired by Stephen Hubbard
AUDIT COMMITTEE
Chaired by Rosie Shapland
REMUNERATION COMMITTEE
Chaired by Lesley-Ann Nash
ESG COMMITTEE
Chaired by Duncan Owen
EXECUTIVE COMMITTEE
The Executive Committee is responsible for the execution
of the Company’s strategy and the day-to-day management
of the business.
DISCLOSURE COMMITTEE
Identifies and controls inside information or information which
could become inside information and determines how and when
that information is disclosed in accordance with applicable legal
and regulatory requirements.
Our governance framework
Our governance framework supports the
development of good governance practices
across the Group. The Board has overall
responsibility for governance within the Group.
The Board delegates certain of its
responsibilities to its Nominations,
Remuneration, Audit and ESG Committees.
Further details of the work, composition, role
and responsibilities of these Committees are
provided in separate reports on pages 141, 159,
172 and 178. Each of the Committees has terms
of reference which were reviewed by the
Committees and the Board during the year.
The performance of each of the Committees
is assessed annually as part of the evaluation
process described later in this report.
The Board delegates all operational matters
to the Executive Committee, except for
matters specifically reserved to the Board.
The schedule of matters reserved for the
Board is reviewed at least once a year and
can be accessed on the Company website at
www.workspace.co.uk/investors/about-us/
governance/committee-terms-of-reference.
Further information on the matters reserved
and the relationship between the Board
and the Executive Committee can be found
on page 135.
The terms of reference of each Board
Committee are available on the Company’s
website at www.workspace.co.uk/investors/
about-us/governance/committee-terms-of-
reference.
Membership
6
Independent
Non-Executive
Directors
Key responsibilities:
– Reviews succession plans for
the Board and its Committees
and considers its structure, size,
composition and diversity
– Supports the development of
an inclusive and diverse talent
pipeline, and reviews supporting
initiatives to increase diversity
– Monitors that the Board has the
appropriate knowledge, skills and
experience to operate eectively
and deliver our strategy
– Recommends to the Board the
appointment of a Non-
Executive Director for employee
engagement
Nominations Committee
Pages 141 to 158
Membership
3
Independent
Non-Executive
Directors
Key responsibilities:
– Oversees the Group’s financial
reporting
– Maintains and manages the
relationship with the External
Auditor, including monitoring
their performance and
reappointment
– Reviews and monitors
management of risks other than
those related to real estate,
development and valuation
Audit Committee
Pages 159 to 171
Membership
3
Independent
Non-Executive
Directors
Key responsibilities:
– Determines the Remuneration
Policy for Executive Board
Directors and considers
whether there is a clear link
between performance and
remuneration
– Considers senior management
remuneration presented by the
CEO
– Reviews workforce remuneration
and related policies
– Reviews remuneration policies
and practices to ensure they
support clarity, simplicity,
transparency and alignment
with culture
Remuneration Committee
Pages 178 to 211
Membership
8
Directors
Key responsibilities:
– Oversees the Group’s ESG
strategy
– Monitors ESG risk and
opportunities
– Sets ESG objectives and
monitors progress against
the objectives
– Ensures reporting of ESG
issues is in line with market
best practice
ESG Committee
Pages 172 to 177
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DIVISION OF RESPONSIBILITIES CONTINUED
How we govern
Non-Executive Directors Page 133
Re-election and election
of Directors
Page 134
Relationship between the
Board and the Executive
Committee
Page 135
Composition of the Executive
Committee
Page 136
Information flow to the Board Page 139
NON-EXECUTIVE DIRECTORS
The Non-Executive Directors have a broad mix
of business skills, knowledge and experience
acquired across dierent business sectors.
This combination enables them to provide
independent and external perspectives to
Board discussions.
The Non-Executive Directors provide
constructive challenge to the Executives. The
Non-Executive Directors also help to develop
proposals on strategy and they monitor
performance.
Independence of Non-Executive Directors
During the year, the Board considered the
independence of all of the Non-Executive
Directors, save for the Chair who was deemed
independent by the Board at the date of his
appointment. The Board has reconfirmed
that the Non-Executive Directors remain
independent from executive management and
that the Non-Executive Directors are free from
any business or other relationship which could
materially interfere with the exercise of their
independent judgement. This independence
is protected by a number of mechanisms
including:
– Meetings between the Chair and the
Non-Executive Directors, individually and
collectively, without the Executive Directors
being present. These meetings are typically
held before each Board meeting and they
are used to discuss areas relevant to the
operation of the Board and the Group in
a more private setting. This year, seven
of these meetings were held
– Separate and clearly defined roles for the
Chair, as head of the Board, and the Chief
Executive Ocer, as head of executive
management, as set out on pages 130 to 131
The Nominations Committee oversees the
independence of the individual Non-Executive
Directors all of whom are deemed to be
independent in line with the recommendations
of the Code. Further details of this supporting
evaluation can be found on page 148.
Time commitment and external appointments
The expected time commitment of the Chair
and the Non-Executive Directors is agreed
and set out in writing in the letter of
appointment to the position, at which time the
existing external demands on an individual’s
time are assessed to confirm that individual’s
capacity to take on the role. Further
appointments which could impair the ability
to meet these arrangements can only be
accepted following approval of the Board.
When assessing additional directorships,
the Board considers the number of public
directorships held by the individual already
and their expected time commitment for those
roles (see biographies on pages 115 to 116).
The Board considers guidance published
by institutional investors and proxy advisers
as to the maximum number of public
appointments which can be managed both
eectively and eciently.
Executive Directors may accept a non-
executive role at another company with the
approval of the Board. Graham Clemett is the
Senior Independent Non-Executive Director at
The Restaurant Group PLC.
The Board is satisfied that each of the
Non-Executive Directors can devote sucient
time to the Company’s business to discharge
their responsibilities eectively. The Non-
Executive Directors oer strategic guidance
to Board discussions and they provide
independent decisions to their respective
Board succession
Pages 146 to 147
Board skills and experience
The biographies of all of the members of
the Board, outlining their experience, can
be found on pages 115 to 116
100%
NON-EXECUTIVE DIRECTOR
INDEPENDENCE
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DIVISION OF RESPONSIBILITIES CONTINUED
Board and Committee duties (see the table
on page 113 for Board meeting attendance).
The biographies of all of the members of the
Board, outlining their experience and external
appointments, can be found on pages 115 to 116.
Stephen Hubbard
As in previous years, the independence of
Stephen Hubbard was specifically considered
during the year. Stephen was previously Chair
of CBRE UK, who are the Group’s external
independent valuers. Stephen retired from
CBRE UK in December 2019.
Furthermore, while he remained as Chair
of CBRE UK, he had no involvement in any
discussions or decisions regarding the
appointment of CBRE or the fees paid to them.
The appointment of CBRE is by the Directors
of the Company, acting through the
Executives, and any communication with
CBRE is entirely with them.
The Board is satisfied and it continues to
conclude that Stephen remains independent
both in character and in judgement, including
in relation to his responsibilities as Chair of
the Company.
In July 2020, Stephen stepped down from
the Audit Committee on his appointment
as Chair of the Company.
NON-EXECUTIVE DIRECTORS CONTINUED RE-ELECTION OF DIRECTORS
In accordance with the Code, all of the
Directors will submit themselves for re-election
at the AGM on 6 July 2023, except for
Stephen Hubbard who will be stepping down
from the Board and as Chair and who will not
seek re-election. Following the Board
evaluation review, detailed on page 155, and
taking into account the Directors’ skills and
experience (set out on pages 115 to 116), the
Board believes that the re-election of the
Directors is in the best interests of the
Company. The Nominations Committee of
the Group has considered their commitments
and it has concluded that the Non-Executive
Directors have sucient time to meet their
Board responsibilities.
The explanatory notes in the Notice of Meeting
for the AGM state the reasons why the Board
believes that the Directors proposed for
re-election at the AGM should be reappointed.
Duncan Owen was appointed as Chair of
the newly formed ESG Board Committee
in April 2022.
Mr Clemett and Mr Benson each have service
contracts, details of which can be found on
page 209.
None of the Non-Executive Directors have
service contracts. Rather, the Non-Executive
Directors are given letters of appointment.
The appointments of Rosie Shapland, Lesley-
Ann Nash, Duncan Owen, Manju Malhotra and
Nick Mackenzie may be terminated by either
the Company, or any one of them, giving three
months’ notice in writing. The appointment of
Stephen Hubbard may be terminated by either
him or the Group giving six months’ notice
in writing. With eect from his appointment
as Chair, which will take eect at the close
of the Company’s AGM on 6 July 2023, the
appointment of Duncan Owen may be
terminated by either him or the Group giving
six months’ notice in writing.
The terms and conditions of appointment
of Non-Executive Directors, including the
expected time commitment, are available for
inspection at the Company’s registered oce.
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DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
BOARD OF DIRECTORS
THE EXECUTIVE COMMITTEE
The relationship between the
Board and the Executive
Committee
The Board considers there to be an
appropriate balance between Executive and
Non-Executive Directors required to lead the
business and safeguard the interests of
shareholders.
As at 31 March 2023, the Board comprised the
Chair, five Non-Executive Directors (all of
whom are independent) and two Executive
Directors. This composition meets the
requirement of the Code for at least half the
Board, excluding the Chair, to be independent
Non-Executive Directors.
The Board delegates all operational matters
to the Executive Committee except for the
matters reserved to the Board.
Executive Committee – managing the
business
The Executive Committee, which is chaired
by Graham Clemett, supports the Board
by providing executive management of
Workspace within the strategy approved
by the Board.
The Executive Committee is accountable to
the Board for implementation of the agreed
strategy. The Executive Committee monitors
customer and market trends, assesses the
implications and benefits of asset
management initiatives and oversees the
eectiveness of the governance framework.
The Executive Committee is responsible for managing the business,
making day-to-day operational decisions and delivering the strategy
set by the Board.
Our strategy
Pages 32 to 35
The Board is responsible for contemplating market trends and their
impact on our strategy, assessing appropriate levels of risk and setting
the objectives for the business, including the approach to ESG
matters. The Board delegates the delivery of the strategy to the
Executive Committee.
Key responsibilities:
Develop the Group strategy and budget for approval by the Board
Receive regular feedback from centre sta and take responsibility
for implementing suggestions for improvements
Collectively responsible for the day-to-day running of the business
Analyse and review initiatives of particular interest to the Group
and present these to the Board as appropriate
Monitor operational and financial results against plans and budgets
Review and approve capital expenditure within the authorities
delegated by the Board
Develop leadership skills and the future talent of the business so
that strong succession plans are in place as the Group develops
Receive updates on the Company’s sustainability strategy
Consider regulatory developments
Focus on the eectiveness of risk management and control
procedures
Driving customer-led growth
Delivering operational excellence
Being sustainable
Key responsibilities:
– review and approval of the Group’s strategy, business objectives
and annual budgets
– approval of the Group’s dividend policy and the payment and
recommendation of interim and final dividends
– approval of full-year and half-year results, including the review
and approval of the going concern basis of accounting and the
viability assessment
– health and safety performance across the Group
– on the advice of the Nominations Committee, reviewing succession
plans for the Board and the senior management team
– review and approval of corporate transactions
– setting the Group’s purpose, values and standards
– approval of decisions likely to have a material impact on the
Company or Group from any perspective, including, but not limited
to, financial, operational, strategic or reputational
– setting the risk appetite and tolerance of the Group
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DIVISION OF RESPONSIBILITIES CONTINUED
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The Board comprises eight people: the
Chair, five Non-Executive Directors and
two Executive Directors
8
1
64
2
75
3
8
Composition of the Executive Committee
The Executive Committee is collectively
responsible for day-to-day operations and
performance and successful implementation
of the Company’s strategy.
Graham Clemett
Chief Executive Ocer
Graham Clemett
Chief Executive Ocer
Paul Hewlett
Director of Strategy & Corporate
Development
Will Abbott
Chief Customer Ocer
Dave Benson
Chief Financial Ocer
Leo Shapland
Head of Portfolio Management
Claire Dracup
Director of People & Culture
Carmelina Carfora
Company Secretary
Richard Swayne
Investment Director
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DIVISION OF RESPONSIBILITIES CONTINUED
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EXECUTIVE DIRECTOR
GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
1
EXECUTIVE DIRECTOR
DAVE BENSON
CHIEF FINANCIAL OFFICER
2
CARMELINA
CARFORA
COMPANY SECRETARY
3
For full details of Graham’s,
Dave’s and Carmelina’s
responsibilities and
experience, go to pages
115 to 117.
WILL ABBOTT
CHIEF CUSTOMER OFFICER
4
Specific responsibilities:
Marketing, brand
development and customer
engagement.
Background and
relevant experience:
Will joined Workspace
in 2020, having spent over
20 years in marketing roles
across a diverse range of
businesses. After beginning
his career in advertising,
Will worked in digital media,
FMCG, financial services
and travel sectors. Prior
to Workspace, Will was
Marketing Director at Hiscox
during a significant period
of growth for the insurer,
and more recently was Chief
Marketing Ocer of Neilson
Active Holidays.
CLAIRE DRACUP
DIRECTOR OF PEOPLE
& CULTURE
5
Specific responsibilities:
HR; training and sta
development; management
of the head oce, personal
assistants and admin teams;
internal culture; business
centre support including
management of the relief
team; health and safety;
monitoring of customer
service; Chair of the Social
Sustainability Committee
and responsible for delivery
of all social sustainability
initiatives.
Background and
relevant experience:
Claire joined Workspace
in 1995, initially as a Centre
Manager before progressing
to Portfolio Manager. In
2008, Claire became Head
of Support Services and she
was responsible for facilities
management, security,
health and safety and
business centre support,
which included recruitment,
training and improvements to
service and quality control.
PAUL HEWLETT
DIRECTOR OF STRATEGY &
CORPORATE DEVELOPMENT
6
Specific responsibilities:
Corporate strategic
initiative development and
execution; investor relations
strategy.
Background and
relevant experience:
Paul joined Workspace
as Director of Strategy &
Corporate Development in
2021. He was previously
Executive Director of the
UK investment Banking Real
Estate team at J.P. Morgan
Cazenove. Paul has over 20
years of Corporate Finance
advisory and Corporate
Broking experience,
advising companies across
the real estate sector on
corporate strategy and a
wide variety of transactions,
most notably focused on
Mergers & Acquisitions and
Equity Capital Markets.
LEO SHAPLAND
HEAD OF PORTFOLIO
MANAGEMENT
7
Specific responsibilities:
Asset management,
development and
operational performance
of the portfolio including
lettings, lease renewals,
property management,
management of the centre
and facilities team and
ESG matters.
Background and
relevant experience:
Leo joined Workspace
in March 2022 from Aviva
Investors, where he was
Head of UK Real Estate
Asset Management,
responsible for the strategy
and financial performance
of a large, diversified
national property portfolio.
Prior to that, Leo spent ten
years at Tishman Speyer,
holding a number of roles
in investment, development
and asset management in
the firm’s London, San
Francisco and Seattle oces.
RICHARD SWAYNE
INVESTMENT DIRECTOR
8
Specific responsibilities:
Investment strategy,
acquisitions and disposals,
and valuations.
Background and
relevant experience:
Richard joined Workspace
in November 2014 as an
Investment Manager. He
was promoted to Head of
Investment in October 2017
and to Investment Director
in April 2020. Prior to
joining Workspace, Richard
qualified as a chartered
surveyor and he worked
for Cushman & Wakefield
Investors and LFF Real
Estate Partners.
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HOW WE GOVERN CONTINUED
GENDER DIVERSITY OF EXECUTIVE COMMITTEE
1
AND DIRECT REPORTS
AS AT 31 MARCH 2023
Female
10
Male
15
ETHNIC DIVERSITY OF EXECUTIVE COMMITTEE
2
AND DIRECT REPORTS
AS AT 31 MARCH 2023
Asian/Asian British – Indian
2
Black/African/Caribbean/Black British – Other
1
White – Other
1
White – English/Welsh/Scottish/Northern Irish/British
21
THE RIGHT SKILLS AND EXPERIENCE TO DRIVE LONG-TERM SUCCESS
THE RIGHT BALANCE TO DRIVE LONG-TERM SUCCESS
Executive and
Leadership
Property and
Real Estate Financial
Corporate
Governance
Customer and
Marketing People ESG
Executive Directors
Graham Clemett
Dave Benson
Executive Committee members
Carmelina Carfora
Will Abbott
Claire Dracup
Paul Hewlett
Leo Shapland
Richard Swayne
1. We consider the Executive Committee to be ‘senior
management’ as defined by the UK Corporate
Governance Code 2018.
2. We consider the Executive Committee to be ‘senior
management’ as defined by the UK Corporate
Governance Code 2018.
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DIVISION OF RESPONSIBILITIES CONTINUED
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SCHEDULED BOARD INPUTS 2022/2023
One-to-one meetings
One-to-one meetings are
held between new Directors
and senior management
as part of the induction
process. The CEO and the
CFO meet with senior
management individually
to discuss operations and
performance, after which,
the CEO and/or the CFO
will report back to the
Board on matters that
require discussion.
Board presentations
Employees below Board
level are invited to present
to the Board on operational
topics. During the year, our
Director of Strategy &
Corporate Development
gave several Board updates
on our integration of McKay
and our Head of Portfolio
Management updated the
Board on the key
development projects being
undertaken by the Group.
There were also updates
from our Head of
Sustainability and Chief
Customer Ocer.
Employee engagement
The Chair held several
meetings with sta as part
of his role as Non-Executive
Director responsible for
employee engagement and
our annual employee survey
also collected feedback
from sta during the year.
Further details on these
and the Group’s other
employee engagement
initiatives during the year
can be found on pages 21,
122 and 139.
Feedback from these
initiatives was then
presented to the Board.
7
Board meetings in 2022/23
AD HOC BOARD INPUTS IN 2022/23
Presentations
from brokers
External speaker on
broader market trends
Updates from
legal advisers
Information flow to the Board
2
BREAKFAST SESSIONS HELD
Q: How do you ensure the employee voice
is heard in the boardroom?
This is my third year as the designated
Non-Executive Director for employee
engagement and our breakfast sessions this
year, were each attended by an eclectic mix
of centre and head oce sta. These sessions
provide a vital link between our employees
and the Board and have proved a great
opportunity to hear feedback directly from
employees and get an insight into our culture.
I’ve really enjoyed seeing Workspace’s
dynamic culture and values in action. Following
the breakfast sessions, I report to the Board
on the discussions held and the key themes
raised. As a Board we also receive regular
updates on our sta and their feedback from
the Executive Committee, including the results
of our annual sta survey.
Q: What were the key themes raised this year?
It was great to gain insight on our day-to-day
operations and the many ideas and areas for
improvement shared by our sta. The issues
raised ranged from how to continue to improve
customer experience, communications and
the impact of energy prices on our customers.
I was pleased to hear overwhelming positive
feedback on our initiatives to promote our
culture and collaboration across the business,
including our inaugural employee shadowing
days, town hall events and training facilities.
See page 21 for further details.
Q: What does the Board want to focus on
in the next year?
We plan to continue building on the Group’s
open and transparent culture, and focus on
how we can support our sta in their roles at
the Group. We are also continuing our focus
on diversity and inclusion, with a number
of new initiatives planned to further our
commitment in this area. I look forward to
hearing feedback from sta on those new
initiatives.
Q&A
Stephen Hubbard
Non-Executive Director for employee
engagement
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DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
The Directors are expected to attend all
meetings of the Board, the Committees on
which they serve and the AGM, and to devote
sucient time to the Group’s aairs, to enable
them to fulfil their duties as Directors.
Should the Directors be unable to attend
meetings, they would be provided with papers
to allow them to make their views known to
the Chair ahead of that meeting.
Prior to each Board meeting, and periodically,
the Chair meets the Non-Executive Directors
without the Executive Directors present,
and maintains regular contact with the CEO,
CFO and with other members of the
management team.
If any Director has concerns about the running
of the Group or proposed action which cannot
be resolved, these concerns are recorded in
the Board minutes. No such concerns arose
during the year under review.
Training and development
With the ever-changing environment in which
Workspace operates, it is important that the
Board maintains a good working knowledge
of the property industry and how the Group
operates within its sector, as well as remaining
aware of recent and upcoming developments
in the wider legal and regulatory environment.
Directors attend external seminars and
briefings in areas considered appropriate
for their own professional development. This
training is designed to build upon the diverse
range of experience that each Director brings
to the Board. The Company Secretary
provides regular updates on legal, regulatory
and corporate governance matters. As
required, Workspace invites external
professional advisers to provide training and
updates on their specialist areas. Updates
and training are not solely reserved for
legislative developments but they aim to
cover a range of issues including, but not
limited to, market trends, the economic and
political environment, ESG, technology and
social considerations.
The Directors are invited to identify areas in
which they would like additional information
or training, following which the Company
Secretary will arrange for the necessary
resources to be put in place. The resulting
sessions may be internally or externally
facilitated.
This year, the Directors have received updates
and presentations on the following areas:
– Governance and regulatory developments
– ESG commitments and net zero carbon
pathway
– Data protection compliance
– Executive remuneration trends and best
practice, including ESG in remuneration
– Inclusion and diversity
– Conflicts of interest
– Market updates
Information and support to the Board
The Board and its Committees are provided
with comprehensive papers in a timely
manner to enable members to be fully briefed
on matters to be discussed at their meetings.
In consultation with the Chair, the CEO and
CFO, the Company Secretary manages the
provision of information to the Board for
their formal Board meetings and at other
appropriate times.
The CEO and CFO keep the Board appraised
of business matters relating to the Group on
a timely basis. They provide various updates
to the Board on many aspects of the
business, ranging from trading performance,
progress being made on our refurbishment
and redevelopment projects, the rationale for
acquisitions and disposals and how these are
aligned to strategy. The CEO and CFO also
inform the Board on the discussions held with
analysts, investors and other stakeholders.
The Chair of each Committee separately
engages with Executive Committee members
and other sta relevant to their roles, as well
as meeting with relevant external advisers.
The Company Secretary and external advisers
periodically update the Board on regulatory
changes. This year, these have included the
introduction of the Register of Overseas
Entities, recent FCA enforcement decisions
and updates in corporate governance
guidance.
The Board utilises an electronic Board paper
system which provides immediate and secure
access to Board papers and materials. Prior
to each Board meeting, the Directors receive
the agenda and supporting papers through
this system meaning that they have the latest
and the most relevant information in advance
of the meeting.
After each Board meeting, the Company
Secretary operates a comprehensive follow-
up procedure to enable actions to be
completed as agreed by the Board.
The Directors have access to the advice of
the Company Secretary, Carmelina Carfora.
Her biography can be found on page 117.
At the direction of the Chair, Carmelina is
responsible for advising the Board on matters
of corporate governance and compliance with
Board procedures.
How the Board discharges its responsibilities
The Board discharges its responsibilities
through an annual programme of Board and
Committee meetings which are scheduled
throughout the year, with main meetings
timed around the Group’s financial calendar.
Additional meetings are convened to consider
an annual cycle of topics, including the annual
strategy day, key management and financial
updates, review of risk as well as the approval
of acquisitions and refurbishment
programmes. In the year ended 31 March
2023, the Board met formally on seven
occasions, including a strategy day in
September 2022. Supplementary meetings
or conference calls are held between formal
Board meetings as required.
The Board engaged with the Group’s advisers
during the year and there was a presentation
from the Group’s brokers and PR advisers in
September 2022. The Group’s valuer, CBRE,
presented to the Board in May 2022 and
November 2022. The CBRE presentation
covered the valuation of the property
portfolio and the wider market in which the
Group operates. Knight Frank, the Group’s
former valuer for the McKay portfolio of
properties, presented to the Board in
November 2022.
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HOW WE GOVERN CONTINUED
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The Nominations Committee is
responsible for monitoring that
the Board, its Committees and
Workspace’s senior management
have a good balance of skills and
experience, to lead Workspace
eectively both now and in the
longer term.
Stephen Hubbard
Chair of the Nominations Committee
QUICK LINKS
Membership and attendance
at Nominations Committee meetings
Page 142
Chair’s letter Page 143
The role of the Nominations Committee Page 145
COMPOSITION, SUCCESSION AND EVALUATION
The Committee comprises the Non-Executive Directors and is chaired by Stephen Hubbard.
Details of individual attendance at the meetings held during the year are set out below.
More information on the skills and experience of all Committee members can be found
on pages 115 to 116.
Member
since
Meetings
attended
Stephen Hubbard (Chair) 2014 3/3
Rosie Shapland 2020 3/3
Lesley-Ann Nash 2021 3/3
Duncan Owen
2
2021 2/3
Manju Malhotra 2022 3/3
Nick Mackenzie 2022 3/3
Damon Russell
1
2013 1/1
1. Damon Russell retired from the Board on 21 July 2022.
2. Duncan Owen did not attend the January Nominations Committee.
Board Composition
Considered the composition of the Board to ensure that the Board has the right balance
of skills, knowledge, experience, diversity and attributes required of existing and any future
Non-Executive Directors.
Chair Succession
Rosie Shapland, Senior Independent Director, led the appointment process for a successor
to Stephen Hubbard, who will be stepping down from the Board in July 2023.
Membership of the Board Committees
Implemented new Board Committee structure. An ESG Board Committee was established
to provide a higher level of focus and visibility on sustainability at Board level and involved
all members.
Board Eectiveness Review
Oversaw the annual Board eectiveness review, which tracked the development of key
aspects of governance and provided the opportunity for the Board to consider in depth
its contribution to strategy and horizon scanning.
Diversity and Inclusion Policy
Reviewed the Diversity and Inclusion Policy and considered the progress against Board
diversity and inclusion principles.
MEMBERSHIP AND ATTENDANCE AT NOMINATIONS COMMITTEE MEETINGS KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEAR
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
Dear shareholder,
On behalf of the Board, I am pleased to present
the report of the Nominations Committee.
This year, a key focus for the Committee
was to identify my successor as Chair.
On 28 February 2023 we were pleased to
announce the appointment of Duncan Owen
as my successor. More information on the
appointment process is highlighted in Rosie
Shapland’s letter, which can be found on
page 144. Rosie, as Senior Independent
Non-Executive Director led the Chair
recruitment process. Duncan will assume
the role following the conclusion of the
AGM on 6 July 2023.
I am delighted the Board has identified an
excellent successor. Duncan, who joined the
Board in 2021, has over 30 years’ experience
in the real estate sector. He has served as the
CEO of both public and private companies
and his roles have included the Global Head
of Real Estate at Schroders plc, and the CEO
of Immobel Capital Partners, a pan-European
specialist ‘Green’ real estate investor in the
oce and residential sectors. Until recently,
Duncan was on the Board of Governors for
the Church Commissioners and chaired its
Property Investment Committee.
Nominations Committee
Chair’s letter
The Committee plays a key role in supporting
the Board within the Governance Framework
in reviewing the composition of the Board
and its Committees. During the year, the
Committee oversaw the evaluation of the
Board as well as progress on the
implementation of recommendations from
previous evaluations. This includes assessing
whether the balance of skills, diversity,
experience, knowledge and independence
on the Board is appropriate to enable it to
operate eectively. Read more on page 155.
The Board remains focused on promoting
broader diversity and creating an inclusive
culture. See pages 148 to 154 for details on
the Board’s activities on diversity this year.
Looking forward, the Nominations Committee
will continue to develop and monitor
succession plans both at Board and senior
management level.
Please read on for more information about
the work of the Committee.
Stephen Hubbard
Chair of the Nominations Committee
6 June 2023
The Nominations Committee has
continued to play a key role in
supporting Workspace’s long-
term sustainable success and
monitoring the tenure of Non-
Executive Directors to eectively
manage succession planning
Stephen Hubbard
Chair of the Nominations Committee
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
GENDER DIVERSITY OF THE BOARD
1 APRIL 2020 – 31 MARCH 2023
2020 2023
2020 2023
Men (including those self
identifying as men)
67.0% 62.5%
Women (including those self
identifying as women)
33.0% 37.5%
Representation of women (including self identifying as
women) on the Board has increased 4.5% since April 2020.
ETHNIC DIVERSITY OF THE BOARD
1 APRIL 2020 – 31 MARCH 2023
2020 2023
2020 2023
White British or other White
(including minority-white groups)
100% 75%
Asian/Asian British
0 12.5%
Black/African/Caribbean/
Black British
0 12.5%
+25%
BOARD ETHNIC DIVERSITY
SINCE APRIL 2020
Rosie Shapland
Senior Independent Non-Executive Director
While the Board will miss
Stephen’s guidance, I am
delighted that Duncan is
taking over the role of Chair
of the Company
Chair succession
Page 146
Duncan Owen’s biography
Page 116
Stephen Hubbard was appointed to the
Board in July 2014 and has held the role
of Chair since 9 July 2020. Consequently,
Stephen will have served on the Board for
nine years in July 2023, the maximum time
that the UK Corporate Governance Code
2018 recommends that the Chair should
remain in post from the date of their initial
appointment.
Given Stephen’s tenure and the likelihood
that he would step down from the Board
at the end of nine years, the Nominations
Committee had for some time been
considering succession planning for the
Chair. Duncan Owen was appointed as a
Non-Executive Director of the Company in
July 2021, with his appointment forming part
of the Company’s long-term succession
planning. A thorough search was conducted
by the Company’s Board-level external search
agency, Fidelio, identifying a number of
diverse and suitable candidates and through
a robust process, coming to the successful
selection and appointment of Duncan Owen.
As part of that process, a candidate brief
had been prepared which specified the
experience that the Company was looking for,
including deep property knowledge, long-
term expertise in asset management and
utilisation, understanding of capital markets
and investor communications. Although this
recruitment process was primarily for a
Non-Executive Director role, the specifics
of the brief were designed in part because
the Nominations Committee was conscious
that Stephen’s nine-year maximum tenure
on the Board would be reached in 2023,
and consequently the Committee was keen
to identify candidates who could potentially
be suitable for the Chair role when it
became vacant.
The Nominations Committee considered
carefully who would be an appropriate
successor to Mr Hubbard and concluded that
Mr Owen has the appropriate knowledge,
experience and time available to undertake
the role of Chair. Mr Owen will be appointed
Non-Executive Chair of the Company at the
conclusion of the Company’s 2023 Annual
General Meeting.
On behalf of the Board, I would like to take
the opportunity to thank Stephen for his
support and guidance since joining the Board
and for his excellent chairship over the past
three years. He has played a key role in the
growth of the Company and was especially
instrumental in helping us successfully navigate
the challenges during the pandemic and in
refreshing the composition of the Board.
Stephen leaves the business with our very
best wishes.
Rosie Shapland
Senior Independent Non-Executive Director
6 June 2023
BOARD DEVELOPMENT SINCE 2020
LETTER FROM THE SENIOR INDEPENDENT DIRECTOR
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
Key activities
Pages 146 to 158
Board succession
Page 147
The role of the Nominations Committee
How the Committee operates
The Committee held three meetings,
primarily to progress the appointment
of our new Chair.
– The meetings are usually held immediately
prior to or following a Board meeting,
although the Committee also meets
on other occasions on an ad hoc basis,
as required
– Only members of the Committee have
the right to attend meetings. However, an
invitation to attend meetings is, on occasion,
extended to the Chief Executive Ocer, in
order that the Committee can understand
his views, particularly on key talent within
the business
– All Directors can, for the purpose of
discharging their duties, obtain independent
professional advice at the Company’s
expense. No Director had reason to use
this facility during the year
Nominations Committee responsibilities
The Nominations Committee considers the
structure, size and composition of the Board,
its Committees and members of the
Executive Committee. The Nominations
Committee also receives oversight from the
Chief Executive Ocer on the Company’s
leadership roles, which include the Executive
Committee members and their direct reports.
The Committee’s responsibilities include:
– Leading the process for new Board
appointments and reviewing succession
for Directors and senior management
– Regularly reviewing the structure, size and
composition of the Board and its Committees
– Facilitating an eectiveness review of the
Board, its Committees and Directors
– Reviewing the time commitment expected
from the Chair and Non-Executive Directors
– Recommending the election and re-
election by shareholders of the Directors,
having due regard to their performance
and ability to continue to contribute to the
Board, taking into consideration the skill,
experience and knowledge required along
with the need for progressive refreshing
of the Board
The Nominations Committee is responsible
for monitoring that the Board, its Committees
and Workspace’s senior management have a
good balance of skills, knowledge, alignment
to the needs of the business and experience,
to lead Workspace eectively both now and
in the long term.
This is achieved through succession planning
and talent development, and an understanding
of the changing competencies required to
support the Group’s strategy, purpose, vision,
culture and values. The way in which this is
supported through the current Board
composition is set out on page 148.
The Committee also plays a key role
in supporting inclusion and diversity at
Workspace, which at Board level involves
reviewing and monitoring processes and
initiatives in the Group, with employee
engagement playing an important role.
The Committee is responsible for
recommending candidates for the role of Non-
Executive Director responsible for employee
engagement. The Committee also oversees the
development of Board members who are keen
to expand their competency and knowledge.
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
Nominations Committee
activities in 2022/23
1. Chair succession Page 146
2. Board Succession Planning Page 147
3. Performance of the
Nominations Committee
Page 147
4. Board composition Page 148
5. Diversity & inclusion Page 148
6. Board evaluation Page 155
CHAIR SUCCESSION
During the year, the Committee continued
to fulfil its core responsibilities of reviewing
the structure of the Board and its Committees.
A key focus of the Committee has been to
identify a successor to Stephen Hubbard, who
will have completed nine years on the Board
in July 2023. The Committee determined that
Duncan Owen should succeed Stephen.
Duncan was appointed as a Non-Executive
Director of the Company in July 2021, with his
appointment forming part of the Company’s
long-term succession planning. On his
appointment in 2021, Duncan underwent
a formal appointment and induction process.
At that time, a thorough recruitment and
selection process had been undertaken,
assisted by the Company’s Board-level
external search agency Fidelio Partners
Board Development & Executive Search Ltd
(‘Fidelio’). Fidelio is an external and
independent board consultancy which
specialises in building board capability and
is recognised for its commitment to ESG,
diversity and inclusion. Fidelio has been
accredited for the sixth year in succession by
the FTSE Women Leaders Review (formerly
the Hampton-Alexander Review) for their
contribution towards achieving greater
gender balance including for FTSE 350
boards and leadership teams. Fidelio also
supports the work of the Parker Review.
Fidelio’s commitment to identifying the most
qualified and inclusive candidates for roles has
resulted in strong and diverse shortlists for
each of the Board appointments Workspace
made over the last three years.
Fidelio has also supported with regard
to Board eectiveness but has no other
connection with the Company or the
individual Directors.
Key considerations for the search process
conducted in 2021 which resulted in the
appointment of Duncan Owen.
The Nominations Committee discussed the
skills and experience required for new
members joining the Board. It was concluded
that the successful candidate would bring the
following attributes:
– Deep property expertise and familiarity
with tenant and occupier trends.
– An understanding of the investment markets.
– Strong operational focus and ability to
contribute to Workspace’s ambition to
develop its customer-centric business model.
– The ability to draw on long-term, relevant
experience of driving value for the customer.
– An ability to constructively challenge and
support the management team and the
Board while maintaining a highly
collaborative approach and collegiate style.
– Familiarity with the requirements of being
a Board member of a listed company.
– A keen awareness of stakeholder interests
and a strong interest in ESG and how it is
shaping the work of the Board and the
impacts on the business.
– A good understanding of the parameters of
being a Non-Executive Director and possess
a strong capability to add value to the role.
– Understand the importance of diversity and
inclusion agendas and the value this brings
to an organisation.
– Excellent judgement, able to lead logical
and evidence-based discussions.
In addition, there was a clear expectation that
candidates would be able to devote sucient
time to the role.
Our extensive search and selection process
Fidelio were engaged to conduct the selection
process. They were asked to draw up a
detailed role specification. This was reviewed
with the Chair who then engaged with the
Nominations Committee. Final role specification
was then approved.
In follow-up discussions held between the
Chair and the Committee, they reflected upon
the experience of the candidates and their
specific skill sets. The Nominations Committee
considered that given Duncan’s experience
and the roles he was performing at that time,
he would bring a fresh and complementary
perspective to an existing Board of Directors,
who already bring valuable knowledge,
expertise and diversity from roles in property,
finance and government.
Further details of the recruitment process for
Duncan Owen can be found on pages 131 to
132 of the 2022 Annual Report.
Recommendation
In February 2023, after taking all of the above
into consideration, the Nominations Committee
concluded that it should recommend to the
Board that Duncan be appointed to the role
of Chair. The Board formally approved the
appointment in February 2023.
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
1
BOARD SUCCESSION PLANNING
Board succession
The Committee regularly reviews the
composition of the Board to ensure it continues
to have the appropriate balance of skills to
support the Company in achieving its strategy.
When considering any future appointments
the Committee will continue to make decisions
in consideration of our Board diversity
principles, detailed on page 154.
Following refreshment of the Board in the
last three years, with five new Non-Executive
Directors joining the Board during that time,
this year the focus of the Committee was on
Chair succession as detailed on page 146.
No new Directors were appointed during this
year. The Group has initiatives to develop sta
with leadership potential which are detailed
on page 149.
Time commitments
The Directors have demonstrated a strong
commitment to their roles on our Board and
Committees. The Directors attended meetings
of the Board and Committees scheduled in
2022/23 as well as additional ad hoc meetings.
For further details of attendance at meetings
see page 113.
The Directors have also given careful
consideration to their external time
commitments to confirm that they are able to
devote an appropriate amount of time to their
roles on our Board and Committees. For each
of the Directors, the Board considers that the
time commitment that he or she is required
to devote to those external roles does not
compromise their role at Workspace. The
Nominations Committee reviews, on an
ongoing basis, Directors’ time commitments
and confirmed that they were fully satisfied
with the amount of time each Director
devoted to the business.
The Committee also recognises that there
is value in the Non-Executive Directors being
active on other Boards in an Executive or
Non-Executive Director capacity.
Directors’ induction programmes
All new Non-Executive and Executive Directors
joining the Board undertake a formal and
personalised induction programme, designed
to provide an understanding of the Company’s
business, strategy, culture, ESG, governance,
management and stakeholders. This covers the
operation and activities of the Company, such
as site visits, meeting members of the senior
management team across our key business
areas and operations, the Company’s principal
strategic risks, the role of the Board, the
decision-making matters reserved to the Board,
and the responsibilities of Board Committees.
This is tailored to take into account a Director’s
previous experience and responsibilities.
The Company Secretary assists the Chair
in designing and facilitating an induction
programme for new Directors and ongoing
training.
Directors are also briefed on their roles and
responsibilities as a director of a listed company.
For Non-Executive Directors, specific committee
responsibilities relevant to their committee
membership are covered, to enable them to
function eectively as quickly as possible.
In addition, Directors are oered follow-up
sessions in any areas in which they want to
increase their knowledge. We also oer
ongoing bespoke development for Directors
and Committee Chairs.
Directors are encouraged to continue to meet
with management after their induction on an
ongoing basis to support them and pass on
their experience.
A diverse workforce that brings
an appropriate balance of skills,
experience and knowledge,
as well as fresh perspectives,
enriches our business and
contributes to our long-term
success
Stephen Hubbard
Chair
Key activities
Pages 146 to 158
Chair succession
Page 146
PERFORMANCE OF THE
NOMINATIONS COMMITTEE
The performance of the Nominations
Committee was assessed during the year.
From the responses provided, it was
concluded that the Nominations Committee
was operating eectively.
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
32
DIVERSITY & INCLUSIONBOARD COMPOSITION
Our Diversity & Inclusion Policy applies
both to the Board and the wider business.
Workspace’s purpose is to give businesses the
freedom to grow. We know that a workforce
made up of people with a wide range of
backgrounds and experiences will contribute
to our long-term success and help to achieve
our strategy (see page 32 for further details
on our strategy). We are committed to
supporting diversity and to creating an
inclusive culture that attracts the best
individuals to our workforce.
We value diversity in all its richness and work
hard to create an environment where talented
people can thrive, without regard to gender,
gender reassignment, race, ethnicity, age,
religious or spiritual beliefs, sexual orientation,
marital and civil partnership status, disability,
education or social background. A diverse
organisation benefits from the dierent
perspectives inclusivity in these areas can
bring, as well as from variety in skills, industry
experience and personality.
We want to build a diverse pipeline of talented
employees and senior managers to support
us as we continue to grow and achieve our
purpose. It is our policy to appoint the best
person for the role and we are committed to
ensuring that our processes and initiatives
encourage diversity and allow a diverse group
of potential candidates to be identified at both
Board and Executive-level.
Reviewing the Board and Committee
composition
As part of the Board’s annual eectiveness
review, described on page 155, the Committee
considers the composition of the Board and
its Committees in terms of balance of skills,
experience, length of service and wider
diversity considerations.
The Board and its Committees continue to
have a strong mix of experienced individuals
on the Board who are not only able to oer
an external perspective on the business, but
also provide constructive challenge to review
the Group’s strategy. The Nominations
Committee is satisfied that each Director
continues to make an eective contribution
to the Board and to fulfil their duty to promote
the success of the Company. Furthermore,
the respective skills of the Directors were
found to complement one another, enhancing
the overall operation of the Board.
The Board has carefully considered the
guidance criteria regarding the composition
of the Board under the UK Corporate
Governance Code. In the opinion of the
Board, the Chair and all the Non-Executive
Directors bring independence of judgement
and character, a wealth and diversity of
experience and knowledge and the
appropriate balance of skills. The Directors
give sucient time to enable them to carry
out eectively their responsibilities and
duties to the Board and the Committees on
which they sit. They are suciently independent
of management and are free from any other
circumstances or relationships that could
interfere with the exercise of their judgement.
With eect from the close of the 2023 AGM,
no Non-Executive Directors will have been
on the Board for more than six years.
As at 31 March 2023, the Board comprised
the Chair, two Executive Directors and five
Non-Executive Directors. Further details on
the independence of the Directors and their
re-election can be found on pages 133 to 134
and on pages 3 to 4 of the 2023 Notice of
Annual General Meeting.
In accordance with the Code, with the
exception of Stephen Hubbard, all the
Directors will retire and oer themselves
for re-election by shareholders at the 2023
Annual General Meeting. Having served
on the Board for nine years in July 2023,
Stephen Hubbard will retire following the
conclusion of the AGM.
The biographies of all members of the Board,
outlining the skills and experience they bring
to their roles, are set out on pages 115 to 116.
Stephen Hubbard was appointed as the
Non-Executive Director for employee
engagement in July 2020. Further details
can be found on page 130.
Chair’s evaluation for 2022/23
The Senior Independent Director chaired a
meeting of Non-Executive Directors, without
the Chair present, to appraise the Chair’s
performance and to address any other
matters which the Directors might wish to
raise. The outcome of these discussions was
conveyed by the Senior Independent Director
to the Chair. It was concluded that the Chair
is highly respected and is valued for his
industry knowledge and experience. The
Board is satisfied that the Chair continued
to be eective and shows a high level of
commitment in discharging his
responsibilities.
Our plans for next year
We are committed to continually progressing
our initiatives to improve diversity. In the next
year we plan to:
– Introduce further employee support
networks
– Review our benefits and policies and
implement any changes recommended
– Introduce ‘back to work’ inductions and
coaching for those returning from parental
leave
– Further increase the awareness of our sta
in all areas of diversity & inclusion, for
example by making greater use of external
speakers and developing social impact
projects that connect our business centres
with their local communities
– Trial job sharing in certain roles
– Oer apprenticeships in certain roles
– Review job descriptions to ensure the
language used is fully inclusive and attracts
a diverse pool of talent
– Expand our career pathways to other roles
within the organisation where applicable
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54
RECRUITMENT AND SELECTIONCULTURE TRAINING AND DEVELOPMENT
HOW WE PROMOTE DIVERSITY & INCLUSION
DIVERSITY & INCLUSION CONTINUED
Every employee has the right to be treated with respect and
dignity throughout their employment with us and not to be
discriminated against. We have a zero tolerance attitude to
bullying, harassment or victimisation of any kind
Our recruitment and selection, training and development,
performance reviews and promotion processes are all based
solely on individual merit and free from bias
We monitor and analyse the diversity of our employees
so that we can track and progress our diversity initiatives.
This year, we made changes to how we collect diversity
information from our sta in order to improve the quantity
and quality of data available to us
Our Board and Executive Committee are regularly updated
on our progress with diversity initiatives and external
guidance and recommendations for improving diversity.
We provide unconscious bias and harassment training
for all employees
We oer flexible working options (including hybrid working)
to support employees with family and/or caring
commitments
This year we introduced an employee support network
aiming to provide a forum for parents and carers, including
how Workspace can better support them. In the coming
year, we will factor any feedback from this network into our
processes for supporting returners to work
In 2022 we hired a Recruitment Manager to oversee our entire
recruitment activity and process and we introduced a new
recruitment policy which sets out fair and consistent
recruitment procedures
We review and change job titles where appropriate. This year
we changed the role of Receptionist to Centre Co-ordinator
to better reflect the role and to appeal to a wider pool
of candidates
We review job specifications to ensure we consistently use
inclusive language that encourages both male and female
candidates
We provide unconscious bias and interview skills training for
all hiring managers. In the coming year we intend to introduce
further training for line managers, including managing
dicult conversations
Guidance and support notes are provided to hiring managers
to promote fair and thorough processes
We advertise all vacancies internally before undertaking any
external advertisement, to encourage internal applications
When we do advertise externally, we have increased our use of
social media and other direct recruitment methods in order to
reach a wider pool of talent, including encouraging applications
from people who may be returning to work and from local
communities via local job centres, universities and schools
Where we use recruitment agencies, we ensure they have
a commitment and track record in diverse appointments
When a senior role becomes available, we seek to encourage
diverse applications and to shortlist an equal number of men
and women where possible
We promote progressive career development through
encouraging lateral job moves where opportunities arise
This year, we introduced bi-monthly meetings between the
HR team and senior managers with a view to identifying
opportunities for sta development
During our annual appraisal process, we identify employees
who have strong potential for development, and put training
and development plans in place for them
We provide a Group-wide internal training programme to
oer employees opportunities to learn and develop skills
such as organisation, people management and managing
dicult situations
During this year, we have started to oer Institute of
Leadership & Management training for line managers
We support sta with further studies by sponsoring external
learning and development where appropriate
We trialled ‘career pathways’, for our centre team roles, to
make it clearer to sta how they can progress their careers
at Workspace
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Q: What made you want to set up a group
for those with caring responsibilities and
how will it support our sta?
As someone who has caring responsibilities
myself, I could really relate to this topic and
putting this network together was important
to me. It can be very dicult to balance
caring responsibilities while working as you
are juggling two worlds. People can
sometimes feel like they are alone and that
others don’t understand the challenges they
face. The Supporting Others group provides
a forum for people to share their experiences
– both the positives and the challenges – and
learn from and support each other in a safe
space. It’s an invaluable forum for discussing
ideas on how Workspace can support those
with caring responsibilities.
Q: What have been the key matters raised
by the network so far?
Support on return from parental leave has
been a key topic. Parents highlighted the
challenges of coming back to work after an
extended period, including switching your
mindset back to work and understanding the
changes that will inevitably have arisen in
their absence.
As a result we are planning to introduce some
new initiatives for those returning to work,
including mini back-to-work inductions and
training on any new systems and processes
that have been implemented while they have
been on parental leave. There has also been
a focus on the importance of ‘me time’
amongst your work and caring responsibilities.
Q: What are your plans for the network
in the next year?
We plan to build on what we have achieved
this year, continuing to provide a space for
employees to talk openly and support each
other. We would also love to invite some
guest speakers, perhaps someone who has
reached the very top of their career while
juggling caring responsibilities, so that they
can share their experience and insights into
the challenges they faced and the key to
their success.
Q&A
Satpreet Dhariwal
Senior HR Manager and Chair of our Supporting Others group
SPOTLIGHT ON SUPPORT FOR PARENTS AND CARERS
It was very important
to me that we provide
a forum for those with
caring responsibilities
to share experiences
and support each other
Satpreet Dhariwal
Senior HR Manager and Chair of our
Supporting Others group
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
GENDER AND ETHNIC DIVERSITY AT BOARD AND EXECUTIVE COMMITTEE LEVEL
The Board is fully supportive of the
recommendations of both the FTSE Women
Leaders Review (the successor to the
Hampton-Alexander Review) and the Parker
Review, and of the new requirements of
LR 9.8.6R(9).
The tables to the right set out the numerical
data required to be disclosed in accordance
with LR 9.8.6R(9), as at 31 March 2023. There
have been no changes between 31 March 2023
and the date of this Report.
As at 31 March 2023, the Group has met two
of the three targets set by LR 9.8.6R(9). Rosie
Shapland is Senior Independent Director and
the Group therefore meets the LR 9.8.6R(9)
target to have at least one of the senior Board
positions held by a woman. Two members of
the Board are from a minority ethnic
background, meeting the LR 9.8.6R(9) target
that at least one member of the Board should
be from a minority ethnic background.
As of 31 March 2023, the Board consists
of three women and five men, meaning the
Board comprises 37.5% women, narrowly
missing the LR 9.8.6R(9) target that women
should represent at least 40% of the Board.
This represents an improvement from 33% as
at 1 April 2022. In addition, Stephen Hubbard
will be stepping down from the Board from
the end of the Company’s AGM in July 2023,
at which point women will represent 42.9%
of the Board.
Board positions are, by their nature, limited
in number meaning that vacancies are less
common, but when vacancies do become
available the Board will continue to recruit
in a manner which attracts a diverse mix of
candidates and to shortlist an equal number
of men and women wherever possible. For
more information on our Board diversity
principles and processes see page 148.
The data contained in the disclosures to the
right was self-reported by members of the
Board and Executive Committee. The
Executive Committee were asked to specify
their gender identity and ethnic origin via
our HR system, with each question using
a dropdown menu with options to select.
The Board were separately each asked the
same questions with the same options.
Graham Clemett and Dave Benson are
members of both the Board and the Executive
Committee and therefore are included in both
the calculations relating to the Board and
those relating to executive management.
Board composition
Page 148
37.5%
FEMALE REPRESENTATION
AT BOARD LEVEL AS AT 31 MARCH 2023
GENDER
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men (including those self
identifying as men) 5 62.5% 3 6 75%
Women (including those self
identifying as women) 3 37.5% 1 2 25%
Non-binary 0 0% 0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
ETHNICITY
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority-white groups) 6 75% 4 8 100%
Mixed/Multiple Ethnic Groups 0 0% 0 0 0%
Asian/Asian British 1 12.5% 0 0 0%
Black/African/Caribbean/
Black British 1 12.5% 0 0 0%
Other ethnic group, including
Arab 0 0% 0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
Further information on the composition of the Board can be found on page 114 and on the
composition of the Executive Committee on page 136.
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Male: 123 42.0%
Female: 170 58.0%
The above disclosure is made in accordance with section 414C(8)(c)(iii) of the Companies Act
2006. The Board breakdown required by section 414C(8)(c)(i) of the Companies Act 2006 is set
out on page 151. In addition, for the purposes of disclosure under section 414C(8)(c)(ii) of the
Companies Act 2006, the Group had four male and two female senior managers as at 31 March
2023, calculated in accordance with sections 414C(9) and (10)(b) of the Companies Act 2006.
White: 206 70.3%
– English/Welsh/Scottish/Northern Irish/British
– White – Irish
– White – Other
151
5
50
Black: 26 8.9%
– Black/African/Caribbean/Black British – Caribbean
– Black/African/Caribbean/Black British – African
– Black/African/Caribbean/Black British – Other
14
10
2
Asian: 37 12.6%
– Asian/Asian British – Indian
– Asian/Asian British – Bangladeshi
– Asian/Asian British – Pakistani
– Asian/Asian British – Chinese
– Asian/Asian British – Other
14
5
2
2
14
Mixed: 23 7.9%
– Mixed – White and Black Caribbean
– Mixed – White and Black African
– Mixed – White and Asian
– Mixed – Other
– Mixed
4
4
1
13
1
Other ethnic group: 1 0.3%
18–29: 76 25.9%
30–39: 123 42.0%
40–49: 62 21.2%
50–59: 20 6.8%
60–69: 11 3.8%
70–79: 1 0.3%
DIVERSITY IN THE WIDER WORKFORCE
GENDER DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2023
AGE DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2023
ETHNIC DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2023
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
SPOTLIGHT ON PROGRESSION & DEVELOPMENT
I have been at Workspace for seven years.
I joined in March 2016 as Centre Manager
of The Light Bulb and Morie Street Studios
and demonstrated great work ethic and
commitment to prove myself in that role.
Just under two years later, I was entrusted
with the management of the Group’s largest
site, Kennington Park business centre.
The site requires a meticulous approach
due to the range of spaces available,
from traditional oce and studio space
to commercial kitchens and industrial
workshops. It usually has several appraisals
and projects ongoing at any one time.
Managing it requires a greater level of
knowledge and skill and I was glad for the
opportunity to step up to the challenge.
In 2021, I decided to undertake the
qualification to become an Associate of RICS
in the commercial property path, in order
to learn additional skills and open up future
opportunities for my career. Workspace
were extremely supportive of me doing
the qualification. Not only did they provide
financial funding for my studies, but my
line managers and other senior colleagues
dedicated their time to help me with any
questions I had, and gave me the
opportunity to work on real business
projects that I could then submit as case
studies for my final assessment.
In late 2022 I saw the role of Associate Asset
Manager advertised internally. With the
knowledge I have developed from my RICS
studies and my Centre Manager roles, I
decided to apply for the promotion and was
delighted when I was successful. I started my
new role as Associate Asset Manager in April
2023 and I am looking forward to the fresh
challenges and opportunities it will bring.
I was given the opportunity
to work on real life business
projects that also helped with
my studies as well as my
development at Workspace
Ewelina Vale
Associate Asset Manager
KEY FACTS
£61k
EMPLOYEE TRAINING
SPONSORED
25
UNCONSCIOUS BIAS AND
HARASSMENT TRAINING
SESSIONS
9
INTERNAL LATERAL
JOB MOVES
29
INTERNAL PROMOTIONS
12
WORKSPACE WINNERS
Kennington Park Business
Centre, Oval
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
BOARD DIVERSITY PRINCIPLES AND PROGRESS
At Board level, we recognise that a group that is diverse in nature, irrespective of characteristics such as gender, ethnicity, skills, experience and background, is able to provide diering perspectives
and challenge to debates and decisions. When recruiting new Board members, the Nominations Committee makes all decisions in consideration of this policy and the principles below. The principles
have been agreed with the aim of increasing diversity within our Board and its Committees, and developing a pipeline of high potential diverse leaders and senior managers.
PRINCIPLES IMPLEMENTATION PROGRESS AGAINST OBJECTIVES
Ensure the Board comprises an appropriate balance of skills
and brings a balance of diverse characteristics including in
terms of gender, ethnicity, skills, experience and background
in order to bring fresh perspectives and to enrich our business
and contribute to our long-term success.
The diversity of the Board, in a number of respects, is
continually reviewed by the Nominations Committee and is
considered annually by the wider Board as part of the Board
evaluation process to ensure the Board is continuing to enrich
the business and contribute to its long-term success.
In March 2023, the Board discussed this year’s Board
evaluation process. An important part of the discussion
related to the value of diversity, including cognitive diversity.
No concerns were raised in connection with the diversity of
the Board.
37.5% female representation on our Board as at 31 March 2023
(2022: 33%). 25% ethnic minority representation on our Board
as at 31 March 2023 (2022: 22%).
Ensure the recruitment process, including advertisements and
use of recruitment agencies, allows for a diverse group of
potential candidates to be identified.
The Board places importance on ensuring the recruitment
process is fair and is based solely on individual merit. The
Board instructs executive search firms to assist with sourcing
the best candidates for the role. When instructing an executive
search firm, the Board will explicitly request that a diverse mix
of individuals are identified for the role.
The Board actively seeks diverse candidates. Over the last
three years, five new Non-Executive Directors have been
recruited. A thorough recruitment and selection process was
undertaken, assisted by the Company’s Board-level external
search agency, Fidelio. As part of that process, candidate
briefs were prepared and a diverse long and short-list was
presented for each Non-Executive Director position. In making
these appointments, the Board considered its Diversity &
Inclusion Policy.
The Board and Nominations Committee will only engage with
executive search firms that have signed up to the Standard
Voluntary Code of Conduct for Executive Search Firms.
The Board will continue to engage executive search firms that
have signed up to the Standard Voluntary Code of Conduct.
During 2022/23, Fidelio were the only executive search
firm engaged by the Board. Fidelio is accredited under the
Hampton-Alexander Enhanced Code of Conduct and has
signed up to the Standard Voluntary Code of Conduct in
order to provide sucient support to the Board in
enhancing diversity.
Board attention and focus is given to initiatives designed
to develop a pipeline of talented, high potential employees
and senior managers from a diverse range of backgrounds
including in terms of gender, ethnicity, skills, experience
and background.
The HR team has been tasked with continuing to progress our
existing initiatives to support development of a diverse pipeline
of talent (see page 149 for further details) as well as delivering
the new initiatives detailed on page 148.
During the year, the HR team continued to introduce and
progress a number of initiatives aimed at increasing diversity
across the workforce. See page 149 for more details for our
diversity initiatives.
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
BOARD EVALUATION
We conducted an internal Board evaluation
for 2023 in line with best practice corporate
governance requirements. This followed an
internal evaluation facilitated by Fidelio in
2022 and an external evaluation conducted
by Fidelio in 2021, the outcomes of which are
detailed on page 156.
The evaluation focused on the overall
eectiveness of the Workspace Board,
building on the prior year’s evaluation which
enabled the Board to monitor progress on
key aspects of governance, including the
composition of the Board. In addition, the
2023 evaluation provided a deep dive into
how eectively the Board is contributing
to strategy and horizon scanning.
Fidelio prepared a tailored Board
questionnaire, including both a quantitative
and qualitative element, comprising open
questions around the Board’s oversight
of strategy and emerging risk.
Fidelio has supported with regard to Board
composition. They have no other connection
with the Company or individual Directors.
In conducting this evaluation, the Board was
conscious of ensuring that the process met
the requirements of the Code and had a clear
focus on enhancing the eectiveness of the
Board. Following Fidelio’s evaluation in 2021
and 2022 and the ongoing Board refreshment,
the Board decided to leverage this momentum
and conduct a review that would lead to
meaningful insights and enable the Board
to make further progress in enhancing
performance and its eectiveness.
Fidelio worked with the Company to develop
an innovative approach to the internal
evaluation which met the needs of the Code
through the combination of a tailored
questionnaire and facilitated Board discussion
to explore the findings from the questionnaire.
An established
timeline with
incremental
improvements made
each year
Stephen Hubbard
Chair of the Nominations
Committee
2020/21 2021/22 2022/23
EXTERNAL BOARD EVALUATION
The Board eectiveness review was
conducted against a backdrop of
change, with new appointments to the
Board combined with the impact of
the pandemic on both the business
and the work of the Board.
INTERNAL BOARD EVALUATION
This process was developed with a
clear focus on the ‘high-performing
Board‘ and how the Board adds value.
This approach built on the prior Board
evaluation and the progress made and
also contributed to the momentum and
potential of a relatively new Board.
INTERNAL BOARD EVALUATION
The evaluation covered the
eectiveness of the Workspace Board,
and how this has developed over the
past year. Looking ahead it has a clear
focus on the Board’s contribution to
strategy and horizon- scanning.
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
6
APRIL 2023
Key outcomes
agreed
FEBRUARY 2023
Focused
questionnaire
JANUARY 2023
Board discussion
MARCH 2023
Meeting with
the Board
BOARD EVALUATION – SPOTLIGHT ON DEVELOPING A HIGH-PERFORMANCE BOARD CONTINUED
BOARD DISCUSSION
A discussion was held by the Board
to consider key subject areas for this
external review.
Key questions
– Is there scope to develop the Board’s
contribution to strategy and horizon
scanning?
– How can Board Members and the
Executive Committee engage further
beyond the formal Board Meetings?
– How eective are the various Board
Committees and does the Committee
structure remain appropriate?
– What is the quality of Board learning?
– What are the next steps for the Workspace
Board to enhance performance and
eectiveness?
FOCUSED QUESTIONNAIRE ISSUED
TO THE BOARD
Fidelio developed a tailored questionnaire,
focused on Board eectiveness and
contribution to strategy and horizon scanning.
Key focus areas
The quantitative questionnaire enabled
the Board to provide feedback on eight key
aspects on governance. This was broadly
comparable with the prior year and provided
the opportunity to monitor progress.
The qualitative questionnaire enabled a
deep dive on four key aspects of strategy
and horizon scanning including examples
of best practice.
MEETING WITH THE BOARD
The Board then had the opportunity
to explore the findings during its meeting
in March.
Discussion points
The discussion was designed to review
progress on key aspects of governance and
to consider whether specific steps needed to
be taken. In addition the discussion enabled
a good debate around strategy formation,
horizon scanning and where there were
opportunities to increase eectiveness.
KEY OUTCOMES AGREED
The feedback from this year’s Board
evaluation was positive and concluded that
the Board worked well and the Committee
structure continued to evolve.
Specific development themes
– The Board will continue to develop its
oversight of strategy and horizon scanning
– Holding more regular strategy updates
– Inviting external and internal speakers
to focus on a particular area of interest.
Following the recommendations from this
external review, an implementation plan and
progress tracker will be developed by Gillian
Karran-Cumberlege from Fidelio and the
Company Secretary which will be reviewed
by the Board.
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
PROGRESS AGAINST THE EXTERNAL BOARD EFFECTIVENESS REVIEW CONDUCTED IN 2022
Item discussed
by the Board Focus area Progress
Strategy Continue to develop its
oversight of strategy and
horizon scanning.
The Board continues to consider the Group strategy at each Board meeting. An annual strategy day was held in September 2022
and this was attended by some members of the Executive Committee. Actions from the strategy day were then circulated to the Board.
This will remain a focus for the Board going forward.
Board Committee
structure
Review of the Board
Committee structure and
membership for the next
phase of Workspace’s
development.
Consider the formation
of an ESG Board Committee
and the disbandment of
the Risk Committee,
with responsibilities to be
integrated into the Board and
Audit Committee’s remits.
A review of the Board Committee structure was undertaken during the year. It was concluded that membership of the Audit Committee
would include Rosie Shapland (Chair), Lesley-Ann Nash and Manju Malhotra. Previously, the Audit Committee consisted of all Non-
Executive Directors. Other NEDs are invited to attend those meetings of the Audit Committee convened to review the full and half-year
results, typically held in May and November.
No changes were proposed to either the Remuneration or Nominations Committees.
The ESG Committee was formed during the year, with its first meeting held in September 2022. The Committee is chaired by Duncan
Owen. More details can be found on pages 172 to 177.
The Risk Committee was disbanded during the year, with the final Risk Committee Report included in the 2022 Annual Report.
The responsibilities of the Risk Committee have been integrated into the Board and Audit Committee remits.
Employee
engagement
Continue to focus on eective
workforce engagement.
During the year we continued with a programme of events outside of Board meetings at which members of the Board and the
Executive Committee can build relationships on a more informal basis.
The Chair also held breakfast meetings with sta during the year. Further details can be found on page 139.
The Director of People and Culture attended the Board meeting in November 2022, where the Board were provided with feedback
received from sta on the employee survey conducted during the year.
The CEO provides the Board with oversight of the broader people agenda, succession planning, development and changes in sta
across the business. This includes updates from town hall meetings.
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NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
PROGRESS AGAINST THE EXTERNAL BOARD EFFECTIVENESS REVIEW CONDUCTED IN 2022 CONTINUED
Item discussed
by the Board Focus area Progress
Board learning Continuous learning for
Board members to enhance
understanding of the
Company and the business
it operates in.
The Board strategy day oers an opportunity for members of the Board to hear from internal and external speakers on a variety
of topics, including market trends and developments as well as strategic planning across areas of the business.
Whilst the approach to Board learning will be kept under review, we shall continue to develop a dynamic programme of relevant
subject areas that reflect strategic priorities or challenges.
Bespoke Board learning programmes will also continue, as appropriate.
Diversity, inclusion
and ESG
Review progress on diversity
and inclusion and ESG both
at Board level and throughout
the business.
For details of our progress with diversity and inclusion, see pages 148 to 154.
A commitment to acting sustainably is one of the three pillars to our strategy which demonstrates how deeply it is embedded and
ensures we consider sustainability in all business decisions.
The ESG Committee was established during the year and will review our sustainability strategy, governance, and science-based targets
to transition to net zero.
We have continued to progress our social impact through initiatives such as the InspiresMe programme and employee wellbeing
activities. Read more on pages 50 to 57.
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2022/23 CONTINUED
AUDIT COMMITTEE REPORT
The Audit Committee plays a key
role in promoting the maintenance
of a strong and transparent control
environment at Workspace.
Rosie Shapland
Chair of the Audit Committee
QUICK LINKS
Membership and attendance at Audit Committee meetings Page 160
Key topics considered Page 160
Chair’s letter Page 161
Role of the Audit Committee Page 163
Significant matters considered Page 164
Developing a robust Viability Statement Page 166
Fair, balanced and understandable Page 167
External audit Page 168
Risk management and internal controls Page 170
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AUDIT, RISK AND INTERNAL CONTROL
Portfolio valuation
– Considered the objectivity and independence of the external valuers
– Discussed the presentation of the portfolio valuation by the external valuers
Financial and Narrative Reporting
– Reviewed the year-end financial statements including key judgements, estimates
and assumptions
External Audit
– Reviewed and discussed reports from KPMG, summarising their findings arising from
the 2021/22 audit and the half-year review of the results of the Group for the six months
ended 30 September 2022
– Assessed the independence and objectivity of the external auditors
Changes to principal risks
– Reviewed management’s proposal to include climate risk as a principal risk
Internal controls and risk management
– Reviewed and discussed an update from the Group’s Head of Technology on the Group’s
business continuity plan and cyber security
– Reviewed the eectiveness of the Company’s control environment and the Company’s
process for self-certification of the operating eectiveness of controls
Governance
– Reviewed terms of reference
– Discussed assessment of the eectiveness of the Audit Committee
The Committee is made up entirely of Non-Executive Directors and each Committee member
has considerable commercial knowledge and broad industry expertise. The Committee is
chaired by Rosie Shapland. Details of individual attendance at the meetings held during the
year are set out below. More information on the skills and the experience of all Committee
members can be found on pages 115 to 116.
Member
since
Meetings
attended
Rosie Shapland (Chair)
1,2
2020 4/4
3
Lesley-Ann Nash
2
2021 4/4
3
Manju Malhotra
2
2022 4/4
3
1. In accordance with the UK Corporate Governance Code 2018, the Board considers that Rosie Shapland has significant
recent and relevant financial experience.
2. Following Board discussions on the structure of its Committees, it was agreed that from 21 April 2022, the Committee will
be made up of three members, Rosie Shapland, Lesley-Ann Nash and Manju Malhotra. Other Non-Executive Directors are
welcome to attend meetings should they wish to do so. All Non-Executive Directors attended meetings held in May and
November 2022 to review the full and half-year results and the first joint meeting of the Audit and ESG Committee
meeting held in January 2023.
3. The Audit Committee meeting in January 2023 was a joint meeting with the ESG Committee.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEARMEMBERSHIP AND ATTENDANCE AT AUDIT COMMITTEE MEETINGS
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Dear shareholder,
On behalf of the Board, I am pleased to
present the Audit Committee Report. This
report is intended to provide shareholders
with an understanding of the work we have
done to provide assurance on the integrity of
the Annual Report and Financial Statements
for the year ended 31 March 2023. Much of
the work of the Committee is necessarily
targeted around the key areas of financial
reporting, external audit, internal control and
risk management, all of which is underpinned
by a robust governance framework.
This has been a busy period for the finance
team, with the McKay acquisition and
preparation for the implementation of a new
finance system.
Review of material issues
The Audit Committee has a key role in
checking that the Group’s narrative reporting
gives a fair, balanced and understandable
assessment of the Group’s position and
prospects and establishing that the financial
statements provide a true and fair view of
the Group’s financial aairs. As part of this
process, we considered the significant
financial judgements made during the year,
along with other key financial reporting
issues. In this context and in conjunction with
the Board, we considered the twice annual
valuation of the investment portfolio, the
valuation process and the key assumptions
made by the valuers and their independence.
Following our review, we are satisfied that the
valuation process is robust, the assumptions
and estimates used in the valuation are
appropriate and that the valuers remain
independent. Further details can be found
on page 164.
Audit Committee
Chair’s letter
MONITORING FUTURE DEVELOPMENTS
Continue to focus on climate change and its
potential impact on the financial statements,
review mitigation strategies whilst
monitoring risk across business decisions
including assurance from Accenture on our
carbon emissions disclosures. See page 101
for more details.
Jointly, with the ESG Committee, review
the programme of activity being undertaken
to ensure the eectiveness of ESG policies
and procedures.
Continue to focus on the Company’s
protection against cyber threats.
Monitor proposed changes to the UK
Corporate Governance Code, particularly
with respect to internal controls.
We also considered, as we do on a regular
basis, the potential for fraud in revenue
recognition, scope for management override
of controls and compliance with regulations.
We found no concerns arising from this review.
A description of the main activities that the
Committee considered during the year can
be found on page 160.
Climate change
As the Group is committed to being net
zero carbon by 2030, it is important that
our financial reporting reflects and supports
this goal. The Board discussed the impact
of climate change on the Group’s financial
reporting and financial statements and it
considered the requirement for companies to
disclose, on a comply or explain basis, against
the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD).
The Board received updates on the Company’s
progress against this requirement from our
Head of Sustainability. More information can
be found on page 118.
As part of its review of Principal Risks,
and following the joint meeting with the
ESG Committee in January 2023, the Audit
Committee agreed that climate change be
included as a principal risk.
Cyber security
Cyber security remains a focus area for
the Committee. The Head of Technology
attended the March Audit Committee to give
an assessment of cyber risk and update on
progress made in protecting the Group
against evolving threats.
The Audit Committee has a
key role in checking that the
Group’s narrative reporting
gives a fair, balanced and
understandable assessment
of the Group’s position
and prospects and establishing
that the financial statements
provide a true and fair view
of the Group’s financial aairs
Rosie Shapland
Chair of the Audit Committee
The role of the Audit Committee
Pages 163 to 164
Risk management and internal controls
Pages 170 to 171
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Viability and going concern statements
The Committee considered the going
concern statements in the interim statement
and the Annual Report, and the viability
statement in the Annual Report. This included
reviewing the work undertaken by
management, which considered plausible
downside forecasts factoring in the Group’s
principal risks and certain uncertainties, and
the appropriateness of the five-year viability
assessment period. Following this review,
we were satisfied that management had
conducted robust viability and going concern
assessments and recommended approval of
these to the Board.
See our viability and going concern
statements on pages 87 to 88.
2023 Annual Report
The External Auditor confirmed that they had
found no unadjusted material misstatements
in the course of their work.
After reviewing the reports from management,
and following discussions with the External
Auditor and valuers, the Committee is
satisfied that:
– the process used to determine the property
valuation was satisfactory
– the financial statements appropriately
address the key judgements and the key
estimates
– the Group has adopted appropriate
accounting policies
– both the External Auditor and the valuers
remain independent and objective in
their work
The Board as a whole is responsible for
assessing the Group’s position, performance,
business model and strategy. The
Committee’s role in this assessment is
covered on page 167. For the year ended
31 March 2023, the Committee confirmed
to the Board it was satisfied that the Annual
Report and Accounts was fair, balanced
and understandable.
Committee eectiveness
The Company undertook an internally
facilitated Board eectiveness evaluation this
year, which assessed our performance as a
Committee. I am pleased that this concluded
that we operate eectively and that the Board
takes assurance from the quality of our work.
Risk, control and assurance
The Group has several processes in place to
provide eective internal control, including
self-certification of controls by risk owners,
reviews of fraud, anti-bribery and
whistleblowing policies and a risk management
framework under which controls, and their
eectiveness, are managed and evaluated.
Between the Audit Committee and the full
Board, we have reviewed the eectiveness
of the Group’s risk management and internal
control systems where we have not identified
any significant failings or weaknesses.
In January 2023, the Audit Committee held a
joint meeting with the newly established ESG
Committee. At this meeting, the Audit and
ESG Committees reviewed the Company’s
policies and procedures that support the
implementation of our ESG strategy, as well as
the programme of assurance being undertaken
to ensure the eectiveness of these policies
and procedures. Both Committees were
satisfied that the Company’s policies and
procedures in this area operate eectively,
and that adequate assurance is undertaken.
The Committees also considered whether
climate risk should be identified as a Principal
Risk. Whilst the Company has an active
programme of managing its climate risk
exposures through ongoing assessment of
risk, the establishment of control measures
and active management of physical risk,
it was concluded that given the nature of
climate risk, which will require greater
oversight of mitigation strategies and
monitoring of risk across business decisions,
it should be considered as a Principal Risk.
We do not have a formal internal audit
function, a matter which is kept under review
by the Audit Committee. The Group has,
however, appointed a Head of Security and
Risk Management whose remit includes
maintaining our risk management and control
framework and conducting regular
independent assurance.
During the year the Head of Security and
Risk Management chaired monthly Risk
Management meetings attended by senior
management, conducted bi-annual self-
certification of controls across the Group,
completed a principal risk review and
mapped out our internal and external
assurance activities. The focus for the
following 12 months is to evolve our internal
assurance programme with additional
independent reviews across the business.
I hope that you find this report informative
and can take assurance from the work
undertaken by the Committee during the year
to deliver its key responsibilities.
Rosie Shapland
Chair of the Audit Committee
6 June 2023
The Committee was satisfied
that management had
conducted robust viability and
going concern assessments
Developing a robust Viability Statement
Page 166
Fair, balanced and understandable reporting
Page 167
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
FORWARD PLANNING
Subjects include climate change, ESG eectiveness, monitoring recommendations
from BEIS, changes to the UK Corporate Governance Code
AUDIT COMMITTEE
Assess and discuss topics with senior management and External Auditor
Regular inputs received from: Workspace management and the External Auditor
The role of the Audit
Committee
The Audit Committee reviews and monitors
the integrity of the Group’s financial reporting
in advance of its consideration by the Board.
The Committee oversees the relationship with
the External Auditor in order to assess their
eectiveness and to annually assess their
independence and objectivity. Following the
changes in Committee structure, the Audit
Committee now also reviews and monitors
the Group’s risk management and internal
controls framework.
Through our ongoing
programme we identified that,
while the Company has an
active programme of managing
its climate risk exposures,
climate change should be
considered a Principal Risk
AUDIT COMMITTEE RESPONSIBILITIESHOW THE COMMITTEE OPERATES
Financial reporting
– Review the year-end and interim financial
statements and monitor the reporting
process, including key judgements,
estimates and assumptions and the
presentation of significant transactions.
Information on significant matters in
relation to the financial statements that
were considered by the Committee can
be found on page 164
– Review the appropriateness of accounting
policies and practices
– Advise the Board on the Group’s viability
and going concern statements including
the assumptions in plans, key risks
considered, and the sensitivities tested.
More information on the Committee’s
assessment of the Group’s viability and
going concern status can be found on
pages 166 to 167
– Review the content of the Annual Report
and Accounts and advise the Board on
whether, taken as a whole, they are fair,
balanced and understandable and provide
the information necessary for shareholders
to assess performance, the business model
and strategy. The Group’s strategy and
business model are explained on pages
32 to 35 and 64 to 68 respectively
External audit
– Assess the work of the External Auditor in
relation to significant financial judgements
made by management. More information
is available on pages 168 to 169
– Assess the eectiveness of the external
audit process and the ongoing relationship
with the External Auditor. This is done by
considering their approach to the audit
and understanding of our business,
discussing their reporting and any issues
identified and obtaining the views of
management
The Audit Committee is composed solely of
independent Non-Executive Directors, with a
wide diversity of experience. Rosie Shapland,
as a Chartered Accountant with many years
of senior financial experience, satisfies the
requirement of having appropriate recent
and relevant financial experience. The
Committee as a whole has competence
in the sector in which the Group operates.
Meetings of the Audit Committee coincide
with key dates in the financial reporting and
audit cycle. During the year, the Committee
met on four occasions, in May and November
2022 and in January and March 2023. The
meeting in January was a joint meeting with
the ESG Committee to review the Group’s ESG
related policies and procedures that support
the implementation of our ESG strategy.
A forward plan of agenda items guides the
business to be considered at each meeting
and is regularly reviewed and developed.
This pre-planning facilitates the work of the
Committee, enabling it to give thorough
consideration to matters of particular
importance to the Group.
The Committee receives information in
advance of its meetings including information
from management and detailed reports from
the External Auditor including the audit
report. The Committee meets privately with
the External Auditor, at least annually, and it
liaises with Company management in
considering areas for review.
The Committee regularly invites the external
audit lead partner, the Chair of the Board,
the Chief Executive Ocer, the Chief Financial
Ocer, the Group Financial Controller and the
Head of Security and Risk Management to
attend Committee meetings. Representatives
from our external valuers, CBRE, attend Board
meetings twice per year to present the half-
and full-year valuation reports.
Meetings of the Committee are held in advance
of the Board meetings to allow the Committee
Chair to provide a report on the key matters
discussed to the Board, and for the Board
to consider any recommendations made.
All of this, along with ongoing challenge,
debate and engagement, allows the Committee
to discharge its responsibilities eectively.
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AUDIT COMMITTEE RESPONSIBILITIES CONTINUED
– Review and monitor the objectivity and
the independence of the External Auditor,
including its policy governing the provision
of non-audit services. Refer to page 169
for more information on our process for
maintaining their independence
– Agree the remuneration of the External
Auditors
Portfolio valuation
– Consider the objectivity and independence
of the external valuers
– Review and challenge the methodology,
assumptions and judgements used by the
external valuers to ensure they are
appropriate
– Review the External Auditor’s assessment
of the valuation, including an explanation
as to how the valuation is audited
Internal controls and risk management
– Review the adequacy and eectiveness of
the Group’s overall risk assessment processes
that inform the Board’s decision making,
including the design, implementation and
eectiveness of those processes
– Advise the Board on the Group’s overall risk
appetite, tolerance and strategy, and the
principal and emerging risks the Company
is willing to take to achieve its long-term
strategic objectives. See page 170 for details
of how the Committee has considered risk
appetite and strategy during the year
– Advise the Board on the likelihood and
impact of principal risks materialising,
and the management and mitigation of
principal risks to reduce the likelihood of
their incidence or their impact. See pages
69 to 76 for information on the Committee’s
consideration of principal risks
– Review the eectiveness of the Group’s
control environment, including the
adequacy of key financial controls
– Review whistleblowing arrangements
whereby employees may, in confidence,
raise concerns about possible improprieties
in financial reporting or other matters,
to receive assurance that there are
proportionate and independent procedures
in place. See page 91 for more information
on our Whistleblowing Policy
– Review the Group’s procedures for
preventing and/or detecting fraud
– Review the Group’s procedures for the
prevention and detection of bribery and
monitor the reports generated by such
procedures. See page 91 for more
information on our Anti-Bribery Policy
– Consider whether the Group should have
an internal audit function
Governance, best practice and development
– Keeping up to date with expected changes
to the Code, specifically regarding the
control environment following the
recommendations of the BEIS consultation
– Keeping up to date on investor, shareholder
and market sentiment (with advice from the
Company’s brokers)
– Ensuring compliance with applicable
accounting standards, monitoring
developments in accounting regulations
as they aect the Group and reviewing the
appropriateness of accounting policies and
practices in place
– Keeping up to date with regulatory and
legislative matters relevant to the Group
– Considering ESG matters in all decision
making
– Approve the Committee timetable and
planner which detail the areas of focus
for the Committee each year
– Discuss the assessment of the eectiveness
of the Committee
– Review and approve changes to the
Committee’s terms of reference
Internal controls
More information on the Group’s
internal controls and risk management
process is available:
Pages 170 to 171
Significant matters considered
by the Committee
Valuation of the investment property
portfolio
The valuation of the investment property
portfolio is inherently subjective, requiring
significant judgement. The outcome is
significant for the Group in terms of its
investment decisions, results and
remuneration, and is a major component of
Total Property Return and Total Accounting
Return, two of our KPIs.
Therefore, this matter is considered by both
the Board and the Audit Committee.
The valuation is conducted externally by
independent valuers, CBRE, one of the world’s
largest commercial real estate services firms.
CBRE presented the year-end and interim
valuations to the Board and Committee, who
reviewed the methodology and the outcomes
of the valuation, challenging the key
assumptions and judgements. The Audit
Committee also considered the objectivity
and independence of the valuers.
Following the acquisition of McKay in May
2022, the Board and Committee also reviewed
the half-year McKay valuation prepared by
their previous valuers Knight Frank.
KPMG met with the valuers and they
presented their views on the valuation to the
Committee, as well as an explanation of how
the valuation is audited. The Board and
Committee considered that they were
satisfied that the methodology, assumptions
and judgements used by the valuers were
appropriate, that the valuations were suitable
for inclusion in the financial statements and
the work of the External Auditor was
appropriate.
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
The Committee considers all financial
information published in the full and interim
financial statements and considers
accounting policies adopted by the Group,
presentation and disclosure of the financial
information and it challenges the key
judgements and estimates made by
management in preparing the financial
statements.
The Committee pays close attention to
matters it considers to be important by virtue
of their impact on the Group’s results, or the
level of complexity, judgement or estimation
involved in their application on the
consolidated financial statements.
The Committee reviewed a number of other
key matters which have been considered
by management and discussed with KPMG,
including the uncertainty relating to collection
of trade receivables and the accounting for
the McKay acquisition and for the costs of
the new ERP system implementation.
Portfolio valuation
Our property portfolio, is independently
valued twice annually by our external valuers,
CBRE Limited.
Our properties are critical to our business
and the valuation demonstrates the value
that we are delivering to our shareholders.
It is a measure of how well we are managing
our buildings and driving rental income.
Furthermore, the valuation is a significant
part of both our net asset value and Total
Property Return, which are both key
performance indicators.
Given its significance, management, the
Board and the Committee monitor the
objectivity and independence of the valuers,
and review the methodology and outcomes
of the valuation, challenging the key
assumptions and judgements.
A number of meetings are held between
key management and CBRE ahead of the
valuation at which the inputs and
methodology of the valuation are discussed.
Key discussions include:
– London commercial property market:
current trends and circumstances expected
to aect the market are discussed
– comparable market evidence: recent
transactions are considered and compared
to assumptions made in valuing our
portfolio
– development projects: we provide CBRE
with any updates to ongoing or future
schemes and we discuss the assumptions
CBRE has made, particularly for more
complex schemes where more significant
levels of judgement are required
– estimated rental values: the estimated
rental values proposed by CBRE are
discussed and reviewed, with management
ensuring that these are in line with our
recent rental activity
– property information: we provide CBRE
with information on any changes to
properties that may aect the valuation
– other inputs used by the valuers are
reviewed and discussed
£2.7bn
PORTFOLIO VALUATION
76
CORE LOCATIONS
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
THE PROCESS WE UNDERTOOK WAS AS FOLLOWS:
Developing a robust Viability Statement
As part of the Group’s Viability Statement, the following factors were considered:
– the Group’s current financial and operational position and the current economic outlook
– the Group’s cash flows, financing headroom and financial ratios
– reassessment of key risks and their potential impact on the business model
Our Viability Statement
Pages 87 to 88
Our Going Concern Statement
Page 87
STAGE 1:
Risk identification
Responsibility
Executive Committee
Risk Management Group
Heads of Department
The strategic and operational risks were
reviewed to identify the principal risks to
viability over the period under consideration.
The risks that would impact solvency and
liquidity, either individually or in combination
with other risks, were considered
STAGE 2:
Risk assessment
Responsibility
Executive Committee
Risk Management Group
Heads of Department
For each risk, the following factors were
considered:
– our risk appetite (the level of risk the
Board is willing to take)
– the controls in place to mitigate the risk
– the quantum of risk
STAGE 3:
Scenario sensitivity analysis
Responsibility
Executive Committee
Heads of Department
For those risks identified as being severe
enough to impact the viability of the Group,
sensitivity analysis was performed to
understand the potential impact on liquidity
and financial ratios
STAGE 4:
Conclusions
Responsibility
The Board
Audit Committee
Executive Committee
Heads of Department
External Auditor
The Audit Committee considered the
findings from this analysis and made their
recommendations to the Board, which was
given the opportunity to question the
process and the findings
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
On behalf of the Board, the Committee has
considered whether, in its opinion, this Annual
Report and Accounts, taken as a whole, is fair
balanced and understandable and whether
it provides the information necessary for
shareholders to assess the Group’s position,
performance, business model and strategy.
Our strategy
Pages 32 to 35
THE PROCESS WE FOLLOWED
2
REPORT FROM THE CFO AND GROUP FINANCIAL CONTROLLER
1
AUDIT COMMITTEE REVIEW
4
EXTERNAL AUDIT REVIEW
5
RECOMMENDATION TO BOARD AND BOARD’S CONCLUSION
3
FAIR, BALANCED AND UNDERSTANDABLE ASSESSMENT
The Committee discussed a report from the CFO and the Group Financial Controller
covering the financial statements within the Annual Report and Accounts:
this highlighted the significant changes and the areas of focus in the financial statements
and commented on any new accounting standards in the period.
The Committee reviewed the Annual Report at an early stage, and throughout the
process, to enable sucient time for comment and review and to check overall balance
and consistency.
The External Auditor presented the results of its audit work to the Committee.
The Board consider the Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy.
A fair, balanced and understandable assessment was prepared by the management team
and circulated to the Committee. This assessment highlights factors which support the
responsibility of the Committee.
Fair, balanced and
understandable reporting
Andrew Dodson
Group Financial Controller
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
QUESTIONS WERE POSED AROUND THE FOLLOWING SUBJECTS:
As part of the eectiveness review following the March 2022 year end, a questionnaire
was issued to Committee members, regular attendees of the Committee and those
involved in the external audit process.
OUTCOMES
From its discussions during the year, the challenges presented to the External Auditor and a
review of the reporting received, the Committee considers that the External Auditor provides
appropriate professional challenge and reports its findings in an open and direct manner.
The Committee remains satisfied:
with the eectiveness of the external audit and the interaction between the External Auditor
and the Committee and with the External Auditor’s qualifications, expertise and resources.
The Committee discussed a summary of the key findings and results at its meeting
in November 2022 and no significant concerns were identified.
The results of the review were discussed with the External Auditor to monitor the continuing
quality of audit services. The External Auditor, the Committee and management agreed
to focus on improving communications going forward. The Committee’s relationship
with the External Auditor is one of openness and professionalism.
Eectiveness
Eectiveness of
the external audit
process, the
quality and scope
of the audit plan,
advising, on a
timely basis,
about any new
developments
regarding risk
management,
corporate
governance,
financial
accounting and
related risks
Delivery
Delivery and
execution of the
agreed external
audit process
for the 2021/22
financial year
Eciency
Eciency and
performance of
the audit team
as well as
relevant and
qualified
specialists
involved in the
audit process
and continuity of
sta during the
audit process
Communication
Communication
and engagement
between the
senior
management
team, the
finance team,
KPMG and the
Committee
Contact
Contact with
the audit team
outside of the
audit
Following a competitive tender process,
KPMG were appointed by shareholders as the
Workspace External Auditor for the financial
year ended 31 March 2018 and KPMG continue
to be Workspace’s External Auditor.
Following the completion of the former lead
audit partner’s five-year tenure, a new lead
audit engagement partner, Bano Sheikh,
was appointed for this reporting period.
Audit and non-audit fees
Fees payable to the External Auditor for audit
and non-audit services are set out in note 2
on page 232. This year, the non-audit services
performed by KPMG included the review of
the Group’s half-year results and Green Bond
use of proceeds assurance.
Audit quality
An important part of the Committee’s work
consists of overseeing the relationship with,
and performance of, the External Auditor, in
particular with regards to the independence,
quality, rigour and challenge of the external
audit process. The Committee reviews the
eectiveness of the audit throughout the year
taking into account:
– the detailed audit strategy for the year and
coverage of any risks, scope, and level of
fees for the audit
– the quality, knowledge and expertise of the
engagement team
– insight around the key accounting and the
audit judgements
– the quality of reporting and discussions
at the Audit Committee meetings
– the outcome of the review of eectiveness
of the External Auditor and the audit
process discussed below
Annually, the Committee assesses the
qualifications, expertise, resources and
independence of the Group’s External Auditor,
as well as the eectiveness of the audit
process. The Chair of the Committee also
meets with the KPMG partner.
AUDIT AND NON-AUDIT FEES
2022–2023
£440k
Audit
Non-audit
370
70
AUDIT AND NON-AUDIT FEES
2021–2022
£335k
Audit
Non-audit
280
55
AUDIT AND NON-AUDIT FEES
2020–2021
£336k
Audit
Non-audit
240
96
THE EFFECTIVENESS OF EXTERNAL AUDIT
External audit
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
In addition to the annual review of
eectiveness, the Committee considered the
independence and objectivity of the External
Auditor through a combination of assurances
provided by the External Auditor on the
safeguards in place to maintain independence;
oversight of the Non-Audit Services Policy
and fees paid.
KPMG LLP have confirmed to the Committee
that:
– the audit of the consolidated financial
statements is undertaken in accordance
with the UK firm’s internal policies and
procedures
– they have internal procedures in place
to identify any aspects of non-audit work
which could compromise its role as auditor
and to ensure the objectivity of their
audit report
– they believe that, in their professional
judgement, the safeguards they have in
place suciently guard against the threats
to independence
– the total fees paid by the Group during the
year do not represent a material part of the
firm’s fee income
– they consider that they have maintained
audit independence throughout the year
– As required by the Code, the Audit
Committee has a formal policy governing
the engagement of our External Auditor,
KPMG, to supply non-audit services and
to assess the threats of self-review,
self-interest, advocacy, familiarity and
management. KPMG has discontinued the
provision of all non-audit services (other
than those closely related to the audit) to
all FTSE 350 companies, meaning non-audit
services will be confined to a more limited
scope of work than that defined by the
Audit Committee’s terms of reference
The Committee is satisfied that the External
Auditor is independent.
The Audit Committee will continue to review
the eectiveness and the independence of the
External Auditor each year.
The Group complies with the Competition
and Markets Authority Order 2014 relating to
audit tendering and the provision of non-audit
services, and it is the Group’s intention to put
the audit out to tender at least every ten years
as required by applicable law and regulation.
The external audit was last tendered in 2017
following which the External Auditor changed
from PricewaterhouseCoopers LLP (PwC)
to KPMG.
It is currently anticipated that an audit tender
will be conducted before the end of the
financial year ending 31 March 2024 in respect
of the audit for the year ending 31 March 2025
to allow sucient time for a handover period
if required.
There are no contractual obligations which
restrict the Committee’s choice of external
auditor or which put in place a minimum
period for their tenure.
– During the year, KPMG was asked to provide
additional services in the form of assurance
over the allocation of proceeds from the
green bond
– If the External Auditor is to be considered
for the provision of non-audit services, the
scope of work and the fees must be
approved in advance by the Chief Financial
Ocer, the Company Secretary and the
Chair of the Audit Committee. 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
AUDITOR INDEPENDENCE AND OBJECTIVITY SAFEGUARDING AUDITOR INDEPENDENCE
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Risk management and internal controls
The Committee, on behalf of the Board, keeps under review the eectiveness of the Group’s
risk management and internal control systems through management updates and output from
the Group’s Risk Management Group to ensure that the controls in place are eective. This
framework is designed to manage rather than eliminate business risks and to provide reasonable
assurance against material misstatement in the financial statements.
On the basis of the processes outlined on this page and having regard to the ‘Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting’ issued by the FRC
in September 2014, the Board, supported by the Audit Committee, has reviewed the
eectiveness of the risk management and internal control systems. No significant control failings
or weaknesses were identified during the period under review.
The Directors confirm that the processes described below have been in place during the
2022/23 financial year and up to the date of approval of the Annual Report and Accounts.
AUDIT COMMITTEE THE BOARD
The Audit Committee has a key role in developing appropriate governance and challenge
around risk management and considering processes and assurance. It also sets the tone and
culture within the organisation regarding risk management and internal control.
The Board has defined its risk appetite for strategic and operational risks. A standard
methodology for risk assessment is applied across the Group to assist with monitoring inherent
and residual risk and to assist with comparing residual risk against target risk.
The Group had the following key procedures and monitoring processes in place during the year to provide eective internal control:
– an ongoing process to identify, evaluate and manage risks, including the self-certification of controls by risk owners, which is monitored and regularly reviewed by the Risk Management Group
and executive team. Significant issues are presented to the Board and Audit Committee
– the Group’s key controls include appropriate segregation of duties that are embedded across the organisation
– on behalf of the Board, the Audit Committee reviews fraud and anti-bribery policies and procedures; annual anti-bribery training is in place for all employees and there have been no reported
instances of whistleblowing, bribery or corruption during the period under review
– the Group has in place a system for planning, reporting and reviewing financial performance, including performance against strategy and its business plan
– in April 2022, the Board formed an ESG Committee which reviews the Group’s environmental and social related risks
– the Audit Committee reviews technology risks including IT systems and cyber risk, to ensure that the Group’s IT function eectively implements preventative and detective controls to monitor
and to mitigate risk
As required by the Code, the Board, through the Audit Committee has carried out a robust assessment of the principal and emerging risks facing the Group, including those that could threaten
its business model, future performance, solvency or liquidity.
This assessment is further described in the Strategic Report on pages 69 to 76.
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Whistleblowing policy
Page 91
With eect from 21 April 2022, the activities of the Risk Committee were integrated into
the Audit Committee, with the Board retaining overall responsibility for risk management,
and in particular for risks relating to valuation, development and real estate. This updated
risk management framework reflects the new structure from 21 April 2022.
Due to its size, the Group does not have
an internal audit function, a matter reviewed
by the Audit Committee during the year.
The Committee has advised the Board that,
currently, it considers there to be no need
for an internal audit function. The External
Auditor has confirmed this currently has
no impact on their audit approach.
The Group has a Head of Security and Risk
Management whose responsibilities include
maintenance of our risk management and
control processes.
To supplement reviews of risk management
and internal control, a programme of
operational, facilities management and health
and safety reviews are undertaken across our
properties by qualified senior head oce
personnel. Any significant findings will then be
reported to the Audit Committee. In addition,
all key controls are recorded on a central
register and control owners are required to
certify the eectiveness of controls for which
they are responsible and to provide details of
further actions to address any identified
ineectiveness. No significant issues were
identified during the year.
INTERNAL AUDIT
Board of Directors
– Sets the Group’s overall risk appetite, tolerance and strategy
– Oversees the Group’s principal risks, including property valuation, development
and real estate risks
– Receives advice and recommendations from the Audit Committee and
Executive Committee
Audit Committee
– Oversees the Group’s risk management framework
– Advises the Board on risk appetite, tolerance and
strategy
– Oversees all risks except risks related to property,
valuation, development and real estate which are
overseen by the Board
Executive Committee
– Oversees and manages the Group’s day-to-day risk management
procedures
– Reports to the Board and Audit Committee on the operation and
eectiveness of controls
Risk Management
Group
– Responsible for the implementation and embedding of risk
management activities
– Reviews and challenges the risk information provided by Risk
Owners
– Reports to the Executive Committee, although the Audit Committee
has the power to request attendance or reports from the Risk
Management Group directly if it is felt this is necessary
Risk owners
– Each risk identified by the Group is assigned a Risk Owner
– Risk Owners are responsible for monitoring, managing and reporting
on their risks, as well as identifying any emerging risks
Risk identification
1
– Risks are identified when projects are
being considered or through being raised
organically by members of sta
– Identified risks are captured in Risk Registers
– A Risk Owner is assigned to each risk and has
responsibility for assessing and monitoring
that risk
Risk assessment
2
– Each risk is assessed and scored
according to the potential impact and
likelihood of it materialising
– Each risk is given an Inherent Risk Score
(pre-controls) and a Residual Risk Score
(post-existing controls)
– Each risk is also assigned a Target Risk
Score representing the Group’s risk
tolerance for that risk
Risk response
3
– Each Residual Risk Score is compared
to its Target Risk Score
– If the Residual Risk Score is higher than the
Target Risk Score, action is taken to reduce
it towards the target
– Controls are assigned an owner who is
responsible for monitoring whether the
controls operate eectively
Risk monitoring and reporting
4
– Risks are regularly monitored by the
Risk Owners
– Control owners regularly certify that their
controls continue to operate eectively
– The Risk Management Group oversees this
activity and escalates significant changes
and new risks to the Executive Committee,
Audit Committee and/or Board as
appropriate
OUR RISK MANAGEMENT FRAMEWORK OUR RISK MANAGEMENT PROCESS
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
The ESG Committee’s role is to
promote long-term sustainable
success of the Company by ensuring
environmental and social factors are
fully integrated in business strategy
and decision making.
Duncan Owen
Chair of the ESG Committee
QUICK LINKS
Membership and attendance at ESG Committee meetings Page 173
Key topics considered by the Committee during the year Page 173
Chair’s letter Page 174
Governance of ESG matters at Workspace Page 175
Spotlight on Net Zero Pathway Page 176
ESG policies, procedures and related assurance Page 177
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ESG COMMITTEE REPORT
The Committee consists of six independent Non-Executive Directors, the Chief Executive
Ocer and the Chief Financial Ocer (biographies are available on pages 115 to 116). At the
request of the Committee, members of the Executive Committee, the senior management
team and/or external advisers may be invited to attend all or part of any meeting, as and when
appropriate.
Meetings of the ESG Committee
During the year under review, the Committee held two meetings (in September 2022 and
in January 2023). The September meeting established the Committee and approved its terms
of reference. Moving forwards, the Committee has agreed to hold three meetings a year.
These meetings are expected to be held in January, April and September.
Member
since
Meetings
attended
Duncan Owen (Chair) 2022 2/2
1
Rosie Shapland 2022 2/2
1
Lesley-Ann Nash 2022 2/2
1
Manju Malhotra 2022 2/2
1
Nick Mackenzie 2022 2/2
1
Stephen Hubbard 2022 2/2
1
Graham Clemett 2022 2/2
1
Dave Benson 2022 2/2
1
1. The ESG Committee meeting in January 2023 was a joint meeting with the Audit Committee.
Progress on net zero carbon
– Reviewed net zero carbon pathway and progress made across all scopes of carbon
– Discussed appropriateness of interim milestones and key metrics that should be prioritised
– Reviewed the overall investment plan to 2030
– Considered key dependencies for successful delivery of net zero carbon commitment
Evidence of social impact
– Reviewed the approach to social impact, key focus areas and progress made to date
– Agreed key social programmes, as a key focus for the year along with performance
indicators to measure progress
– Reviewed industry best practice on social impact and identified improvement opportunities
– Discussed the ambition to have a long-term flagship social impact target
ESG risk mitigation
– Reviewed climate risk exposure of the business against a number of warming scenarios
– Assessed the level of residual risk and mitigation strategy
– Considered elevating climate risk as a principal risk for business
Governance and reporting
– Established the ESG Committee and agreed the terms of reference
– Agreed how sustainability will be governed at all levels of business, and set five ESG targets
at Board level which are linked to remuneration
– Reviewed and approved information reported on sustainability
– Reviewed all ESG policies and eectiveness of programmes and audit procedures
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEARMEMBERSHIP AND ATTENDANCE AT ESG COMMITTEE MEETINGS
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ESG COMMITTEE REPORT CONTINUED
Dear shareholder,
I am pleased to present to you the first
report of the ESG Committee for the year
ended 31 March 2023.
The Committee was established in April 2022
to strengthen the Board’s oversight of
environmental and social issues. The Board,
recognising the increasing stakeholder focus
on ESG matters, considered it prudent to
have a dedicated forum in which to discuss
ESG-related matters. The proposal for
establishing a Board-level ESG Committee
was put forward in March 2022 when the
Board was exploring the characteristics that
would make it a high performing Board.
The ESG Committee was established the
following month.
From the beginning, the Committee agreed
that there would be four key themes for it
to focus on:
(i) having a clear and a credible path
to net zero;
(ii) evidencing long-term commitment
to social welfare;
(iii) active management of ESG risks and
opportunities; and
(iv) maintaining high standards of corporate
governance and reporting.
Undeniably, the business has an inherent
sustainable business model, and as a
Committee our role is to ensure Workspace
continues to stay at the forefront of
sustainability performance.
In its first-year establishment, the Committee
has eectively delivered on several tasks we
had set out, including establishing a robust
governance structure with clear terms of
reference, deeper dive into the Company’s
net zero pathway and climate risk profile,
prioritising social impact alongside
ESG Committee
Chair’s letter
environmental commitment and conducting
a critical review of ESG policies and
procedures. The Committee also received
technical briefings from subject matter
experts on a number of topics, including
evolving sustainability reporting requirements.
I detail on page 173 an overview of the
activities which we have carried out.
Net zero carbon transition
In 2019, Workspace made a commitment
to becoming a net zero carbon business by
2030. Workspace has signed up to the Better
Buildings Partnership (‘BBP’) Climate
Commitment to deliver net zero carbon real
estate portfolios by 2030. Following a
detailed analysis of the emissions across the
business and the value chain, Workspace
have also developed a set of science-based
targets which are aligned to the goals of the
Paris Agreement and the IPCC’s 1.5°C report.
These targets have been approved by the
Science Based Targets initiative (SBTi) and
cover both our operational emissions and our
embodied carbon emissions.
Embedding ESG into the workings
of other Committees
To ensure the ESG agenda is not siloed,
we also identified ways in which ESG
considerations are embedded within the
workings of other Committees. This year we
held a joint meeting with the Audit Committee
to review the ESG policies and eectiveness
of the audit programme in place. ESG input
is also informing discussions at the
Nominations Committee regarding requisite
expertise at Board level and with the
Remuneration Committee regarding aligning
compensation with ESG targets.
I am proud to chair the ESG
Committee at Workspace,
a business where sustainability,
social impact and strong
governance is at the heart
of everything. There is a real
potential within the business
to be a market leader on
sustainability and making
a positive impact for our
customers. I am committed
to supporting the long-term
sustainable success of the
Company
Duncan Owen
Chair of the ESG Committee
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ESG COMMITTEE REPORT CONTINUED
GOVERNANCE OF ESG MATTERS AT WORKSPACE
THE BOARD
NOMINATIONS COMMITTEE
Chaired by Stephen Hubbard
AUDIT COMMITTEE
Chaired by Rosie Shapland
REMUNERATION COMMITTEE
Chaired by Lesley-Ann Nash
ESG COMMITTEE
Chaired by Duncan Owen
Looking forward
Given the fast-evolving pace of the ESG
agenda, the Committee recognises that
it needs to be future-focused and evolve
its priorities to maintain oversight of both
existing flagship initiatives and capturing
new opportunities. As such, we will be
revisiting the materiality assessment for the
business each year to identify new frontiers
to focus on. Undeniably, the urgency will
remain on driving net zero carbon transition
at pace and the Committee will continue
to closely monitor the Company’s progress
on its net zero pathway. However, our
responsibility towards our people, our
customers and our communities take equal
priority. We believe there is both a moral
and a commercial imperative to maximise
broader stakeholder value, ensuring the
business is leading the way on responsible
and inclusive practices for its employees,
customers, suppliers, and local communities.
To this end, the Committee will focus on
setting a framework for social impact
alongside long-term ambitious goals.
Duncan Owen
Chair of the ESG Committee
6 June 2023
Key responsibilities:
– Ensuring requisite strength
of Board ESG expertise
Key responsibilities:
– Integrity of ESG reporting
& targets
– Strategic risk management,
including reputational risk
Key responsibilities:
– Aligning compensation with
ESG goals
– Ensuring clarity of ESG metrics
and KPIs
Key responsibilities:
– Detailed scrutiny and oversight
of ESG
– Ensuring adequate resource
– Driving Board focus on ESG
The role of the Board
The Chief Executive Ocer along with the
Workspace Board have the highest level of
responsibility on all ESG matters. The role
of the Board is to maintain close oversight
of the ESG programme, ensuring long-term
sustainable success of the business.
An ESG Committee comprising of six
independent Non-Executive Directors, the
Chief Executive Ocer and the Chief Financial
Ocer is set up to assist the Board in
incorporating ESG considerations in business
strategy and decision making.
The ESG Committee receives a detailed
update on our sustainability and climate-
related goals three times a year, from
members of the Executive Committee
and the Head of Sustainability. The update
from the Committee and any associated
recommendations are then put forward
to the Board for consideration.
The ESG Committee also informs the working
of other Board Committees with ESG
considerations as it pertains to remuneration,
nominations and audit functions.
Management responsibility
The Executive Committee at Workspace are
responsible for creating the ESG strategy
for the business and individual Executive
Committee members are responsible for
leading on the delivery of environmental and
social programmes. The Executive Committee
receives monthly updates on ESG matters,
including progress against the annual
ESG targets.
At operational level, the day-to-day
management of ESG initiatives is managed by
the members of the Environmental and Social
Sustainability Committee, a cross function
group comprising of heads of departments
who are responsible for individual
workstreams. Both these Committees include
several Executive Committee members, which
ensures senior level ownership and oversight
of implementation plans and streamlines
communication to the wider Executive
Committee and the Board.
Ownership and accountability
ESG considerations are embedded across the
business, ensuring there is clear oversight and
accountability at each level – at Board level,
at Executive level and at operational delivery
level. Further, the core ESG targets for the
business have been translated into performance
objectives for all employees and are linked to
their remuneration.
Terms of reference
The Committee’s role and responsibilities are
set out in the terms of reference, which were
last updated in September 2022 and which
are available on the Company’s website at
workspace.co.uk/investors/about-us/
governance/board-committees.
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ESG COMMITTEE REPORT CONTINUED
ESG COMMITTEE CHAIR’S LETTER CONTINUED
SPOTLIGHT ON NET ZERO PATHWAY TRACKING PROGRESS ON NET ZERO CARBON PATHWAY
During the year, the Committee conducted
a deeper dive of the net zero pathway for the
business to ensure it is on track to achieving
full decarbonisation by 2030.
Whilst this will not be an easy undertaking,
I am pleased with the progress the business
has already made by reducing its like-for-like
scope 1 and 2 emissions by 11% compared to
last year, particularly the significant reduction
achieved in fossil fuel use and achieving
market-leading performance on embodied
carbon associated with its development and
construction activity.
Despite owning several historic buildings, Workspace has successfully refurbished a significant
proportion of the portfolio to all electric, highly sustainable buildings, resulting in a significant
27% reduction of scope 1 emissions this year. It is also very encouraging to see the level of
knowledge within various teams on the topic and a real dedication towards driving positive impact.
It is important that Workspace continues to maintain a lead on its decarbonisation journey and
hence the Committee made a decision to govern progress on net zero pathway, as described below.
I am pleased with the progress
made on the net zero pathway,
particularly the significant
reduction in embodied carbon
associated with development
activities
Duncan Owen
Chair of the ESG Committee
1
REVIEW OF EXISTING NET ZERO PATHWAY
2
ESTABLISHING TARGETS AT BOARD LEVEL
3
NET ZERO DUE DILIGENCE
4
INVESTMENT DECISIONS
The Committee reviewed the scope of Workspace’s net zero commitment and the
proposed net zero pathway. Four key workstreams were identified as key levers for
achieving net zero carbon by 2030. Within each workstream, annual milestones
were set and progress against these tracked at each Committee meeting
Given the strategic importance of net zero carbon to the business, the Remuneration
Committee decided to link energy and carbon reduction targets to Director’s remuneration
It was agreed to implement detailed climate risk and net zero due diligence to inform all
new acquisitions and establish alignment with the existing net zero pathway. The existing
pathway was subsequently updated to reflect the acquisition of the McKay portfolio
The Board considered attainment of high energy and carbon performance as a key factor
when evaluating and approving all capex decisions
Leroy House,
Islington
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ESG COMMITTEE REPORT CONTINUED
ESG COMMITTEE CHAIR’S LETTER CONTINUED
ESG policies, procedures and related assurance
Workspace has a robust
assurance programme,
supported by internal and
external checks to ensure
compliance with policies
Once a year, Workspace holds a joint Audit
Committee and ESG Committee meeting.
The objective of this meeting is to review and
to approve a programme of assurance aimed
at assessing the eectiveness of policies
and processes relating to ESG matters. The
detailed review conducted by the Committee
gave confidence that Workspace has a robust
assurance programme, supported by internal
and external checks to ensure compliance
with policies. This year the Company also
launched its Supplier Code of Conduct which
ensures all the suppliers are aligned with
Workspace’s expectations and ambitions,
especially when it comes to issues such as
living wage, modern slavery, anti-bribery,
health and safety, equal opportunities, and
sustainability.
The table to the right shows the list of
policies and procedures that support the
implementation of our ESG strategy:
Environmental
Climate change policy Ensures that Workspace conduct their business in a climate responsible way
Environmental policy Ensures that Workspace conduct their business in an environmentally responsible way
Sustainable development brief Sets minimum requirements for our development and refurbishment projects on energy,
carbon, waste, water, materials, nature and wellbeing
Net zero pathway Ensures that Workspace have quantifiable emission reduction targets and a clear plan
to achieve net zero carbon in alignment with a 1.5°C future
Green finance framework A framework used by Workspace to issue a green debt instrument including green bonds,
private placement, and green loans
Social
Health and safety policy Ensures that Workspace delivers its obligations under health and safety legislation. The policy
aims to reduce accidents and it endeavours to control health and safety risks to employees
and others who may be aected by Workspace’s activities
Supplier Code of Conduct Sets Workspace’s principles for ethical conduct and behaviour in business practices.
The Supplier Code of Conduct also ensures that Workspace’s suppliers, contractors,
service providers and representatives live up to our values and standards
Modern slavery statement Sets out a zero-tolerance stance towards slavery and human tracking for Workspace’s
operations and amongst its suppliers
Equal opportunities and dignity
at work policy
Sets Workspace’s expectations and standards regarding equal opportunities and dignity
at work. The policy also outlines managerial and sta responsibilities to ensure the business’
principles are observed
Governance
Risk management framework A five-step approach to ensure Workspace has a robust process to assess and to manage risks
Anti-Bribery and Corruption,
and Gifts and Hospitality policy
Sets out standards and expectations for employees to ensure relationships with suppliers are
conducted in an ethical way which is compliant with relevant legislation and provides
guidance on how to recognise and deal with corruption issues
Whistleblowing policy Ensures that sta are aware of how to raise serious concerns. The policy provides guidance,
and it ensures a robust process exists to enable an adequate response to the concerns raised.
Ensures that sta will be protected from retribution
Inclusion and diversity policy Ensures that Workspace is committed to supporting diversity and to creating an inclusive culture
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ESG COMMITTEE REPORT CONTINUED
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Our approach to Remuneration
is designed to be simple and
transparent and to support the
Company’s strategy, values, and
our purpose to give businesses
the freedom to grow.
Remuneration for 2023 has been
framed by the Company’s excellent
operational performance and the
broader stakeholder experience.
Lesley-Ann Nash
Chair of the Remuneration Committee
QUICK LINKS
Membership and attendance at Remuneration Committee meetings Page 179
Chair’s letter Page 181
Remuneration at a glance Page 185
REMUNERATION
The Committee consists of Non-Executive Directors and is chaired by Lesley-Ann Nash.
Details of individual attendance at the meetings held during the year are set out below.
More information on the skills and experience of all Committee members can be found
on pages 115 to 116.
Member
since
Meetings
attended
Lesley-Ann Nash (Chair) 2021 6/6
Stephen Hubbard 2014 6/6
Rosie Shapland 2020 6/6
Support for the Remuneration Committee
During the year, we sought external support from PwC and internal support from the CEO,
whose attendance at Committee meetings was by invitation from the Chair, to advise on
specific questions raised by the Committee and on matters relating to the performance and
remuneration of the senior management team. The Company Secretary attended each
meeting as Secretary to the Committee. No Director was present for any discussions that
related directly to their own remuneration.
Remuneration Policy (the ‘Policy’) 2023
As part of the triennial review of the Directors’ Remuneration Policy, the Committee
undertook a review of the remuneration arrangements for the Executive Board Directors.
This included a review of our key remuneration principles and a review of the current policy
in order to agree initial proposals for the new Policy. Shareholders and proxy agencies
were approached and consulted, with feedback reviewed and responded to by the
Committee (further details can be found on page 190). The proposals were put forward
and the changes were approved by the Committee.
Wider workforce remuneration
The Committee reviewed wider workforce remuneration arrangements and took these into
account when reviewing remuneration for the Executive Directors. One particular area of
focus during the year was the Committee’s approval of management proposals for sta
in response to the increased cost of living.
Executive and senior management remuneration framework
The Committee reviewed annual bonus outcomes for 2021/22 and reviewed performance
outcomes under the 2019 LTIP. The Committee also set performance metrics and targets
for the 2022/23 annual bonus, including appropriate sustainability and ESG metrics, and
approved the 2022 LTIP awards. This year included a review of performance metrics for
2023/24 incentives against our strategy, including ESG, and a review of annual monitoring
of shareholding guidelines.
Reflecting ESG targets under the annual bonus and the LTIP
The Committee approved appropriate sustainability metrics in both the annual bonus
for 2022/23 and for the 2023 LTIP grant.
Gender Pay Gap
2022 was the first year in which we met the requirement regarding employee numbers
to publish our gender pay gap. The Committee received a presentation from Human
Resources which outlined our gender pay gap and this was published in March 2023.
Committee Governance
The Committee considered key executive remuneration trends and market practice
including updates on the current executive pay environment, shareholder guidelines and
corporate governance. A review of the results of the internal performance evaluation of the
Remuneration Committee was conducted as well as a review of the Committee terms of
reference. During the year, the Committee approved the Directors’ Remuneration Report;
Directors’ Remuneration Policy; and Gender Pay Gap Report.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEARMEMBERSHIP AND ATTENDANCE AT REMUNERATION COMMITTEE MEETINGS
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REMUNERATION CONTINUED
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Aligning our purpose and strategy with our remuneration principles and the experience of all our stakeholders
OUR KEY REMUNERATION PRINCIPLES
Alignment with our
strategy and purpose
Workspace has worked hard to articulate and define our
purpose, alongside our established values and corporate
strategy. Our remuneration is aligned with the Group’s
objectives and long-term strategy through a mix of short
and long-term performance metrics. This aligns with the
‘alignment to culture’ principle under Provision 40 of the
UK Corporate Governance Code.
A focus on risk A significant part of an Executive’s reward is linked to
performance with a clear line of sight between business
performance and the delivery of Shareholder value. Performance
measures applicable to the 2023 LTIP grant have been
reviewed and are based on a combination of financial, share
price, ESG and strategic measures aligned with the Company’s
strategic plan. This aligns with the ‘risk’ and ‘proportionality’
principles under the UK Corporate Governance Code.
Acting in a
sustainable way
Incorporating ESG into our incentive arrangements strongly
aligns to the sustainability pillar of our strategy. Staying ahead
of the sustainability curve and delivering on our net zero
carbon commitments is a fundamental part of Workspace’s
long-term strategy. This aligns with the ‘alignment to culture’
principle under Provision 40 of the UK Corporate
Governance Code.
Transparency and
simplicity for the
benefit of all our
stakeholders
The Committee seeks to embed simplicity and transparency in
the design and delivery of Executive reward. The remuneration
structure is simple to understand for both participants and
Shareholders and is aligned to the strategic priorities of the
business. This aligns with the ‘clarity’, ‘simplicity’ and
‘predictability’ principles under Provision 40 of the UK
Corporate Governance Code.
Consistency
of application
Short and long term incentive plans, operated across the
organisation, reward the delivery of the business strategy.
A high percentage of rewards are delivered in the form of
equity, meaning that Executives are strongly aligned with
Shareholders. Executives are also required to build significant
shareholdings in Workspace. This aligns with the ‘risk’ principle
under Provision 40 of the UK Corporate Governance Code.
Stakeholder experiences in 2023
Pages 181 to 182 and 184
OUR PURPOSE, STRATEGY AND STAKEHOLDERS
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REMUNERATION CONTINUED
Dear shareholder,
As Chair of the Remuneration Committee
and on behalf of the Board, I am pleased
to present our 2023 Remuneration Report.
The report is split into:
– Remuneration at a glance: highlighting how
executive pay, simply and transparently,
incentivises delivery of our strategy and
promotion of our values – pages 185 to 188
– Our new Directors’ Remuneration Policy
that will be put to shareholders at our 2023
AGM – pages 189 to 196
– Annual Report on Directors’ remuneration
explaining how our policy aligns with our
objectives and strategy including the
implementation of pay for 2023/24 –
pages 197 to 211
We as a Committee are highly conscious
of our role in underpinning the Company’s
ability to develop long-term value for all
stakeholders and none more so than at a time
of significant economic uncertainty. The
Committee continues to be guided by its key
principles which are detailed on page 180.
Business performance
This year has seen market volatility persist
with increases in interest rates against a
backdrop of slow global growth and the
ongoing conflict in Ukraine. The increases
of interest rates has aected most real estate
markets globally resulting in higher yields and
correspondingly lower values. This economic
environment is a challenge for the real estate
sector and only agile businesses which
continue to evolve and provide excellent
operational performance will succeed.
Despite these challenges facing the market,
Workspace has made good progress against
its strategic priorities and key performance
indicators. A strong trading performance
during the year resulted in a 29% increase
Remuneration Committee
Chair’s letter
in trading profit alongside a 34% increase in
net rental income. This has been fuelled by
resilient levels of customer demand, as our
flexible oer is an increasingly attractive
option for successful innovative businesses
in London’s SME community. The increased
interest rates, in the case of Workspace, have
therefore been largely oset by our improved
ability to drive higher levels of occupation
through operational excellence.
The integration of McKay has also been a
focus for Workspace over the year. We have
successfully completed the operational
integration of the McKay portfolio. We
continue to make progress in our plan to add
value to the portfolio by adapting the former
McKay buildings to fit our strategy, rolling out
our flexible lease oer. We have also now
disposed of the majority of the non-core
McKay assets. Initial delays did however mean
the sales were a significant challenge for the
management team, against the negative
backdrop of rising interest rates and reduced
investor confidence.
Notwithstanding the above, we remain
mindful that the negative valuation change
has resulted in a falling EPRA NAV per share
of 6.2% for shareholders. We are aware of
the challenges our customers and business
partners are facing in the current economic
environment. Therefore, we must remain
focused on continuously oering good value
and great service.
The experience of our stakeholders
We as a Committee actively considered
various aspects of the wider context in
reviewing outcomes for the 2022/23
remuneration of our Executive Directors,
including the experience of all the Company’s
stakeholders during the year, such as our
employees, customers and suppliers.
Our key priorities as a
Remuneration Committee are
to ensure that remuneration
arrangements attract and
retain a high-calibre team of
Executive Directors and senior
management and to oer them
every encouragement to
successfully deliver our strategy
and to create shareholder
value in a sustainable and
responsible manner
Lesley-Ann Nash
Chair of the Remuneration Committee
29%
INCREASE IN TRADING PROFIT
AFTER INTEREST
20%
INCREASE IN DIVIDEND PER SHARE
84%
CUSTOMER SATISFACTION
Gender pay gap report
Page 124
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REMUNERATION CONTINUED
We remained mindful of the pressures and
challenges faced by many of our employees
in the current economic climate. As part of this,
the Company determined that our 2023/24
sta salaries would increase by 6%, with a
minimum uplift of £3,000 for sta earning
below £50,000, as well as that payment
being accelerated to April. More information
about other benefits that are oered to
employees can be found on page 198.
This year we also published our inaugural
gender pay gap report which can be found
on our website. The Board and the Committee
are fully committed to eectively promoting
diversity throughout the business as an
integral part of our corporate culture and
purpose. We are fully aware that a diverse
workforce that brings an appropriate balance
of skills, experience and knowledge, as well as
fresh perspectives, enriches our business and
contributes to our long-term success.
A summary of how the remuneration
outcomes align with the experience of our
other stakeholders is set on page 184.
Remuneration outcomes in 2022/23
After very careful consideration, and taking
into account all relevant factors as described
and detailed throughout this Annual Report,
the Committee took the following decisions
in respect of remuneration for the Executive
Directors:
Base salary
Executive Directors will receive a base salary
increase of 3% which is below the level awarded
to the wider workforce (as set out above),
and this will take eect from 1 April 2023.
Annual bonus 2022/23
Despite the challenges facing the market,
it has been a productive year across the
Company. We delivered a strong trading
performance in the year leading to above
target outcomes under this measure of the
bonus. With ESG at the top of the Company’s
agenda, we have made real progress against
a number of objectives set in this area.
We are also pleased to report various
achievements under our strategic financial
and operational eciency metrics, including
the delivery of integration cost savings from
the McKay acquisition and successful
integration of McKay’s sta and processes.
This detail is set out on page 204.
As a result, the formulaic outcome under the
bonus was 89% of maximum (106.4% of salary).
The Committee assessed the outcome in the
context of ensuring it is reflective of
corporate performance as well as the
experience and expectation of shareholders.
The Committee has decided to use its
discretion to apply a reduction to the overall
bonus outturn for the CEO of 20% of salary.
This results in a bonus outcome of 72% of
maximum (86.4% of salary) for the CEO.
This equates to £448,589 for Graham Clemett
and £380,167 for Dave Benson. Of the bonus
award, 33% will be deferred in shares for three
years under the Deferred Bonus Plan.
Vesting of 2020 Long Term Incentive Plan
The LTIP awards granted to Graham Clemett
and Dave Benson in 2020 were subject to
performance conditions measured over the
three financial years from 1 April 2020 to
31 March 2023. The vesting of 50% of the
awards was subject to Total Shareholder Return
(TSR) performance relative to FTSE 350 real
estate companies (excluding agencies), with
the remaining 50% subject to Total Property
Return (TPR) versus the IPD Benchmark.
Having tested the performance conditions,
TPR performance was above upper quartile,
meaning this element vested in full. Therefore,
the overall formulaic outcome is 50%.
SUMMARY OF EXECUTIVE DIRECTORS’ TOTAL REMUNERATION
The tables below set out a single figure for the total remuneration received by each Executive
Board Director for the year ended 31 March 2023. The full table can be found on page 200.
GRAHAM CLEMETT
Chief Executive Ocer
2022/23
£000
FIXED PAY
BASE SALARY
519.2
PENSION
1
51.9
BENEFITS
2
22.5
TOTAL FIXED
593.6
VARIABLE PAY
ANNUAL BONUS
3
448.6
LTIP
4,5
391.1
OTHER – SAYE, SIP
0
TOTAL VARIABLE
839.7
TOTAL 1,433.3
OF WHICH SHARE PRICE GROWTH
£0
DAVE BENSON
Chief Financial Ocer
2022/23
£000
FIXED PAY
BASE SALARY
357.3
PENSION
1
35.2
BENEFITS
2
0
TOTAL FIXED
392.5
VARIABLE PAY
ANNUAL BONUS
3
380.2
LTIP
4,5
269.1
OTHER – SAYE, SIP
0
TOTAL VARIABLE
649.3
TOTAL 1,041.8
OF WHICH SHARE PRICE GROWTH
£0
1. Pension: During 2022/23 each of Messrs Clemett and Benson received a cash allowance in lieu of pension contribution.
2. Benefits: Taxable value of benefits received in the year by Executive Directors includes a car allowance, private health
insurance and death in service cover.
3. Annual bonus: This is the total bonus earned in respect of performance during the relevant year. For 2022/23, the
Committee set a minimum deferral requirement of 33% of the bonus earned. For 2022/23, this deferral was equivalent
to £148,034 for Mr Clemett and £125,455 for Mr Benson.
4. None of the LTIP single figure is attributable to share price growth.
5. The 2022/23 figure includes the estimated value of 50% of the 2020 LTIP shares that vested based on performance to
31 March 2023. The share price used is the three-month average to 31 March 2023 of £4.88. This will be updated in next
year’s report to reflect the share price on the date of vesting. As allowable under the relevant plan rules and approved
Policy, the Committee determined that dividend equivalents are payable under the 2020 LTIP award – this figure therefore
includes the value of dividend equivalents accrued on the shares that are vesting over the relevant performance period.
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REMUNERATION COMMITTEE CHAIR’S LETTER CONTINUED
This equates to a total of £391,084 for
Graham Clemett and £269,114 for Dave
Benson (these figures include dividend
equivalents). The net vested shares will
be subject to a two-year holding period.
The Committee considered that the LTIP
performance outturns were fair and reasonable
relative to the financial performance of the
business and also stakeholder experience.
As disclosed in our 2020 Directors’
Remuneration Report, the Committee was
mindful of the context prevailing on grant
of the 2020 LTIP awards. We concluded that
the awards would be granted on the normal
timetable but committed to remaining
mindful of guarding against windfall gains
as a result of share price movements over the
period. Taking into consideration a number
of factors, including the current share price
compared to that at the time of the grant and
share price movements over the period, the
Committee has concluded that participants
will not benefit from a windfall gain on the
2020 LTIP awards and therefore has
determined that no adjustment is required.
Proposed changes to the Directors’
Remuneration Policy
Our current Directors’ Remuneration Policy
was approved by shareholders at our 2020
AGM with a vote in favour of 99.54%. In line
with the regulatory timeline for Policy reviews,
we will be seeking shareholder approval for
a new Policy at our AGM in July this year.
Having carried out a detailed review, the
Remuneration Committee believes that whilst
our current Policy has worked well for us and
our stakeholders and remains strategically
aligned, the review provides us an
opportunity to further enhance this alignment
with limited change in a couple of areas.
As part of the Policy review, the Committee
completed a comprehensive programme of
shareholder engagement to ensure their views
were reflected in the new Policy and I would
like to thank them for their highly valued time.
I outline a summary of the key changes here,
and the full Policy is on pages 189 to 196.
Maximum annual bonus opportunity
for the CEO
The outcome of our Policy review this year
determined that, whilst the measures and
structure of our annual bonus Policy remain
fit for purpose, the current opportunity for
the CEO is materially behind that of companies
within the FTSE 250 and the FTSE 350 real
estate sector.
Whilst the Committee does not solely base
the remuneration of Workspace on the
comparison with its peers, it is essential that
the CEO package remains competitive in the
context of a complex and growing business
such as Workspace. As such, we are proposing
to increase the maximum bonus opportunity
for the CEO from 120% to 150% of salary.
This change enhances the portion of the CEO’s
total remuneration that is subject to stretching
performance targets, ensuring Workspace
rewards for strong business performance.
The CFO’s maximum bonus opportunity will
remain at 120% of salary.
The current annual bonus deferral of 33%
of the award into shares for three years will
be retained, which alongside the CEO’s
shareholding requirement of 200% of salary,
ensures full alignment with the experience
of shareholders.
LTIP performance measures
For the past five years, awards granted under
the LTIP have been subject to TSR and TPR
performance measures with equal weighting.
Following careful consideration, we are
proposing to remove TPR from the LTIP and
introduce three new measures to better align
our LTIP with our strategic priorities. No changes
are proposed to the existing TSR measure.
The proposed LTIP measures and weightings
for the 2023 LTIP grant are:
– TSR relative to FTSE 350 Real Estate
companies (excluding agencies) (25%)
– Earnings per Share (‘EPS’) growth (25%)
– Total Accounting Return (‘TAR’) (25%)
– Environmental, Social and Governance
(‘ESG’) metrics (25%)
The combination of these measures better
reflects the alignment with strategy and purpose.
EPS growth is an important headline measure
of Workspace’s financial performance, with
outcomes better aligned to our success in
active portfolio management and investment.
Including TAR as a measure in our LTIP
ensures we reward the creation of value for
shareholders in the form of dividends paid and
growth in Net Asset Value. Incorporating ESG
strongly aligns to the sustainability pillar of
our strategy, which includes focus on creating
sustainable environments and achieving net
zero by 2030. Full details on the targets for
the 2023 LTIP grant can be found on page 207.
The Committee determined that 2023 LTIP
awards would be granted at the normal level
of 200% of salary for the CEO and CFO.
When making this decision, the Committee
was mindful of our share price performance
over the year, particularly since awards were
last granted, and determined that at the end
of the performance period, careful
consideration will be given as to whether any
windfall gains have arisen from these awards.
Further to this, as with previous awards,
a performance underpin will apply to the
awards which allows the Committee to reduce
vesting should the Committee believe that the
outturn is inconsistent with the overall
performance of the business.
No other changes are proposed to our Policy
which is set out on pages 189 to 196. A full
summary of the implementation of Policy,
including annual bonus measures for the
2023/24 financial year, is set out on page 206.
Changes to below Board remuneration
Although the remuneration of below Board
employees does not fall in the remit of the
Policy, the Committee believes it is important
to communicate the proposed changes as
part of our open dialogue with shareholders.
It is a priority of the Committee to ensure
that employees below Board are rewarded
appropriately for their continued
contributions to the business, incentivised to
remain with Workspace, and are fully aligned
to the experience of our shareholders. We are
therefore proposing to grant restricted share
awards (‘RSAs’) below Board in place of the
performance based LTIP structure. Executive
Directors will not receive RSAs.
Engagement with our shareholders
We are grateful for the feedback and support
we receive from shareholders, and believe that
regular engagement with our stakeholders is
key to our commitment to achieving the
highest standards of corporate governance and
integrity. As I mentioned above, in line with this,
the Committee consulted with our largest
investors ahead of the renewal of our Policy
at our 2023 AGM. I am pleased to say that the
shareholders that engaged with us
appreciated our approach.
I look forward to your continued engagement
and I hope you will join the Board in
supporting our Directors’ Remuneration
Report and Directors’ Remuneration Policy
at the upcoming 2023 AGM.
Lesley-Ann Nash
Chair of the Remuneration Committee
6 June 2023
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Stakeholder experiences in 2023
Pages 181 and 182
OUR PURPOSE, STRATEGY AND STAKEHOLDERS
Our investors
We believe in an open dialogue with investors.
As part of our Directors’ Remuneration Policy
review, the Committee consulted with major
shareholders and investor bodies, receiving
helpful and positive feedback.
We ensure that shareholders’ experience
is reflected in remuneration outcomes as
demonstrated by our exercise of discretion to
the overall bonus outturn for the CEO this year.
During the year, the Committee reviewed the
LTIP performance measures to ensure these
continue to align to our strategic priorities.
Subsequently, the Committee approved the
introduction of an EPS growth measure for the
2023 LTIP grant. EPS is an important headline
measure of Workspace’s financial
performance and profitability. The existing
relative TSR condition remains a performance
measure for the 2023 LTIP grant and a key
measure in ensuring outcomes from the LTIP
align with the experience of our shareholders.
Our partners and suppliers
We work with a broad range of long-term
partners and these relationships are governed
by stringent ethical and sustainability
standards. As an accredited Living Wage
employer ourselves, we are committed to
paying the Real London Living Wage to 100%
of our suppliers and partners working on
Workspace premises.
Our communities
We create a flatter, fairer London: by
providing high-quality, aordable space, we
bring employment into the local areas and
help create community hubs. We strongly
believe in giving something back to the
communities where we have a presence,
which is why we oer employment support
to disadvantaged young people.
As part of our annual bonus sustainability
metrics, our InspiresMe programme was
launched to local schools, colleges and youth
organisations where students benefitted from
career sessions and work experience.
The environment
Sustainability is at the heart of our strategy
and this is reflected in incentives for our
Executive Directors. Whilst sustainability
objectives are part of our annual bonus,
during the year the Committee discussed and
approved the inclusion of ESG metrics within
the LTIP for the 2023 grant. The measures
include key objectives which directly support
our strategy in focusing on creating
sustainable environments and achieving
net zero by 2030.
Our customers
Our customers are at the heart of our business
and this is reflected in our strategy, with one
of our three strategic pillars relating to
customer-led growth. Customer satisfaction
is a measure within our annual bonus for our
Executive Directors and the Committee was
satisfied that the bonus outcomes for the year
accurately reflected the experience of our
customers at Workspace.
Our people
Mindful of the challenging economic
environment faced by our employees, the
Committee oversaw the decision to award
salary increases of 6% with a minimum uplift
of £3,000 to those earning below £50,000.
The introduction of the restricted share award
for senior employees below board level
ensures these individuals can share directly
in the success of Workspace and are fully
aligned with shareholders’ experience.
Employee engagement and wellbeing are
reflected in our sustainability objectives as
part of our Executive Directors’ bonuses.
The Committee set objectives on employee
wellbeing initiatives, achieved through the
roll-out of a series of successful events.
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REMUNERATION CONTINUED
All sta in the Company are eligible to
participate in the Company’s annual bonus
plan, all-employee share schemes, pension
scheme, life assurance arrangements and
medical insurance benefits.
While the Executive Directors participate in
the Company’s LTIP, the rest of the Executive
Committee and some senior employees
receive the Company’s new Restricted Share
Awards (‘RSA’). Executive Directors and
Executive Committee members are also
required to adhere to the Company’s
shareholding guidelines.
When making remuneration decisions for the
Executive Directors, the Committee considers
pay and employment conditions elsewhere in
the Group. The Committee receives regular
updates from the Executive Directors on
employee feedback. The Committee also
monitors bonus payout and share award data.
In respect of share ownership we operate
the following:
LTIP:
Reinforces a strong performance culture at
more senior levels and delivery of long-term
sector outperformance.
Restricted Share Awards:
Supports retention and motivation by
providing greater line of sight over outcomes
and fully aligns participants to shareholders’
experience.
SAYE and SIP:
Provides all employees with the opportunity
to become shareholders of the Company.
Remuneration at a glance
WORKSPACE’S APPROACH TO REMUNERATION AND HOW WE INCENTIVISE AT ALL LEVELS WITHIN THE COMPANY
ELEMENTS OF PAY AT WORKSPACE
BASE SALARY PENSION BENEFITS ANNUAL BONUS SHARE OWNERSHIP
Executive Directors
2
LTIP
SAYE and SIP
Executive Committee
6
Restricted share
awards
SAYE and SIP
Other senior employees
65
Restricted share
awards
SAYE and SIP
Rest of employees
220
SAYE and SIP
Salaries are set to
reflect market value
of the role and aid
recruitment and
retention.
Employees are
eligible for a 2:1
match on employee
pension contributions
of 3% or 5% of salary.
Employees receive a
combination of
benefits relevant for
their role including
life assurance
arrangements and
medical insurance
benefits.
Opportunities and
performance
conditions are
tailored to reflect an
individual’s role and
responsibilities.
Share ownership
enables all employees
to share in the
long-term success
of the Group and
aligns them with
shareholder interests.
ELIGIBILITY WITHIN
WORKSPACE
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How our variable pay aligns to our strategic pillars
– In executing our strategy we aim to create value and positive outcomes for our shareholders and all other stakeholders.
– We frequently consider the performance measures we use for our incentives to check that they support the delivery of our strategy.
OUR THREE STRATEGIC PILLARS:
2023/24 ANNUAL BONUS AND LINK TO STRATEGY
2023 LTIP AND LINK TO STRATEGY
We have amended the measures for 2023/24, as we believe there is an opportunity to better align our LTIP
with our strategy.
ANNUAL BONUS
The component measures provide
a good balance of reward against
the three pillars of our strategy which
are the foundations of Workspace’s
future growth.
Measures shown as % of award
Total: 10 0%
LTIP
The balance of the measures is well
aligned to our strategy of driving income
growth and enhancing shareholder
value over the longer term whilst
always acting in a sustainable way.
Measures shown as % of award
Total: 10 0%
THE 2022 LTIP MEASURES WERE
AS FOLLOWS
Measure and % weighting
Link to
strategy
50%: Total Shareholder Return
(TSR) relative to FTSE 350
Real Estate companies
(excluding agencies)
50%: Total Property Return
(TPR) versus IPD benchmark
Measure:
Total Shareholder Return
(TSR) relative to FTSE 350
Real Estate companies
(excluding agencies)
Measure:
Total Accounting Return
(TAR)
Measure:
Earnings Per Share
(EPS) Growth
Measure:
Environmental, Social
and Governance
(ESG) metrics
Measure:
Financial objectives (Trading profit
after interest (50%), Strategic
financial (10%))
Measure:
Sustainability
Measure:
Operational
eciency
Measure:
Customer
satisfaction
Weighting:
60%
Weighting:
25%
Weighting:
25%
Weighting:
25%
Weighting:
25%
Weighting:
20%
Weighting:
10%
Weighting:
10%
Driving customer-led growth
Delivering operational excellence
Being sustainable
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REMUNERATION CONTINUED
REMUNERATION AT A GLANCE CONTINUED
Summary of Executive
Directors’ Total Remuneration
Graham Clemett
Chief Executive Ocer
FIXED COMPONENTS
OF EXECUTIVE PAY
£000
BASE SALARY
519.2
PENSION
51.9
BENEFITS
22.5
TOTAL FIXED
593.6
VARIABLE COMPONENTS
OF EXECUTIVE PAY
£000
ANNUAL BONUS
448.6
LTIP
391.1
OTHER – SAYE, SIP
0
TOTAL VARIABLE
839.7
SINGLE FIGURE FOR
2022/23
1,433.3
ANNUAL BONUS
OUTCOMES UNDER THE 2022/23 ANNUAL BONUS
Measure:
Threshold
(0% payable)
Maximum
(100% payable)
Outcome
(% of salary)
CEO actual
£000
TRADING PROFIT AFTER INTEREST
£57. 3m £62.3m
51.0%
60%
264.8
Actual: £61.4m
1
STRATEGIC FINANCIAL OBJECTIVES
0% 100%
9.0%
12%
46.7
Actual: 75%
SUSTAINABILITY OBJECTIVES
0% 100%
24%
24%
124.6
Actual: 100%
OPERATIONAL EFFICIENCY
0% 100%
11.1%
12%
57.6
Actual: 92.5%
CUSTOMER SATISFACTION
72% 80%
11.3%
12%
58.6
Actual: 84%
2
FORMULAIC OUTTURN
106.4% 120% 552.4
DISCRETIONARY REDUCTION APPLIED TO OUTTURN OF 20% OF SALARY
86.4% 448.6
1. This excludes the impact of the McKay acquisition.
2. With adjustment, see page 201.
Measure:
Threshold
(20% payable)
Maximum
(100% payable)
Formulaic outcome
(% of award)
CEO actual
£000
TOTAL SHAREHOLDER RETURN (TSR)
RELATIVE TO FTSE 350 REAL ESTATE
COMPANIES (EXCLUDING AGENCIES)
MEDIAN UPPER QUARTILE
0%
50%
£340.7
OF WHICH SHARE PRICE:
£NIL
Actual: 5th percentile
TOTAL PROPERTY RETURN (TPR)
VERSUS IPD
MEDIAN UPPER QUARTILE
50%
50%
£50.4
DIVIDEND EQUIVALENT:
Actual: 77th percentile
TOTAL
50% 100% £391.1
LTIP
OUTCOMES UNDER THE 2020 LTIP PERFORMANCE MEASURES OVER THE PERIOD 1 APRIL 2020 TO 31 MARCH 2023
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REMUNERATION AT A GLANCE CONTINUED
Summary of Executive
Directors’ Total Remuneration
Dave Benson
Chief Financial Ocer
FIXED COMPONENTS
OF EXECUTIVE PAY
£000
BASE SALARY
357.3
PENSION
35.2
BENEFITS
0
TOTAL FIXED
392.5
VARIABLE COMPONENTS
OF EXECUTIVE PAY
£000
ANNUAL BONUS
380.2
LTIP
269.1
OTHER – SAYE, SIP
0
TOTAL VARIABLE
649.3
SINGLE FIGURE FOR
2022/23
1,041.8
ANNUAL BONUS
OUTCOMES UNDER THE 2022/23 ANNUAL BONUS
Measure:
Threshold
(0% payable)
Maximum
(100% payable)
Formulaic outcome
(% of salary)
CFO actual
£000
TRADING PROFIT AFTER INTEREST
£57. 3m £62.3m
51.0%
60%
182.2
Actual: £61.4m
1
STRATEGIC FINANCIAL OBJECTIVES
0% 100%
9.0%
12%
32.2
Actual: 75%
SUSTAINABILITY OBJECTIVES
0% 100%
24%
24%
85.8
Actual: 100%
OPERATIONAL EFFICIENCY
0% 100%
11.1%
12%
39.7
Actual: 92.5%
CUSTOMER SATISFACTION
72% 80%
11.3%
12%
40.3
Actual: 84%
2
BONUS OUTTURN
106.4% 120% 380.2
1. This excludes the impact of the McKay acquisition.
2. With adjustment, see page 201.
Measure:
Threshold
(20% payable)
Maximum
(100% payable)
Formulaic outcome
(% of award)
CFO actual
£000
TOTAL SHAREHOLDER RETURN (TSR)
RELATIVE TO FTSE 350 REAL ESTATE
COMPANIES (EXCLUDING AGENCIES)
MEDIAN UPPER QUARTILE
0%
50%
234.5
OF WHICH SHARE PRICE:
£NIL
Actual: 5th percentile
TOTAL PROPERTY RETURN (TPR)
VERSUS IPD
MEDIAN UPPER QUARTILE
50%
50%
34.7
DIVIDEND EQUIVALENT:
Actual: 77th percentile
TOTAL
50% 100% 269.1
LTIP
OUTCOMES UNDER THE 2020 LTIP PERFORMANCE MEASURES OVER THE PERIOD 1 APRIL 2020 TO 31 MARCH 2023
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REMUNERATION CONTINUED
REMUNERATION AT A GLANCE CONTINUED
This section sets out the
Directors’ Remuneration Policy
and Annual Report on
Remuneration. A binding
shareholder resolution to approve
the Directors’ Remuneration
Policy (pages 190 to 196) will be
put forward at the 2023 Annual
General Meeting (‘AGM’) of the
Company on 6 July 2023.
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REMUNERATION CONTINUED
Our new Remuneration Policy
This section sets out the Directors’
Remuneration Policy. A binding shareholder
resolution to approve this section will be
proposed at the 2023 Annual General Meeting
(‘AGM’) of the Company on 6 July 2023. The
Policy will be eective from the 2023 AGM
subject to shareholder approval and will be
available to view at workspace.co.uk/investors
in the corporate governance section.
CONSIDERATION OF SHAREHOLDER VIEWS
The Committee values ongoing dialogue with
shareholders and welcomes feedback on
Directors’ remuneration. As part of the Policy
review, the Committee directly consulted with
major shareholders. A letter setting out our
proposals was shared with investors reflecting
over two-thirds of our issued share capital, as
well as with investor bodies, including ISS,
Glass Lewis and the Investment Association.
Through this process, the Committee
responded to questions raised and held
meetings where requested to further clarify
the proposals.
We were grateful for the feedback received
and pleased that this was positive overall.
FIXED COMPONENTS OF EXECUTIVE PAY
PURPOSE AND LINK TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS CHANGES FROM
PREVIOUS POLICY
BASE SALARY
To reflect market
value of the role and
an individual’s
experience,
performance and
contribution.
2023/24
2024/25
2025/26
2026/27
2027/28
Salaries are normally
reviewed annually.
Salary levels take account of:
– Role, performance and
experience.
– Business performance
and the external economic
environment.
– Salary levels for similar
roles at relevant
comparators.
– Salary increases across
the Group.
Increases are applied in
line with the outcome of
the review. There is no
prescribed maximum.
Increases for Executive
Board Directors will
typically be in line with
those of the wider
workforce.
Both Company and
individual performance
are considered when
setting Executive
Director base salaries.
None.
PENSION
To provide market
competitive
pensions.
2023/24
2024/25
2025/26
2026/27
2027/28
Directors participate in
adefined contribution
pension scheme or may
receive a cash allowance in
lieu of pension contribution.
Up to 10% of salary.
For individuals with less
than a year’s service with
Workspace, this will be
6% of salary.
None. None.
BENEFITS
To provide market
competitive benefits.
2023/24
2024/25
2025/26
2026/27
2027/28
Benefits typically include
carallowance, private health
insurance, and death in service
cover. Where appropriate,
other benefits may be oered
including, but not limited to,
allowances for relocation.
In addition, Directors are
eligible to participate in
all-employee share plans,
currently the SAYE and Share
Incentive Plan.
Benefits may vary by role
and individual
circumstance, and are
reviewed periodically.
There is no overall
maximum.
Include car allowance,
private health insurance
and other benefits.
None. None.
REMUNERATION POLICY TABLE
The table below describes the Policy in relation to the components of remuneration for Executive Directors.
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REMUNERATION CONTINUED
VARIABLE COMPONENTS OF EXECUTIVE PAY
PURPOSE AND LINK TO STRATEGY OPERATION MAXIMUM OPPORTUNITY PERFORMANCE METRICS CHANGES FROM
PREVIOUS POLICY
ANNUAL BONUS
To reinforce and reward
delivery of annual
strategic business
priorities, based on
performance measures
relating to both Group and
individual performance.
Bonus deferral provides
alignment with
shareholder interests.
2023/24
2024/25
2025/26
2026/27
2027/28
A portion of the annual bonus is
deferred into shares for a period
of three years. The deferral is 33%
of bonus earned.
Dividend equivalents may be
accrued on deferred shares.
The Committee may apply malus
and clawback in circumstances of
gross misconduct, material
misstatement of the Group’s
results, an error in calculation,
serious reputational damage, and
corporate failure up to the end of
the deferral period.
The maximum bonus
potential for Executive
Board Directors is
asfollows:
CEO: 150% of salary
p.a.
CFO: 120% of salary
p.a.
Performance is measured relative to financial, operational,
ESG, strategicandindividual objectives in the year aligned
with theCompany’s strategic plan.
Performance measures and weightings are reviewed each
year to ensure they remain appropriate and reinforce the
business strategy. Atleast 60% of the total bonus will be
based on financial measures.
Bonus awards are at the Committee’s discretion and the
Committee will consider the Company’s performance in the
round. The Committee may override the formulaic bonus
outcome within the limits of the plan where it believes the
outcome is not reflective of performance, to ensure fairness
to both shareholders and participants.
The bonus pays out on a straight-line basis from threshold
to 100% at maximum performance.
The maximum bonus
potential for the CEO
is now 150% of salary,
the maximum bonus
potential for the CFO
remains at 120%
ofsalary.
LONG TERM
INCENTIVE PLAN (LTIP)
To reward and align to the
delivery of sustained
long-term performance
and to align the interests
of participants with those
of shareholders
2023/24
2024/25
2025/26
2026/27
2027/28
The Committee may grant
annualawards of Performance
Shares which vest after three
years, subject to performance
conditions.
Vested shares are subject to a
further two-year holding period.
The Committee has discretion to
apply malus and clawback to
awards (circumstances as listed in
the Annual Bonus row above) up
to the end of the holding period.
Dividend equivalents may be
accrued on shares in respect
ofthe performance and
holdingperiod.
Normal maximum
award of up to 200%
of salary p.a.
An award of 300%
of salary p.a. may be
made in exceptional
circumstances.
Performance share plan awards will be based on a
combination offinancial, share price, ESG and strategic
measures aligned with the Company’sstrategic plan.
For 2023 awards the performance measures will be:
– Total Shareholder Return (TSR) relative to FTSE 350
Real Estate companies (excluding agencies) (25%)
– Earnings Per Share (EPS) Growth (25%)
– Total Accounting Return (TAR) (25%)
– Environmental, Social and Governance (ESG) (25%)
A performance underpin will apply which allows the
Committee to reduce vesting if performance is inconsistent
with the overall performance of the business.
For threshold performance, vesting is typically 20%
of maximum.
The Committee may, in the context of the underlying business
strategy, use dierent measures and/or vary the weightings
of the measures. The Committee would consult with major
shareholders prior to making any significant changes.
None.
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Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
Notes to the Remuneration Policy table
Share awards will be operated in accordance
with the rules of the relevant plan. In
accordance with those rules, the Committee
has discretion in the following areas:
– In the event of a variation of share capital
or a demerger, delisting, special dividend,
rights issue or other similar event which
may, in the Committee’s opinion, aect the
current or future value of shares, the
number of shares subject to an award and/
or any performance condition attached to
awards, may be adjusted
– The Committee may determine that awards
may be settled in cash
– The Committee may determine the basis on
which dividends will be calculated which
may include notional reinvestment. The
Committee may increase the time horizons
for deferral or holding periods
REMUNERATION POLICY TABLE CONTINUED
PURPOSE AND LINK TO STRATEGY OPERATION CHANGES FROM
PREVIOUS POLICY
SHAREHOLDING
REQUIREMENT
2023/24
2024/25
2025/26
2026/27
2027/28
Shareholding guideline for Executive Board Directors of 200% of salary.
Post-cessation shareholding requirement of 200% of salary for two years
post-departure.
In the event a leaver has not met the relevant shareholding requirement at the
point of cessation of employment, they would be required to retain their full
pre-cessation shareholding for the two-year period.
None.
NON-EXECUTIVE DIRECTORS’ REMUNERATION
PURPOSE AND LINK TO STRATEGY OPERATION CHANGES FROM
PREVIOUS POLICY
FEES
To reflect the time
commitment in
performing the duties
and responsibilities
of the role.
2023/24
2024/25
2025/26
2026/27
2027/28
The Chair receives an annual fee.
Non-Executive Directors receive an
annual base fee. Additional fees are
paid to Non-Executive Directors for
additional responsibilities such as
chairing a Board Committee.
Fees are reviewed from time to time,
taking into account time commitment,
responsibilities and fees paid by
companies of a similar size and
complexity.
Expenses incurred in the performance
of non-executive duties for the
Company may be reimbursed or paid
for directly by the Company, including
any tax due on the expenses. Non-
Executive Directors do not normally
receive any benefits, however these
may be provided in the future if in the
view of the Board this was considered
appropriate.
Total fees paid to Non-Executive
Directors will remain within the limit
stated in the Articles of Association.
None.
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REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
As part of the review of the Policy, the
Committee gave careful consideration to
performance measures and targets for
incentives to ensure that they are aligned to
the Company’s strategy and to performance
for our shareholders. To that end, no changes
to the annual bonus measures are proposed
at this stage.
The annual bonus measures are intended
to provide a good balance of rewarding
operational excellence, customer
relationships and building deep market
knowledge which are the foundations of the
Company’s future growth, whilst ensuring
a greater focus on sustainability.
To better align with Workspace’s strategy,
the performance measures for the 2023 LTIP
award will be:
– Total Shareholder Return (TSR) relative
to FTSE 350 Real Estate companies
excluding agencies (25%)
– Earnings Per Share (EPS) Growth (25%)
– Total Accounting Return (TAR) (25%)
– Environmental, Social and Governance
(ESG) (25%)
The Committee may, in the context of the
underlying business strategy, use dierent
performance measures and/or vary the
weightings of the measures. Major
shareholders would be consulted prior
to any significant changes.
The Committee will set Group financial
targets for the annual bonus with reference to
the prior year and forward-looking business
forecasts, ensuring the levels of performance
required are appropriately challenging.
The measurement of performance against
performance targets is at the Committee’s
discretion, which may include appropriate
adjustments to financial or non-financial
elements and/or consideration of overall
performance in the round.
Performance conditions and targets may
be varied if an event occurs or circumstances
arise which cause the Committee to
determine that they have ceased to be
appropriate. If they are varied, they must,
in the opinion of the Committee, be fair,
reasonable and materially no less dicult
than the original condition when set.
PERFORMANCE MEASURES AND TARGETS RECRUITMENT AND PROMOTION POLICY
The Committee will appoint new Executive Board Directors with a package that is in line with
the Remuneration Policy in place and agreed by shareholders at the time.
Component Approach
BASE SALARY The base salaries of new appointees will be determined by reference
to the individual’s role and responsibilities, experience and skills,
relevant market data, internal relativities and their current basic salary.
Base salary may be higher or lower than the previous incumbent.
Salaries may be set at an initially lower level with the intention of
increasing salary at a higher than usual rate as the executive gains
experience in the role.
PENSION New appointees will be eligible to participate in the Group’s defined
contribution pension plan or receive a cash alternative, in line with
the Policy.
BENEFITS New appointees will be eligible to receive benefits in line with the
Policy, including relocation benefits if appropriate (relocation
benefits are subject to a maximum time limit of two years).
ANNUAL BONUS The structure described in the Policy table will normally apply to
new appointees with the relevant maximum being pro-rated to
reflect the proportion of the year served.
The Committee retains the flexibility to determine that for the first
year of appointment any annual incentive award will be subject to
such terms as it may determine.
LTIP New appointees will be eligible for awards under the LTIP which will
normally be on the same terms as other executives, as described in
the Policy table.
The maximum aggregate value of incentives (excluding buyouts) on appointment will be in line
with the aggregate maximums in the Policy table.
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REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
RECRUITMENT AND PROMOTION POLICY
CONTINUED
TERMINATION POLICY
To facilitate recruitment the Committee may
need to ‘buy out’ remuneration forfeited on
joining the Company. This will be considered
on a case-by-case basis and may comprise
cash or shares. In general:
– If such remuneration was in the form of
shares, compensation would be in the
Company’s shares
– If remuneration was subject to achievement
of performance conditions, compensation
would normally be subject to performance
– The timing of any compensation will, where
practicable, match the vesting schedule of
the remuneration forfeited
The over-riding principle would be that the
value of any replacement buy out awards
should be no more than the commercial value
of awards which have been forfeited. For any
buyout award, the leaver provisions may be
determined at the time of the award.
The approach in cases of appointing a new
Executive Board Director by way of internal
promotion will be consistent with the policy
for external appointees detailed above. Where
such an individual has contractual commitments
made prior to their promotion to Executive
Board Director level, the Company will continue
to honour these arrangements. Similarly,
if an Executive Board Director is appointed
following a merger or an acquisition of a
company by Workspace, legacy terms and
conditions may be honoured.
For interim positions a cash supplement may
be paid rather than salary (for example a
Non-Executive Director taking on an executive
function on a short-term basis).
Payments of basic salary, benefits and
pension made up to the termination date
are in line with contractual notice periods.
Payments in lieu of notice are limited to the
Executive Board Director’s basic salary for
the unexpired portion of the notice period.
A payment may be made in lieu of unused
holiday entitlement. The Company may make
phased payments which are paid in monthly
instalments and subject to mitigation.
The Committee reserves the right to make
any other payments in connection with a
Director’s cessation of oce or employment
where the payments are made in good faith
in discharge of an existing legal obligation
(or by way of damages for breach of such
an obligation) or by way of a compromise or
settlement of any claim arising in connection
with the cessation of a Director’s oce or
employment. Any such payment may include
but is not limited to paying reasonable
relocation costs, any reasonable level of fees
for outplacement assistance and/or the
Director’s legal or professional advice fees
in connection with his cessation of oce
or employment.
In the event that a participant ceases to
be an employee of Workspace, treatment
of outstanding awards under the Group’s
incentive plans will be determined based
on the relevant plan rules.
Component Approach
ANNUAL BONUS There is no automatic entitlement to an annual bonus. The Committee
retains discretion to award bonuses for leavers taking account of the
circumstances of departure. Leavers during the plan year normally
lose any entitlement to bonus unless the individual is considered a
‘good leaver’
1
. Good leavers are eligible for an award to the extent that
performance conditions have been satisfied and pro-rated for the
proportion of the financial year served, with Committee discretion
to treat otherwise.
DEFERRED BONUS
SHARES
Deferred bonus shares normally lapse unless the individual is
considered a ‘good leaver’
1
, in which case awards normally continue
and are released at the usual time, although the Committee has the
discretion to allow earlier release.
On death, awards typically vest immediately.
LTIP Under the LTIP, unvested shares normally lapse unless the individual is
considered a ‘good leaver’
1
, in which case awards are normally tested
for performance over the full performance period and pro-rated for
time based on the proportion of the vesting period served, with
Committee discretion to treat otherwise. On death, awards will
typically vest immediately subject to the satisfaction of performance
conditions as determined by the Committee.
LTIP awards which are subject to an additional holding period will
typically be retained and released at either
(a) the end of the holding period; or
(b) two years from cessation – whichever is soonest, although the
Committee has the discretion to allow earlier release.
ALL-EMPLOYEE
PLANS
For all-employee HMRC registered plans such as SAYE and SIP, leavers
will be treated in accordance with the approved rules of these plans.
1. A good leaver is defined as an employee who ceases to hold employment during the plan year by reason of: injury, ill-health
or disability proved to the satisfaction of the Committee; retirement with the agreement of the Group Company by which
he is employed; the participant’s employing Company ceasing to be a Group Company; the business or part of the business
to which the participant’s employment relates being transferred to a person who is not a Group Company; or any other
reason which the Committee in its absolute discretion so permits.
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REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
TREATMENT OF CORPORATE EVENTS CONSIDERATION OF EMPLOYMENT
CONDITIONS ELSEWHERE IN THE COMPANY
LEGACY COMMITMENTS MINOR AMENDMENTS
In the event of a change of control or winding
up of the Company, the LTIP awards will vest
based on the extent to which the Committee
determines that the performance conditions
have been or would have been met. Pro-rating
for service in the vesting period will apply
unless the Committee decides otherwise.
Outstanding deferred bonus awards will vest
in full as soon as practicable in such
circumstances. In the event of a variation of
share capital, demerger, special dividend or
any other transaction which will materially
impact the value of shares the Committee
may, at its discretion, allow deferred bonus
and LTIP awards to vest on the same basis as
for a change of control described above.
Alternatively, an adjustment may be made to
the number of shares if considered appropriate.
When setting remuneration for Executive
Directors the Committee takes into account
contextual information about pay and
conditions within the Group, including salary
increases and bonus awards for all employees.
The Committee members receive regular
updates from the Executive Directors in
relation to employee feedback, and on pay
and employment conditions elsewhere in the
Company. Our Chair, Stephen Hubbard, is
our designated Non-Executive Director
responsible for overseeing employee
engagement. During the last financial year,
employees were not formally consulted on
the design of the Executive Directors’ Policy
but were informed of the Company’s
performance and key remuneration decisions.
We are committed to sharing business
success across the organisation with all
employees participating in a short-term
incentive plan. At more senior levels,
remuneration is more long term and larger
proportions are dependent on both Group
and individual performance and paid in the
form of shares. We operate both an SAYE
and a SIP open to all employees. The
illustration on page 185 provides an overview
of remuneration throughout Workspace and
the way in which our share incentive plans
cascade through the organisation.
The Committee may make minor amendments
to the Policy (for regulatory, exchange control,
tax or administrative purposes or to take
account of a change in legislation) without
obtaining shareholder approval.
The Committee reserves the right to make any
remuneration payments and payments for loss
of oce (including exercising any discretions
available to it in connection with such
payments) notwithstanding that they are not
in line with the Policy set out above where the
terms of the payment were agreed: (i) before
16 July 2014 (the date the Company’s first
shareholder-approved Directors’
Remuneration Policy came into eect);
(ii) before the Policy set out above came into
eect, provided that the terms of the payment
were consistent with the shareholder-approved
Directors’ Remuneration Policy in force at the
time they were agreed; or (iii) at a time when
the relevant individual was not a Director of the
Company and, in the opinion of the Committee,
the payment was not in consideration for the
individual becoming a Director of the Company.
For these purposes ‘payments’ include the
Committee satisfying awards of variable
remuneration and, in relation to an award over
shares, the terms of the payment are ‘agreed’
at the time the award is granted.
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Workspace Group PLC
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REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
£000
Fixed pay
On-target
Maximum
Maximum with
50% share price
appreciation
£000
Fixed pay
On-target
Maximum
Maximum with
50% share price
appreciation
Possible payouts under policy
Based on our proposed Remuneration Policy,
we set out below scenarios for the potential
remuneration to be earned by our Executive
Directors under the Policy for various
performance assumptions. In line with
the Companies (Miscellaneous Reporting)
Regulations 2018, we have included the
impact of a potential scenario of a 50% share
price appreciation on the LTIP.
A high proportion of the Executive Board
Directors’ packages are made up of shares,
supporting the alignment of executive pay
with the interests of our shareholders. The
increased value in remuneration from share
price appreciation is beneficial for both
Executive Directors and shareholders.
Salary as at 1 April 2023. Salary as at 1 April 2023.
Current contribution rate of 10% of salary. Current contribution rate of 10% of salary.
As provided in the single figure table on page 200. As provided in the single figure table on page 200.
Impact of 50% share price appreciation over three years (on the LTIP). Impact of 50% share price appreciation over three years (on the LTIP).
Minimum – no bonus payable;
On-target – 50% of maximum potential bonus;
Maximum – maximum potential bonus.
Minimum – no bonus payable;
On-target – 50% of maximum potential bonus;
Maximum – maximum potential bonus.
Minimum – no LTIP vesting;
On-target – 20% of maximum (threshold vesting);
Maximum – maximum LTIP vesting.
Minimum – no LTIP vesting;
On-target – 20% of maximum (threshold vesting);
Maximum – maximum LTIP vesting.
Base salary Base salary
Pension
Pension
Benefits Benefits
Share price growth Share price growth
Annual bonus Annual bonus
LTIP LTIP
0 03,500 3,5003,000 3,0002,500 2,5002,0002,000 1,5001,500 1,0001,000500 500
SINGLE FIGURE SCENARIOS
Graham Clemett, CEO
SINGLE FIGURE SCENARIOS
Dave Benson, CFO
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REMUNERATION CONTINUED
OUR NEW REMUNERATION POLICY CONTINUED
Annual report on remuneration
WHAT WE PAID OUR DIRECTORS IN 2022/23
TOTAL TARGET COMPENSATION COMPARED TO OUR PEERS
Chart A below shows the relative position of target total compensation
for our Executive Directors compared to our peers. When we set the
target total compensation for the Executive Directors, one of the factors
the Committee considers is the competitive market for our Executive
Directors, which we believe is the FTSE 250 and FTSE 350 Real Estate
companies, and the size of the Company compared to these peers.
The Committee has been pleased to report above target-performance
against market benchmark has been achieved over recent years.
BOTTOM
QUARTILE
THIRD
QUARTILE
SECOND
QUARTILE
TOP
QUARTILE
FTSE 350
REAL ESTATE
FTSE 250
CHART A (I) — GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
Positioning of total remuneration of the
Company relative to market benchmarks.
BOTTOM
QUARTILE
THIRD
QUARTILE
SECOND
QUARTILE
TOP
QUARTILE
FTSE 350
REAL ESTATE
FTSE 250
CHART A (II) — DAVE BENSON
CHIEF FINANCIAL OFFICER
Positioning of total remuneration of the
Company relative to market benchmarks.
OUR SHAREHOLDING REQUIREMENTS (AUDITED)
Our Executive Directors are encouraged to hold a high number of
shares in order to align their interests to those of the shareholders, and
to encourage a long-term view of the sustainable performance of the
Company. As such, our Directors are impacted by the share price over
the year in the same way as our shareholders.
Chart B below shows that, in the year, the CEO met his minimum
shareholding requirements. The CFO joined in April 2020 and is
building his shareholding.
0% 100%
MINIMUM SHAREHOLDING
REQUIREMENT
200% 400%300%
1. All shares that are either unvested and not subject to performance or subject to
performance have been included on a net of tax basis (i.e. at a 50% discount).
2. This is based on a share price of £5.2854 being the average share price over the year to
31 March 2023 and salaries of £519,200 and £357,300 for Graham Clemett and Dave
Benson respectively.
CEO
CFO
% OF SALARY
CHART B
OUR SHAREHOLDING
REQUIREMENT HAS BEEN MET
Owned outright or vested.
Unvested and not subject to performance.
Subject to performance.
OVERALL LINK TO REMUNERATION AND EQUITY OF THE
EXECUTIVE DIRECTORS
Table A below sets out the single figure for 2022/23, the number of
shares held by the Director at the beginning and end of the financial
year, and the impact on the value of these shares taking the opening
price and closing price for the year.
TABLE A
Graham Clemett Dave Benson
2022/23 single figure (£000) 1,433.3 1,041.8
Shares held at start of year 135,311 20,085
Shares held at end of year 141,930 39,765
Value of shares at start of year (£000)
1
926.9 137.6
Value of shares at end of year (£000)
2
620.2 173.8
Dierence (£000) (306.7) 36.2
1. Based on a closing share price on 31 March 2022 of £6.85.
2. Based on a closing share price on 31 March 2023 of £4.37.
This section sets out the Annual Report
on Remuneration. An advisory shareholder
resolution to approve this section, together
with the Chair’s statement on pages 180 to 183
will be put forward at the 2023 AGM of the
Company on 6 July 2023.
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REMUNERATION CONTINUED
OUR APPROACH TO FAIRNESS AND WIDER WORKFORCE CONSIDERATIONS THE YEAR ON YEAR CHANGE IN OUR DIRECTORS’ REMUNERATION
When making remuneration decisions for the
Executive Board Directors, the Committee
considers pay, policies and practices
elsewhere in the Group.
We receive regular updates from the
Executive Board Directors, and we monitor
bonus payout and share award data.
In this section, we provide context to our
Executive Board Director remuneration by
explaining our employee policies and our
approach to fairness, as well as the ratio
of CEO pay to that of the wider workforce.
Communication and engagement
with employees
The Board is committed to an open dialogue
with our employees over various decisions.
Our Chair, Stephen Hubbard, is our designated
Non-Executive Director responsible for
overseeing employee engagement. During
the last financial year, employees have been
informed about activities, performance and
the Company’s response to the increased
cost of living through sta briefings held by
the CEO and other members of the Executive
team. Mr Hubbard also held three informal sta
events during the year. Employees are kept
informed about activities and performance
not only through these briefings but also by
the circulation of corporate announcements
and other relevant information to all sta,
supplemented by updates on the intranet.
Share schemes
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 and
the Share Incentive Plan.
Equal opportunities
Workspace is committed to an active Equal
Opportunities Policy from recruitment and
selection, through training and development
and in performance reviews and promotion.
All decisions relating to employment
practices are objective, free from bias and
based solely upon work criteria and individual
merit. We consider the needs of all employees,
customers and the community.
We use everyone’s talents and abilities, and
we value diversity. The Company aims to
make our promotion and recruitment practices
fair and objective. We encourage continuous
development and training, as well as the
provision of equal opportunities and career
development for employees. Further details
of this are shown on pages 148 to 154.
Retirement benefits
The Company provides pension benefits for
the majority of its employees. The Company’s
commitment to pension contributions,
consistent with last year, ranges from 6%
to 10% of an employee’s salary. The pension
scheme is open to every employee in
accordance with the new Government
auto-enrolment rules.
The table below sets out the changes year on year between our Director pay and average
employee pay. As per our Policy, salary increases applied to Executive Directors will typically
be in line with those of the wider workforce.
Table B below shows the percentage change in Director remuneration, comprising salary,
taxable benefits and annual bonus, and comparable data for the average of employees within
the Company. The comparator group is based on all employees (excluding the CEO, CFO and
Non-Executive Directors), normalised for joiners and leavers during the year. The average
number of people employed by the Company during the year was 291 (2022: 249). All employees
are eligible for consideration for an annual bonus.
TABLE B
2023 2022 2021
Director
Salary/
fees
Taxable
benefits
Annual
variable
Salary/
fees
Taxable
benefits
Annual
variable
Salary/
fees
Taxable
benefits
Annual
variable
Executive
Directors
Graham Clemett 3% 4% -11% 2% 1% 157% 9% -15% -54%
Dave Benson 3% n/a 10% 2% n/a 157% n/a n/a n/a
Non-Executive
Directors
Stephen Hubbard 6% n/a – 24% n/a – 198% n/a –
Damon Russell
1
-65% n/a – 10% n/a – 10% n/a –
Rosie Shapland 31% n/a – 194% n/a – n/a n/a –
Lesley-Ann Nash 15% n/a – 345% n/a – n/a n/a –
Duncan Owen
2
73% n/a – n/a n/a – n/a n/a –
Nick Mackenzie
2
491% n/a – n/a n/a – n/a n/a –
Manju Malhotra
2
491% n/a – n/a n/a – n/a n/a –
All other
employees 19% -4% -11% 5% -24% 58% 5% -5% -5%
1. Damon Russell stepped down from the Board on 22 July 2022, therefore the above information reflects his time in role.
2. Duncan Owen joined the Board in July 2021 with both Nick Mackenzie and Manju Malhotra joining the Board in January 2022,
and therefore were paid a partial fee in the prior year.
3. This increase is a result of the acquisition of McKay Securities and the inclusion of these employees in the figures for 2023.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
PAY COMPARISONS
Chart C shows the single figure of
remuneration for our CEO over time, and the
pay of our average employee, each rebased
to 2013. We have also included our TSR
performance over this period.
FTSE 350 Real Estate Supersector Index
FTSE 250 Index
Workspace Group PLC TSR
CEO single figure
TABLE C
CEO single figure of total remuneration £000 31 Mar 2014 31 Mar 2015 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 31 Mar 2021 31 Mar 2022 31 Mar 2023
Graham Clemett
1
– – – – – – 1,349.9 764.4 1,080.0 1,433.3
Jamie Hopkins
2
966.9 3,533.1 2,262.7 2,205.6 1,674.2 1,728.2 490.9 – – –
Annual bonus payout
Graham Clemett (% of maximum opportunity) – – – – – – 78% 33% 83% 72%
Jamie Hopkins (% of maximum opportunity) 97.8% 97.2% 95.3% 100% 100% 95.8% – – – -
LTIP vesting
Graham Clemett (% of maximum opportunity) – – – – – – 87.24% 0% 0% 50%
Jamie Hopkins (% of maximum opportunity) – 100% 100% 88.7% 62.7% 50.7% 87.24% – – –
Ratio of single total
remuneration figure shown
to employees as a whole
to employee lower quartile
3
– – – – – 53x 47x 23x 32x 43x
to employee median 34x 128x 79x 72x 48x 33x 43x 15x 23x 29x
to employee upper quartile
3
– – – – – 23x 23x 11x 15x 20x
1. Mr Clemett assumed the role of Interim CEO on 1 June 2019 and was appointed CEO on 24 September 2019.
2. Mr Hopkins was appointed as an Executive Director on 12 March 2012 and stepped down from the Board on 31 May 2019.
3. See next page for details on calculation.
CHART C
0
600
500
400
300
200
100
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Workspace Group PLC
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
PAY COMPARISONS CONTINUED SINGLE FIGURE OF EXECUTIVE DIRECTORS (AUDITED)
Chief Executive’s Pay Ratio
The table below compares the single total
figure of remuneration for the CEO with that
of the Group employees who are paid at the
25th percentile (lower quartile), 50th
percentile (median) and 75th percentile
(upper quartile) of its employee population.
Despite voluntarily disclosing the ratio of
CEO pay to workforce pay in previous years
(see page 199, this is the first year in which
Workspace meets the requirement regarding
employee numbers as per the Companies
(Miscellaneous Reporting) Regulations 2018.
Year Methodology
25th
percentile
ratio
50th
percentile
ratio
75th
percentile
ratio
2023 Option A 43:1 29:1 20:1
Option A, as set out under the reporting
regulations, was used to calculate remuneration
for 2023, as well as 2022 and 2021.
The UK employees included are those
employed on 31 March 2023 and remuneration
figures are determined with reference to the
financial year ending on 31 March 2023.
We have chosen Option A as we believe
that it is the most robust methodology for
calculating these figures. The value of each
employee’s total pay and benefits was
calculated using the single figure methodology
consistent with the CEO, with the exception
of the annual bonus, which was calculated
using 2021/22 financial year bonuses (which
were paid during 2022/23) as the individual
2022/23 financial year bonus information was
not available at the last practical date before
the finalisation of this report. For employees
who joined during the 2022/23 financial year
(82 employees), we’ve included their bonus
as nil as they were not entitled to receive a
2021/22 financial year bonus. This means that
the ratios are higher than if we were able to
include a bonus amount for these employees.
No elements of pay have been omitted. Where
required, remuneration was approximately
adjusted to be full-time and full-year
equivalent basis based on the employee’s
average full-time equivalent hours for the
year and the proportion of the year they were
employed. No other adjustments were made.
The table below sets out the salary and total
pay and benefits of the employee at the lower
quartile, median and upper quartile for the
2022/23 financial year.
25th
percentile
50th
percentile
75th
percentile
Salary £28,300 £41,200 £58,500
Total pay
and benefits £33,286 £48,886 £73,350
There is significant volatility in this ratio,
caused by the following:
– Our CEO pay was made up of a higher
proportion of incentive pay than that of
our employees, in line with shareholder
expectations. This introduces a higher
degree of variability in his pay each year
versus that of our employees
– Long-term incentives, which make up
a significant proportion of our CEO’s pay,
are provided in shares, and their value
on vesting, included in his single figure,
reflects the movement in share price
over the three years prior to vesting. This
outcome can add significant volatility to the
CEO’s pay and this is reflected in the ratio
For these reasons, we believe the median pay
ratio this year is consistent with pay, reward
and progression policies for UK colleagues.
The illustrations below set out a single figure for the total remuneration received by each
Executive Board Director for the year ended 31 March 2023 and the prior year.
Graham Clemett, CEO Dave Benson, CFO
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
Fixed pay
Base salary 519.2
504.0
357.3
346.8
Pension
1
51.9
50.4
35.2
30.8
Benefits
2
22.5
21.6
0
0
Total fixed 593.6 576.0 392.5 377.6
Variable pay
Annual bonus
3
448.6
502.0
380.2
345.4
LTIP
5
391.1
0
269.1
–
Other – SAYE, SIP
4
0
2.0
0
2.0
Total variable 839.7 504.0 649.3 347.4
Total 1,433.3 1,080.0 1,041.8 725.0
Of which share price growth 0 0 0 0
1. Pension: During 2022/23 each of Messrs Clemett and Benson received a cash allowance in lieu of pension contribution.
2. Benefits: Taxable value of benefits received in the year by Executive Directors includes a car allowance, private health
insurance and death in service cover.
3. Annual bonus: This is the total bonus earned in respect of performance during the relevant year. For 2021/22 and 2022/23,
the Committee set a minimum deferral requirement of 33% of the bonus earned. For 2022/23, this deferral was equivalent
to £148,034 for Mr Clemett and £125,455 for Mr Benson.
4. SIP awards granted in September 2021. See page 211 for details.
5. The 2022/23 figure includes the estimated value of 50% of the 2020 LTIP shares that vested based on performance to
31 March 2023. The share price used is the three-month average to 31 March 2023 of £4.88. This will be updated in next
year’s report to reflect the share price on the date of vesting. As allowable under the relevant plan rules and approved
Policy, the Committee determine that dividend equivalents are payable under the 2020 LTIP award – this figure includes
accrued dividends on vested shares.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Annual bonus payout in
respect of 2022/23 (Audited)
For 2022/23 the maximum bonus opportunity
for the Executive Directors was 120% of salary.
Payouts are subject to the assessment of
performance against stretching financial,
strategic and business performance targets,
and are calculated on a straight-line basis
from 0% at threshold to 100% at maximum
performance. Both Graham Clemett and Dave
Benson are required to defer 33% of their
bonus into Company shares for three years.
The targets are set based on our budgeting
process, which takes account of market
expectations, planned acquisitions and
disposals of assets, and aspirations around
Company growth.
The performance measures, targets and
outcomes for each measure are shown to
the right.
ANNUAL BONUS
OUTCOMES UNDER THE 2022/23 ANNUAL BONUS
Measure:
Threshold
(0% payable)
Maximum
(100% payable)
Formulaic outcome and
opportunity as a % of salary
TRADING PROFIT AFTER INTEREST
£57. 3m £62.3m
51.0% 60%
Actual: £61.4m
1
STRATEGIC FINANCIAL OBJECTIVES
0% 100%
9.0%
12%
Actual: 75%
SUSTAINABILITY OBJECTIVES
0% 100%
24%
24%
Actual: 100%
OPERATIONAL EFFICIENCY
0% 100%
11.1%
12%
Actual: 92.5%
CUSTOMER SATISFACTION
72% 80%
11.3%
12%
Actual: 84% of this element
2
TOTAL 106.4% 120%
OUTCOME (£000)
GRAHAM CLEMETT, CEO
FORMULAIC OUTTURN
£552.4
DISCRETIONARY REDUCTION APPLIED TO
OUTTURN OF 20% OF SALARY
BONUS OUTTURN
£448.6
86.4%
TOTAL BONUS
£148.0
OF WHICH IS DEFERRED
BONUS
OUTCOME (£000)
DAVE BENSON, CFO
BONUS OUTTURN
£380.2
106.4%
TOTAL BONUS
£125.5
OF WHICH IS DEFERRED
BONUS
1. This excludes the impact of the McKay acquisition.
2. The overall outcome was reduced as there was a 0.6% increase in the number of disagree/strongly disagree categories.
ANNUAL BONUS PAYOUT IN RESPECT OF 2022/23
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Strategic financial, operational
eciency and sustainability
objectives 2022/23
A summary of the strategic financial,
operational eciency and sustainability
objectives is shown to the right. Full details
for each performance measure are set out
on pages 203 and 204.
STRATEGIC FINANCIAL, OPERATIONAL EFFICIENCY, SUSTAINABILITY OBJECTIVES (AUDITED)
Strategic financial
objectives
1
Activity
Disposal of non-core assets
Delivery of integration cost savings from
McKay acquisition
Complete debt refinancing post McKay
acquisition
Continue to build Workspace brand profile
Operational eciency
objectives
2
Activity
Integration of McKay sta and processes
Roll-out of new finance system
New customer complaints policy and process
Continued roll-out of Workspace Inclusive oer
Sustainability
objectives
3
Activity
Progress our pathway to net zero carbon
by 2030
All lettable units to be A and B rated by 2030
Improve customer advocacy of our
sustainable credentials
Launch our new InspiresMe programme to
local schools, colleges and youth organisations
Employee and customer well-being initiatives
Page 203 Page 203 Page 204
Opportunity
24%
Outcome
24%
Opportunity
12%
Outcome
11.1%
Opportunity
12%
Outcome
9%
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
STRATEGIC FINANCIAL OBJECTIVES – OUTCOME 9%/12%
1
Target Achievement
Disposal of non-core assets – Sale of McKay industrial portfolio – Exchanged for sale of 5 of the 9 non-core industrial assets on 16 May 2023 for £82m
– Sale of other McKay non-core
assets
– Disposal of Newbury medical centre for £7m in July 2022
– Sale of Riverside residential scheme – Sale of Riverside residential scheme completed for £54m in March 2023
Delivery of integration cost
savings from McKay acquisition
– 50% reduction in McKay corporate
costs by exit 22/23
– Costs reduced from £6.4m p.a. prior to acquisition to £0.9m p.a. based on average cost in Q4 (80% reduction)
Complete debt refinancing
post McKay acquisition
– Rollover of Aviva debt facility – Completed transfer of Aviva facility in September 2022 avoiding £13m break cost
– Replacement of short-term
acquisition facilities with long-term
debt
– Acquisition facility replaced by £135m of McKay revolver facilities transferred to Workspace on same terms
as existing facilities with maturity subsequently extended to April 2025
Continue to build Workspace
brand profile
– Raise brand awareness by 2%
(average awareness in 21/22 of 11%)
– Now reached 14% average spontaneous brand awareness (based on Opinium brand research)
OPERATIONAL EFFICIENCY OBJECTIVES – OUTCOME 11.1%/12%
2
Target Achievement
Integration of McKay sta
and processes
– Completed successfully by
December 22
– Integration completed in November 2022
Roll-out of new finance system – Completed successfully by April 23 – System design, build, data load and testing substantially complete with end-user training under way by the end
of April 2023.
– System went live on 16 May 2023.
New customer complaints
policy and process
– Roll-out new policy and process
across Company by December 22
– Processes established and customer feedback portal launched 13 December 2022 – 56 cases raised to date
– Monthly reporting in place with resolution of cases being monitored to ensure SLA’s being met
Continued roll-out of
Workspace inclusive oer
– Roll-out to further 10 centres by
March 23
– This has been rolled out to 9 out of 10 of the remaining centres in scope of the Workspace Inclusive Oer
– The only exception is Canalot Studios which is undergoing refurbishment where the required Wi-Fi roll-out will be
installed as part of the building upgrade
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
SUSTAINABILITY OBJECTIVES – OUTCOME: 24%/24%
3
Target Achievement
Progress of our pathway to
net zero carbon by 2030
– Reduce energy intensity across the
portfolio by 5%
– 5% reduction in energy intensity
– Reduce scope 1 emissions (gas) per
sq. ft. by 5%
– 27% reduction in gas consumption (subject to minor adjustment for emissions from refrigerant leaks)
All lettable units to be A and B
rated by 2030
– Eliminate all F and G rated units – No F, G or unrated units remaining
– Increase the percentage of A and B
rated area in the portfolio by 10%
– 12% of floor area upgraded to EPC A/B
Improve customer advocacy
of our sustainable credentials
– Improve our ‘agree and strongly
agree’ customers satisfaction score
to 70% (currently 66%)
– The percentage of customers who agree or strongly agree that Workspace is a socially and environmentally
responsible business has increased from 66% to 70.5% Source: Workspace 2023 customer survey
Launch our new InspiresMe
programme to local schools,
colleges and youth
organisations
– Successful roll-out at four centres – Achieved roll-out of InspiresMe at five pilot centres: Kennington Park, Brickfields, Cargo Works, The Chocolate
Factory and Mare Street
– 182 students benefitted from CV workshops, career sessions and 20 students were hosted for work experience
– The responses from school partners and customers were extremely positive with 100% of the schools who took
part agreeing they were keen to continue with this initiative next year
Employee and customer
well-being initiatives
– Continued roll-out of a variety of
wellbeing events, both virtual and
physical
Employees
– 23 employee wellbeing and mental health events delivered with 600 attendees at these sessions
– Over 160 employees utilised our wellbeing cashback programme (Healthshield) with claim back of circa £28,000
– We received an average score from the recent annual employee survey of 75% on employee wellbeing across six
wellbeing questions
Customers
– Our central events team hosted 71 events of which 50 were wellbeing focused. This includes Paws in Work,
cocktail master-classes, Leafage terrarium building, yoga classes, art for wellbeing initiatives, and were attended
by 1,600 customers
– In addition centre teams hosted 37 wellbeing themed events
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
LTIP AWARD VESTING IN RESPECT OF 2022/23 (AUDITED) LTIP AWARDS MADE DURING THE 2022/23 FINANCIAL YEAR (AUDITED)
The 2020 LTIP awards measured performance over the period 1 April 2020 to 31 March 2023.
Details of the performance targets and achievement against them are set out below.
On this basis, 50% of the 2020 LTIP will vest.
The 2021 LTIP awards are based on the same targets and weightings as the 2020 LTIP award
shown below, measured over the period 1 April 2021 to 31 March 2024.
TABLE D
Measure Threshold
(20% payable)
Maximum
(100% payable)
Actual Formulaic outcome
(% of award)
TOTAL SHAREHOLDER
RETURN (TSR) RELATIVE
TO FTSE 350 REAL
ESTATE COMPANIES
(EXCLUDING AGENCIES)
MEDIAN UPPER QUARTILE
5th
PERCENTILE
0%/50%
TOTAL PROPERTY
RETURN (TPR) VERSUS
IPD
MEDIAN UPPER QUARTILE
77th
PERCENTILE
50%/50%
LTIP (% MAXIMUM)
VESTING
50%/100%
CEO CFO
NUMBER OF SHARES
VESTING (AUDITED)
69,819 48,044
Under the current Policy conditional share awards under the LTIP are granted to a maximum of
200% of salary. Awards under the 2022 LTIP are subject to the performance conditions detailed
in Table E below measured over the period 1 April 2022 to 31 March 2025.
TABLE E
Relative TSR
vs. sector group
1
(50% of the award)
Total Property
Return versus
London IPD index
(50% of the award)
Threshold
3
(20% vesting) Median Median
Maximum
3
(100% vesting) Upper Quartile Upper Quartile
1. The comparator group for the 2022 LTIP cycle is FTSE 350 Real Estate companies excluding agencies.
2. For any shares to vest on relative TSR, the Company’s TSR outcome must exceed the median TSR of the comparator group
over the performance period.
3. There is straight-line vesting between the ‘Threshold’ and ‘Maximum’ performance levels.
The following awards were granted during the year under the 2022 LTIP:
Performance share award
Director Date of grant
Market price at
date of award
1
Number
of shares
Face value
£ % of salary
Graham Clemett 24 June 2022 £6.2800 165,350 1,038,398 200%
Dave Benson 24 June 2022 £6.2800 113,789 714,594 200%
1. The share price for calculating the levels of awards was £6.2800, the average mid-market closing price over the three
dealing days 21, 22 and 23 June 2022, in accordance with the LTIP rules.
Deferred shares were granted (as conditional share awards) under the 2021/22 bonus of 25,380
shares to Mr Clemett and 17,463 shares to Mr Benson (33% of bonus awarded) on 27 June 2022.
The share price on the date of grant was £6.475 which represented the average mid-market
closing price.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
2023/24 ANNUAL BONUS AND LINK TO STRATEGY
Measure:
Financial objectives (Trading profit
after interest (50%), Strategic
financial (10%))
Measure:
Sustainability
Measure:
Operational eciency
Measure:
Customer satisfaction
Bonus
weighting:
60%
Bonus
weighting:
20%
Bonus
weighting:
10%
Bonus
weighting:
10%
How we will apply the policy in 2023/24
As explained in the Remuneration Committee Chair’s letter, we are seeking shareholder approval for a new Directors’ Remuneration Policy at the AGM on 6 July 2023. On the basis that it is approved
by shareholders, it will be implemented as set out below.
BASE SALARY
The Executive Directors will be awarded a 3%
salary increase which is below the average
applied to the wider workforce.
Salaries will be as follows:
CEO
£534,800
CFO
£368,100
PENSION
In line with the proposed Policy set out in this report, the Executive Directors will receive
a contribution to a defined contribution plan or a cash allowance in lieu of contribution of
10% of salary respectively.
ANNUAL BONUS
As per the proposed Policy, there is a change
to the CEO’s annual bonus maximum potential
in 2023/24 and this will be 150% of salary.
There is no change to the CFO’s annual bonus
maximum potential in 2023/24, and this will
continue to be 120% of salary.
33% of the total bonus paid will be deferred
into shares for three years. Dividend equivalents
may be accrued on deferred shares.
Whilst we believe that disclosing the exact
performance conditions and targets for all
measures would not be in the best interests
of shareholders, we remain committed to best
practice disclosure. We therefore set out to the
right some examples of the objectives that the
Committee will consider in respect of evaluating
the strategic financial and operational eciency
and sustainability objectives. Full disclosure
on the targets, performance achieved and
resulting bonus payouts for 2023/24 will
be provided in next year’s report.
Operational eciency objectives will include
elements which optimise value and service
such as centre and asset management.
Strategic financial targets will cover key
drivers of our commercial success including
capital management and brand awareness.
ESG metrics will align to our core
sustainability focus including the reduction
in energy intensity and an increase in social
value impact.
Full disclosure on the targets, performance
achieved and resulting bonus payouts for
2023/24 will be provided in next year’s report.
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Being sustainable
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
HOW WE WILL APPLY THE POLICY IN 2023/24
LONG-TERM INCENTIVE PLAN (LTIP)
Following careful consideration, we have decided to amend the performance measures of the
2023 LTIP, to better align with Workspace’s strategy.
Maximum award 200% of salary. The performance measures and targets for the four elements
are as follows:
Total Shareholder
Return relative to
FTSE 350 Real
Estate companies
(excluding agencies)
Earnings Per Share
(EPS) Growth
Total Accounting
Return (TAR)
Environmental,
Social and
Governance (ESG)
Weighting (% of award) 25% 25% 25% 25%
Threshold (20% vesting) Median 5% p.a. 4.5% p.a. See below
Maximum (100% vesting) Upper Quartile 10% p.a. 10% p.a. See below
A holding period of two years will apply to any net vested shares under the LTIP.
To allow any payouts to be fully reflective of underlying performance, the LTIP underpin allows
the Committee to reduce vesting should the Committee believe that the performance is
inconsistent with the overall performance of the business.
ESG LTIP THREE YEAR TARGETS
Environmental, social and governance (ESG)
Threshold
(20% vesting)
Maximum
(100% vesting) Weighting
Reduction in scope 1 gas emissions 15% 20% 50%
Increase in percentage of EPC A or B
rated space 20% 27% 50%
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Being sustainable
Weighting:
25%
Weighting:
25%
Weighting:
25%
Weighting:
25%
2023 PERFORMANCE MEASURES AND LINK TO STRATEGY
Measure:
Total Shareholder Return (TSR) relative
to FTSE 350 Real Estate companies
(excluding agencies)
Measure:
Earnings Per Share (EPS) Growth
Measure:
Total Accounting Return (TAR)
Measure:
Environmental, Social and Governance
(ESG) metrics
NON-EXECUTIVE DIRECTOR FEES
The fees for Non-Executive Directors are reviewed and agreed annually. The fees, which are
eective from 1 April 2023, are set out in the table below.
2023/24 fee 2022/23 fee % change
Chair £200,000 £200,000 0%
NED base fee £55,000 £55,000 0%
Chair of Audit Committee fee £10,800 £10,800 0%
Chair of Remuneration Committee fee £10,800 £10,800 0%
Chair of ESG Committee fee £10,800 £10,800 0%
Senior Independent Director fee £10,800 £10,800 0%
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
SINGLE FIGURE FOR NON-EXECUTIVE DIRECTORS (AUDITED)
Table F below sets out a single figure for the total remuneration received by each Non-Executive Director for the year ended 31 March 2023 and the prior year:
TABLE F
Stephen Hubbard Damon Russell Duncan Owen Rosie Shapland Lesley-Ann Nash Manju Malhotra Nick Mackenzie
Non-Executive Director
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
2022/23
£000
2021/22
£000
Base fee 200.0 188.0 19.2 51.0 55.0 35.4 55.0 51.0 55.0 51.0 55.0 9.3 55.0 9.3
Additional fees – – 2.7 10.8 6.3 – 21.6 7.6 10.8 6.3 – – – –
Total 200.0 188.0 21.9 61.8 61.3 35.4 76.6 58.6 65.8 57.3 55.0 9.3 55.0 9.3
1. Expenses incurred by Non-Executive Directors represent the cost to the Group, being gross of taxation. In 2022/23 Nick Mackenzie was reimbursed for out of pocket expenses incurred in attending meetings, in connection with the discharge of his duties
of £1,111.70.
2. Additional fees were paid during the year to Non-Executive Directors serving as Chairs of the Remuneration, Audit and ESG Committees. An additional fee is also paid to the Senior Independent Non-Executive Director.
SHARE OWNERSHIP AND SHARE INTERESTS (AUDITED)
The table below shows the interests of the Directors and connected persons in shares (owned
outright or vested). There have been no changes in the interests in the period between 31 March
2023 and 6 June 2023.
TABLE G
31 March
2023
31 March
2022
Chair
Stephen Hubbard 41,500 23,640
Executive Directors
Graham Clemett 141,930 135,311
Dave Benson 39,765 20,085
Non-Executive Directors
Rosie Shapland Nil Nil
Lesley-Ann Nash Nil Nil
Nick Mackenzie 12,400 Nil
Manju Malhotra Nil Nil
Duncan Owen 9,410 5,560
Past Directors
Damon Russell
1
See note Nil
1. Damon Russell stepped down from the Board on 22 July 2022. As at the date of leaving, Damon Russell did not hold any shares.
Dave Benson, who joined the Company on 1 April 2020, acquired 19,850 shares in September
2020. Mr Benson was subsequently awarded 235 ordinary shares under the Workspace Group
PLC Share Incentive Plan and acquired a further 19,680 shares on 1 September 2022.
Table H below shows the Executive Directors’ interest in shares.
TABLE H
Executive Director Type
Owned
outright
or vested
2
Unvested and
not subject to
performance
3
Subject to
performance
4
Total
Graham Clemett Shares 141,930 123,143 282,393 547,466
Market value options
1
Nil 3,389 Nil 3,389
Dave Benson Shares 39,765 70,757 194,330 304,852
Market value options
1
Nil 5,649 Nil 5,649
1. Market value options include SAYE options outstanding and not yet matured as at 31 March 2023. The exercise price of
these was set at 80% (in accordance with HMRC and the plan rules) of the market value of a share at the invitation date.
See page 211 for further details.
2. The total shares owned outright or vested.
3. This figure includes the deferred bonus shares awarded in 2020, 2021 and 2022 for Mr Clemett and the deferred bonus
shares awarded in 2021 and 2022 for Mr Benson and the number of shares vesting, (gross), pursuant to the 2020 LTIP award.
4. The interest in shares of 282,393 for Mr Clemett consists of LTIP awards made in 2021 and 2022. The interest in shares
of 194,330 for Mr Benson consists of LTIP awards made in 2021 and 2022, details of which can be found on page 210
in this report.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
External appointments
It is the Board’s policy to allow Executive Directors to take up one Non-Executive position
on the board of another company, subject to the prior approval of the Board. Any fee earned
in relation to outside appointments is retained by the Executive Director. Mr Clemett was
appointed a Non-Executive Director of The Restaurant Group PLC, eective 1 June 2016 and as
Senior Independent Director on 6 November 2020. Mr Clemett is paid an annual fee of £69.3k.
Mr Benson does not hold any external appointments.
Relative importance of spend on pay
Chart D below shows the Company’s actual expenditure on shareholder distributions (including
dividends and share buybacks) and total employee pay expenditure for the financial years
ended 31 March 2022 and 31 March 2023.
CHART D
EMPLOYEE REMUNERATION DISTRIBUTION TO SHAREHOLDERS
2023
£29.5m
2023
£49.4m
2022
£21.8m
2022
£40.5m
+35% +22%
The estimated total dividend as reported in the financial statements for the year to 31 March 2023
was £49.4m.
Payments for loss of oce (audited)
None.
Payments to past Directors (audited)
None.
Service contracts of Directors serving in the year
Executive Directors are employed under contracts of employment with Workspace Group PLC.
The principal terms of the Executive Directors’ service contracts are as follows.
Notice period
Executive Director Position Eective date of contract From Company From Director
Graham Clemett Chief Executive Ocer 31 July 2007 12 months 12 months
Dave Benson Chief Financial Ocer 1 April 2020 12 months 12 months
Graham Clemett joined the Company as CFO in July 2007 and was appointed as CEO on
24 September 2019. Mr Clemett served as Interim CEO and CFO from 31 May 2019 until
September 2019.
The Chair and Non-Executive Directors have letters of appointment. Dates of the Directors’
letters of appointment are set out below:
Name
Date of original appointment
(date of reappointment)
Date of appointment/
last reappointment at AGM Notice period
Stephen Hubbard 16 July 2014 (23 January 2020) 2022 6 months
Rosie Shapland 6 November 2020 (n/a) 2022 3 months
Lesley-Ann Nash 1 January 2021 (n/a) 2022 3 months
Duncan Owen 22 July 2021 (n/a) 2022 3 months
Manju Malhotra 26 January 2022 (n/a) 2022 3 months
Nick Mackenzie 26 January 2022 (n/a) 2022 3 months
The Directors are subject to annual re-election at the AGM. Non-Executive Directors’ letters
of appointment and Executive Directors’ contracts are available to view at the Company’s
registered oce.
Mr Hubbard’s reappointment letter dated 23 January 2020 stated that his appointment would
be for a period of three years commencing on the conclusion of the 2020 AGM. The AGM was
held on 9 July 2020.
Mr Owen, as Chair designate, signed a new letter of appointment dated 27 February 2023 which
will take eect from the conclusion of the AGM on 6 July 2023.
ADDITIONAL INFORMATION
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Committee advisers
During the year, PwC LLP acted as independent adviser to the Committee. PwC LLP was
appointed by the Committee in 2018 following a selection process. PwC LLP is a founding
member of the Remuneration Consultants Group and voluntarily operates under the Code of
Conduct in relation to Executive remuneration consulting in the UK. The Committee is satisfied
that the PwC LLP engagement partner and team, which provide remuneration advice to the
Committee, do not have connections with the Group that may impair their objectivity and
independence. The fees charged by PwC LLP for the provision of independent advice to the
Committee during the year were £113,605 (based on hourly rates). PwC LLP provided no other
services during the financial year.
Voting at the Company’s AGMs
The table below sets out the results of the most recent shareholder votes on the Policy Report
and the advisory vote on the 2021/22 Annual Report on Remuneration at the 2022 AGM on
21 July 2022. The Committee views this level of shareholder support as a strong endorsement
of the Company’s Policy and its implementation.
Percentage of votes cast Number of votes cast
For and
Discretion Against
For and
Discretion Against Withheld
1
Policy Report (2020 AGM) 99.54 0.46 116,307,019 539,870 1,666
Annual Report on
Remuneration (2022 AGM) 98.55 1.45 144,279,654 2,123,283 4,663
1. A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against
a resolution.
ADDITIONAL INFORMATION CONTINUED
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 Investment Association in respect of
all-share plans (10% in any rolling ten-year period) and Executive share plans (5% in any rolling
ten-year period) as at 31 March 2023 is detailed below.
As of 31 March 2023, around 2.3% and 2.0% shares have been, or may be, issued to settle
awards made in the previous ten 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.
ALL-SHARE PLANS EXECUTIVE SHARE PLANS
LIMIT
10%
LIMIT
5%
ACTUAL
2.3%
ACTUAL
2%
Outstanding LTIP awards
Details of current awards outstanding to Graham Clemett and Dave Benson are detailed below.
Executive Director
At 1 April 2022
Performance
2
Lapsed during
the year
Performance
Vested during
the year
Performance
At 31 March 2023
Performance
Graham Clemett
18/06/2019 71,814 71,814 – –
18/06/2020 139,638 – – 139,638
24/06/2021 117,043 – – 117,043
24/06/2022 – – – 165,350
Dave Benson
18/06/2020 96,089 – – 96,089
24/06/2021 80,541 – – 80,541
24/06/2022 – – – 113,789
1. Awards will vest subject to the satisfaction of performance conditions detailed on page 207 over the three-year
performance period.
2. LTIP awards made to the Executive Directors. In June 2020, 2021 and 2022 awards were in respect of 200% of salary
based on a share price at date of award of £7.0767, £8.6117 and £6.2800 respectively. The 2020 LTIP awards vested
at 50%.
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
Share options
The following table shows, for the Directors who served during the year, the interests
in outstanding awards under the HMRC-approved Savings Related Share Option Plan and
SIP Awards.
Executive Director
At
01/04/2022
Granted
during
the year
Lapsed
during
the year
Vested
in year
At
31/03/2023
Exercise
price
Normal exercise date
From To
Graham Clemett 107 – – – 107 18.09.18
228 – – – 228 30.08.20
233 – – – 233 05.09.22
235 – – 235 29.09.24
3,389 – – – 3,389 £5.31 01.09.23 01.03.24
Dave Benson 5,649 – – – 5,649 £5.31 01.09.25 01.03.26
235 – – – 235 29.09.24
1. Mr Clemett was granted awards under the Share Incentive Plan on 18 September 2015 (107); 30 August 2017 (228);
5 September 2019 (233) and 29 September 2021 (235).
2. Mr Benson was granted an awards under the Share Incentive Plan on 29 September 2021 (235).
There have been no changes in Directors’ interests over options in the period between the
balance sheet date and 6 June 2023.
The Directors’ Remuneration Report has been approved by the Board of Workspace Group PLC.
By order of the Board
Lesley-Ann Nash
Chair of the Remuneration Committee
6 June 2023
ADDITIONAL INFORMATION CONTINUED
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
The Directors present their report on the aairs of the Group
together with the audited financial statements for the year
ended 31 March 2023.
Workspace Group PLC is incorporated in the UK and registered as a public limited company
in England and Wales with company number 02041612 and registered oce at Canterbury
Court, Kennington Park, 1-3 Brixton Road, London SW9 6DE. It is listed on the main market
of the London Stock Exchange.
It is the ultimate holding company of the Group, a full list of its subsidiaries is set out in note 27
to the financial statements set out on pages 249 and 250.
Where reference is made in this Directors’ Report to other sections of the Annual Report, those
sections are incorporated by reference into this Directors’ Report. Certain disclosures required
to be contained in the Directors’ Report have been incorporated into the Strategic Report as set
out in ‘Other information’ below.
Dividends
An interim dividend of 8.4 pence was paid in February 2023 (2022: 7.0 pence) and the Board
is recommending the payment of a final dividend of 17.4 pence (2022: 14.5 pence) per share to
be paid on 4 August 2023 to shareholders whose names are on the Register of Members at the
close of business on 7 July 2023. This makes a total dividend of 25.8 pence (2022: 21.5 pence)
for the year.
Disclosure of information to auditors
The Directors who held oce at the date of approval of this Directors’ Report confirm that,
so far as they are each aware, there is no relevant information of which the Company’s auditor
is unaware; and each Director has taken all the steps that they ought to have taken as a Director
to make themselves aware of any relevant audit information and to establish that the Company’s
auditor is aware of that information.
Directors’ indemnities
Under the Company’s Articles of Association the Company may, to the extent permitted by law,
indemnify any Director, Secretary or other Ocer of the Company against any liability and the
Company may also purchase and maintain insurance against such liability. The Board considers
that the provision of such indemnification is in keeping with current market practice and the
Board believes that it is in the best interest of the Company to provide such indemnities in order
to attract and to retain high-calibre Directors and Ocers.
The Company purchased and maintained Directors’ and Ocers’ liability insurance during the
year under review and at the date of approval of the Directors’ Report. Qualifying third-party
indemnity provisions (as defined by Section 234 of the Companies Act 2006) were in force
during the period and these provisions remain in force in relation to certain losses and liabilities
which the Directors may incur to third parties in the course of acting as Directors or employees
of the Company or of any associated company.
Employment policies
Workspace recognises that a diversity of skills and experiences in our workforce will provide
a competitive advantage. The Company has various employment policies, including in relation
to recruitment, diversity & inclusion, health & safety and wellbeing. We monitor these practices
to ensure that they are fair and objective.
This includes giving full and fair consideration to applications from prospective employees
who are disabled, having regard to their aptitudes and abilities, and not discriminating against
employees under any circumstances (including in relation to applications, training, career
development and promotion) on the grounds of any disability. In the event that an employee,
worker or contractor becomes disabled in the course of their employment or engagement,
Workspace aims to ensure that reasonable steps are taken to accommodate their disability
by making reasonable adjustments to their existing employment or engagement.
Further detail on our employment policies and how we invest in our workforce can be found
on pages 50 to 53 and 149.
Details of how we reward our employees can be found on pages 181 and 198 and in notes 23 and
24 to the financial statements.
Share capital
As at 31 March 2023, the Company’s issued share capital comprised a single class of 191,638,357
ordinary shares of £1.00 each. Details of the Company’s issued share capital are set out on
page 246.
Restrictions on transfer of shares
There are no restrictions on the transfer of ordinary shares in the Company other than
restrictions that are imposed by law or regulation (for example, insider trading laws). In addition,
pursuant to the Company’s Dealing Code, Directors and certain employees of the Group require
the approval of the Company to deal in ordinary shares of the Company.
The Company is not aware of any agreements between shareholders that may result in restrictions
on the transfer of securities.
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Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REPORT OF THE DIRECTORS
Substantial shareholdings in the Company
As at 31 March 2023 and 15 May 2023, the following interests in voting rights over the issued
share capital of the Company had been notified:
Shareholder
31 March 2023 15 May 2023
Number of shares Percentage held Number of shares Percentage held
The London & Amsterdam
Trust Company Limited
53,749,281 28.05% 53,749,281 28.05%
BlackRock, Inc. 23,204,769 12.11% 22,449,889 11.72%
Janus Henderson Investors 10,933,585 5.71% 11,004,298 5.74%
Columbia Threadneedle
Investments
9,246,497 4.82% 9,410,346 4.91%
The Vanguard Group Inc 7,258,575 3.78% 7,291,439 3.80%
Legal & General Investment
Management Ltd
5,846,861 3.05% 5,496,379 2.87%
Articles of Association
The following description summarises certain provisions of the Company’s Articles of
Association and applicable English law concerning companies. Any amendment to the Articles
of Association of the company may be made in accordance with the provisions of the Companies
Act 2006, by way of special resolution.
Directors
Unless otherwise determined by ordinary resolution of the Company, the Board shall be
comprised of not less than two or more than ten Directors. The Board may exercise all powers
of the Company, subject to the Company’s Articles of Association, the Companies Act 2006 and
other applicable legislation.
Directors may be elected by the members in a general meeting or appointed by the Board.
The Company’s Articles of Association require any new Directors to stand for election at the next
AGM following their appointment. The Articles of Association also require each Director to stand
for re-election every three years following their election. However, in accordance with the Code
and the Company’s current practice, all continuing Directors will oer themselves for election
or re-election (as applicable) at the AGM on 6 July 2023.
In addition to any power of removal conferred by the Companies Act 2006, the Company may
by ordinary resolution remove any Director before the expiry of their period of oce.
Voting and other rights
Subject to the provisions of the Companies Act 2006, to any special terms on which shares may
have been issued or to any suspension or abrogation of voting rights pursuant to the Articles of
Association, every member who is present in person shall have one vote on a show of hands or,
on a poll, one vote for each share of which they are a holder.
The Company is not aware of any agreements between shareholders that may result in
restrictions on voting rights.
The Company may, by ordinary resolution, declare dividends but no dividend shall exceed the
amount recommended by the Board. Subject to the provisions of the Companies Act 2006, the
Board may also declare and pay such interim dividends as appears to the Board to be justified
by the profits of the Company available for distribution. Except as otherwise provided by the
rights attached to shares, all dividends shall be paid to shareholders according to the amounts
paid up on the shares on which the dividend is paid.
Subject to the terms of allotment of shares, the Board may only make calls on shareholders
in respect of any amounts unpaid on the shares held by them. All shares are fully paid.
Purchase of own shares and issuing shares
Under the Company’s Articles of Association, the Company may purchase any of its own shares.
The Company was granted authority at the 2022 Annual General Meeting to make market
purchases of its own ordinary shares. This authority will expire at the conclusion of the 2023
Annual General Meeting and a resolution will be proposed to renew this authority. No ordinary
shares were purchased under this authority during the year.
The Company was granted authority at the 2022 Annual General Meeting to allot and/or grant
rights to subscribe for, or convert securities into, shares in the Company up to an aggregate
nominal amount as set out in the Notice of Annual General Meeting 2022. This authority will
expire at the conclusion of the 2023 Annual General Meeting and a resolution will be proposed
to renew this authority.
Significant agreements on change of control
The Group’s borrowing facilities and other financial instruments (details of which can be found
in note 16 to the financial statements) are agreements that could allow counterparties to
terminate or to alter those arrangements in the event of a change of control of the Company.
Compensation for loss of oce in the event of a takeover
There are no agreements in place between the Company and its employees or Directors
for compensation for loss of oce or employment that occur because of a takeover bid.
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Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REPORT OF THE DIRECTORS CONTINUED
Employee Share Trusts
The Company operates an Employee Share Ownership Trust (‘ESOT’) and a trust for the Share
Incentive Plan (‘SIP’). The trusts are used to purchase Company shares in the market from time
to time and hold them for the benefit of employees, including for satisfying awards that vest
under the Company’s various share incentive plans. The ESOT also holds some Company shares
in particular ringfenced accounts for specific employees who have options over such shares vest
under the Company’s share incentive plans but have not yet exercised those options. The trustee
of the ESOT may vote the shares it holds in the Company at its discretion, but where it holds any
shares in a ringfenced account for particular employees it will seek their instructions on how it
exercises the votes attached to those shares. The trustee of the SIP trust does not vote the rights
attached to shares held in the trust.
Information required under LR9.8.4R
Interest capitalised Note 10 to the financial statements
Details of long-term incentive schemes Remuneration Report, pages 187 and 188, 191
and 205
There is no further information required to be disclosed under LR9.8.4R.
Other information
Other information relevant to the Directors’ Report may be found in the following sections of the
Annual Report:
Information Location in Annual Report
Corporate governance statement, prepared
in accordance with rule 7.2 of the Financial
Conduct Authority’s Disclosure Guidance
and Transparency Rules
Corporate Governance Report, pages 106 to 215
Principal risks and uncertainties, pages 69
to 76
Culture, purpose, values and strategy Strategic Report, pages 14 and 32 to 35
Corporate Governance Report, pages 118 to 120
Directors Directors’ biographies, pages 115 and 116
Our Board, page 113
Directors’ training and development Corporate Governance Report, page 140
Diversity & inclusion Corporate Governance Report, pages 148
to 154
Employee share schemes Note 23 to the financial statements
Engagement with employees Strategic Report, page 21
Stakeholder engagement, page 122
Section 172(1) Statement, page 125
Engagement with suppliers, customers
and others
Strategic Report, pages 16 to 25
Stakeholder engagement, pages 121 to 123
Section 172(1) Statement, page 125
Financial risk management Note 18 to the financial statements
Principal risks and uncertainties, pages 69 to 76
Future developments Chair’s Letter, page 11
CEO Letter, page 13
Our business model, pages 64 to 68
Our strategy, pages 32 to 35
Greenhouse gas emissions and energy
consumption
GHG/SECR Emissions, page 101
Political donations Compliance Statements, page 91
Post balance sheet events Note 29 to the financial statements
Principal risks and uncertainties Principal risks and uncertainties, pages 69
to 76
Research and development The Company does not undertake research and
development activities
By Order of the Board
Carmelina Carfora
Company Secretary
6 June 2023
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
REPORT OF THE DIRECTORS CONTINUED
The Directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements
for each financial year. Under that law they are required to prepare the Group financial
statements in accordance with UK-adopted international accounting standards and applicable
law and have elected to prepare the parent Company financial statements in accordance with
UK accounting standards and applicable law, including FRS 101 Reduced Disclosure Framework.
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 aairs of the Group and parent
Company and of the Group’s profit or loss for that period. In preparing each of the Group and
parent Company financial statements, the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable, relevant, reliable and prudent;
– for the Group financial statements, state whether they have been prepared in accordance
with UK-adopted international accounting standards;
– for the parent Company financial statements, state whether applicable UK accounting
standards have been followed, subject to any material departures disclosed and explained
in the parent Company financial statements;
– assess the Group and parent Company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern; and
– use the going concern basis of accounting unless they either intend to liquidate the Group
or the parent Company or to cease operations or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sucient to
show and explain the parent Company’s transactions and disclose with reasonable accuracy at
any time the financial position of the parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the UK governing the preparation
and dissemination of financial statements may dier from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements
will form part of the annual financial report prepared using the single electronic reporting format
under the TD ESEF Regulation. The auditor’s report on these financial statements provides no
assurance over the ESEF format.
Responsibility statement of the directors in respect of the annual financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the consolidation taken as a whole;
– the strategic report includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face; and
– we consider the Annual Report and Accounts, taken as a whole, is fair, balanced and
unstandable and provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
Signed on behalf of the Board on 6 June 2023 by:
Graham Clemett
Chief Executive Ocer
Dave Benson
Chief Financial Ocer
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Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
1. OUR OPINION IS UNMODIFIED
We have audited the financial statements of Workspace Group PLC (“the Company”) for the
year ended 31 March 2023 which comprise the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent Company Balance Sheet, the
Consolidated and Parent Company Statement of Changes in Equity, the Consolidated Statement
of Cash Flows, and the related notes, including the accounting policies on pages 229 to 231 for
the Group and Note A for the Parent Company financial statements.
In our opinion:
– the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s aairs as at 31 March 2023 and of the Group’s loss for the year then ended;
– the Group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
– the Parent Company financial statements have been properly prepared in accordance with UK
accounting standards, including FRS 101 Reduced Disclosure Framework; and
– the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities are described below. We believe that the audit
evidence we have obtained is a sucient and appropriate basis for our opinion. Our audit
opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 14 July 2017. The period of total
uninterrupted engagement is for the 6 financial years ended 31 March 2023. We have fulfilled our
ethical responsibilities under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard were provided.
Overview
Materiality:
Group financial statements as a whole
£28.0m (2022: £24.5m)
0.99% (2022: 0.98%) of Total Assets
Coverage 100% (2022: 100%) of Total Group’s Assets
Key audit matters vs 2022
Recurring risks Group: Valuation of Investment Property
Parent Company: Recoverability of
Investments in subsidiaries
2. KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
Key audit matters are those matters that, in our professional judgement, were of most
significance in the audit of the financial statements and include the most significant assessed
risks of material misstatement (whether or not due to fraud) identified by us, including those
which had the greatest eect on: the overall audit strategy; the allocation of resources in the
audit; and directing the eorts of the engagement team. We summarise below the key audit
matters (unchanged from 2022), in decreasing order of audit significance, in arriving at our audit
opinion above, together with our key audit procedures to address those matters and, as required
for public interest entities, our results from those procedures. These matters were addressed,
and our results are based on procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we do not provide a separate opinion on
these matters.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC
2. KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT CONTINUED
The risk Our response
Valuation of
investment property
(Group)
Investment properties:
(£2,643.3 million;
2022: £2,366.7 million)
Assets Held for Sale:
(£123.0m; 2022:
£65.9m)
Refer to page 159
(Audit Committee
Report), page 229
(accounting policy) and
page 236 (financial
disclosures).
Subjective valuation
Investment properties (incorporating Assets held for sale) is the largest
balance in the financial statements and is held at fair value in the Group’s
financial statements.
The portfolio is externally valued by a qualified independent valuer.
Each property is unique and determining fair value requires significant
judgement and estimation, in particular over the key assumptions of
the estimated rental value and the yield. The key assumptions will be
impacted by a number of factors including location, quality and
condition of the building and occupancy. Valuing investment properties
either under development or with development potential can be further
complicated by the need to assess the likelihood of planning consent,
an allowance for developer’s profit and forecast of construction costs.
Whilst comparable market transactions can provide valuation evidence,
the flexible oce sector is still maturing and the unique nature of each
property means that a key factor in the property valuations are the
assumptions made by the external valuer.
Furthermore, each property valuation includes source data provided by
management and relied on as accurate by the external valuer, primarily
the database of tenancy contracts. For some properties, the relatively
short average lease length in the Workspace portfolio and reduced
market comparable information for such flexible oce space means the
external valuer is more reliant on tenancy data to support their market
rent assumptions than may be the case in other property sectors.
Therefore the valuation is more sensitive to the source data than may
be the case for more mature sectors with longer leases.
The eect of these matters is that, as part of our risk assessment, we
determined that the valuation of investment properties has a high
degree of estimation uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the financial statements as
a whole, and possibly many times that amount.
We performed the tests below rather than seeking to rely on any of the Group’s controls
because the nature of the balance meant that detailed testing is inherently the most eective
means of obtaining audit evidence.
Our procedures, assisted by our own property valuation specialist, included:
Assessing valuer’s credentials: We assessed the external valuers objectivity, independence,
professional qualifications and experience through research, discussions with them and reading
their valuation report.
Methodology choice: We critically assessed the methodology used by the external valuer by
using our own property valuation specialist to assist us in checking whether the valuation report
is in accordance with the RICS Valuation Professional Standards ‘the Red Book’, IFRS and that
the valuation methodology adopted is appropriate by reference to acceptable valuation practice.
Benchmarking assumptions: We held discussions with the external valuer and challenged their
assumptions used in valuing the investment properties including the market evidence used by
them to support their assumptions.
For a sample of properties selected using various criteria including analysis of the value of a
property as well as correlation with movements in market rent, we evaluated and challenged the
appropriateness of the key assumptions upon which these valuations were based, including
those relating to forecast market rents and yields, by making a comparison to our own
understanding of the market and to industry benchmarks.
Retrospective review: We performed a retrospective review by comparing disposals during the
year to the latest valuation performed and challenged management on material dierences.
Test of detail: We compared a sample of key inputs used in the valuations, such as rental
income and lease length, to lease contracts.
For redevelopment properties, we assessed the future construction costs and agreed a sample
of contractual costs to contracts.
We assessed the completeness of the year end tenancy schedule and compared this to the post
year end schedule. We challenged management on any material dierences in leases.
We assessed the appropriateness of adjustments made by the external valuer to the tenancy
data provided by management. For a sample of adjustments, we challenged the external valuer
and assessed whether the adjustments were reasonable.
Our results
We found the resulting estimate of valuation of investment properties to be acceptable
(2022: acceptable).
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC
CONTINUED
The risk Our response
Recoverability of
Parent Company’s
investments in
subsidiaries
(£1,313.2 million;
2022: £929.8 million)
Refer to page 159
(Audit Committee
Report), page 252
(accounting policy) and
page 253 (financial
disclosures).
Low risk, high value:
The carrying amount of the Parent Company’s investments in
subsidiaries represents 70.8% (2022: 66.6%) of the Company’s total
assets. Their recoverability is not at a high risk of significant
misstatement or subject to significant judgement. However, due to
their materiality in the context of the Parent Company financial
statements, this is considered to be the area that had the greatest
eect on our overall Parent Company audit.
We performed the tests below rather than seeking to rely on any of the Company’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our procedures included:
Test of detail: We compared the carrying amount of 100% of investments with the relevant
subsidiaries’ prior year financial statements and current year draft balance sheets to identify
whether their net assets, being an approximation of their recoverable amount, were in excess
of their carrying amount.
Our results
We found the Company’s conclusion that there is no impairment of its investments in
subsidiaries to be acceptable (2022: acceptable).
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC
CONTINUED
3. OUR APPLICATION OF MATERIALITY AND AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Materiality for the Group financial statements as a whole was set at £28.0 million (2022: £24.5
million), determined with reference to a benchmark of total Group Assets, of which it represents
0.99% (2022: 0.98%).
Materiality for the Parent Company financial statements as a whole was set at £18.50 million
(2022: £14.03 million), determined with reference to a benchmark of Company total assets, of
which it represents 1% (2022: 1%).
In addition, we applied materiality of £2.9 million (2022: £2.45 million) to certain components of
adjusted trading profit after interest which comprises net rental income, administrative expenses
and net finance costs for which we believe misstatements of lesser amounts than materiality for
the financial statements as a whole could be reasonably expected to influence the Company’s
members’ assessment of the financial performance of the Group.
In line with our audit methodology, our procedures on individual account balances and disclosures
were performed to a lower threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual account balances add up to
a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2022: 75%) of materiality for the financial statements
as a whole, which equates to £21.0 million (2022: £18.4 million) for the Group and £13.8 million
(2022: £10.52 million) for the Parent Company. We applied this percentage in our determination
of performance materiality because we did not identify any factors indicating an elevated level
of risk.
We agreed to report to the audit committee any corrected or uncorrected identified
misstatements exceeding £1.40 million (2022: £1.23 million) for the Group and exceeding £0.93
million (2022: £0.70 million) for the Parent Company; or £0.15 million (2022: £0.12 million) for
misstatements relating to accounts to which the lower materiality was applied, in addition to
other identified misstatements that warranted reporting on qualitative grounds.
The Group team performed the audit of the Group as if it was a single aggregated set of financial
information. The Group team performed the Parent Company audit. The audit was performed
using the materiality levels set out above.
The scope of the audit work performed was fully substantive as we did not rely upon the Group’s
internal control over financial reporting.
Total Group assets and Materiality
TOTAL GROUP ASSETS
£2,839.1m (2022: £2,511.9m)
GROUP MATERIALITY
£28.0m (2022: £24.5m)
£28.0m
Whole financial statements
materiality (2022: £24.5m)
Total Group assets
£21.0m
Whole financial statements
performance materiality
(2022: £18.4m)
£2.9m
Materiality applied to Group
components of adjusted trading
profit after interest. (2022: £2.45m)
£1.40m
Misstatements reported to the
audit committee (2022: £1.23m)
Group materiality
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC
CONTINUED
4. THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT
In planning our audit we have considered the potential impacts
of climate change on the Group’s business and its financial
statements. Climate change impacts the Group in a number of
ways:
– through its own operations (including potential reputational risk associated with the Group’s
delivery of its climate related initiatives),
– through its portfolio of investment properties and the greater emphasis on climate related
narrative and disclosure in the Annual Report.
The Group’s main potential exposure to climate change in the financial statements is primarily
through its investment properties as the key valuation assumptions and estimates may be impacted
by climate risks. As part of our audit we have made enquiries of Directors and the Group’s
Corporate Sustainability team to understand the extent of the potential impact of climate
change risk on the Group’s financial statements and the Group’s preparedness for this. We have
performed a risk assessment of how the impact of climate change may aect the financial
statements and our audit, in particular with respect to the valuation of investment properties.
Given that these valuations are largely based on comparable market evidence we assessed that
the impact of climate change was not a significant risk for our audit nor does it constitute a key
audit matter. We held discussions with our own climate change professionals to challenge our
risk assessment. We have also read the Group’s disclosure of climate related information in the
front half of the Annual Report as set out on pages 92 to 103, and considered consistency with
the financial statements and our audit knowledge. We have not been engaged to provide
assurance over the accuracy of these disclosures.
5. GOING CONCERN
The directors have prepared the financial statements on the going concern basis as they do not
intend to liquidate the Group or the Company or to cease their operations, and as they have
concluded that the Group’s and the Company’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that could have cast significant doubt
over their ability to continue as a going concern for at least a year from the date of approval of the
financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to
identify the inherent risks to its business model and analysed how those risks might aect the
Group’s and Company’s financial resources or ability to continue operations over the going
concern period. The risks that we considered most likely to adversely aect the Group’s and
Company’s available financial resources, liquidity and covenant compliance over this period were:
– A fall in customer demand as a result of economic downturn over the next two years and
reduction in the like for like occupancy over the period of March 2024, with a gradual recovery
by March 2028;
– New lettings at below the average price per sq. ft. of vacating customers; – Higher levels of
counterparty risk, with increased levels of bad debt; – Higher level of cost inflation.
We considered whether these risks could plausibly aect the liquidity, covenant compliance or
availability of borrowings and debt refinancing in the going concern period by assessing the
degree of downside assumption that, individually and collectively, could result in a liquidity issue,
taking into account the Group’s current and projected cash and facilities (a reverse stress test).
We assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
– we consider that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate;
– we have not identified, and concur with the directors’ assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast
significant doubt on the Group’s or Company’s ability to continue as a going concern for the
going concern period;
– we have nothing material to add or draw attention to in relation to the directors’ statement in
the basis of preparation note in the financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast significant doubt over the Group
and Company’s use of that basis for the going concern period, and we found the going
concern disclosure in the basis of preparation note to be acceptable; and
– the same statement is materially consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were reasonable at the time they
were made, the above conclusions are not a guarantee that the Group or the Company will
continue in operation.
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CONTINUED
6. FRAUD AND BREACHES OF LAWS AND REGULATIONS – ABILITY TO DETECT
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or
conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity
to commit fraud. Our risk assessment procedures included:
– Enquiring of directors and inspection of policy documentation as to the Group’s high-level
policies and procedures to prevent and detect fraud, including the Group’s channel for
“whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged
fraud.
– Reading Board minutes, Executive Committee minutes and attending Group audit committee
meetings.
– Considering remuneration incentive schemes and performance targets for management,
including total shareholder return, total property return compared to IPD and growth in
trading profit after interest targets for management remuneration.
We communicated identified fraud risks throughout the audit team and remained alert to any
indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit
targets and our overall knowledge of the control environment, we perform procedures to
address the risk of management override of controls, in particular the risk that Group
management may be in a position to make inappropriate accounting entries and the risk of bias
in accounting estimates and judgements such as significant assumptions used in the valuation of
investment properties, including estimated rental values and market based yields. On this audit
we do not believe there is a fraud risk related to revenue recognition because of the relative
simplicity of revenue streams. We did not identify any additional fraud risks.
We performed procedures including:
– Identifying journal entries and other adjustments to test based on risk criteria and comparing
the identified entries to supporting documentation. These included those with unusual
account combinations.
– Assessing whether the judgements made in making accounting estimates are indicative
of a potential bias.
Identifying and responding to risks of material misstatement due to non-compliance
with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a
material eect on the financial statements from our general commercial and sector experience,
through discussion with the directors and other management (as required by auditing
standards), and discussed with the directors the policies and procedures regarding compliance
with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to
any indications of noncompliance throughout the audit.
The potential eect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly aect the financial statements
including financial reporting legislation (including related companies legislation), distributable
profits legislation and taxation legislation (including conditions to maintain UK Real Estate
Investment Trust (“REIT”)) status in accordance with the REIT regime) and we assessed the
extent of compliance with these laws and regulations as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences
of non-compliance could have a material eect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or litigation. We identified the following
areas as those most likely to have such an eect: landlord and tenant legislation, property laws
and building legislation, environmental and sustainability legislation and certain aspects of
company legislation recognising the financial nature of the Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these
laws and regulations to enquiry of the directors and other management and inspection of
regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is
not disclosed to us or evident from relevant correspondence, an audit will not detect that
breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have
detected some material misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with auditing standards. For example,
the further removed noncompliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be expected to detect
noncompliance with all laws and regulations.
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CONTINUED
7. WE HAVE NOTHING TO REPORT ON THE OTHER INFORMATION IN THE ANNUAL REPORT
AND ACCOUNTS
The directors are responsible for the other information presented in the Annual Report together
with the financial statements. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on
our financial statements audit work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge. Based solely on that work we
have not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
– we have not identified material misstatements in the strategic report and the directors’ report;
– in our opinion the information given in those reports for the financial year is consistent with
the financial statements; and
– in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency
between the directors’ disclosures in respect of emerging and principal risks and the viability
statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
– the directors’ confirmation within the viability statement on page 87 that they have carried out
a robust assessment of the emerging and principal risks facing the Group, including those that
would threaten its business model, future performance, solvency and liquidity;
– the Principal Risks and Uncertainties disclosures describing these risks and how emerging risks
are identified, and explaining how they are being managed and mitigated; and
– the directors’ explanation in the viability statement of how they have assessed the prospects
of the Group, over what period they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities as they fall due over the
period of their assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to review the viability statement, set out on page 87 under the Listing
Rules. Based on the above procedures, we have concluded that the above disclosures are
materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired
during our financial statements audit. As we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to report on these statements
is not a guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency
between the directors’ corporate governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the following is materially
consistent with the financial statements and our audit knowledge:
– the directors’ statement that they consider that the annual report and financial statements
taken as a whole is fair, balanced and understandable, and provides the information necessary
for shareholders to assess the Group’s position and performance, business model and
strategy;
– the section of the annual report describing the work of the Audit Committee, including the
significant issues that the audit committee considered in relation to the financial statements,
and how these issues were addressed; and
– the section of the annual report that describes the review of the eectiveness of the Group’s
risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the
Group’s compliance with the provisions of the UK Corporate Governance Code specified by the
Listing Rules for our review.
We have nothing to report in this respect.
8. WE HAVE NOTHING TO REPORT ON THE OTHER MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
Under the Companies Act 2006, we are required 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.
We have nothing to report in these respects.
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CONTINUED
9. RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities
As explained more fully in their statement set out on page 215, the directors are responsible for:
the preparation of the financial statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error; assessing
the Group and Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of accounting
unless they either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report
prepared using the single electronic reporting format specified in the TD ESEF Regulation.
This auditor’s report provides no assurance over whether the annual financial report has been
prepared in accordance with that format.
10. THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company’s members, as a
body, for our audit work, for this report, or for the opinions we have formed.
Bano Sheikh (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London, E14 5GL
6 June 2023
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CONTINUED
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
Notes
2023
£m
2022
£m
Revenue 1 17 4.2 132.9
Direct costs
1
1 (57 .6 ) (46.2 )
Net rental income 1 116.6 86. 7
Administrative expenses 2 (21.5 ) (19.3 )
Trading profit 9 5 .1 6 7. 4
(Loss)/profit on disposal of investment properties 3(a) (0.7 ) 7. 8
Other income 3(b) – 0.6
Other expenses 3(c) (3.8 ) –
Change in fair value of investment properties 10 (88.0 ) 68.7
Impairment of assets held for sale 10 (5. 1 ) –
Operating (loss)/profit (2.5 ) 144.5
Finance costs 4 (34.4 ) (20.5 )
Exceptional finance costs 4 (0.6 ) –
(Loss)/profit before tax (37 .5 ) 124.0
Taxation 6 (0 .3 ) (0. 1 )
(Loss)/profit for the financial year after tax (37 .8 ) 123.9
Basic (loss)/earnings per share 8 (19.9 p) 68.5 p
Diluted (loss)/earnings per share 8 (19 .9 p) 68. 1 p
1. Direct costs in 2023 includes impairment of receivables of £1. 1 m (2022: £1.5 m). See note 1 for additional information.
Notes
2023
£m
2022
£m
(Loss)/profit for the financial year (37 .8 ) 123.9
Other comprehensive income:
Items that may be reclassified subsequently to profit
or loss:
Change in fair value of other investments 0. 4 –
Fair value of investments recycled to retained earnings – 2 .1
Cash flow hedge – transfer to income statement – (0.3 )
Items that will not be reclassified subsequently to profit
or loss:
Pension fund movement 24 0. 9 –
Other comprehensive income in the year 1.3 1.8
Total comprehensive (loss)/income for the year (36.5 ) 125.7
The notes on pages 227 to 250 form part of these financial statements.
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CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2023
Notes
2023
£m
2022
£m
Non-current assets
Investment properties 10 2,643.3 2,366.7
Intangible assets 2.0 1.9
Property, plant and equipment 11 4.4 2.9
Other investments 12 2 .1 1 .7
Deferred tax 6 – 0.3
Current assets
Trade and other receivables 13 45.8 23.5
Assets held for sale 123.0 65.9
Cash and cash equivalents 14 18.5 49.0
Total assets 2,839. 1 2,511.9
Current liabilities
Trade and other payables 15 (107 .8 ) (85.8 )
Borrowings 16(a) (49.8 ) –
(157 .6 ) (85.8 )
Non-current liabilities
Borrowings 16(a) (859. 1 ) (595.5 )
Lease obligations 17 (34.7 ) (31.0 )
(893.8 ) (626.5 )
Total liabilities (1,051.4 ) (712.3 )
Net assets 1,787.7 1, 799.6
Notes
2023
£m
2022
£m
Shareholders’ equity
Share capital 20 191.6 181. 1
Share premium 20 295.5 295.5
Investment in own shares 22 (9.9 ) (9.9 )
Other reserves 21 91.0 32.6
Retained earnings 1,219.5 1,300.3
Total shareholders’ equity 1,787.7 1, 799.6
The notes on pages 227 to 250 form part of these financial statements.
The financial statements on pages 224 to 250 were approved and authorised for issue by the
Board of Directors on 6 June 2023 and signed on its behalf by:
Graham Clemett Dave Benson
Director Director
Company registration number – 02041612
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Attributable to owners of the Parent
Notes
Share
capital
£m
Share
premium
£m
Investment
in own
shares
£m
Other
reserves
£m
Retained
earnings
£m
Total
share-
holders’
equity
£m
Balance at 31 March 2021 181. 1 295.5 (9.6 ) 33. 1 1,219.4 1,719.5
Profit for the financial year – – – – 123.9 123.9
Other comprehensive
income for the year – – – – 1.8 1.8
Total comprehensive
income – – – – 125. 7 125.7
Transactions with owners:
Purchase of own shares 22 – – (0.3 ) – – (0.3 )
Dividends paid 7 – – – – (44.8 ) (44.8 )
Share based payments 23 – – – 1.6 – 1.6
Recycled OCI to retained
earnings 21 – – – (2. 1 ) – (2. 1 )
Balance at 31 March 2022 181. 1 295.5 (9.9 ) 32.6 1,300 .3 1,7 99.6
Loss for the financial year – – –
Other comprehensive
income for the year – – – 0. 4 0.9 1.3
Total comprehensive
income – – – 0.4 (36.9 ) (36.5 )
Transactions with owners:
Shares issued 20 10.5 – – 56.6 – 6 7. 1
Dividends paid 7 – – – – (43.9 ) (43.9 )
Share based payments 23 – – – 1.4 – 1.4
Balance at 31 March 2023 191.6 295.5 (9.9 ) 91. 0 1,219.5 1,787.7
The notes on pages 227 to 250 form part of these financial statements.
Notes
2023
£m
2022
£m
Cash flows from operating activities
Cash generated from operations 19 110.5 80.5
Interest paid (31.7 ) (22.6 )
Net cash inflow from operating activities 78.8 5 7. 9
Cash flows from investing activities
Purchase of investment properties (184.4 ) (88.4 )
Capital expenditure on investment properties (56.2 ) (29.8 )
Proceeds from disposal of investment properties
(net of sale costs) 7. 1 117 .3
Proceeds from disposal of assets held for sale (net of
sale costs) 41.4 –
Purchase of intangible assets (0.8 ) (0.5 )
Purchase of property, plant and equipment (3. 1 ) (0.7 )
Other (expenses)/income (2.9 ) 4.5
Settlement of defined benefit pension scheme (1.3 ) –
Proceeds from sale of investments 3(b)/12 – 6.8
Net cash (outflow)/inflow from investing activities (200 .2 ) 9.2
Cash flows from financing activities
Finance costs for new/amended borrowing facilities (1.6 ) (1.3 )
Exceptional finance costs – (16.4 )
Settlement of derivative financial instruments – 0.7
Repayment of bank borrowings and Private
Placement Notes 16(g) (150.0 ) (17 3.5 )
Draw down of bank borrowings 16(g) 286. 0 25.0
Own shares purchase (net) – (0 .3 )
Dividends paid 7 (43.5 ) (43.3 )
Net cash inflow/(outflow) from financing activities 90.9 (209. 1 )
Net decrease in cash and cash equivalents (30.5 ) (142.0 )
Cash and cash equivalents at start of year 14 49.0 191.0
Cash and cash equivalents at end of year 14 18.5 49.0
The notes on pages 227 to 250 form part of these financial statements.
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Notes
2023
£m
2022
£m
Fixed assets
Investments C 1,313.2 929.8
1,313.2 929.8
Current assets
Debtors: amounts falling due within one year D 534.1 439.1
Cash and cash equivalents 7.0 34.3
541.1 473.4
Total assets 1,854.3 1,403.2
Current liabilities
Creditors: amounts falling due within one year E (255.2) (168.9)
Borrowings F (50.0) –
(305.2) (168.9)
Creditors: amounts falling due after more than one
year
Borrowings F (719.4) (595.5)
Total liabilities (1,024.6) (764.4)
Net assets 829.7 638.8
Capital and reserves
Share capital 191.6 181.1
Share premium 295.6 295.6
Investment in own shares (9.9) (9.9)
Other reserves G 90.6 32.6
Retained earnings
1
261.8 139.4
Total shareholders’ equity 829.7 638.8
1. Retained earnings for the Company include profit for the year of £166.3m (2022: £7.5m loss).
The notes on pages 252 to 254 form part of these financial statements.
The financial statements on pages 251 to 254 were approved by the Board of Directors
on 6 June 2023 and signed on its behalf by:
Graham Clemett Dave Benson
Director Director
Workspace Group PLC
Registered number 02041612
PARENT COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
251
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
A. ACCOUNTING POLICIES
These financial statements were prepared in accordance with Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (‘FRS 101’).
Basis of accounting
The financial statements are prepared and approved by the Directors on a going concern basis
under the historical cost convention and in accordance with Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (‘FRS 101’).
In preparing these financial statements, the Company applies the recognition, measurement and
disclosure requirements of UK-adopted international accounting standards (‘Adopted IFRSs’),
but makes amendments where necessary in order to comply with Companies Act 2006 and has
set out below where advantage of the FRS 101 disclosure exemptions has been taken. The
financial statements are presented in Sterling.
a) The requirements of IAS 7 to provide a statement of cash flows and related notes for the year.
b) The requirements of IAS 1 to provide a statement of compliance with IFRS.
c) The requirements of IAS 1 to disclose information on the management of capital.
d) The requirements of paragraphs 30 and 31 of IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors’ to disclose new IFRSs that have been issued but are not yet eective.
e) The requirements in IAS 24 ‘Related Party Disclosures’ to disclose related party transactions
entered into between two or more members of a Group, provided that any subsidiary which is
a party to the transaction is wholly owned by such a member.
f) The requirements of IFRS 7 on financial instruments disclosures.
g) The requirements of paragraphs 91-99 of IFRS 13 ‘Fair Value Measurement’ to disclose
information of fair value valuation techniques and inputs.
The above disclosure exemptions are allowed because equivalent disclosures are included in the
Group’s consolidated financial statements.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Share
capital
£m
Share
premium
£m
Investment
in own
shares
£m
Other
reserves
£m
Retained
earnings
£m
Total
share-
holders’
equity
£m
Balance at 31 March 2021 181.1 295.6 (9.6) 31.0 191.7 689.8
Loss for the year – – – – (7.5) (7.5)
Total comprehensive loss – – – – (7.5) (7.5)
Transactions with owners:
Dividends paid – – – – (44.8) (44.8)
Own shares – – (0.3) – – (0.3)
Share based payments – – – 1.6 – 1.6
Balance at 31 March 2022 181.1 295.6 (9.9) 32.6 139.4 638.8
Profit for the year – – – – 166.3 166.3
Total comprehensive income – – – – 166.3 166.3
Transactions with owners:
Shares issued 10.5 – – 56.6 – 67.1
Dividends paid – – – – (43.9) (43.9)
Share based payments – – – 1.4 – 1.4
Balance at 31 March 2023 191.6 295.6 (9.9) 90.6 261.8 829.7
The notes on pages 252 to 254 form part of these financial statements.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
252
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
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, is £166.3m (2022: £7.5m loss). £179.5m
were received in the year from subsidiary undertakings (2022: nil).
Dividend payments are disclosed in note 7 to the consolidated financial statements.
C. INVESTMENTS
Investment in
subsidiary
undertakings
£m
Cost
Balance at 31 March 2022 1,064.1
Additions in the year 383.4
Balance at 31 March 2023 1,447.5
Impairment
Balance at 31 March 2022 and 31 March 2023 134.3
Net book value at 31 March 2023 1,313.2
Net book value at 31 March 2022 929.8
An impairment test has performed at the year end by comparing the carrying amount of 100% of
investments with the relevant subsidiary financial information to identify whether their net assets,
being an approximation of their recoverable amount, are in excess of their carrying amount.
D. DEBTORS
Amounts falling due within one year
2023
£m
2022
£m
Amounts owed by Group undertakings 533.5 438.0
Corporation tax asset 0.6 1.1
534.1 439.1
Amounts owed by Group undertakings are unsecured and repayable on demand. Interest is
charged to Group undertakings.
At the balance sheet date, there is no expectation of any material credit losses on accounts owed
by Group undertakings.
A. ACCOUNTING POLICIES CONTINUED
Significant accounting policies
i. Investments
Investments 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 and reversal of impairment is taken to the profit and loss account.
ii. 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 has also established 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 for share based payments are met in note 23 of the Group’s
consolidated financial statements.
iii. 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.
Taxation
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 are relevant to the financial year.
Deferred tax is provided in full on temporary dierences between the tax base of an asset or
liability and its carrying amount in the balance sheet. Deferred tax is determined using tax rates
that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets
are recognised when it is probable that taxable profits will be available against which the
deferred tax asset can be utilised.
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.
253
Workspace Group PLC
Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2023 CONTINUED
E. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023
£m
2022
£m
Amounts owed to Group undertakings 250.8 165.0
Withholding tax 1.9 1.5
Accruals and deferred income 2.5 2.4
255.2 168.9
Amounts owed to Group undertakings are unsecured and repayable on demand. Interest is paid
to Group undertakings.
F. BORROWINGS
Borrowings and financial instruments Interest rate Repayable
2023
£m
2022
£m
Creditors: amounts falling due within
one year
Bank overdraft due within one year
or on demand Base + 2.25% On demand – –
Bank Loan SONIA + 1.75%
1
September 2023 50.0 –
Creditors: amounts falling due after
more than one year
3.07% Senior Notes 3.07% August 2025 80.0 80.0
3.19% Senior Notes 3.19% August 2027 120.0 120.0
3.6% Senior Notes 3.60% January 2029 100.0 100.0
Bank Loan SONIA + 1.77%
2
December 2025 123.0 –
Green Bond 2.25% March 2028 300.0 300.0
Total borrowings 773.0 600.0
Less cost of raising finance (3.6) (4.5)
Foreign exchange dierences – –
Net borrowings 769.4 595.5
1. This is an average over the life of the debt. The margin increases from 1.5% to 2.0% over the facility availability period.
2. The base margin is dependent upon the LTV as reported in the client certificate, which is submitted twice a year. The
maximum margin is 2.15%. The base margin can be adjusted further by up to 4.5bps dependent upon achievement of three
ESG-linked metrics.
All the above borrowings are unsecured.
Maturity analysis of borrowings:
2023
£m
2022
£m
Repayable within one year 50.0 –
Repayable between one and two years – –
Repayable between two and three years 203.0 –
Repayable between three and four years – 80.0
Repayable between four and five years 420.0 80.0
Repayable in five years or more 100.0 440.0
773.0 600.0
G. CAPITAL AND RESERVES
Movements and notes applicable to share capital, share premium account, investment in own
shares, other reserves and share based payment reserve are shown in notes 20 to 23 on pages
246 to 248 and in the statement of changes in equity.
Other reserves:
Equity-settled
share based
payments
£m
Merger reserve
£m
Total
£m
Balance at 31 March 2021 22.3 8.7 31.0
Share based payments 1.6 – 1.6
Balance at 31 March 2022 23.9 8.7 32.6
Share based payments 1.4 – 1.4
Issue of shares – 56.6 56.6
Balance at 31 March 2023 25.3 65.3 90.6
254
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Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2023 CONTINUED
31 March
2023
£m
31 March
2022
£m
31 March
2021
£m
31 March
2020
£m
31 March
2019
£m
Rents receivable 136.7 104.3 118.0 132.7 123.7
Service charges and other income 37.5 28.6 24.3 28.7 25.7
Revenue 174.2 132.9 142.3 161.4 149.4
Trading profit before interest 95.1 67.4 62.5 104.3 93.9
Net interest payable
1
(34.4) (20.5) (23.8) (23.3) (21.5)
Trading profit after interest 60.7 46.9 38.7 81.0 72.4
Profit/(loss) before taxation (37.5) 124.0 (235.7) 72.5 137.3
Profit/(loss) after taxation (37.8) 123.9 (235.7) 72.1 137.3
Basic earnings/(loss) per share (19.9)p 68.2p (130.3)p 40.0p 78.9p
Dividends per share 25.8p 21.5p 17.75p 36.16p 32.87p
Dividends (total) 49.4 40.6 32.1 65.4 59.3
Investment properties 2,643.3 2,366.7 2,349.9 2,586.3 2,591.4
Other assets less liabilities 46.4 (9.4) (65.5) (47.1) (29.2)
Net debt (902.0) (557.7) (564.9) (541.2) (580.2)
Net assets 1,787.7 1,799.6 1,719.5 1,998.0 1,982.0
Gearing 50% 31% 33% 27% 29%
Loan to value 33% 23% 24% 21% 22%
EPRA Net Tangible Assets (NTA) £9.27 £9.88 £9.38 £10.88 £10.85
1. Excludes exceptional items.
31 March
2023
£m
31 March
2022
£m
31 March
2021
£m
31 March
2020
£m
31 March
2019
£m
Workspace Group:
Number of estates 86 57 58 59 64
Lettable floorspace (million sq. ft.) 5.2 4.0 3.9 3.9 3.9
Number of lettable units 4,910 4,482 4,196 4,009 4,796
Average unit size (sq. ft.) 1,065 844 942 922 975
Rent roll of occupied units £140.1m £111.0m £103.9m £132.8m £127.5m
Overall rent per sq. ft. £32.86 £33.26 £33.90 £39.18 £38.45
Overall occupancy 81.50% 84.3% 77.8% 87.0% 84.8%
Enquiries (number) 10,563 11,007 8,870 13,041 12,575
Lettings (number) 1,312 1,520 1,146 1,454 1,238
EPRA Measures
EPRA Earnings per share 29.4p 26.2p 21.3p 44.5p 40.3p
EPRA Net Tangible Asset per share £9.27 £9.88 £9.38 £10.88 £10.85
255
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FIVE-YEAR PERFORMANCE (UNAUDITED)
2019–2023
PERFORMANCE METRICS (UNAUDITED)
Property name Postcode Category
Lettable
floor area
sq. ft.
Net rent roll of
occupied units
£
Ancells Road GU51 2UN Acquisitions 34,577 422,979
Archer Street Studios W1D 7AZ Like-for-like 14,984 854,489
Ashcombe House KT22 8LQ Acquisitions 17,452 148,468
Barley Mow Centre W4 4PH Refurbishment 77,995 1,856,864
Blackthorne Road SL3 0AH Acquisitions 73,507 814,741
Brickfields E2 8HD Like-for-like 56,755 2,236,916
Brunel Road RG7 4XE Acquisitions 135,094 1,361,312
Building 329 RG12 8PE Acquisitions 32,516 547,097
Busworks N7 9DP Refurbishment 104,571 1,280,589
Canalot Studios W10 5BN Like-for-like 48,030 1,173,776
Cannon Wharf SE8 5EN Like-for-like 32,619 608,021
Cargo Works SE1 9PG Like-for-like 65,942 3,277,690
Castle Lane SW1E 6DR Acquisitions 14,254 796,923
Centro Buildings NW1 0DU Like-for-like 203,183 8,329,087
China Works SE1 7SJ Like-for-like 68,809 2,225,162
Chiswick Studios W4 5PY Like-for-like 11,378 375,441
Chocolate Factory (part) N22 6XJ Refurbishment 28,752 493,928
Clerkenwell Workshops EC1R 0AT Like-for-like 52,879 2,393,340
Columbia House GU14 0GT Acquisitions 40,756 660,000
Corinthian House CR0 2BX Acquisitions 43,749 647,426
Crown Square GU21 6HR Acquisitions 47,97 1 668,778
Cygnet House TW18 4RH Acquisitions 3,437 76,727
E1 Studios E1 1DU Like-for-like 40,430 913,514
East London Works E1 1DU Like-for-like 38,333 936,022
Edinburgh House SE11 5DP Like-for-like 64,513 2,578,617
Evergreen Studios TW9 1QE Acquisitions 17,323 920,000
Exmouth House EC1R 0JH Like-for-like 51,106 2,531,786
Five Acre Site CT19 5DR Acquisitions 60,536 327,489
160 Fleet Street EC4A 2DQ Refurbishment 42,566 1,458,694
Fuel Tank SE8 3DX Like-for-like 35,189 702,685
Property name Postcode Category
Lettable
floor area
sq. ft.
Net rent roll of
occupied units
£
Gainsborough House SL4 1TX Acquisitions 18,661 548,417
338 Goswell Road EC1V 7LQ Like-for-like 41,490 1,952,558
Grand Union Studios W10 5AD Like-for-like 62,958 1,742,997
60 Gray’s Inn Road WC1X 8AQ Like-for-like 36,139 1,918,031
9 Greyfriars Road RG1 1NU Acquisitions 38,493 918,503
20-30 Greyfriars Road RG1 1NL Acquisitions 33,344 586,000
Havelock Terrace SW8 4AS Refurbishment 58,164 1,252,217
Ink Rooms WC1X 0DS Like-for-like 22,235 887,176
Kennington Park SW9 6DE Like-for-like 348,879 10,088,945
Leroy House N1 3QP Refurbishment 0 0
Lock Studios E3 3YD Redevelopment 54,237 1,060,164
Lower Cherwell Street OX16 5AY Acquisitions 40,060 277,498
Mallard Court TW18 4RH Acquisitions 22,176 335,058
Mare Street Studios E8 3QE Refurbishment 54,863 1,419,496
Metal Box Factory SE1 0HS Like-for-like 106,316 6,433,969
Mirror Works E15 2NH Redevelopment 39,669 668,478
Morie Street SW18 1SL Like-for-like 21,707 445,183
Oakwood Trade Park RH10 9AZ Acquisitions 51,834 838,924
Pall Mall Deposit W10 6BL Refurbishment 60,092 1,373,871
Parkhall Business Centre SE21 8EN Refurbishment 122,665 1,967,982
Parma House / Chocolate Factory N22 6XF Redevelopment 34,983 179,660
Peer House WC1X 8LZ Like-for-like 9,739 272,663
Pegasus Place RH10 9AY Acquisitions 50,544 1,128,060
Pill Box E2 6GG Like-for-like 50,409 1,133,569
Poplar Business Park E14 9RL Like-for-like 65,178 1,030,806
Portsoken House EC3N 1LJ Acquisitions 49,640 1,604,519
Prospero House RH1 1LP Acquisitions 48,934 1,208,782
Q West TW8 0GP Redevelopment 54,960 610,119
Rainbow Industrial Park (Part) SW20 0JK Like-for-like 21,180 428,461
Rainbow Industrial Park (Phase 2) SW20 0JK Redevelopment 89,934 250,707
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PROPERTY PORTFOLIO 2023 (UNAUDITED)
Property name Postcode Category
Lettable
floor area
sq. ft.
Net rent roll of
occupied units
£
Rivergate House RG14 2PZ Acquisitions 61,396 1,244,886
Riverside (Commercial) SW18 4UQ Refurbishment 43,000 0
Salisbury House EC2M 5QQ Like-for-like 215,594 10,555,322
ScreenWorks N5 2EF Like-for-like 63,974 2,116,254
Sopwith Drive KT13 0UZ Acquisitions 62,198 0
Swan Court SW19 4JS Acquisitions 57,543 1,679,741
The Switchback SL6 7RJ Acquisitions 36,817 715,629
The Biscuit Factory (Cocoa Studios) SE16 4DG Like-for-like 39,298 1,045,538
The Biscuit Factory (Part) SE16 4DG Like-for-like 122,724 2,184,430
The Biscuit Factory (J Block) SE16 4DG Refurbishment 83,811 1,240,566
The Frames EC2A 4PS Like-for-like 51,864 3,099,879
The Leather Market SE1 3ER Like-for-like 146,925 5,069,539
The Light Box W4 5PY Like-for-like 74,135 1,780,953
The Light Bulb (part) SW18 4GQ Like-for-like 52,699 1,218,489
The Light Bulb (Phase 2) SW18 4WW Redevelopment 17,226 317,091
The Mille TW8 9DW Acquisitions 96,698 2,085,628
The Planets GU21 6HR Acquisitions 98,255 0
Three Acre Site CT19 5FG Acquisitions 44,300 349,525
Old Dairy EC2A 4HT Refurbishment 56,983 2,180,261
The Print Rooms SE1 0LH Like-for-like 45,622 2,457,785
The Record Hall EC1N 7RJ Like-for-like 57,015 3,011,278
The Shaftesbury Centre W10 6BN Like-for-like 12,627 261,912
The Shepherds Building W14 0DA Like-for-like 141,805 5,222,800
Thurston Road SE13 7SH Redevelopment 7,133 123,033
Vox Studios SE11 5JH Like-for-like 106,944 4,214,705
Wenlock Studios N1 7EU Refurbishment 30,939 921,189
Westbourne Studios W10 5JJ Refurbishment 56,756 1,775,290
Willoughby Road RG12 8FB Acquisitions 54,157 594,947
66 Wilson Street EC2A 2BT Acquisitions 11,893 461,472
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Annual Report and Accounts 2023
Strategic Report Our Governance Financial Statements Additional Information
PROPERTY PORTFOLIO 2023 (UNAUDITED)
CONTINUED
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 EPS is a definition of earnings per share
as set out by the European Public Real Estate
Association (‘EPRA’). It is based on operating
earnings where profit before tax is adjusted to
exclude the impact of any changes in property
valuation, gains or losses on property
disposals and fair value movements.
EPRA Net Asset Value (‘EPRA NAV’) is a
definition of net asset value as set out by
EPRA. It is adjusted to include investment
properties at fair value and to exclude certain
items not expected to crystallise in a long-
term investment property business model.
EPRA Net Reinstatement Value (‘EPRA NRV’)
represents the value required to rebuild an
entity, assuming that no asset sales takes
place. Assets and liabilities that are not
expected to crystallise in normal
circumstances, such as fair value movements
on derivatives and deferred tax on property
valuation movements, are excluded.
EPRA Net Tangible Assets (‘EPRA NTA’)
focuses on a company’s tangible assets and
assumes that entities buy and sell assets,
thereby crystallising certain levels of
unavoidable deferred tax.
EPRA Net Disposal Value (‘EPRA NDV’)
represents the shareholders’ value under a
disposal scenario, where deferred tax, financial
instruments and certain other adjustments are
calculated to the full extent of their liability,
net of any resulting tax.
Like-for-like are those properties with
stabilised occupancy, excluding recent
acquisitions and buildings impacted by
significant refurbishment or redevelopment
activity.
Loan to Value (‘LTV’) is net debt divided by
the current value of properties owned by the
Group as valued by CBRE.
LMA is the Loan Market Association.
MSCI IPD MSC Inc is a company that produces
independent benchmarks of property returns
under the brand IPD.
Net Asset Value per share (‘NAV’) is net
assets divided by the number of shares at the
period end.
Net debt is the amount drawn on bank and
other loan facilities, including overdrafts, less
cash deposits. This excludes any foreign
exchange movements.
Net rents are rents excluding any contracted
increases and after deduction of inclusive
service charge revenue.
Occupancy is the area of space let divided by
the total net lettable area (excluding land used
for open storage) expressed as a percentage.
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.
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 consolidated income statement to enable
a full understanding of the Group’s financial
performance.
Gearing is the Group’s net debt as a
percentage of net assets.
Green Finance Framework is aligned with
ICMA’s Green Bond Principles (2018 edition)
and LMA’s Green Loan Principles (2021
edition) and addresses UN SDGs 7, 11, 12 and
13. The framework allows Workspace to issue
a variety of GDIs and sets out the principles
for the use and management of proceeds
from GDIs.
ICMA is the International Capital Market
Association.
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 net rental
income.
Rent roll is the annualised net rent of
occupied units for a property or portfolio of
properties at a reporting date.
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.
SONIA is the Sterling Overnight Interbank
Average Rate, an important interest
benchmark administrated by the Bank of
England.
Total Accounting Return is the growth in
absolute EPRA net asset per share plus
dividends paid in the year as a percentage of
the opening EPRA net asset value per share.
Total Property Return (‘TPR’) is a percentage
measure calculated by MSCI IPD and defined
in the MSCI Global Methodology for Real
Estate Investment as the percentage of value
change plus net income accrued relative to
the capital employed.
Total Shareholder Return (‘TSR’) is the
growth in ordinary share price as quoted on
the London Stock Exchange plus dividends
per share received for the year, expressed as a
percentage of the share price at the beginning
of the year.
Trading profit after interest is net rental
income, less administrative expenses and
finance costs (excluding exceptional finance
costs).
UN SDGs is UN Sustainable Development
Goals which are addressed in the Green
Finance Framework.
258
Workspace Group PLC
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Strategic Report Our Governance Financial Statements Additional Information
GLOSSARY OF TERMS
Registrar
All general enquiries concerning ordinary
shares in Workspace Group PLC should
be addressed to:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Telephone: +44 (0)370 707 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 an investor website which
holds, amongst other information, a copy of
the 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/investors
Registered oce and headquarters
Canterbury Court
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: investor.relations@workspace.co.uk
Company Secretary
Carmelina Carfora
The Company’s advisers include:
Independent auditors
KPMG LLP
15 Canada Square
London E14 5GL
Solicitors
Slaughter and May
1 Bunhill Row
London EC1Y 8YY
Clearing bankers
NatWest
250 Bishopsgate
London EC2M 4AA
Joint stockbrokers
JP Morgan
25 Bank Street
London E14 5JP
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
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Designed and produced by Gather
www.gather.london
INVESTOR INFORMATION
Workspace Group PLC
Annual Report and Accounts 2023
Workspace Group PLC
Canterbury Court
Kennington Park
1–3 Brixton Road
London
SW9 6DE
Telephone: +44 (0)20 7138 3300
Web: www.workspace.co.uk
Email: investor.relations@workspace.co.uk
If you require information regarding
business space in London, call
+44 (0)20 7369 2390 or visit:
www.workspace.co.uk