Workspace Group PLC
Annual Report and Accounts 2024
Front cover image
The front cover image was created from a photo
of Workspace people, customers and partners
captured at an event held at Kennington Park.
The original drone image is shown here and we
also captured the event on film (watch it via the
QR code on page 8).
WHOEVER YOU ARE,
WHATEVER YOU DO,
WE HAVE A SPACE FOR YOU
Our vision is to be the first choice
in London for the brightest businesses,
people and investors.
Our purpose is to give businesses the
freedom to grow. We achieve this by giving
our customers working environments they can
personalise and an experience tailored to their
business. Free from constraint and compromise.
We deliver our purpose by staying true to our
values: know your stuff, find a way, show we
care and make it fun. Our people are as driven,
diverse and innovative as our customers and
our culture ensures we stay close to our
customers and their needs.
This is why around 4,000 of London’s
brightest businesses call Workspace home.
As the leading flexible brand for
SMEs across London, I am confident
that Workspace has a clear
competitive advantage.
Graham Clemett
Chief Executive Officer
For London’s SMEs, flexibility
means choice and control.
Cherry Tian
Head of Marketing
STRATEGIC REPORT
1
1 It all happens at Workspace
9 Business model
12 Performance highlights in 2024
14 Chair’s statement
16 Chief Executive Officer’s statement
18 Our stakeholders
29 Our market
35 Our strategy
39 Sustainability
66 Our key performance indicators
71 Principal risks and uncertainties
79 Business review
88 Compliance statements
OUR GOVERNANCE
108
108 How good governance ensures
‘It all happens at Workspace’ for the long term
110 Chair’s introduction to Governance
116 Board leadership and company purpose
135 Division of responsibilities
146 Composition, succession and evaluation
166 Audit, risk and internal control
180 ESG Committee report
186 Remuneration
218 Report of the Directors
221 Directors’ responsibility statement
FINANCIAL STATEMENTS
222
222 Independent auditor’s report
230 Consolidated income statement
230 Consolidated statement
of comprehensive income
231 Consolidated balance sheet
232 Consolidated statement of changes in equity
232 Consolidated statement of cash flows
233 Notes to the financial statements
257 Parent Company balance sheet
258 Parent Company statement of changes in equity
258 Notes to the Parent Company financial statements
ADDITIONAL INFORMATION
261
261 Five-year performance
262 EPRA performance measures
263 Property portfolio
265 Glossary of terms
266 Investor information
CONTENTS
Go to:
www.workspace.co.uk/onlineannualreport2024
Canalot Studios, Ladbroke Grove
Portsoken House, Aldgate
Workspace Group PLC
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IT ALL HAPPENS AT WORKSPACE
Engaging with our customers
Pages 20 to 24
Our values in action
Page 26
WILD FAWN, CUSTOMER
Their space in The Biscuit Factory is designed for
hand-making and packaging their sustainable jewellery.
SONAL JAIN, HEAD OF SUSTAINABILITY
Ensures sustainability remains at the heart
of everything we do.
JAMES AVERY, HEAD OF CENTRE MANAGEMENT
Manages our team of Centre Managers to make sure
our buildings and our customer service are at their best.
JUKEBOX STUDIOS, CUSTOMER
Records popular podcasts and online videos
at Pall Mall Deposit in Ladbroke Grove.
ALBION CYCLING, CUSTOMER
Creates innovative, sustainable cycling clothing
in their work space at Fuel Tank in Deptford.
OUR NEIGHBOURS
We bring together our customers, suppliers and people, as well
as the local community, at regular events across our portfolio.
WATCH THE FILM
WATCH THE FILM
WATCH THE FILM
WATCH THE FILM
WATCH THE FILM
WATCH THE FILM
MAKERS CREATORS
MANAGERS
INNOVATORS
NEIGHBOURS
Throughout the year we have filmed stories that capture some of the makers,
innovators and creators from our diverse customer base. We’ve also turned
the camera on ourselves to show how our purpose, values and culture ensure
we stay close to the 4,000 businesses that call Workspace home.
LEADERS
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We love that we could adapt
the space, so that we can make
and pack our jewellery all
in the same room.
Emma Barnes
Founder, Wild Fawn
How we support makers
At Workspace, we offer a blank canvas that allows makers like
Wild Fawn to customise and brand their space. Our flexible offer has
allowed them to organise their space into distinct zones for design,
production, packaging, and customer consultations.
WATCH THE FILM
MAKERS
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INNOVATORS
With the hum of sewing machines
in the background, we feel very
close to the sustainable garments
we’re developing.
Rupert Hartley
Co-Founder, Albion Cycling
How we support innovators
Our customers want more than just desk space. They want areas
where they can develop and test their latest products. Albion use
machines in their space to cut new materials. They also host repair
workshops for their customers to help extend the life of their garments.
WATCH THE FILM
3
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CREATORS
Workspace has helped my creative
journey by allowing me to do pretty
much anything I want to my space.
Daniel Stewart
Managing Director, Jukebox Studios
How we support creators
Creative customers want to be creative with their space.
For instance, Jukebox Studios has divided its space into
several sound studios and mixing rooms, each reflecting
its unique brand personality.
WATCH THE FILM
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AT WORKSPACE, WE ARE AS
DRIVEN AND INNOVATIVE AS OUR
CUSTOMERS – IT’S HOW WE STAY
CLOSE TO THEM AND THEIR NEEDS.
5
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MANAGERS
The most common feedback we
receive from customers highlights
our centre teams as heroes.
James Avery
Head of Centre Management
Putting the customer first
We have created a new role, Head of Centre Management, and
two new Regional Managers. With James Avery running the team,
this additional level of oversight provides more support to our centre
teams, ultimately continuing our focus on putting the customer first.
WATCH THE FILM
6
Workspace Group PLC
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LEADERS
From big strategic decisions to
small choices, sustainability shapes
all our actions. At Workspace, every
individual is committed to driving
our sustainability agenda forward.
Sonal Jain
Head of Sustainability
Our edge is our sustainable business model
Our business model empowers us to boldly advance our sustainability goals and
deliver impact for all our stakeholders. By prioritising refurbishment, we breathe
new life into old buildings, creating high-quality, sustainable work spaces. Our investments
across London stimulate economic activity, enhance local amenities and ultimately
create a more equitable distribution of employment opportunities across the city.
WATCH THE FILM
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Workspace Group PLC
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NEIGHBOURS
I love the sense of community
at Workspace – there’s always
something fun going on.
Victoria Murley
Centre Manager, Fleet Street
Celebrating our neighbours
We frequently host events in our buildings to unite Workspace people
and customers. In April 2024, we held a Spring party at Kennington Park
and used the opportunity to take an aerial photo that captured our community
spirit and now features on the cover of this Annual Report.
WATCH THE FILM
8
Workspace Group PLC
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Strategic Report Our Governance Financial Statements Additional Information
IT ALL HAPPENS AT WORKSPACE
AND OUR SUSTAINABLE BUSINESS MODEL
ENSURES WE CREATE LONG-TERM VALUE
FOR OUR STAKEHOLDERS
It connects the two parts of our business:
1
A first class customer experience,
delivered by our operating platform.
2
The property portfolio, which
we are continuously enhancing.
BUSINESS MODEL
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DELIVERING VALUE FOR THE LONG TERM
CUSTOMER VALUE
86.1%
CUSTOMER SATISFACTION
Read more on page 19
PEOPLE VALUE
85.5%
EMPLOYEE INCLUSIVITY
Read more on page 55
COMMUNITY VALUE
+£0.8m
DIRECT SOCIAL VALUE
Read more on page 60
PARTNER AND SUPPLIER VALUE
100%
CONSTRUCTION & FACILITIES
PARTNERS PAID LONDON
LIVING WAGE
Read more on page 27
INVESTOR VALUE
+8.5%
DIVIDEND GROWTH
Read more on page 79
ENVIRONMENT
11%
REDUCTION IN ENERGY
USE INTENSITY ACROSS THE
LIKE-FOR-LIKE PORTFOLIO
Read more on page 44
Delivered
by our great
people
Our leading
customer
proposition
Fully
embedding
sustainability
Supported
by our smart
operating
platform
Creating
a unique
portfolio
Delivering
income and
capital growth
PROPERTY
CUSTOMER
CUSTOMER
We stay close to our customers,
gaining insight and knowledge
about what they need to help
their businesses grow.
PROPERTY
Active asset management
allows us to create hubs of
economic activity and a more
sustainable London.
OUR PURPOSE,
VALUES AND CULTURE
DRIVE EVERYTHING
WE DO
BUSINESS MODEL CONTINUED
1 2
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CUSTOMER PROPERTY
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 our staff
surveys consistently show
are well understood.
Our culture is dynamic
and open and helps attract
and retain people who align
with these values and have
a broad range of skills,
experience and backgrounds.
In 2023/24, we developed
new partnerships to support
our commitment to recruit
from a more diverse talent
pool, for example with
Jobcentre Plus and Sapphire
Partnership, a charity focused
on providing opportunities
to young people not in
employment, education
or training. We are also
growing our apprenticeship
programme and have
designed clearer career
pathways for centre teams,
which has resulted in around
10% of our centre staff being
promoted during the year.
We provide companies
with customisable space
on flexible terms within
inspiring, sustainable
buildings in dynamic
London locations. We
cater to customers who are
creative, passionate owners
of businesses, for whom
being able to express their
individuality and personality
is vitally important.
We are always enhancing
and refining the customer
experience. This year, we
have continued to upgrade
communal spaces, cafés and
meeting rooms and added
phone booths across the
portfolio. We have expanded
our events programme,
rolling out a calendar of
exciting and engaging
events, with a focus on
wellbeing and networking.
Customer satisfaction
was up 2.1% to 86.1%
this year, as well as a
2% increase to 86.5%
in customers who would
recommend Workspace.
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 in vibrant
neighbourhoods and are
often landmarks in their areas.
We actively manage the
portfolio to enhance the
quality of space, implement
the latest sustainability
features and generate
value over the long term.
We target 90% occupancy
on our like-for-like properties
and, as occupancy rises,
we can enhance pricing.
As well as driving rental
growth, our refurbishment
and redevelopment pipeline
expands our footprint, and
we use our deep knowledge
of the London property
market to recycle capital
and invest in strategic
acquisitions to help
accelerate our growth plans.
Through our inherently
sustainable business model we
aim to 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 we also install
the most efficient systems
and engage with customers
to reduce operational carbon.
We ensure our operations
are sustainable, focusing on
waste management, water
efficiency and sustainable
procurement.
We play a key role in the
employment-led regeneration
of areas across London: our
buildings become hubs of
economic activity, bringing
more employment
opportunities and prosperity
into emerging areas.
Our properties generate
sustainable, long-term
income, which we reinvest
to enhance the portfolio
and return to shareholders
as dividends.
We prudently manage
our balance sheet and are
committed to maintaining
conservative leverage, which
we expect to reduce further
through strategic disposals
and as values improve.
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 proprietary, in-house
operating platform is a
combination of skilled teams,
smart systems and actionable
data. It enables us to
manage a huge volume of
customer activity in-house,
from enquiries and viewings
through to lettings, facilities
management, billing
and renewals.
These ongoing interactions
with customers, as well as
our regular surveys, provide
real-time market intelligence.
Over the year, we have
embedded our new finance
system and prepared the
way for a new CRM system
in 2024/25. With these
dynamic systems in place,
we will drive further
efficiencies and harvest
even more data, which
helps inform decision-
making across the business.
Maintaining direct
relationships with our
customers also means
we can work with them to
enhance the sustainability
of our buildings.
GIVING THEM WHAT THEY NEED TO GROW THEIR BUSINESSES CREATING HUBS OF ECONOMIC ACTIVITY
Leading customer
proposition
Supported by our smart
operating platform
Creating a unique
portfolio
Fully embedding
sustainability
Delivering income
and capital growth
Delivered by
great people
BUSINESS MODEL CONTINUED
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PERFORMANCE HIGHLIGHTS IN 2024
FINANCIAL
EPRA NTA PER SHARE
£8.00
2024 8.00
9.27
9.88
2023
2022
1. A reconciliation of basic and diluted earnings to trading
profit after interest is in note 8 to the financial statements.
Despite the economic challenges, we have had another
year of strong performance, with continued demand from
London’s SMEs for our flexible offer delivering double-digit
rent roll and pricing growth in the year.
Our distinctive offer, proven operating platform and track
record, alongside ownership of an extensive, high-quality
property portfolio mean we are well positioned to capitalise
on the growing shift towards flex and to capture more of the
significant market opportunity ahead of us.
UNDERLYING PROPERTY VALUATION
-9.5%
TRADING PROFIT AFTER INTEREST
1
£66.0m
2024 66.0
60.7
46.9
2023
2022
NET RENTAL INCOME
£126.2m
2024 126.2
116.6
86.7
2023
2022
DIVIDEND PER SHARE
28.0p
2024 28.0
25.8
21.5
2023
2022
Business review
Pages 79 to 87
(LOSS)/PROFIT BEFORE TAX
£(192.8)m
2024(192.8)
(37.5)
124.0
2023
2022
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LIKE-FOR-LIKE RENT ROLL GROWTH
+9.6%
2024 9.6
7.1
8.7
2023
2022
AVERAGE LETTINGS PER MONTH
103
2024 103
110
127
2023
2022
AVERAGE ENQUIRIES PER MONTH
788
2024 788
798
917
2023
2022
REDUCTION IN ENERGY USE INTENSITY
ACROSS THE LIKE-FOR-LIKE PORTFOLIO
11%
DONATED TO SINGLE HOMELESS PROJECT
£31k
AVERAGE VIEWINGS PER MONTH
524
2024 5 24
518
598
2023
2022
SCOPE 1 AND 2 EMISSIONS
REDUCTION SINCE 2019/20
20%
100%
RENEWABLE ELECTRICITY SOURCED
SUSTAINABILITYOPERATIONAL
Our accomplishments this
year are a testament to our
unwavering commitment
to sustainability.
Sonal Jain
Head of Sustainability
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PERFORMANCE HIGHLIGHTS IN 2024 CONTINUED
1. A reconciliation of basic and diluted earnings to trading
profit after interest is in note 8 to the financial statements.
QA
Duncan Owen was appointed Chair of
Workspace after the 2023 AGM, having
joined the Board in 2021. We sat down with
him to discuss his first year in the role, what
differentiates Workspace in the market and
the exciting growth opportunities for the
business going forward.
Q
What have been your priorities as Chair
of Workspace in this first year?
A
Initially, I was focused on continuing to
learn and build an even deeper understanding
of the business and the people beyond the
Executive Committee members who I knew
well from my two years as a Non-Executive
Director. I made it a priority to get out to
more Workspace sites to see the blend of
characterful, heritage buildings and modern
properties that we own and to meet the
customer-facing teams on the ground.
Succession planning has been a key priority
this year, particularly after Graham Clemett
announced his intention to retire in January.
We have conducted a rigorous and thorough
search process and were delighted that so
many excellent candidates came forward
for consideration. As a consequence, we are
fortunate to have found such a strong CEO
designate in Lawrence Hutchings. His deep
experience in the listed real estate environment
and world-class skills as a hands-on operator
of multi-use assets make him the ideal person
to lead Workspace. Equally compelling is his
widely acknowledged warmth of personality
and high integrity which are a great fit for
the existing team.
Beyond the CEO appointment, we have also
taken steps to further strengthen the Board
with the appointment of David Stevenson as
Non-Executive Director. He brings invaluable
capital markets experience and strategic
thinking as an investor, as well as expertise
in the SME sector and in optimising digital
strategies. This will complement our existing
Board and support Workspace in delivering
our growth ambitions.
Q
How has your perception of Workspace
changed now that you’ve been in the Chair
role for a year?
A
I have a much better appreciation now
of the factors that differentiate Workspace
in the market. The flexible space industry
is increasingly competitive and growing
strongly as it emerges from a niche within
the real estate sector to the mainstream.
Workspace stands out from its peers for
several reasons. The first and strongest
reason is our people and the culture we’ve
cultivated, which would be particularly
difficult for competitors to copy. Workspace
is as much an operating, people-led business
as it is a property company. We hire the
best people from hospitality, marketing,
technology and the real estate industries
and we have a fantastic culture that ensures
our people are looked after, offered great
career development opportunities and,
as a result, employee retention is high.
£66.0m
TRADING PROFIT AFTER INTEREST
1
28.0p
DIVIDEND PER SHARE
Duncan Owen
Chair
Our people have a common
sense of purpose – a key
differentiator for Workspace.
Everyone is focused on
delivering a great experience
for our customers and giving
their businesses the freedom
to grow.
CHAIR’S STATEMENT
14
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The Company has a common sense
of purpose, which is the second key
differentiator for Workspace. Everyone
is focused on delivering a great experience
for customers and giving their businesses
the freedom to grow. Whether you’re in
the Facilities Management team, Executive
team or a Centre Manager, there is real
collaboration across the Company towards
achieving our purpose.
Finally, for more than 35 years, Workspace has
pioneered a truly flexible offer and developed
a unique customer-centric operational platform
– comprising our people and our proprietary
systems. This supports the delivery of the
customer experience. It is this platform that
will enable us to scale the business over the
longer term and grow earnings for the
benefit of shareholders.
Q
You referenced culture – how does the
Board monitor the culture of the business?
A
Workspace’s culture has developed over
almost four decades. It starts with the DNA
of the business – our earliest annual reports
talked about customer-centricity, which is at
the heart of our culture. This has evolved as
new people have joined and innovated with
new ideas to constantly improve our service.
We have a strong set of values, which I see
are genuinely lived by in the day-to-day
operations of the business.
Both the Board and Executive Committee
closely monitor culture and how it is
embedded throughout the business.
We do this primarily through our employee
engagement programme. This is a mix of
formal engagement, with regular presentations
to the Board on strategic and operational
initiatives from senior managers, and informal
engagement, where I and other NEDs host
breakfast or lunch meetings for people across
the business. These are held at Workspace
sites and have no fixed agenda, but provide
an opportunity for employees to give
feedback, make suggestions and raise
any issues or concerns they might have.
Q
Why is sustainability so important
to Workspace?
A
I mentioned our DNA. Sustainability has
always been in our DNA and is integral to our
business. We own historic buildings and it is
our responsibility to maintain them for future
generations and make them fit for purpose in
today’s world. Where we do develop sites, we
do so with our environmental footprint in mind
and are committed to our goal of being a net
zero carbon business. We also work closely
with our customers to reduce our combined
impact and we know how important
sustainability is to their businesses. Many of
our customers are B Corp certified, or aiming
to be so, and in our recent survey of SME
business owners, 66% responded that they
would be more likely to use a supplier or
service if they had B Corp certification.
Q
What are your priorities for 2024/25?
A
With Lawrence, our new CEO, joining the
business later this year, our priority is going
to be his handover with Graham and induction
on to the Board and into the business.
On that note, I’d like to take this opportunity
on behalf of the Board to express our gratitude
to Graham for his many years of service.
As CFO for twelve years and CEO for the last
five, he has made a significant contribution
to the success of Workspace over that time.
It is thanks to Graham’s invaluable leadership
and the hard work of all our people that
Workspace is so well positioned as we look
to the future.
Whilst we are in a challenging economic
environment, with political uncertainty also
impacting markets, Workspace has proven
its resilience through previous economic
downturns, as well as its outperformance
during better times. We have a fantastic
team and a clear strategy to take advantage
of our operational leverage to deliver
earnings growth. SME occupiers want the
customer service, flexibility, and type of
quality locations we have across the portfolio.
Workspace is London’s largest owner and
operator of flexible, sustainable work space.
This creates barriers to entry for competitors
and provides us with a wealth of knowledge
and an opportunity to profitably increase
our market share for the benefit of our
customers, our people and our shareholders.
Duncan Owen
Chair
FIVE REASONS TO INVEST
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 more than
35 years. We helped create the London
flex market.
It’s a great time to be the leader
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 and social impact
in the areas we operate.
We’re not done until our customers are
Our quality, in-person service offers daily
face-to-face access and creates close
relationships with strong retention.
We have a fantastic team
and a clear strategy to take
advantage of our operational
leverage to deliver
earnings growth.
CHAIR’S STATEMENT CONTINUED
Our governance
Pages 109 to 221
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We’ve had another year
of strong trading. Our ability
to deliver sustained dividend
growth for shareholders
remains a key focus for
the Company.
CHIEF EXECUTIVE OFFICER’S STATEMENT
£126.2m
NET RENTAL INCOME
£66.0m
TRADING PROFIT AFTER INTEREST
1
Graham Clemett
Chief Executive Officer
We’ve had another year of strong trading at
Workspace. Continued demand for our flexible
lease offer has meant that we’ve been able
to maintain broadly stable occupancy and
increase pricing by some 10% through the
year. This has involved a huge amount of
customer activity with our teams completing
1,238 lettings and 705 renewals, worth £53.3m
in terms of rent roll. The result is an 8% growth
in net rental income delivering a 9% increase
in trading profit after interest, to £66m. As a
result, the Board has recommended a final
dividend of 19p per share, taking the full year
dividend to 28p per share, an increase of 8.5%
on last year. Our ability to deliver sustainable
dividend growth for shareholders remains
a key focus for the Company.
Our property teams have been busy too.
We’re continuing to deliver three major
refurbishment projects and I’m looking
forward to the launch of Leroy House in
Islington in September, which will be our first
net zero building. Our property portfolio also
offers up rich opportunities for smaller scale
projects and we have completed on some
30 smaller refurbishments and upgrades
over the year, which are delivering strong
and immediate income returns. We’ve also
exchanged or completed on the disposal
of £143m of non-core assets as we continue
to recycle capital and strengthen the
balance sheet.
Our property valuation has reduced by 9.5%
on an underlying basis over the year although
the pace of this reduction slowed significantly
in the second half. This was primarily driven
by a continued outward movement in yields,
with the like-for-like equivalent yield now at
7.0%. As a result, our net tangible asset value
per share is down 13.7% to £8.00, which
remains significantly higher than our current
share price. I would expect this valuation to
be the low point of the current cycle given
the forecast of interest rate reductions
combined with our ability to continue
delivering pricing growth and value-add
asset management activity.
With the Executive and senior management
teams, we’ve spent useful time over the year
on how we can deliver on our longer-term
ambitions, with the vision to be the first choice
in London for the brightest businesses, people
and investors. We are now progressing a
number of customer and technology
initiatives to take forward these plans.
We describe our customers as London’s
brightest businesses. They are SMEs, the
unsung heroes of the London and UK
economy, and a large and growing part of it.
Workspace has been providing space for
SMEs for over 35 years and we understand
what they need to grow their businesses.
They need the right buildings in the right
locations, true flexibility – both in their lease
and how they can use the space – and a work
space provider with a sustainable mindset
that puts the community and the
environment at the heart of its offer.
To be first choice for these businesses,
we need the brightest people in the market.
Our unique and valuable operating platform
is a combination of these people, smart
systems and actionable data and insights.
Our stakeholders
Pages 18 to 28
I am immensely proud of
the distinctive culture we’ve
cultivated at Workspace;
it has made my time in the
business hugely enjoyable.
1. A reconciliation of basic and diluted earnings to trading
profit after interest is in note 8 to the financial statements.
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CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
1,238
LETTINGS COMPLETED IN THE YEAR
86.1%
CUSTOMER SATISFACTION SCORE
On that note I want to thank all our teams
for their hard work over the last year. It is no
surprise that our customer satisfaction score
has risen this year to 86.1%.
As I come towards the end of my tenure
at Workspace, I have been reflecting on the
changes I’ve seen over the last seventeen
years. The most obvious is that the flexible
model, which Workspace has pioneered since
its inception in the late 1980s, has become
increasingly mainstream in the real estate
industry. There is undoubtedly more
competition in our space but as the leading
flexible brand for SMEs across London,
I am confident that Workspace has a clear
competitive advantage.
I am immensely proud of the distinctive
culture we’ve cultivated at Workspace;
it has made my time in the business hugely
enjoyable, despite the challenges we have
had to deal with over the last two decades.
I have no doubt that Lawrence Hutchings,
who succeeds me as Chief Executive Officer,
will be a great fit for the business and that
Workspace will continue to thrive under
his leadership.
I wish everyone at Workspace and all our
stakeholders all the best for the future. I will
of course remain an invested shareholder and
I look forward to watching from the sidelines
as Workspace goes from strength to strength.
Graham Clemett
Chief Executive Officer
ACCELERATING THE EVOLUTION OF WORKSPACE
Adding value for customers
We conduct market research to ensure
we understand our existing and potential
customers and that our offer caters to
their needs. It informs improvements to the
customer experience and offer, including
ongoing enhancements to our cafés,
events and customer service, as well as asset
management activity to optimise the portfolio.
Building our brand
As the first major flex brand in London we
have a unique heritage in the Capital. In the
face of growing competition, we continue
to cement our position and build awareness
of Workspace amongst all stakeholders.
Evolving our digital strategy
Our digital capabilities are well embedded
within Workspace, supporting teams and
the smooth operation of our platform. Our
strategic focus is now on leveraging digital
technologies to enhance the experience,
and create greater value, for customers.
With growing demand for sustainable,
flexible space and a nimble, open culture,
Workspace is ideally placed to continue
to evolve. Our strategy is focused on
growth and we believe that our platform
– a combination of people, smart systems
and actionable data – will enable us to
grow faster than our peers and ultimately
outperform the market.
Scaling the portfolio
There is significant headroom in our market.
With 4,000 customers, we estimate that
we have a 3% market share at a time of
structural growth in the number of SMEs.
We will continue to benefit from economies
of scale as we grow the portfolio through
strategic acquisitions and refurbishment
projects, which will deliver more than one
million sq. ft. of new and upgraded space.
Our unique and valuable
operating platform is a
combination of our people,
smart systems and
actionable data.
An aerial photo shot for our
annual report front cover
image at a customer event
in Kennington Park
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OUR STAKEHOLDERS
Listening to our stakeholders guides
our decision making.
Page
1. OUR CUSTOMERS
19
2. OUR PEOPLE
25
3. OUR INVESTORS
27
4. OUR PARTNERS AND SUPPLIERS
27
5. OUR COMMUNITIES
28
6. THE ENVIRONMENT
28
STAYING CLOSE
TO OUR
STAKEHOLDERS
MEANS WE CAN
RESPOND TO
THEIR NEEDS,
FASTER.
To understand what matters most we listen to our
stakeholders, both in person and by collecting real-time
data, directly informing the way we make decisions.
OUR STAKEHOLDERS
Canalot Studios, Ladbroke Grove
Our strategy
Pages 35 to 38
There are clear links between our
market trends and our strategy.
Section 172(1) Statement
Page 131 to 134
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OUR PURPOSE,
VALUES AND
CULTURE GET US
CLOSER TO OUR
STAKEHOLDERS
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Our centre teams received
more than 1,000 individual
shout-outs in our customer
survey for consistently going
out of their way to help
customers and create a
vibrant atmosphere.
Greg Absalom
Customer Insight Manager
81
CUSTOMER EVENTS HOSTED THIS YEAR
79.2%
OF CUSTOMERS SAY WORKSPACE IS
A SOCIALLY AND ENVIRONMENTALLY
SUSTAINABLE BUSINESS, UP 8.6%
YEAR ON YEAR
OUR CUSTOMERS
OUR STAKEHOLDERS CONTINUED
How we engage
We maintain a continual dialogue with a
customer from the moment they make an
enquiry, and our Centre Managers foster
close relationships once they’ve moved in.
We collect scheduled feedback twice a year
from our 4,000 customers. We use these
invaluable insights to enhance our service
and building management, guiding key
decisions on everything from refurbishments
to acquisitions.
How the Board engaged
– Reviewed our brand and marketing
campaigns.
– Reviewed customer experience initiatives.
– Considered the results of the customer
survey and reviewed ongoing feedback.
– Evaluated key monthly customer metrics.
Significant topics raised
– Wi-Fi and connectivity quality.
– Strong performance of centre teams
(over 1,000 formal ‘shout-outs’).
– Frequency and type of social events.
– Social and environmental sustainability.
– Breakout areas, meeting rooms
and phone booths.
– Quality of cafés.
Activity in the year
– New centralised Centre Management
team to strengthen customer focus.
– Delivered 30 smaller asset management
projects.
– Rolled out inclusive billing to
a further nine buildings.
– Launched new conference and events
space for existing and external customers.
– Invested in Wi-Fi upgrade programme.
– Added 10 new meeting rooms.
– 81 customer events with 4,000 attendees,
including launching a series of customer
festivals and new sustainability
roundtable events.
– Further streamlined leasing process
with faster transaction times and
improved customer experience.
– Launched four new in-house coffee bars.
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RESPONDING
TO THE NEEDS OF
OUR CUSTOMERS
Our regular 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.
Of these 12, we have highlighted four key
priority areas over the following pages:
Page
FLEXIBILITY
20
QUALITY OF SERVICE
21
TYPE OF PROPERTY
22
SOCIAL ENGAGEMENT
23
100%
OWNERSHIP OF OUR
BUILDINGS PUTS US
IN A UNIQUE POSITION
WHEN RESPONDING
TO CUSTOMER DEMAND
OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
Cherry Tian
Head of Marketing
FLEXIBILITY:
IT ALL HAPPENS
AT WORKSPACE
Q
What do our customers have in common?
A
Our SME customers are incredibly
diverse. However, they are all passionate
about what they do and share the same
dynamism and drive. They’re busy creating,
making and innovating – whether that’s
producing podcasts, making sustainable
deodorants or designing apps.
Q
What sort of space do they want?
A
They want more than just standard desk
space and flexible lease terms. Given the
variety of businesses we attract, they value a
range of choices and flexibility in every sense.
Q
What does true flexibility mean to you?
A
For London’s SMEs, flexibility means
choice and control. Most flexible office
providers use a one-size-fits-all model. At
Workspace, customers have the freedom to
design and brand their space, creating a true
home for their teams. We also make it easy
for them to move across our over 70 well-
connected locations as their business evolves.
Q
How is this reflected in the brand campaign?
A
This year’s campaign showcases just
how diverse, interesting and innovative our
customers are. They know where they want
to be and what they want to do, and just
need the freedom to make it happen. At
Workspace, they can. You can find our ads
online, on the radio/podcasts, and on buses
and Underground billboards, celebrating
our colourful customers – from architects
to app developers and jewellery makers to
PR agencies. It All Happens At Workspace.
WHAT IT LOOKS LIKE WHEN
EVERYTHING WE DO COMES
TOGETHER FOR OUR CUSTOMERS
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Andrea Kolokasi
Head of Business Development
QUALITY OF SERVICE:
ENSURING IT STAYS
CORE TO OUR OFFER
Q
Beyond providing great space, how do
you enhance the customer experience
at Workspace?
A
There’s a huge amount that we offer
beyond the four walls of the customer’s
space. Our cafés are a really good example
– they are the beating heart of the centre
and that’s why we’ve started to hire our own
baristas and provide our own café offering
in some locations. This year, we’ve also grown
and enhanced our meeting rooms platform
and launched our own Workspace sound;
curated playlists which can be heard in
the communal areas of our buildings.
Q
How has the new Eventspace conference
centre performed in its first few months
of operation?
A
It’s been really well received by both
internal and external customers. We’ve had
some large brands, such as Microsoft and
Lloyds Bank, book events with us and some
repeat bookers, which is a great sign. We’re
excited about continuing that momentum
in our first full year of operation.
Q
What else have you been working
on this year?
A
We’re working with our furniture partner
on a broader offer to help our customers
see the potential in their space and better
facilitate the move-in process, in addition
to our existing free space planning offer.
Q
What’s on the horizon for you and your team?
A
We’re focusing on enhanced customer
experience, overhauling our MyWorkspace
customer portal to create a digital community
hub that enables greater customer
connections and offers new services.
RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
There’s a huge amount
that we offer beyond the
four walls of the
customer’s space.
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RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
Richard Swayne
Investment Director
TYPE OF PROPERTY:
THE RIGHT
BUILDINGS IN THE
RIGHT LOCATIONS
Q
How do you know what kind of building
is right for your customers?
A
We have a long and successful track
record in providing space for SMEs so
we’ve built up a wealth of knowledge on their
needs. But it’s not just about what customers
need, you also need development and asset
management expertise to know what type
of building can be best carved up for our
multi-let offer. The configuration is crucial.
Q
How do you decide when to invest
and when to sell?
A
We have a rigorous investment strategy
for acquisitions and refurbishment projects,
that is underpinned by specific criteria
including ESG performance and strict return
hurdles. Our operating platform also ensures
we know where demand is around London so
we can take a view on future income growth
or whether an asset has reached maturity.
Q
You’ve been a net seller this year.
What have you disposed of?
A
This year, we’ve sold £143m of non-core
assets, recycling capital to pay down debt
and help fund our project pipeline.
Q
Will you be in the market for acquisitions
next year?
A
We have a clear growth strategy that
includes exciting prospects within our existing
portfolio that can be complemented with
buying great buildings in the right locations
when opportunities arise. The market
continues to be constrained by the economic
environment but we are well positioned to
take advantage of acquisitions that are
aligned with our investment strategy.
Our operating platform
ensures we know where
demand is around London
so we can take a view on
future income growth.
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RESPONDING TO THE NEEDS OF OUR CUSTOMERS CONTINUED
OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
Sophia Merola
Events Coordinator
SOCIAL ENGAGEMENT:
HOW WE BUILD
COMMUNITY
Q
Why are events important to our customers?
A
Our customers love that they can learn,
network, and unwind right where they work.
Whether it’s grabbing breakfast at a panel
discussion, hanging out at a lunch event,
or enjoying live music at night, there’s
something for everyone. These events
enhance the community feel and give
businesses an extension of their own
company culture, making coming to
work more exciting for their teams.
Q
How have our events evolved this year?
A
We’ve really ramped up our customer
events, hosting 81 this year. Highlights
included our It All Happens At Workspace
events, co-hosted with customers, such as
jewellery making or pottery workshops, which
drew more than 1,100 customers. We also
continued our London’s Brightest Businesses
panels, moderated by enterprise journalists
from The Times and Evening Standard. We
kicked off our Sustainability Roundtable
series, bringing customers together to tackle
big topics like B Corp certification. A big plus
has been our new state-of-the-art events centre,
Eventspace at Salisbury House, so we can
now host even bigger and better gatherings
(read more on page 36).
Q
How do these events benefit Workspace?
A
They’re a part of why people love
working here. They bring our ‘Make It Fun’
value to life and get great feedback for
boosting the overall vibes, giving our
customers networking opportunities. Our
surveys show that people who join our events
are more satisfied and stay with us for longer,
helping us build stronger connections and
keeping our community thriving.
Our customers love that
they can learn, network,
and unwind right where
they work.
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OUR STAKEHOLDERS CONTINUED
OUR CUSTOMERS CONTINUED
RESPONDING
TO THE FUTURE
NEEDS OF OUR
CUSTOMERS
Our experienced Technology team boasts
extensive expertise in connectivity and
engineering, and are dedicated to using
innovative technology to help empower
our customers and teams.
Chris Boultwood
Head of Technology
How are you using technology to improve
the customer journey?
Our Systems Innovation team is always
looking at ways to make the customers’ life
that bit simpler and smoother. This year, we
introduced an internal app for centre teams
to ease the process for customers moving
in and out. Instead of juggling emails and
paperwork, customers can handle everything
through the app – from uploading pictures
to filling out descriptions and requirements,
all stored securely on the cloud. This not only
speeds up the process but also enhances
transparency between Workspace teams
and customers.
How can AI help with the customer journey
We’re already experimenting with AI
internally, using tools like Microsoft Co-Pilot
to enhance some of our processes. But we’re
not stopping there, we’re also exploring how
AI can enhance our customer experience.
For instance, we’re testing AI in our meeting
room systems to adjust temperatures for
optimal comfort while also cutting down on
energy use. In time, we hope these insights
could expand to entire buildings, not just
individual rooms.
How are you improving connectivity
for customers?
Over the past two years we have invested
heavily in upgrading to superfast internet
via the latest Wi-Fi 6 technology. The service
provides four times the capacity of the usual
network, improving customer satisfaction
significantly – as reflected in a nearly 10%
increase in our connectivity scores since
we started the project.
What are you most excited about
in the future?
We’re working with an augmented reality
partner to enhance how customers see and
fit-out their potential space. We’ll be trialling
the use of iPads and VR headsets to visualise
and arrange furniture in 3D, even seeing
prices as they design their layout. It’s a
game-changer for customers personalising
their spaces, and it perfectly complements
our blank canvas offer.
Our strategy
Pages 35 to 38
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How we engage
Our culture and values consistently receive
high scores in our employee survey. This year
91% said they would recommend Workspace
as a great place to work. Our regular town
hall broadcasts provide a forum to hear from
teams across the business. We also carry out
a series of face-to-face and virtual events
throughout the year, where we gather both
formal and informal feedback.
How the Board engaged
– Reviewed and discussed our new
recruitment policies.
– Chairman featured in our Wrap Live
staff newsletter.
– Chairman and two separate Non-Executive
Directors hosted two employee
engagement sessions with a mix of centre
and head office staff providing feedback.
Significant topics raised
– Strategy and vision.
– Diversity and inclusion, especially
around recruitment.
– Communication from senior leaders.
– Intra-company collaboration and
information sharing.
– Career development.
– Health and wellbeing.
– Systems improvements.
Activity in the year
– Strategy and vision workshops
for senior managers.
– Enhanced recruitment processes,
encouraging more internal hires
and greater diversity.
– Six Wrap Live town halls – mix
of in-person and virtual events.
– Four Wrap On Tour events, where the
Executive team engage with centre staff.
– Enhanced Wrap bulletin staff newsletters.
– Introduced our first e-learning portal.
– Upgraded our systems.
– Increased frequency of internal recognition
‘shout-outs’, 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 centralised Centre Management team
to strengthen customer focus.
– New Facilities Management team structure,
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.
Since tracking diversity, we
have found that we are more
diverse than the national
average, which we are
extremely proud of.
Claire Dracup
Director of People & Culture
45
INTERNAL PROMOTIONS
91%
OF OUR PEOPLE WOULD RECOMMEND
WORKSPACE AS A GREAT PLACE TO WORK
OUR PEOPLE
OUR STAKEHOLDERS CONTINUED
Read more about how we
engage with our people in
the governance section
Pages 126 to 127
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OUR STAKEHOLDERS CONTINUED
OUR PEOPLE CONTINUED
KNOW YOUR STUFF
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.
Our people understand that
a smile and the right word
at the right time can make
all the difference.
Living our values – Donating
space to Sheltersuit
Workspace’s offer of lettings
in kind has allowed charity,
Sheltersuit, to make a home
at Record Hall, allowed it to
bring its life-saving sleeping
bags to homeless people
across London.
FIND A WAY
We look for those who
are persistent and have the
confidence to move things
forward when it is difficult.
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.
LIVING OUR VALUES:
A CLEAR
FRAMEWORK
FOR SUCCESS
Our company values are embraced
by our people – 96% believe they align
perfectly with our culture. We celebrate
individuals who exemplify these values
quarterly with our Workspace Winners
awards. This year, we’ve also introduced
an award for centre teams.
116
PEOPLE COMPLETED ROLE
SHADOWING THIS YEAR
Meet our Events Coordinator
Page 23
We host social and wellbeing
events for our employees
throughout the year
96%
BELIEVE OUR VALUES
MATCH OUR CULTURE
Embedding our culture
Page 127
Sheltersuit, Record Hall
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OUR STAKEHOLDERS CONTINUED
OUR PARTNERS AND SUPPLIERSOUR INVESTORS
How we engage
We work with a broad range of long-term
partners and have a strong track record of
refurbishments and redevelopments where
good relationships with local government,
communities and contractors are integral.
We ensure that all our partners and suppliers
meet 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
– Discussed new supplier onboarding process.
– Approved modern slavery statement.
Significant topics raised
– Creating sustainable buildings.
– Compliance with building regulations
and neighbourhood plans.
– Access for all user groups.
– Urban regeneration.
– Recycling and waste practice.
– London Living Wage.
Activity in the year
– Launched new, simplified supplier
onboarding process.
– Continued to ensure suppliers and partners
working on Workspace premises pay Real
London Living Wage.
– Worked with our supply chain to adopt
environmentally friendly practices.
– Promoted recycling and sustainable waste
practices among our suppliers and partners.
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 disposal of £143m of non-core
assets in the year.
– The Chair engaged with our largest
investors following the announcement of
Graham Clemett’s upcoming retirement.
– Attended the AGM.
– Reviewed and discussed the bi-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 and cost
of debt.
– CEO succession.
– Growth strategies.
– Our sustainability approach.
– Brand and marketing capability.
– Competition.
Activity in the year
– 97 investor meetings (in-person and virtual).
– 19 sell-side analyst and buy-side investor
site tours.
– 6 real estate conferences attended globally.
– AGM.
100%
CONSTRUCTION &
FACILITIES PARTNERS
PAID REAL LONDON
LIVING WAGE
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How we engage
Creating a flatter, fairer London is central
to our strategy. Our high-quality, affordable
space brings employment into local areas and
helps create community hubs. We support
and work closely with our local communities,
and offer employment-led opportunities
to disadvantaged young people.
How the Board engaged
– Reviewed our social impact strategy and
received monthly updates on initiatives.
– Our Chair and NEDs discussed social
impact initiatives at their employee
engagement sessions.
Significant topics raised
– Understanding local community needs
to align our social impact initiatives.
– Expanding our partnership with Single
Homeless Project.
– Partnering with 10 local schools to support
skills and employability in the area.
Activity in the year
– Launched 100+ community engagement
initiatives in partnership with local charities.
– Raised £31,000 for Single Homeless Project,
funding a full-time employability
coordinator and benefitting 589 young and
vulnerable people, along with providing
1,560 volunteering hours.
– Rolled out the InspiresMe community
skills and employment programme across
10 centres, benefitting over 300 students.
How we engage
We recognise the climate emergency and
know that the real estate sector contributes
to nearly 40% of global carbon emissions.
We have pledged to become net zero carbon.
Our model of refurbishing existing buildings
substantially reduces embodied carbon.
Our operating platform enables us to monitor
energy usage in real time, ensuring efficiency
and responsiveness. By actively engaging
with our customers to improve building
sustainability, we ultimately drive higher
satisfaction scores and retention.
How the Board engaged
– Reviewed our net zero pathway and
received monthly updates on progress.
– Reviewed our climate risk exposure,
ensuring we have a robust mitigation
strategy in place.
Significant topics raised
– How to reduce emissions through a long-
term renewable power purchase strategy.
– Enhancement of metering and smart
controls for high energy optimisation.
– Engaging and upskilling customers on
energy reduction.
– Upgrading units to high sustainability
standards, meeting at least EPC A or B.
Activity in the year
– Secured the industry’s first renewable
power purchase deal, fulfilling two thirds
of our electricity needs.
– Increased smart building energy
management system coverage to 75%
of our portfolio.
– Rolled out the Big Energy Race campaign,
engaging customers on energy reduction
and saving over 860,000 kWh.
– Upgraded over 10% of the portfolio to EPC
A/B standards.
OUR COMMUNITIES THE ENVIRONMENT
OUR STAKEHOLDERS CONTINUED
1,600
WORKSPACE TOTAL
VOLUNTEERING HOURS
Solar energy deal powers
a greener work space
We took a major stride towards our net zero
carbon objective with a groundbreaking deal
to source two-thirds of our electricity from
solar energy. This 10-year deal with Statkraft,
Europe’s top renewable energy producer,
powers our spaces with electricity from a new
solar plant in Devon, boosting the UK’s clean
energy output. The Corporate Power Purchase
Agreement (CPPA) also allows our customers
to achieve their own sustainability ambitions
by significantly reducing their carbon footprint
while helping stabilise their costs.
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FOUR KEY
TRENDS SHAPE
OUR CUSTOMERS’
NEEDS
Acting on market trends and understanding what our
customers want helps to inform our decisions and the
activities we undertake to deliver stakeholder value.
Our target market comprises around 138,000 London
SMEs. With some 4,000 customers, we currently let
space to 3% of this market.
It is our ambition to increase our market share over the
long term and key to achieving this, is maintaining a clear
understanding of the market and the key trends affecting
our existing and prospective customers.
Our strategy
Pages 35 to 38
Our market trends are
linked to our strategy. The Frames, Shoreditch
OUR MARKET
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OUR MARKET CONTINUED
IT IS A GROWING MARKET
The number of London SME’s continues to grow
WE ARE SEEING EMERGING CUSTOMER TRENDS
Work life culture and the role of the workplace are shifting
270
250
230
210
190
170
150
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
WE ARE IN OUR OWN SPACE IN THE MARKET
Limited, relatively fragmented competition
LOW FLEXIBILITY
LEASE
HIGH FLEXIBILITY
Large floor plates
TURN-KEY OFFER
Fully fitted
Large floor plates
TRADITIONAL OFFER
Unfurnished
TRADITIONAL WORK LIFE CULTURE
Work life is about fitting into hierarchies
and top-down business cultures.
Conventional processes are followed
in highly structured spaces which are
separate from the outside world.
Offices/co-working
SERVICED OFFER
Fully furnished
WE ARE WELL POSITIONED
Workspace is uniquely placed to respond to these trends and capture market share
Work life is more purposeful, fostering an
inclusive environment that respects and
reflects individuality and diverse ways of
working. There is a blurring of the
boundaries between work and the outside
world and greater connection with local
communities.
AN EMERGING CULTURAL SHIFT
THE WORKSPACE OFFER
USE OF SPACE
HIGH FLEXIBILITYLOW FLEXIBILITY
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1,238
LETTINGS IN THE YEAR
OUR MARKET CONTINUED
TREND 1:
THE ECONOMY
Despite signs of a gradual recovery
on the horizon, businesses continue to
navigate a complex economic landscape
The Bank of England’s forecast of 1.5%
growth in 2025 offers a cautiously
optimistic outlook for the UK’s recovery
1
.
Yet businesses are still facing a complex
landscape characterised by tight labour
markets, sustained inflation, and the
cost of doing business are expected
to remain high.
What this means for our customers
SMEs have proved resilient and adaptable
2
,
with more than half expecting their profit to
increase in 2024
3
. In Workspace’s March 2024
survey of 300 SME owners and leaders, 88%
said they are confident about their future.
This growing confidence, alongside economic
shifts and changes in work models, has seen
robust demand for our flexible offer, with
1,238 lettings and 705 customer renewals
completed in the year.
Meanwhile, by securing long-term energy rates
and offering inclusive billing, we help our
customers manage their expenses effectively
so they can focus on growth.
Workspace response
Our portfolio includes 77 locations with
a variety of options to suit different budgets.
Our new inclusive billing combines Wi-Fi,
rent and energy into one monthly payment,
simplifying finances for our customers.
We also protect against fluctuating energy
prices by hedging costs and primarily using
solar energy for electricity.
Workspace has disposed of £143m non-core
assets in the year, with the proceeds helping
to pay down debt and fund our value-
enhancing programme of upgrades and
refurbishments. Our strong balance sheet
coupled with our truly flexible offer and
freehold ownership model means we are
well positioned to weather any further
economic volatility.
Vox Studios, Vauxhall
1. Bank of England’s Monetary Policy Report, May 2024.
2. Business insights and Impact on UK Economy, ONS,
May 2024.
3. State of UK Business, BCG, 2024.
RELEVANT STRATEGIC PILLARS
Driving customer-led growth
Delivering operational excellence
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8%
UPLIFT IN CUSTOMER
SATISFACTION WITH
CONNECTIVITY SERVICES
OUR MARKET CONTINUED
TREND 2:
INFRASTRUCTURE
AND CUSTOMISABLE
SPACE
Now that they’ve found their hybrid-
working sweet spot, companies expect
the highest standards in infrastructure
and technology
Having fine-tuned their approach, more
than 82% of small business leaders now
aim for a hybrid workforce, more than half
of whom expect it to boost their profits
1
.
What this means for our customers
Our agile SME customers embraced flexible
working well before it became widespread,
long recognising its benefits for work-life
balance, wellness, productivity, talent attraction
and retention, and supporting diversity.
Our customers span a wide array of sectors,
including creative fields like podcast
production and fashion design, and use
their space in versatile ways beyond just
rows of desks.
Hybrid work has made it necessary to
schedule in-person meetings to gather teams.
This has meant our meeting rooms offering
has surged in popularity amongst both
existing customers and external businesses.
This year, we saw a 9% rise in bookings,
totalling 22,000 meeting rooms booked.
Workspace response
For more than 35 years our business model
has been geared toward offering flexibility
and adaptability. Our ownership model
means we can provide a blank canvas so that
customers can tailor their space to how they
would like their teams to work, whether that
is adding comfy areas, white boards or
meeting rooms. Building ownership and
acting on customer feedback also allows
us to enhance our communal areas, giving
customers more space beyond their unit and
adding phone booths to meet the demand
for virtual meetings.
Customers expect super-fast, reliable
connectivity. We’ve upgraded our buildings
with Wi-Fi 6 which has quadrupled network
capacity and are rolling out 5G to give our
customers greater flexibility in how they work.
RELEVANT STRATEGIC PILLARS
Driving customer-led growth
Delivering operational excellence
Jukebox Studios, Pall Mall Deposit
1. 2024 Flexible Working Bill, Michael Page Report, 2023.
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CHARACTERFUL WORKSPACE
BUILDINGS FOR CUSTOMERS
TO CHOOSE FROM
OUR MARKET CONTINUED
TREND 3:
RECRUITMENT
AND RETENTION
Faced by a labour shortage, SMEs
are looking to their space to support
recruitment and retention
Two-thirds (67%) of SMEs struggle to hire
or retain talent, while 85% of employees
agree that the design of their workplace
is crucial to where they work
1
.
What this means for our customers
78% of UK SMEs believe that flexible work
space options are crucial for attracting and
retaining top talent
2
.
London’s SMEs are focusing on work
environments that rival the comfort and
convenience of home to attract and retain
talent. They’re looking for characterful,
attractive buildings in vibrant areas, with 74%
of businesses considering access to amenities,
such as cafés, wellness facilities, and outdoor
spaces, as essential in their choice of office
location
3
. This highlights the importance of
choice in order to find the right space and
location for their teams.
Workspace response
Our blank canvas offer allows businesses
to customise their spaces to suit their culture,
with 77 unique buildings to choose from, each
offering its own personality and community.
As businesses grow and change, they also
have the flexibility to scale, downsize, or
relocate within our portfolio.
Our focus on quality, in-person service and
close relationships with our customers drives
strong retention even as pricing increases.
This constant dialogue helps us meet their
evolving needs and guides our ongoing
enhancements to the spaces, such as adding
high quality cafés and breakout spaces, bike
storage, roof terraces, and meeting rooms
to our buildings.
Leather Market, London Bridge
1. Future Attitudes Report, Aldermore, 2024.
2. Flexible Working: Lessons from the Pandemic
CIPD Report 2022.
3. Workplace Ecosystems of the Future, Cosham
and Wakefield 2023.
RELEVANT STRATEGIC PILLARS
Driving customer-led growth
Delivering operational excellence
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88%
OF LONDON’S SMES SEE
SUSTAINABILITY AS IMPORTANT
TO THEIR BUSINESS
1
OUR MARKET CONTINUED
TREND 4:
CUSTOMERS CARE
ABOUT ESG
More SMEs are embracing holistic
ESG accreditations such as B Corp
As the UK Government scales back its net
zero commitments, sustainable-minded
SMEs are doing the opposite and
increasingly turning to holistic
accreditations like B Corp to enhance
their ESG impact.
What this means for our customers
The rigorous B Corp sustainability certification
is increasingly sought after by companies of
all shapes and sizes.
Nearly 10% of Workspace’s customers are
already B Corp certified or working towards
certification. They see this as invaluable not
only for enhancing their environmental and
social impact but also for maintaining high
standards of management and operations.
Our customers have told us they appreciate
having a landlord that shares their commitment
to sustainability. They value our efforts in
enhancing their green credentials through
initiatives like Optergy energy monitoring,
high recycling rates, and our commitment
to 100% renewable energy.
Workspace response
In 2023, we entered into a purchase power
agreement to source two thirds of our
electricity from solar power. Our operational
energy intensity remains below industry
benchmarks, and we’ve significantly reduced
our scope 1 and 2 emissions. Meanwhile, we
have generated £827,000 worth of direct
social value for our people, customers,
communities and supply chain.
Our sustainability initiatives have been
proven to enhance customer engagement
and retention. This year, we launched a series
of roundtable events aimed at building a
network of sustainable-minded customers.
Our initial event focused on B Corp
certification, where customers exchanged
experiences and insights.
Sustainability supper for customers
held at Kennington Park, Oval
1. Workspace March 2024 survey
of 300 SME owners and leaders.
RELEVANT STRATEGIC PILLARS
Driving customer-led growth
Sustainable from the inside out
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OUR STRATEGY
Driven by our purpose, culture and
values and a clear understanding
of what stakeholders want.
Strategic pillar Page
DRIVING CUSTOMER-LED GROWTH
36
DELIVERING OPERATIONAL GROWTH
37
SUSTAINABLE FROM THE INSIDE OUT
38
OUR UNIQUE
CUSTOMER-LED
OFFER AND
BESPOKE
OPERATING
PLATFORM
DRIVE OUR
LONG-TERM
PERFORMANCE
Our vision is to be the first choice in London
for its brightest businesses, people and investors.
Our strategy to deliver this creates value for
our customers, people and communities.
OUR STRATEGY
Principal risks and uncertainties
Pages 71 to 78
Key performance indicators
Pages 66 to 70 China Works, Vauxhall
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Our goal is to be the home to London’s brightest
businesses. Our growth plans tie in to the continued
strong SME demand in London for our flexible offer
and the customer experience we deliver.
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 differentiated
customer proposition to capture
demand and grow market share.
– Raise our profile amongst target
customers and stakeholders.
Key priorities
– Continue to improve our
flexible offer and service
to retain customers and
support occupancy.
– Focus on customer service,
with centre teams creating
vibrant communities.
Key priorities
– Grow and enhance our portfolio
of historic and character
properties in the right locations.
2023/24 key achievements
– Brand marketing campaigns
focused on demonstrating how
‘It all happens at Workspace’.
– 1,238 lettings completed.
– 705 customer renewals.
– 81 customer events held for
4,000 attendees and launched
new Workspace supper series.
– Showcasing customers on
our social media channels.
2023/24 key achievements
– Continued to improve the
customer journey, including
new reinstatement process
for customers moving.
– Launched our first events and
conference facility at Eventspace
in Salisbury House.
– Delivered significant Wi-Fi
upgrades across the portfolio.
– Grew and enhanced our meeting
room offer across the portfolio.
2023/24 key achievements
– Ongoing refurbishments at The
Biscuit Factory in Bermondsey
and The Chocolate Factory in
Wood Green.
– Near completion of the
refurbishment of Leroy House in
Islington to be launched in 24/25.
– Exchanged on the disposal of
£143m of non-core assets.
2024/25 aims
– Evolve “It all happens at
Workspace” positioning and
launch new ad campaigns.
– More focus on showcasing
what we do to enhance
understanding of our offer.
2024/25 aims
– Deliver upgraded MyWorkspace
customer portal.
– Launch application and broaden
our offer with furniture partners
to ease lettings and customer
move-in process.
2024/25 aims
– Re-launch Leroy House in
Islington, our first net zero
building, and The Chocolate
Factory in Wood Green.
– Continue to recycle capital
into our pipeline of
refurbishment and asset
management projects.
OUR STRATEGY CONTINUED
Relevant KPIs
Financial performance:
1, 5, 6
Non-financial performance:
1, 2, 3, 4, 5
Relevant principal risks
and uncertainties
1, 2, 5, 7
Market trends
1, 2, 3
Salisbury House refurb
and Eventspace launch
We completed the refurbishment
of the front of house, meeting rooms
and Eventspace at Salisbury House
and opened the new space in
September. It has transformed the
entrance to this iconic building and
been very well received by internal
customers, as well as external
customers using the new, state
of the art conference and meeting
room facilities.
Salisbury House, Moorgate
Upgraded front of house
STRATEGIC PILLAR: DRIVING CUSTOMER-LED GROWTH
IN FOCUS
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Our in-house operating platform means we have a uniquely
scalable business. We actively manage our portfolio to deliver
returns through like-for-like rental growth, delivering projects,
targeted acquisitions and disposals, all while maintaining
a prudent approach to financing.
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.
2023/24 key achievements
– Three major refurbishment
projects ongoing, with two
nearing completion.
– Completed 30 smaller
asset management projects
to refurbish and subdivide
units across the portfolio.
– Exchanged on £143m of
disposals of non-core assets.
2023/24 key achievements
– Embedded our new finance
system.
– Created a new centre
management and facilities
management team structure.
– Rollout of Optergy energy
management system to 75%
of our portfolio.
2023/24 key achievements
– Put in place a two-year £100m
interest rate hedge.
– Extended our £335m of bank
debt facilities for a further
12 months.
– Strengthened balance
sheet through disposals
of non-core assets.
2024/25 aims
– Launch Leroy House in
Islington and The Chocolate
Factory in Wood Green.
– Continue to deliver asset
management projects
to refurbish and subdivide
units across the portfolio.
2024/25 aims
– Deliver enhanced CRM system.
– Launch new decoration team to
improve buildings and undertake
repairs for customers.
2024/25 aims
– Continue to recycle
capital through disposal
of non-core assets.
– Invest in ongoing refurbishment
plans that deliver against our
strict investment criteria.
– Review our financing
requirements ahead of debt
maturities in 2025.
FM team workshop on strategy
Alongside our Director of Strategy
and Corporate Development,
Andy Watts, Head of Facilities
Management, hosted a workshop
for his team on Workspace’s vision
and strategy to accelerate growth,
with a focus on what this means
for their day-to-day roles in facilities
management and how their work
helps deliver our vision to be first
choice in London for its brightest
businesses, people and investors.
Relevant KPIs
Financial performance:
1, 2, 3, 4, 5, 6, 7, 8, 9
Non-financial performance:
1, 2, 3, 4, 5
Relevant principal risks
and uncertainties:
1, 2, 3 ,4 ,5 7, 8
Market trends:
1, 2, 3
OUR STRATEGY CONTINUED
Kennington Park, Oval
Facilities team workshop
STRATEGIC PILLAR: DELIVERING OPERATIONAL EXCELLENCE
IN FOCUS
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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.
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.
– Ensure our operations are
sustainable, focusing on waste
management, water efficiency
and sustainable procurement.
– 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 charity partners.
– Roll out our local skills and
employment programme,
InspiresMe, in partnership
with our customers.
– Establish meaningful
partnership with local charities
and community organisations
across the portfolio to deliver
place-based social impact.
2023/24 key achievements
– 11% reduction in like-for-like
energy intensity across the
portfolio.
– 36% reduction in gas use.
– 10.5% increase in spaces with
A/B EPC rating.
– 100% renewable electricity
procured.
– PPA secured for 2/3
rd
of electricity demand.
2023/24 key achievements
– 57 wellbeing events hosted,
benefitting over 3,350 customers.
– 19 employee wellbeing events,
with 600 attendees.
– Voluntarily paid London Living
Wage across the portfolio,
including suppliers.
– 45 internal promotions.
– 8,800 employee hours of training.
– Created a long-term Diversity,
Equity and Inclusion framework.
2023/24 key achievements
– 1,560 employee hours
dedicated to volunteering.
– 300 students benefitted from
our InspiresMe programme.
– 100 community engagement
initiatives across the portfolio.
– Funded an employability
coordinator at SHP, supporting
589 homeless people.
– Delivered £827k equivalent
of direct social value.
2024/25 aims
– Drive further improvement
in energy efficiency and
emissions reductions.
– Champion waste management,
adopting a circular approach.
– Roll out a nature and
biodiversity strategy.
2024/25 aims
– Further improve diversity and
inclusion across the business.
– Champion responsible
and inclusive recruitment.
– Promote Workspace as
an employer of choice.
2024/25 aims
– Scale our impact through
our charity partners, focusing
on skills and employment.
– Enhance our place-based
social impact programme
across each of our centres.
Relevant KPIs
Financial performance:
1, 5, 6
Non-financial performance:
1, 4, 5, 6
Relevant principal risks
and uncertainties:
1, 2, 7, 8, 9, 10
Market trends:
2, 3, 4
Customer engagement
We are pleased to say that over
79% of our customers agree that
Workspace is environmentally and
socially responsible. This is a result
of our multifaceted customer
engagement programme, helping
raise awareness of ESG issues
through newsletters, social media,
building installations, events,
campaigns and our new
sustainability supper series.
Kennington Park, Oval
Customer roundtable event
OUR STRATEGY CONTINUED
STRATEGIC PILLAR: SUSTAINABLE FROM THE INSIDE OUT
IN FOCUS
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Our focus on operational
excellence and business-wide
accountability on sustainability
has driven remarkable
achievements this year.
Accomplishments such as 12%
reduction in direct emissions,
79% customer ESG advocacy
score and securing a
market-first renewable power
deal, stand as a testament of
our unwavering commitment
to sustainability.
Sonal Jain
Head of Sustainability
We have embedded sustainability throughout
our business. It drives how we design and
operate our buildings and informs 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.
In addition, we’ve strategically aligned our
objectives and targets with the United
Nations Sustainable Development Goals
(SDGs). This ensures that our efforts are in
harmony with the global ambitions outlined
by the SDGs.
With a view to adopting best practice and
enhancing the transparency of our
disclosures, we report 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. We also
publish our EPRA sustainability report on our
website www.workspace.co.uk/investors/
sustainability/our-environmental-performance.
over
50%
PORTFOLIO A/B RATED
79%
CUSTOMER ESG ADVOCACY SCORE
Governance
The highest level of responsibility for our
sustainability strategy lies with our Chief
Executive Officer, and together with the rest
of the Workspace Board, they act as guardians
of the strategy. In addition, we have a Board
ESG Committee (refer to page 180) 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.
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SUSTAINABILITY – A STAKEHOLDER FOCUSED APPROACH
ACHIEVEMENTS IN 2023/24
10.5%
OF THE TOTAL PORTFOLIO’S
FLOOR AREA WAS UPGRADED
TO EPC A/B
100%
RENEWABLE ELECTRICITY
SOURCED
76%
RECYCLING RATE
2024
2023
2022
79
76
75
100+
SUSTAINABILITY
EVENTS DELIVERED
79%
CUSTOMER ESG
ADVOCACY SCORE
2024
2023
2022
71
79
66
36%
YEAR ON YEAR REDUCTION
IN FOSSIL FUEL CONSUMPTION
(LIKE-FOR-LIKE PORTFOLIO)
Read more about our
sustainability strategy
and impact
Pages 43 to 65
85.5%
EMPLOYEE INCLUSIVITY SCORE
£827k
DIRECT SOCIAL VALUE GENERATED
2024 827
604
Not recorded
2023
2022
£10.4m
INDIRECT SOCIAL VALUE
1,560
EMPLOYEE VOLUNTEERING HOURS
2024 1,560
620
540
2023
2022
3,350
CUSTOMERS BENEFITTED FROM
OUR WELLBEING OFFERING
RATINGS
81
Real Estate Assessment Score
94
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
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SUSTAINABILITY CONTINUED
2024
2023
2022
12,800,681
8,212,572
12,586,574
Environmental issue
Social issue
Governance issue
Material move since 2022/23
Prioritise issues and refine our strategy
Significant
IMPACT ON WORKSPACE
Very significant
Very significantIMPORTANCE TO EXTERNAL STAKEHOLDERSSignificant
Changes since 22/23
While energy, carbon reduction, health and safety, regulatory compliance, and ethical
practices remain top priorities, we’ve also proactively addressed evolving stakeholder
expectations. We’ve elevated the importance of key issues, including waste management,
customer engagement, nature conservation, biodiversity, and diversity and inclusion.
GRI report
https://www.workspace.co.uk/investors/sustainbility/
our-environmental/performance
Identify key stakeholders
List material issues
Consult stakeholders
Analyse consultation outputs
STEP 1
STEP 2
STEP 3
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.
– Employees
– Customers
– Suppliers
– Regulators
– Investors
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.
– Importance to stakeholders
– Significance of impacts
– Ability of the business to influence
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.
OUR MATERIALITY MATRIX – KEY SUSTAINABILITY ISSUES
Sustainable
transport
Page 48
Water
Page 47
Sustainable
procurement
Page 48
Nature and
biodiversity
Page 48
Climate
adaptation
Page 48
Charitable and
community
support
Page 61
Skills and
employment
Page 57
Customer
engagement
Page 57
Diversity
and inclusion
Page 158
Risk management
Pages 71 and 178
Regulatory
change
Page 45
Health
and safety
Page 91
Energy and
carbon
Page 45
Waste and
resources
Page 46
Sustainable
building design
Page 46
Ethics, conduct
and compliance
Page 56
Wellbeing
Page 56
DEFINING WHAT
MATTERS MOST
Transparency
Page 58
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SUSTAINABILITY CONTINUED
ALIGNMENT OF OUR
KEY SUSTAINABILITY
ISSUES TO UN SDGS
Our sustainability strategy aims to maximise
value for all our stakeholders: our people,
customers, suppliers, investors, and the
environment. Additionally, our strategy
aligns with several of the United Nations
Sustainable Development Goals (SDGs).
The SDGs provide a comprehensive
framework for businesses to assess their
interactions with communities, the economy,
and the environment. By incorporating the
SDGs, we take a holistic approach in our
sustainability strategy. They serve as
a valuable reference during our ESG
materiality assessment process and
guide the establishment of our strategic
sustainability priorities.
ENVIRONMENTAL ISSUES
SOCIAL ISSUES
Through our concerted efforts to drive
positive impact across several material
environmental issues, we actively contribute
to the goals outlined in SDGs 7, 9, 12 and 13.
Our procurement of 100% renewable
electricity supports the generation of clean
energy in the UK, and our energy and carbon
management strategy, including the use
of energy and water saving technologies,
supports innovation within the industry.
Our energy and carbon reduction targets,
as well as recycling targets, support
responsible consumption as well as
climate action. Furthermore, our customer
stakeholder engagement programme plays
a pivotal role in raising awareness about
responsible resource utilisation during
both operational and construction phases.
Through our concerted efforts to drive
positive impact across several material social
issues, we actively contribute to the goals
outlined in SDGs 3, 8, 5 and 10.
Our customer and employee wellbeing
programme directly supports the health and
wellbeing of our people. As a Living Wage
employer, we actively contribute to reducing
inequalities in London and strive to provide
decent work opportunities. Additionally, our
business practices and culture foster diversity
and inclusion, addressing gender inequality.
Furthermore, our partnership with the Single
Homeless Project charity and the provision
of in-kind office space to several non-profit
organisations play a crucial role in combating
inequalities within the city.
ALIGNMENT TO SDG CORRESPONDING KEY MATERIAL ISSUES
Affordable and
clean energy
– Energy and carbon reduction
– Sustainable procurement
Industry,
innovation and
infrastructure
– Energy and carbon reduction, water, waste
– Sustainable procurement
– Sustainable building design
– Sustainable transport
Responsible
consumption
and production
– Energy and carbon reduction, water, waste
– Sustainable procurement
– Customer engagement
Climate action – Energy and carbon reduction, water, waste
– Sustainable procurement
– Sustainable building design
– Climate adaptation
– Nature and biodiversity
ALIGNMENT TO SDG CORRESPONDING KEY MATERIAL ISSUES
Good health and
wellbeing
– Wellbeing
– Health and safety
– Risk management
Gender equality – Skills and employment
– Diversity and Inclusion
Decent work and
economic
growth
– Skills and employment
– Ethics, conduct and compliance
– Charity and community support
Reduced
inequality
– Skills and employment
– Diversity and Inclusion
– Ethics, conduct and compliance
– Charity and community support
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SUSTAINABILITY CONTINUED
OUR THREE-PILLAR SUSTAINABILITY STRATEGY
STRATEGIC
PILLAR 1
DELIVERING A
CLIMATE-RESILIENT
PORTFOLIO
Future proofing our business by
minimising our environmental impact
and transitioning to net zero carbon.
STRATEGIC
PILLAR 2
LOOKING AFTER
OUR PEOPLE
Looking after our people through
our focus on wellbeing, responsible business
practices, skills and employment.
STRATEGIC
PILLAR 3
SUPPORTING OUR
COMMUNITIES
Creating lasting value for our communities
through employment-led regeneration
and meaningful partnerships with local
community groups and charities.
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SUSTAINABILITY CONTINUED
Making Workspace climate resilient is
a key priority for us and we have aligned
our approach with the Better Buildings
Partnership’s (BBP) definition, whereby
a climate-resilient business has a strategy
in place to:
– Mitigate the impact of climate change
by becoming net zero carbon.
– Adapt to operating in a world in which
climate-driven disruption is more frequent.
– Disclose climate-related information to
stakeholders in a useful way.
In response to these principles, we made a
commitment to becoming a net zero carbon
business and have created a robust strategy
to adapt to climate change. Our TCFD
disclosure (page 94) provides detailed
information on our climate risk exposure
and mitigation plans.
We are also a signatory to the BBP Climate
Commitment and have published our net
zero pathway, quantifying our emissions
and outlining our decarbonisation trajectory
(www.workspace.co.uk/investors/
sustainability). This trajectory is informed
by our 1.5°C aligned science-based targets*.
We are in the process of revising our
emissions reduction targets to be in line
with the updated net zero standard from the
Science Based Targets initiative, as we remain
fully committed to the net zero carbon
transition of our business.
* 1.5°C aligned science-based targets:
– Reduce scope 1 emissions 42% by 2030 from 2020
base year.
– Reduce scope 3 GHG from capital goods 20% per sq. ft.
of NLA by 2030 from 2020 base year.
– Continue annually sourcing 100% renewable electricity
through FY 2030.
Accountability and engagement
We continue to make 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. 75% of our
portfolio is now fully BEMS enabled.
This has enabled our site teams and
customers to better understand energy
usage across the properties and implement
targeted reduction initiatives. We also
provide targeted support to customers
who are high users of energy.
To further drive action, we have embedded
energy and carbon targets into various
teams’ objectives. This drove collective effort
between various teams, who delivered an
impressive 11% like-for-like reduction in energy
use intensity of the portfolio. Our customers
also played a key part by wholeheartedly
supporting our portfolio-wide energy
reduction competition (see page 53).
20%
SCOPE 1 AND 2 REDUCTION
SINCE 2019/20
75%
PORTFOLIO SMART
BEMS ENABLED
STRATEGIC
PILLAR 1
DELIVERING A
CLIMATE-RESILIENT
PORTFOLIO
Future proofing our business by
minimising our environmental impact
and transitioning to net zero carbon.
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SUSTAINABILITY CONTINUED
ADDRESSING OUR MATERIAL ENVIRONMENTAL ISSUES: OUR TARGETS
Relevant material issue
ENERGY & CARBON
REGULATORY CHANGE
Relevant material issue
ENERGY & CARBON
Relevant material issue
ENERGY & CARBON
Relevant material issue
ENERGY & CARBON
Relevant material issue
ENERGY & CARBON
SUSTAINABLE BUILDING DESIGN
Workspace response
REDUCE ENERGY USE INTENSITY
(EUI) BY 7% MEASURED IN KWHE/M
2
Workspace response
SIGNIFICANTLY REDUCE THE EUI OF
ALL BUILDINGS CONSUMING ABOVE
THE 130 KWHE/M
2
(2020 UKGBC
TARGET FOR NET ZERO OFFICES)
Workspace response
REDUCE SCOPE 1 EMISSIONS BY
7% ACROSS THE PORTFOLIO
Workspace response
ROLL OUT SMART-BUILDING
ENERGY MANAGEMENT SYSTEM
Workspace response
ALL NEW DEVELOPMENTS AND
REFURBISHMENTS DESIGNED TO
BE NET ZERO CARBON, AIMING
TO ACHIEVE EMBODIED CARBON
OF LESS THAN 500 KGCO
2
/M
2
Status: Achieved Status: Partially achieved Status: Achieved Status: Partially achieved Status: Achieved
We achieved an 11%
reduction in like-for-like
Energy Use Intensity (EUI)
across the portfolio,
compared to last year.
This was mainly driven by an
impressive 36% reduction in
gas use across the portfolio,
along with a 7% reduction
in landlord-procured
electricity. This year, we
invested over £14m on
various energy-efficiency
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
(see case study on Big
Energy Race on page 53).
Our portfolio is inherently
energy efficient when
compared to industry
benchmarks. The average
energy intensity across our
portfolio is 81 kWhe/m
2
/year,
which is 38% better than
the current UK Green
Building Council energy
performance target for net
zero carbon buildings set at
130 kWhe/m
2
. There are only
four buildings performing
above this target and
we have implemented
targeted energy reduction
programmes across
these sites.
We achieved a 36% reduction
in scope 1 emissions due to
significant reduction in gas
use across the portfolio. This
was primarily driven by the
rollout of smart Building
Energy Management Systems
across a number of buildings,
optimisation of temperature
set points and timing controls
and implementation of over
80 HVAC upgrade projects.
Currently over 50% of our
portfolio is fossil fuel free
(all electric or served by
district heating).
46 buildings (c. 75% of
portfolio by area) are now
fully enabled with our smart
Building Energy Management
System, Optergy. This not
only provides visibility of
consumption at unit level for
our customers, it also enables
us to track performance real
time and identify optimisation
opportunities in a timely way.
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 assess and reduce
embodied carbon by
optimising design and material
choices. Estimated embodied
carbon of our current projects
at Leroy House, The Biscuit
Factory and The Chocolate
Factory is 231 kgCO
2
/m
2
,
291 kgCO
2
/m
2
and
436 kgCO
2
/m
2
respectively.
Overall, we achieved a 50%
reduction in greenhouse
gas emissions from capital
goods per sq. ft. from
a 2019/20 base year.
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
In order to continue to
enhance our positive impact,
we set ambitious incremental
targets across all our
identified material issues.
These targets are embedded
amongst multiple business
units and their progress is
closely monitored. Our
annual targets for strategic
pillar 1 are covered in the
following pages, along with
commentary on progress
made and impact achieved.
Andrew Rae-Spiller
Senior Facilities Manager
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
ADDRESSING OUR MATERIAL ENVIRONMENTAL ISSUES: OUR TARGETS CONTINUED
Relevant material issue
ENERGY & CARBON
SUSTAINABLE PROCUREMENT
Relevant material issue
ENERGY & CARBON
REGULATORY CHANGE
Relevant material issue
ENERGY & CARBON
SUSTAINABLE BUILDING DESIGN
Relevant material issue
WASTE AND RESOURCES
Workspace response
INCREASE RENEWABLE ENERGY
SUPPLY AND SOURCE 100%
RENEWABLE ELECTRICITY
Workspace response
INCREASE THE % OF ENERGY
PERFORMANCE CERTIFICATE (EPC)
A AND B RATED AREAS IN THE
PORTFOLIO BY 10%
Workspace response
ALL DEVELOPMENT PROJECTS
TO BE BREEAM EXCELLENT AND
EPC A (B FOR REFURBISHMENTS)
Workspace response
ACHIEVE RECYCLING RATE OF
80% AND DIVERT 100% WASTE
FROM LANDFILL
Status: Achieved
Status: Achieved Status: N/A Status: Partially achieved
Starting February 2024,
two-thirds of Workspace’s
electricity demand was met
by renewable electricity
produced from a solar farm
in Devon through a Power
Purchase Agreement (See
case study, page 184). We
meet the remaining third of
our electricity by continuing
to source 100% renewable
electricity from our utility
supplier (REGO-backed).
12 sites are equipped with
solar panels and generated
196,437 kWh of renewable
electricity in the past year.
This is equivalent to
the annual electricity
usage of over 60 typical
UK households.
This year we upgraded
474k sq. ft. of our portfolio to
EPC A/B rating by installing
high efficiency lighting and
HVAC systems. Overall we
increased A/B rated space by
10.5%, bringing 52% of our
whole portfolio to an A or B
EPC rating.
A total of 22 buildings are
BREEAM certified in our
portfolio. No new projects
were completed this year. All
projects in the pipeline are
being designed to achieve at
least an ‘Excellent’ BREEAM
certification and A rated EPC
(B for refurbishments).
We achieved an average
recycling rate of 76% across
the portfolio. A total of
2,856 tonnes of waste
was generated across the
portfolio, comprising of 58%
post consumer waste, 24%
general waste, 12% food
and 6% bottom ash.
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
APPLYING CIRCULARITY PRINCIPLES
Whilst we continue to focus
on improving our recycling
rate and managing our
operational waste
sustainably, we are very
aware that the built
environment consumes vast
amounts of resources and
generates tonnes of waste
during construction and
refurbishment phases.
We are increasingly applying
circular principles to prioritise
reduction and reuse of
resources, before recycling.
The aim is to reduce the
need for virgin materials and
minimise waste generation.
A great example is our
contractor Nexus Flooring,
who repurposed nine tonnes
of building waste from a refit
project at Chiswick Studios,
including timber and
plasterboard rubble. Timber
found new life as on-site
boundary walls, while
plasterboard rubble
contributed to garden
decking. Scrap metal and
cables were sold, with
proceeds supporting
charitable causes.
To give valuable materials a
second life, two wall AC units
were auctioned, with funds
donated to charity. The £570
generated from Chiswick
Studios’ materials facilitated
the purchase of 310kg of rice
for a local food charity.
This integrated approach
not only minimises waste
but actively supports our
commitment to sustainability
and community welfare.
Material issue
Waste and Resources
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
ADDRESSING OUR MATERIAL ENVIRONMENTAL ISSUES: OUR TARGETS CONTINUED
Across many of our
buildings, we have the
opportunity to enhance
the customer experience
by providing high-quality
external spaces. Part of this
opportunity lies in greening
our terraces, which also
significantly supports local
biodiversity by providing
habitat for local species.
A great example of terrace
enhancement was recently
completed at Kennington
Park, our flagship 350k sq. ft.
building in Lambeth.
Our landscape architects
designed the space in line
with local biodiversity needs,
by selecting species
benefitting the local fauna.
Eight trees were added to the
terrace as well as 64 planters
hosting over 1,000 plants from
a mix of evergreen, pollinators,
native and drought-tolerant
plant species.
Relevant material issue
WATER
Relevant material issue
WATER
Relevant material issue
NATURE AND BIODIVERSITY
Workspace response
ROLL OUT WATER METERING
ACROSS THE PORTFOLIO AND
BENCHMARK CONSUMPTION
Workspace response
TARGET AT LEAST 50%
REDUCTION IN POTABLE
WATER CONSUMPTION
ACROSS ALL MAJOR
DEVELOPMENT PROJECTS
Workspace response
INCREASE GREENERY AND
BIODIVERSITY ACROSS THE
PORTFOLIO, TARGETING AT
LEAST 15% IMPROVEMENT IN
BIODIVERSITY NET GAIN ON
DEVELOPMENT PROJECTS
Status: Achieved
Status: Not achieved Status: Achieved
We now have nearly
100% visibility of our water
consumption and track it
monthly. This has enabled us
to accurately benchmark our
water consumption and set
reduction targets for the
coming year.
Our water consumption
intensity across the portfolio
is 0.48 m
3
/m
2
of NLA, which
is in line with GRESB
standard practice and REEB
benchmarks for offices.
We have developed a
water fixture and fittings
specification in line with
best-in-class market
standards (aligning with
maximum water credits
under BREEAM v.6).
However, designing buildings
to achieve a 50% reduction
in potable water demand is
currently deemed unfeasible
due to practical complexities
and financial unviability
of installing grey water
systems in our buildings.
We will continue to explore
alternative technologies that
drive further reduction in
potable water consumption.
By incorporating urban
greening and biodiversity
net gain (BNG) criteria early
on in the project brief, we
have significantly enhanced
BNG across all our current
projects. For example our
Riverside project is designed
to achieve a 430% BNG and
a 0.42 Urban Greening
Factor (UGF). We have also
rolled out several greening
initiatives across our existing
portfolio (see case study
on the left). A taskforce
has been set up to create
a long-term nature and
biodiversity strategy for
the whole portfolio.
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
URBAN GREENING AT KENNINGTON PARK
Material issue
Nature and Biodiversity
“Incorporating a diverse
range of plant species is
crucial for creating a
sustainable and thriving
ecosystem, this installation
helps to attract insects and
birds into the space.”
Brian Hattersley
Director at 1stForFoliage.
“This is a great example
of how the right species
selection and aesthetic
design can both support local
biodiversity and enhance
customer experience.”
Jack George
Development Manager
at Workspace.
1,000
PLANTS ADDED ON THE
TERRACE
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
Relevant material issue
CLIMATE ADAPTATION
Relevant material issue
SUSTAINABLE TRANSPORT
Relevant material issue
SUSTAINABLE PROCUREMENT
Workspace response
ENSURE ACTIVE MANAGEMENT
OF CLIMATE RISK ACROSS THE
PORTFOLIO
Workspace response
ENHANCE SITE-WIDE
INFRASTRUCTURE TO ENABLE
GREATER UPTAKE OF SUSTAINABLE
TRANSPORT MODES
Workspace response
DRIVE GREATER ENVIRONMENTAL
AND SOCIAL IMPACT THROUGH
PROCUREMENT
Status: Achieved
Status: Achieved Status: Ongoing
We have a robust
understanding of our
exposure to physical climate
risk from the assessment
carried out last year. See
our TCFD report (page 94).
Our mitigation strategy is
detailed on pages 100 to 101.
One of our main risks is
related to flooding on
certain sites and we have set
up a monthly task force to
review flood management
plans, including business
continuity processes. This
task force monitors any
incidents of floods and
remedial action being
taken. This year we rolled
out flood risk and drainage
management surveys across
the portfolio, resulting in no
material flood-related
damage or business
interruption.
We have a total of 55 EV
charging points across
the portfolio, which saved
38 tCO
2
e. We have also
upgraded site facilities to
encourage green transport
and offer over 1,500 secure
cycling racks and over 80
showers across the portfolio.
Our supplier code of
conduct outlines our key
sustainability requirements
which all our suppliers are
mandated to comply with.
This year we also initiated
sustainability-focused
engagements with our top
suppliers to drive targeted
impact. This includes
working with our security
company to switch to
electric bikes, partnering
with contractors to reduce
site waste (case study on
page 46) and reducing
food waste in our cafés
(case study on the right).
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
ADDRESSING OUR MATERIAL ENVIRONMENTAL ISSUES: OUR TARGETS CONTINUED
SUSTAINABLE MANAGEMENT OF OUR CAFÉS
Material issues
Sustainable Procurement
Waste and resources
Workspace directly manages
ten on-site cafés, giving us
an opportunity to implement
ambitious social and
environmental initiatives.
In addition to a zero single-
use plastic policy, we have
partnered with Huskee, a
provider of reusable coffee
cups made from repurposed
coffee grounds, to offer their
products across our cafés.
This avoided 3,715 single-use
cups being purchased in
the last year.
Our Workspace cafés are
also a great way to trial
partnerships with ethical
suppliers such as Galeta for
pastries and Origin Coffee
for coffee grounds.
We are also conscious that
food waste is a material
contributor to greenhouse
gas emissions. Across our
portfolio, it amounts to
2.9 tCO
2
e. Giving away
unsold food not only helps
us fight against food waste,
but also against food poverty.
This is why we have started
using the TooGoodToGo
app, which allows us to give
away meals at a reduced
price. In 2023/24 we have
recorded 2,150 meals
diverted from food waste
streams and landfill.
“Our cafés showcase
Workspace’s commitment
to sustainability. We strive
to improve each year and
have some exciting things
in the works. We are aiming
to completely remove
disposable coffee cups and
reducing food waste by
making our own fresh food.”
Giandonato Rosa
Hospitality Manager
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
We are proud of our
decarbonisation journey
to date. With our 25%
reduction in GHG emissions
since our baseline year, we
are progressing at pace to
achieve net zero carbon.
Ariane Ephraim
Sustainability Manager
Greenhouse Gas emissions
As a signatory to BBP’s Climate Commitment
and the 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 two-thirds of our electricity
comes from a solar plant in Devon and the
remaining third is met by our REGO-back
green electricity contract. We report scope 2
emissions using a location-based methodology.
Our total emissions footprint is 23,447 tCO
2
e.
We have reduced our scope 1 emissions by
41% and our scope 2 emissions by 9% against
our 2019/20 baseline (see graph on the right).
Our net zero carbon pathway
The chart above shows an indicative
emissions reduction trajectory, in line with
our net zero pathway. Our near-term goal
is to reduce our emissions by 50% by 2030.
To achieve this, our immediate focus is on
eliminating the majority of our scope 1 and 2
emissions, and targeted customer energy use
and embodied carbon of our developments
to drive down scope 3 emissions. We have
already reduced our emissions by 25% since
our baseline year. The next page of this
report provides further detail of our net
zero pathway and progress made under
each workstream.
We are in the process of revising our
emissions reduction targets to be in line
with the updated net zero standard from
the Science Based Targets Initiative.
We will accordingly update our net zero
pathway, with the ultimate goal of reducing
our scope 1, 2 and 3 emissions by 90%.
NET ZERO PATHWAY
EMISSIONS REDUCTION TRAJECTORY (TCO
2
E)
Our net zero pathway (www.workspace.
co.uk/investors/sustainability) is an essential
component of our climate resilience pillar.
It guides our efforts across the business
as we work towards achieving net zero
emissions. This pathway outlines a number
of workstreams with sub-targets, including
reduction of operational and embodied
carbon, procurement of high-quality
renewable energy, reduction in value
chain emissions and offsetting.
DEEP DIVE:
NET ZERO CARBON
COMMITMENT
Material issue
Energy and Carbon
WORKSPACE PORTFOLIO
LOCATION-BASED SCOPE 1, 2, 3 GHG EMISSIONS (tCO
2
e)
Scope 1
2,039
Scope 2
6,470
Scope 3
14,938
SCOPE 1 GHG EMISSIONS (tCO
2
e)
2023/24 2,039
3,188
3,451
2022/23
2019/20 (baseline)
SCOPE 2 GHG EMISSIONS (tCO
2
e)
2023/24 6,470
6,482
7,144
2022/23
2019/20 (baseline)
3
5,000
3
0,000
2
5,000
2
0,000
15
,000
1
0,000
5
,000
0
2019/20 2020/21 2022/23 20XX*2021/22 20302023/24
Scope 1 Scope 2 Scope 3
Offsetting for
10% residual
emissions
Aiming
for further
40% reduction
Aiming for
50% reduction
-25%
* Long-term net zero carbon target date to be confirmed once science-based target update is verified.
20/21 dip
was due
to Covid
22/23 increase
was due to McKay
acquisition.
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
OPERATIONAL CARBON
(SCOPE 1&2)
EMBODIED CARBON RENEWABLES ENERGY REDUCE VALUE CHAIN
EMISSIONS (SCOPE 3)
OFFSETTING THIRD-PARTY
VERIFICATION
PROGRESS ON NET ZERO CARBON PATHWAY
Goal:
Eliminate majority of scope
1 and 2 emissions by 2030
Progress:
– 20% reduction in
scope 1 and 2 emissions
– 7% reduction in direct
energy use
– 50% of portfolio
fully electric
– £14m invested in
upgrading our portfolio
in 2023/24
Goal:
Source 100% of power
from high-quality
renewable supply
Progress:
– Two-thirds of electricity
sourced from solar plant
in Devon
– Remaining one-third
is REGO* backed
– 12 sites with solar panels
generating 196,437 kWh
of clean electricity
* REGO (Renewable Energy
Guarantees of Origin) certificate.
Goal:
Reduce embodied carbon
of projects, aiming for less
than 500 kg CO
2
/m
2
for new
developments (250 CO
2
/m
2
for refurbishments)
Progress:
– A detailed embodied
carbon assessment and
reduction plan is created
for all projects
– Estimated embodied
carbon of our current
projects at Leroy House,
The Biscuit Factory and
The Chocolate Factory is
231 kgCO
2
/m
2
, 291 kgCO
2
/
m
2
and 436 kgCO
2
/m
2
respectively
Goal:
Develop a robust offsetting
policy, to enable the
procurement of offsets for
residual emissions only
Progress:
– Offsetting strategy
in development
Goal:
Obtain third-party
verification on emissions
reduction and ensure net
zero plans are backed by
a science-based trajectory
Progress:
– Annual third-party
verification of emissions
– Working towards
updating our science-
based targets in line with
the new guidance
Goal:
Engage with suppliers and
customers to significantly
reduce scope 3 emissions
Progress:
– Reduction in proportion
of portfolio with
customer-managed
energy supplies, resulting
in a 6% reduction in
corresponding energy-
related emissions
– Customer engagement
campaign focused on
energy reduction
– Key supplier engagement
initiated to get better
visibility of emissions and
identify reduction drivers
Relevant UN SDGsRelevant UN SDGs
Relevant UN SDGs Relevant UN SDGsRelevant UN SDGs
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
0
200
150
100
50
Energy use intensity kWhe/m
2
internal area
Buildings in portfolio
APRIL 2023 TO MARCH 2024 ENERGY USE INTENSITY ACROSS THE PORTFOLIO (kWhe/m
2
INTERNAL AREA)
DRIVING ENERGY REDUCTION ACROSS
THE PORTFOLIO
This graph shows the energy use intensity
of all the buildings in the portfolio. The
average energy intensity of our portfolio is
81 kWhe/m
2
of internal area, which is 10%
lower than the 2025 UKGBC target for net
zero carbon offices. We have compared our
energy performance across a number of
industry benchmarks:
– All but 16 buildings meet the 2025 UKGBC
energy performance target for net zero
carbon buildings depicted by the blue line.
– 25 buildings already meet 2030 target
depicted by the yellow line.
In FY 23/24 we set a target of 7% reduction
in energy intensity and through our £14m
investment across over 50 properties
we delivered 11% reduction in energy use
intensity, across the like-for-like portfolio.
We have developed a sustainable
refurbishment playbook, which we
are implementing across our portfolio.
Our goal is to achieve a fully electric
and EPC A/B rated portfolio by 2030.
A recent refurbishment project at
Clerkenwell Workshops serves as a prime
example. We upgraded 44,000 sq. ft. of
space to high sustainability standards by
replacing the gas-powered wet heating
system with a high-efficiency air source heat
pump and installing LED lights and sensors
– all while the building remained fully
operational, with customers in situ. This
refurbishment is projected to reduce the
building’s energy use intensity by 5% and
surpass our financial return expectations.
Properties
202 5 Target
2030 Target
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
We acquired Swan Court, a 57,500 sq. ft.
building in Wimbledon, in 2022 and inherited
a building that had already achieved a
BREEAM Very Good certification and a
B-rated Energy Performance Certificate.
The building’s energy use intensity was
however one of the highest in our portfolio.
Our facilities management team remediated
the situation by implementing operational
improvements:
– Upgraded the Building Management
System to allow for finer time and
temperature controls.
– Adapted heating and cooling time
schedules to occupant needs.
– Turned off air handling units and chillers
during weekends and nights.
– Adjusted temperature set points
in response to outside temperature,
when conditions permit.
– Carried out lighting checks, and
remediated faulty presence
detection systems.
The close collaboration with the main
customer in the building was instrumental,
demonstrating how collaboration with our
customers can unlock great results when
both are working towards energy efficiency
and decarbonisation.
These measures drove a 26% reduction
in energy intensity, all delivered through
low/no cost measures.
SWAN COURT IN NUMBERS
29%
GAS REDUCTION
26%
ELECTRICITY REDUCTION
ENERGY USE
OPTIMISATION –
SWAN COURT,
WIMBLEDON
Being instrumental in
implementing an energy
reduction programme through
insights into building
occupancy patterns has been
incredibly gratifying. Adjusting
temperature and time controls
have yielded impressive results
with minimal investment.
Sarah Miller
Cluster Facilities Manager
Link to material issue:
Energy and Carbon
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
860 MWh
ENERGY SAVED IN FEBRUARY 2024
COMPARED TO FEBRUARY 2023
330
ENERGY SAVING PLEDGES
BIG ENERGY RACE
– PORTFOLIO-WIDE
ENERGY SAVING
COMPETITION
Customer engagement is essential in
unlocking the greatest energy savings and
accelerating progress on our net zero carbon
trajectory. In 2022 we ran a behaviour change
campaign at our Frames building which
helped achieve an 11% energy reduction over
twelve months, in a modern building already
well-equipped. Taking inspiration from the
success at Frames, we ran a portfolio wide
‘Big Energy Race’ campaign across our
entire portfolio in February this year to
encourage all our customers to reduce
their energy consumption.
This energy saving competition included all
buildings in our portfolio. A specific energy
savings target was set for each building
to account for operational attributes and
equipment features. The portfolio was
divided into four clusters and the four
winning buildings had to outperform
their energy savings target by the most.
We targeted our customers through a
multi-channel communications strategy
including a dedicated Big Energy Race
web page, on-site posters, newsletters,
social media takeover and in-person energy
saving workshops for our customers delivered
in partnership with FuturePlus, a valued
customer and sustainability consultancy.
We reached 90 customers across four
workshops and recorded 330 energy saving
pledges from our customers.
Our engaging communication and use of
gamification allowed this campaign to deliver
very tangible results. Over 860,000 kWh
of energy was saved in February 2024
compared to February 2023, the equivalent
of 178 million smart phone charges and
28 Glastonbury festivals. The campaign
motivated our customers to adopt
sustainable behaviours such as switching
off lights, reducing set points and setting
appliances on energy saving mode during
off hours.
The four winning sites will be rewarded with
a ‘sustainable festival’ this summer, featuring
products from our eco-friendly customer
base; another great opportunity to promote
sustainable businesses at Workspace.
I really like that you are
running an energy saving
competition, it’s clear that
you really care about the
environment. We’ve shared
the campaign around our
team and are doing a follow
up to see what changes
people made.
Customer at Kennington Park
Feedback on the campaign
Link to material issue:
Energy and Carbon
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
As a business we are continuously looking
to adopt new solutions and technologies
that can help us reduce the whole life
carbon impact of our buildings.
With this in mind, our development team
undertook a comprehensive review of various
HVAC solutions in the market to identify
solutions that are optimal from a whole
life carbon point of view.
The focus of this research piece was to
consider the operational and embodied
carbon impact of different types of refrigerant
and water-based systems, in conjunction with
considerations such as cost, adaptability and
spatial requirements. The Global Warming
Potential of the various refrigerant options
was also considered, R32 versus R410a.
Results from this comparative analysis
EPC RATINGS
Whilst our portfolio is already compliant
with the current Minimum Energy Efficiency
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 upgrading our
entire portfolio to EPC A/B by 2030, aiming
to deliver at least 10% upgrades each year.
This year, following an investment of over
£14m in HVAC equipment, lighting upgrades
and insulation works across 50 properties,
we have increased the proportion of A/B
rated spaces by 10.5% to reach 52%.
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.£55–70m (c.£9–12m 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.
EPC BREAKDOWN ACROSS THE PORTFOLIO (BY AREA)
A/B 52%
C 25%
D 19%
E 4.0%
TAKING A WHOLE
LIFE CARBON
APPROACH
Link to material issue:
Energy and Carbon
£14m
INVESTED IN 2023/24
IN SUSTAINABILITY UPGRADES
52%
A/B RATED PROPERTIES
are now used to inform HVAC design
decisions in various scenarios such as
new construction, refurbishments and
operational upgrades.
For operational upgrades and refurbishments,
the business will increasingly be looking at
transitioning to R32 variable refrigerant flow
systems to minimise whole-life carbon impact
of HVAC systems.
For new construction projects, it is
understood that a four-pipe water-based
air-source heat pump solution is the most
efficient system from a whole-life-carbon
perspective. This is being implemented
in our Biscuit Factory project.
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SUSTAINABILITY CONTINUED
DELIVERING A CLIMATE-RESILIENT PORTFOLIO CONTINUED
STRATEGIC
PILLAR 2
LOOKING AFTER
OUR PEOPLE
Looking after our people through
our focus on wellbeing, responsible business
practices, skills and employment.
As an employer of 329 people, client
of over 800 suppliers and work space
provider for over 4,000 customers, we
have a responsibility to support all our
stakeholders and help them perform at
their very best. We do this by adopting
responsible business practices, a customer
first approach and creating a culture
that fosters fairness, wellbeing, inclusion
and diversity.
Our people have a common direction under
our sustainability strategy and are guided
by our core values to do the right thing.
Our business fosters 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 updates, shadowing days,
employee suggestion scheme and employee
support networks all contribute to a positive
Company culture.
Listening to our people
To keep delivering the best to our customers,
we keep our ear to the ground and collect
feedback throughout the year and formal
feedback twice a year via a survey. This helps
us evolve our offer 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 in a consistent and timely manner.
Our strategy evolves each year in line with
the employee feedback we gather via an
annual survey. Our People Team have an
employee suggestion scheme to encourage
feedback and new idea sharing throughout
the year.
In order to continue to enhance our positive
impact we set progressively incremental
targets across all our identified material
issues. These targets are embedded
throughout the business and we closely
monitor progress. Our annual targets for
strategic pillar 2 are covered in the following
pages, along with commentary on progress
made and impact achieved.
£827k
DIRECT SOCIAL VALUE GENERATED
£10.4m
INDIRECT SOCIAL VALUE GENERATED
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SUSTAINABILITY CONTINUED
Relevant material issue
WELLBEING
Relevant material issue
DIVERSITY AND INCLUSION
Relevant material issue
ETHICS, CONDUCT AND
COMPLIANCE
Workspace response
SUPPORT AND ENHANCE
THE WELLBEING OF OUR
EMPLOYEES AND CUSTOMERS
Workspace response
DRIVE A DIVERSE AND
INCLUSIVE CULTURE THROUGH
A RANGE OF EDUCATION AND
AWARENESS SESSIONS, AND
EMPLOYEE NETWORKS
Workspace response
CHAMPION COMPLIANCE
WITH LIVING WAGE AND
MODERN SLAVERY ACROSS
THE SUPPLY CHAIN
Status: Achieved
Status: Achieved Status: Achieved
We enhanced our
comprehensive wellbeing
programme for our
employees and customers.
We offered 19 employee
wellbeing events, over 160
employees utilised our health
cash back offering, with a
total claims value of £38k
and delivered 730 employee
hours of mental health
training. We are pleased to
receive an average employee
wellbeing score of 75%,
based on our annual
employee survey.
Our focus this year for
customers was on increasing
our ‘welldoing’ offering. We
hosted 57 sessions including
sketch workshops and
terrarium building, benefitting
over 3,350 customers. More
information is included in the
case study on the right.
We continued to bi-annually
monitor and benchmark data
on diversity across the
business. We published our
second gender pay gap report
and created an action plan to
address this gap. We also
rolled out over 1,300 employee
hours of diversity training.
Inclusive recruitment was a
key focus for us this year,
enabling us to widen access
to profession and promote
social mobility. See case
study on page 59.
Throughout the year we
celebrated eight different
cultures and continued our
employee network to support
people with caring
responsibilities. We were
pleased to receive an
inclusivity score of 85.5% in
our recent employee survey.
Workspace are an accredited
Living Wage employer and
100% of our employees and
contractors are paid above
Living Wage levels. We also
conduct an independent
verification of our
compliance with Living
Wage requirements.
To drive compliance,
Workspace’s supplier code of
conduct is mandated across
all contracts and formally
included in our supplier
on-boarding procedure.
We are also working with a
third party to roll out modern
slavery audits across our
key contracts.
100%
OF EMPLOYEES AND
CONTRACTORS ARE
PAID A LIVING WAGE
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
We prioritise the health and
wellbeing of our employees
and customers. We are
proud to offer a
comprehensive range
of benefits, including a
health cashback plan
that subsidises wellness
treatments. In total, 160
employees utilised our
health cashback plan,
resulting in 498 claims,
equivalent to c.£38k.
We rolled out mandatory
mental health training for
all employees and hosted 19
employee wellbeing events
and initiatives, reaching over
600 attendees.
Building on last year’s
success, we have continued
to deliver a series of
wellbeing events for
our customers, focusing
more on ‘welldoing’.
A total of 57 customer
wellbeing events were
hosted across the portfolio,
benefitting over 3,350
customers. Our puppy
therapy events were once
again extremely popular.
On average, our ‘wellbeing’
events received 4.8/5 star
ratings from customers.
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 more
likely to be brand promoters.
over
3,350
CUSTOMERS BENEFITTED
FROM OUR WELLBEING
OFFERING
ADDRESSING OUR MATERIAL SOCIAL ISSUES: OUR TARGETS
OUR APPROACH TO WELLBEING
Material issue:
Wellbeing
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SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
Relevant material issue
SKILLS AND EMPLOYMENT
DIVERSITY AND INCLUSION
Relevant material issue
SKILLS AND EMPLOYMENT
DIVERSITY AND INCLUSION
Relevant material issue
CUSTOMER ENGAGEMENT
Workspace response
DEVELOP AND SUPPORT OUR
PEOPLE THROUGH PROFESSIONAL
AND CAREER DEVELOPMENT
OPPORTUNITIES AND BEST
IN CLASS BENEFITS
Workspace response
SUPPORT SKILLS AND EMPLOYMENT
THROUGH OUR APPRENTICESHIP
AND WORK PLACEMENT
PROGRAMME
Workspace response
UPSKILL AND ENGAGE
WITH OUR CUSTOMERS TO
DRIVE GREATER SUSTAINABLE
BEHAVIOURS
Status: Achieved
Status: Achieved Status: Achieved
We supported over
26 employees to complete
accredited training, including
24 employees who were
sponsored for our
Leadership and Management
programme. In total we
delivered over 8,800
employee hours of
professional training (women
– 5,119 hours and men –
3,709 hours), including over
370 hours of Chartered
Institute of Personal and
Development coaching and
people skills training.
We rolled out career
pathways and supported 10
employees with progression.
This year we had 45 internal
promotions, of which 38
were earned by women.
We launched our inaugural
apprenticeship scheme this
year, supporting six
employees.
We hosted five pupils
from underprivileged
background for meaningful
work experience.
Throughout the year we
continued our engagement
with our suppliers on
employment related
opportunities. We are
pleased to see that our
building contractor was able
to employ four apprentices
during the refurbishment of
Leroy House. Further, our
cleaning and security
suppliers have offered
permanent employment
to four individuals from
NEET (Not in Employment
or Education) backgrounds.
We rolled out a multifaceted
customer engagement
programme, helping raise
awareness of sustainability
issues through newsletters,
social media, building
installations, events and
campaigns (see case study
on page 53). We hosted
five customer events on
sustainability, reaching 110
customers. We also started
a new series of sustainability
suppers, see more in case
study on the left.
We are pleased to say that
over 79% of our customers
agree that Workspace is
environmentally and socially
responsible. This represents
an increase of more than 10%
compared to last year.
79%
CUSTOMER ESG SCORE
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
In November we hosted the
first event of our new series:
Sustainable Suppers. These
events create a guild of
customers with a common
interest to foster deeper
collaboration and create
opportunities to enhance
sustainability impact.
Noting that a significant
proportion of our SME
customers are interested in
B Corp, the first supper
focused on exploring the
benefits of B Corp
framework.
We invited some of our B
Corp certified customers to
join and share learnings on
how businesses can make a
positive social and
environmental impact.
The event was a huge
success with stimulating and
meaningful discussions.
We have since continued to
roll out our sustainability
suppers at regular intervals
to foster connection and
collaboration between our
customers on various
sustainability themes.
77%
OF LONDON SME’S
ARE AWARE OF B CORP
A really useful way
to compare notes with
your peers in a relaxed
and open way. I came
away from the
sustainability supper
having learnt lots,
made new connections
and thoroughly
enjoyed myself!
Charlie Vass
Co-founder of Vinca Wines
FOSTERING CONNECTION AND COLLABORATION
ADDRESSING OUR MATERIAL SOCIAL ISSUES: OUR TARGETS CONTINUED
Material issue:
Customer Engagement
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SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
28%
FIRST GENERATION
OF THEIR FAMILY TO
GO TO UNIVERSITY
33%
40+ YEARS OF AGE
29%
UNDER 30 YEARS
OF AGE
25%
WITH CARING
RESPONSIBILITIES
26%
ENGLISH NOT AS A
FIRST LANGUAGE
29%
NATIONALITY OTHER
THAN BRITISH
30%
IDENTIFY AS BAME
8%
IDENTIFY AS LGBTQ
56%
IDENTIFY AS FEMALE
Diversity is our strength and the first step
to improving on diversity is to measure it.
97% of our employee base provided their
diversity data, and we have now published
our second gender pay gap report. A
breakdown of the number of directors,
senior managers and all employees by
gender is set out on page 159.
DEEP DIVE:
DIVERSITY
AND INCLUSION
Material issue:
Diversity and Inclusion
Getting the right balance for growth
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. We
are pleased to receive a high inclusivity score
of 85.5% in our recent employee survey.
We have launched a series of initiatives to
support diversity and inclusion:
– All our employees have undergone
mandatory diversity and inclusion training.
– Our diversity network called ‘Supporting
Others’ offers a safe space for colleagues
to share their experience on balancing
work and caring responsibilities.
– We implemented inclusive recruitment
practices including anonymised CVs and
hiring manager training.
– Throughout the year we celebrated eight
events raising awareness of various
cultures and beliefs.
– We launched our diversity framework,
setting out a long-term ambition and
roadmap (further detail on the right side).
We are committed to continuous
improvement and building on our current
initiatives. To effectively monitor our
diversity performance and develop a
comprehensive diversity and inclusivity
improvement plan, we needed a deeper
understanding of our workforce’s diversity.
Therefore, we collected additional data from
our employees. Although participation was
entirely voluntary, we achieved a remarkable
97% response rate, reflecting our employees’
strong support for a strategy aimed at
enhancing diversity and inclusion within
our organisation.
WORKSPACE’S EQUITY, DIVERSITY AND INCLUSION FRAMEWORK
Workstream:
1. RECRUITMENT
2. PROGRESSION
3. FUTURE TALENT
Workstream:
1. AWARENESS
2. BEHAVIOURS
3. FEEDBACK
Workstream:
1. CUSTOMERS
2. SUPPLIERS
3. PARTNERS
Workstream:
1. INCLUSIVE SPACES
Workstream:
1. REPRESENTATION
2. LEAD BY EXAMPLE
3. COMMITMENT
PEOPLE CULTURE
STAKEHOLDERS
BUILDINGS LEADERSHIP
Transparency, Data and Accountability
The framework
Our Equity, Diversity and
Inclusion (EDI) framework has
been developed over the last
year with input from across
the business. The framework
is informed by feedback from
our annual employee survey,
peer reviews and best
practice. The framework (see
above) has five pillars, with
specific workstreams in each,
to ensure a holistic approach
to diversity, and inclusion
across all stakeholders.
Accountability
Diversity and inclusion is a
material issue for the business
and hence we have set a
Board level objective to
maintain an inclusivity score
of at least 85.5%, linking it
to team’s annual bonus
allocation. We also measure
and report on our employee
diversity figures bi-annually,
helping us benchmark and
track improvement over time.
Implementing the framework
An internal EDI working group
is currently being set up to
shape the outcomes and
targets of the framework
and implement the strategy
across Workspace. The group
will be chaired by a member
of the Executive team,
reporting directly to the CEO.
Outcome:
The diversity of
Workspace’s
current and future
talent reflects the
communities that
we operate in.
Outcome:
A culture where
everyone
champions our
strategy, feels
included and
empowered.
Outcome:
Workspace is a
force for positive
change by
advocating for
diversity and
inclusion with
our customers,
suppliers, partners,
and the industry
at large.
Outcome:
Our buildings offer
a more accessible,
welcoming and
accommodating
environment for
everyone.
Outcome:
Leadership is
diverse and can
lead Workspace
into a more diverse
and inclusive
future.
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SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
85.5%
EMPLOYEE INCLUSIVITY SCORE
68
EMPLOYEE HOURS OF INCLUSIVE
RECRUITMENT TRAINING
INCLUSIVE
RECRUITMENT
Having a diverse workforce is key to
Workspace’s success. This means our people
have varied experiences and perspectives
which will drive innovation, make better
decisions, and create a more inclusive
and equitable work environment.
Our recruitment processes have been
continually improving to be inclusive and bias
free in order to attract diverse candidates.
We undertook several key actions to enhance
our inclusive recruitment practices. In 2022,
we appointed a dedicated recruitment
manager to oversee the process efficiently.
We then introduced an inclusive recruitment
policy and provided comprehensive training
to our hiring managers to mitigate biases.
This year we rolled out a new recruitment
software. Leveraging the platform, we
optimised candidate evaluation, alongside
the adoption of blind CVs and bias-free
language in job postings. Additionally,
strategic partnerships were forged this year
with organisations like Sapphire Partners,
Lambeth Jobs Centre and The White Ensign
Association to drive social mobility.
We achieved 59 direct hires, fostering
diversity and enriching our culture. This also
helped us save £350k in recruitment costs,
whilst also broadening our talent pool. Our
collaborations with social mobility-focused
partners have extended our reach and
community engagement, aligning with
our commitment to positive social impact.
As an employer, we are
constantly looking to attract
and retain the best talent.
As such, we actively look
to breakdown barriers to
employment and widen access
to our jobs through working
with social mobility partners.
Ben Saunders
Head of People
Link to material issue:
Diversity and Inclusion
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SUSTAINABILITY CONTINUED
LOOKING AFTER OUR PEOPLE CONTINUED
STRATEGIC
PILLAR 3
SUPPORTING OUR
COMMUNITIES
Creating lasting value for our communities
through employment-led regeneration
and meaningful partnerships with local
community groups and charities.
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 a significant impact in alleviating
homelessness across 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.
Our response to local community needs
As a major provider of work space to over
4,000 of London’s brightest businesses,
Workspace is well placed to address some of
the most pressing social issues in the capital.
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.
Each year we set incremental annual targets
to ensure progress across all our material
issues. Our targets for strategic pillar 3 are
covered in the following pages, along with
commentary on progress made and impact
achieved.
1. Not in Education, Employment or Training.
300
BENEFICIARIES OF SKILLS
AND EMPLOYMENT PROGRAMME
1,560
TOTAL VOLUNTEERING HOURS
100+
COMMUNITY ENGAGEMENT INITIATIVES
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SUSTAINABILITY CONTINUED
ADDRESSING OUR MATERIAL SOCIAL ISSUES: OUR TARGETS CONTINUED
Relevant material issue
SKILLS AND EMPLOYMENT
Relevant material issue
SKILLS AND EMPLOYMENT
CHARITABLE AND COMMUNITY
SUPPORT
Relevant material issue
CHARITABLE AND COMMUNITY
SUPPORT
Relevant material issue
CHARITABLE AND COMMUNITY
SUPPORT
Workspace response
ROLL OUT OUR COMMUNITY
SKILLS AND EMPLOYMENT
PROGRAMME, INSPIRESME,
ACROSS TEN CENTRES
Workspace response
WORKS IN PARTNERSHIP
WITH SHP TO PREVENT
HOMELESSNESS IN LONDON
Workspace response
IMPLEMENT A PLACE BASED
SOCIAL IMPACT INITIATIVE
ACROSS ALL CLUSTERS
Workspace response
SUPPORT CHARITIES AND
VCSES THROUGH OUR LETTINGS
IN KIND OFFERING
Status: Achieved
Status: Achieved Status: Achieved Status: Achieved
We successfully rolled out
InspiresMe, our community
skills and employment
programme in partnership
with our customers and local
schools, across ten centres.
Over 300 students
benefitted through our CV
workshops, career sessions
and 26 students completed
work placements. A total of
30 customers participated
in the InspiresMe programme.
The responses from school
partners and customers
were extremely positive
with 96% of the schools
who took part agreeing they
were keen to continue with
this initiative next year. The
programme also received
a 100% engagement score
from our customers.
We raised over £31,000 for
SHP, additionally we provided
funding for a full-time
employability coordinator
benefitting 589 young and
vulnerable people. A number
of our employees supported
SHP throughout the year and
delivered over 1,460
volunteering hours.
We delivered a successful
employability workshop to
support SHP clients on CV
building and interview skills.
Four customers and four
employees shared their
experience and skills with
10 clients from SHP.
We ran over 100 community
engagement initiatives across
our centres in partnership
with local charities. Our
partnership with local charity
CartridgeBuyBack serves
as a prime example. We
supported them by collecting
used cartridges from our
customers, generating funds
over £5,000 to support
people who are leaving
prison. We also ran 16 food
bank drives, collecting
1.2 tonnes of food, which
were hugely popular with
our customers.
Workspace provided
£177k worth of lettings and
meeting rooms as in-kind
support to various charities.
These organisations are
dedicated to a wide array
of causes, including
homelessness, health,
justice, and emergency aid.
Such support is invaluable to
these charities. See more in
the case studies on the right.
Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs Relevant UN SDGs
Workspace’s in-kind
commitment has enabled
charities to thrive within our
portfolio, they often would
not be able to have a
high-quality work space in
London without this offer.
“Workspace make all our
operations possible by
donating space to us in
Record Hall. Sheltersuit UK
could not function in the way
that it does without them,
and it’s no exaggeration to
say that with this support,
Workspace is saving lives.”
– Ian Sutherland McCook
(CEO) Sheltersuit UK.
Material issue:
Charitable and
community support
£177k
WORTH OF LETTINGS AND
MEETING ROOMS IN-KIND
Edinburgh House hosted a
family classical music concert
by Charity Vauxhall One.
Workspace covered the
cost of the space, cleaning,
and security fees.
There were over 50 attendees
from the local community.
Children who attended were
gifted a Workspace branded
gift bag full of creative
goodies to take away.
The feedback from the
event was overwhelmingly
positive and the acoustics
of the space complemented
the beautiful music.
Material issue:
Charitable and
community support
LETTINGS IN KIND CLASSICAL VAUXHALL
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
SOCIAL VALUE GENERATED BY WORKSPACE FY2023/24
This is the second 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 business activities. A significant
proportion of our social value contribution comes from deeper engagement with the beneficiaries which we believe delivers long lasting impact, compared to financial contribution and donations.
In addition to our direct social value contribution, we have also calculated the indirect value generated through our collaboration with our suppliers, contractors and customers. As we near the
completion of Leroy House in Islington, we’ve included this project in our indirect value calculations, enhancing the comprehensive overview of our social impact.
RESPONSIBLE
AND INCLUSIVE
PRACTICES
DIRECT
£368k
INDIRECT
£10.3m
£133.2k delivered
through EDI training –
220 employees
received unconscious
bias training and 124
employees received
anti-harassment
training
£1.2k delivered
through funding
26 employees for
further studies
£180.6k delivered
through £1.5m spend
with non-profit
organisations as
suppliers
£52.4k delivered
through upskilling
programmes for
customers
£10.3m delivered through
over 26% of construction
spend with local
organisations
EMPLOYMENT
AND SKILLS
DIRECT
£10k
INDIRECT
£77.7k
£836 delivered
through four weeks
of work placement
supported by
Workspace
£5.5k delivered
through 97 staff weeks
of apprenticeships
delivered by
Workspace
£3.9k delivered
through 233 hours
spent supporting
local schools
£77.7k delivered through
64 weeks of apprenticeships,
52 weeks of work
experience, four people
employed from NEET
backgrounds and one
long-term unemployed
individual
WELLBEING
DIRECT
£192k
INDIRECT
£14.9k
£138.2k delivered
through investment in
wellbeing offering for
customers
£17.2k delivered
through investment in
wellbeing campaigns
for staff
£36.5k delivered
through all employees
having access to a
comprehensive
wellbeing programme
£14.9k delivered through
our building contractors
having access to a
comprehensive wellbeing
programme
CHARITY AND
COMMUNITY SUPPORT
DIRECT
£257k
INDIRECT
£1.9k
£12.5k delivered
through 124 hours of
skilled volunteering
£24.4k delivered
through 1,436 hours of
unskilled volunteering
£6.7k delivered
through employees
contributing 400 hours
to support the local
community projects
£213.8k delivered
through in-kind
contributions
£1.9k delivered through
108 hours of unskilled
volunteering
Strategic focus Impact beneficiaries IMPACT THEMES SOCIAL INITIATIVES GENERATING DIRECT VALUE
SOCIAL INITIATIVES
GENERATING INDIRECT VALUE
LOOKING
AFTER OUR
PEOPLE
SUPPORTING
OUR
COMMUNITIES
– Employees
– Customers
– Suppliers
– Community
– Charity
Direct
£827k
Indirect
£10.4m
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
Working with the local community and
charity partners is a key component of
Workspace’s Social Impact strategy.
Our collaboration with like-minded partners
allows us to amplify this impact. The
following pages provide further information
on the initiatives we have delivered by
partnering with our customers, local schools,
our charity partner and contractors on-site.
DEEP DIVE:
A PARTNERSHIP
LED APPROACH
INSPIRESME IN NUMBERS
4/5
SATISFACTION SCORE FROM
STUDENTS
100%
CUSTOMER ENGAGEMENT SCORE
300
BENEFICIARIES SUPPORTED
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
The aim of the programme is to work
alongside our customers to provide
inspiration, knowledge, support and
experience to young 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.
Through InspiresMe, we facilitate
partnerships between local schools and our
customers to improve employability skills of
under-privileged Londoners.
The programme now spans across 10 of our
centres. Our approach includes establishing
partnerships with schools and getting
our customers involved by generating
interest and enthusiasm through targeted
communications raising awareness on young
people unemployment issues. This year we
facilitated work placements, CV workshops,
speed networking and brought our
customers to career fairs to equip students
with the necessary tools for success and to
inspire them.
In the last 12 months, we reached over 300
students through collaborative efforts with
30 of our customers. This approach led to
the placement of 26 students in professional
settings, providing invaluable hands-on
experience. The programme received a
100% engagement score from our customers,
reflecting their enthusiastic involvement and
commitment to the cause. Furthermore,
beneficiaries of the programme expressed
high levels of satisfaction, with an impressive
4 out of 5 rating, affirming the programme’s
effectiveness in empowering individuals for
their future.
INSPIRESME –
SCALING IMPACT
IN THE LOCAL
COMMUNITY
InspiresMe is Workspace’s community
outreach programme, focused on skills
and employment.
Link to material issue:
Skills and employment
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
SINGLE HOMELESS
PROJECT –
OUR PARTNERSHIP
CONTINUES
TO FLOURISH
Link to material issue:
Charitable and community support
Homelessness is a growing issue in London.
Recent research by City Hall showed a 23%
year-on-year increase for the fourth quarter
of 2023, the highest level in a decade.
Being a London based company we chose to
partner with Single Homeless Project as they
are focused on addressing local issues. Each
day across all 32 London boroughs, Single
Homeless Project employees work with
individuals to tackle the underlying causes
of homelessness, such as poor mental health
or drug and alcohol dependency. Often that
means being there for people at a critical
time with the goal of helping them find a job
and accommodation, ultimately supporting
them to take the final steps to living
independently.
Our Charity Wellbeing and Social Committee
(CWS) is made up of 10 employees from
across the Company, and steers our support
to SHP. Annually we pay the salary for the
Employability Manager at SHP and support
the charity’s efforts through fundraising and
volunteering. This year, our support
benefitted 589 young and vulnerable
people. This year 85 Workspace employees
volunteered with SHP, in refurbishing their
hostels, running a sports day and other
initiatives. We also raised over £31,000
for the charity through a number of
fundraising events.
In March 2024, 4 employees and 4 customers
took part in an employability workshop with
10 SHP clients. The aim of the session was to
help SHP clients with creation of CVs and
interview skills.
1,460
HOURS VOLUNTEERED WITH SHP
589
BENEFICIARIES
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
LEROY HOUSE,
ISLINGTON –
DELIVERING
SOCIAL VALUE
IN CONSTRUCTION
Link to material issues:
Sustainable procurement
Skills and Employment
10.3m
SOCIAL VALUE GENERATED
26.5%
CONSTRUCTION SPENT WITH
LOCAL SUPPLIERS
Our refurbishment and development activity
offers us a great opportunity to deliver the
construction programme in a way that
enhances social impact.
Whilst refurbing Leroy House in Islington, we
have closely collaborated with our contractor,
Faithdean, to maximise social value generated
in the local area. The project team have
worked throughout the construction
programme to prioritise initiatives in
response to local community needs.
Through careful procurement decisions we
were able to direct over 26% of the project
spend on local suppliers, within 10 miles from
the site. Faithdean also led several on the
ground initiatives to support their employees
and contractors through a multidimensional
mental health and wellbeing programme.
Other initiatives that took place were
volunteering in a local school, apprenticeships
and putting on a community local skip.
Workspace have also teamed up with the
charity, The eXceL Project, to deliver a
community upskilling programme in the form
of youth work provisions, mentoring and job
readiness training in the borough of Islington.
Wellbeing enhancing features and
community amenities have also been
prioritised in the design of the building
including large windows that open to
ensure good levels of natural daylight
and ventilation, cycle racks and showers to
encourage green modes of transportation
and an onsite cafe and gym. There is also
a green roof to promote biodiversity and
green space nearby for customers to connect
with nature. The regeneration of the site will
continue to improve the local area by creating
new jobs, services and increasing footfall
to local shops and amenities, therefore
continuing to support the local economy.
We are committed to
generating social value
through our projects.
Delivering employment led
regeneration and supporting
the local economy is a key
priority for us.
Kahroon Tanvir
Head of Project Management
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SUSTAINABILITY CONTINUED
SUPPORTING OUR COMMUNITIES CONTINUED
FINANCIAL PERFORMANCE
OUR KEY PERFORMANCE INDICATORS
1. NET RENTAL INCOME 2. TRADING PROFIT AFTER INTEREST 3. EPRA NTA PER SHARE
LINK TO
STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
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.
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 its’ investors as it 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. A reconciliation of basic
and diluted earnings to trading profit after interest is
in note 8 to the financial statements.
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 2023/24
Net Rental Income increased by 8% (£9.6m) to £126.2m.
Underlying net rental income which excludes the net
impact of acquisitions and disposals in the current and
prior year, was up 8.2% to £122.3m, reflecting the
strong increase in rent per sq.ft. achieved in the year.
Trading profit after interest increased by 9% (£5.3m)
to £66.0m. The main driver was the £9.6m growth in net
rental income. Total administrative expenses increased
by £3.8m to £25.3m which includes a £1.9m increase in
share based costs, leaving a £1.9m underlying increase
in administration costs due primarily to wage inflation.
Net finance costs increased to £34.9m in the year,
reflecting the increase in SONIA during the period,
offset by a reduction in net debt.
Our EPRA NTA per share decreased by 13.7% (£1.27)
to £8.00. This was driven by the underlying decrease
in the valuation of our portfolio, offset by trading profit
in the year.
£126.2m £66.0m £8.00
2024 126.2
116.6
86.7
2023
2022
2024 66.0
60.7
46.9
2023
2022
2024 8.00
9.27
9.88
2023
2022
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4. DIVIDEND PER SHARE 5. LIKE-FOR-LIKE RENT ROLL GROWTH 6. LIKE-FOR-LIKE OCCUPANCY
LINK TO
STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
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.
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.
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 2023/24
The increase of 9% (2.2p) in dividend per share
was due to the increased trading profit in the year.
The like-for-like rent roll has increased by 9.6% (£111.2m)
in the year, driven by a 10.4% uplift in rent per sq. ft.
from £40.08 to £44.27.
Like-for-like occupancy broadly stable at 88.1%.
28.0p +9.6% 88.1%
2024 28.0
25.8
21.5
2023
2022
2024 9.6
7.1
8.7
2023
2022
2024 88.1
89.1
89.6
2023
2022
OUR KEY PERFORMANCE INDICATORS CONTINUED
FINANCIAL PERFORMANCE CONTINUED
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7. PROPERTY VALUATION 8. TOTAL PROPERTY RETURN 9. TOTAL SHAREHOLDER RETURN
LINK TO
STRATEGY
Driving customer-led growth
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
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.
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.
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 2023/24
There was an underlying reduction of 9.5% (£256m)
in our property valuation, taking the valuation to
£2,446m. This was mainly driven by an outward shift
in valuation yields offset by increases in estimated
rental values. See Property Valuation section of the
Business Review on pages 82 to 84 for more detail.
The decrease in total returns in the year was driven
by the decrease in the property valuation, although
income returns increased. We have again out
performed our IPD benchmark demonstrating
the resilience of our property portfolio.
Total Shareholder Return has increased due to an
uplift in the share price over the year, and increased
dividends paid in the year.
£2,446m (4.67)% 22.3%
2024 2,446
2,741
2,402
2023
2022
2024(4.67)
1.10
6.49
2023
2022
2024 22.3
(34.0)
(12.3)
2023
2022
OUR KEY PERFORMANCE INDICATORS CONTINUED
FINANCIAL PERFORMANCE CONTINUED
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OUR KEY PERFORMANCE INDICATORS CONTINUED
NON-FINANCIAL PERFORMANCE
1. CUSTOMER ENQUIRIES 2. VIEWINGS 3. OFFER LETTERS
LINK TO
STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
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.
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 offer letters.
Once prospective customers have completed a
viewing, and are interested in the space, an offer
letter is issued containing pricing information and
lease terms. Tracking the number of offer letters
is important as it allows us to assess the success
of our viewings and the demand for our product.
MOVEMENT
IN 2023/24
There was an average of 788 monthly enquiries over
the year, with an average of 818 monthly enquiries
in the final quarter.
There was an average of 524 monthly viewings over
the year, with a good conversion rate from enquiry to
viewing and, as with enquiries, a strong final quarter.
On average 359 offer letters were issued each month
in the year, which represents 69% of viewings.
788 524 359
2024 788
798
917
2023
2022
2024 524
518
598
2023
2022
2024 359
315
322
2023
2022
OUR KEY PERFORMANCE INDICATORS CONTINUED
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OUR KEY PERFORMANCE INDICATORS CONTINUED
NON-FINANCIAL PERFORMANCE CONTINUED
4. LETTINGS 5. RENEWALS 6. EMPLOYEE VOLUNTEERING DAYS
LINK TO
STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
Sustainable from the inside out
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.
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.
We track customer retention and allow us to capture
reversion within our portfolio.
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 2023/24
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.
The average number of renewals completed per
month was 59, a level consistent with the prior year.
The number of volunteering days increased
significantly from 78 to 192. 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.
103 59 192
2024 103
110
127
2023
2022
2024 59
61
15
2023
2022
2024 192
78
68
2023
2022
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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.
This approach flows through to our day to
day management of our operational risks.
We have created a positive culture within
Workspace which encourages open
communication and engagement. This
enables staff 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 well across the business.
We make every effort to engage staff with
risk-related issues, particularly those which
are 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 another period of
challenging macroeconomic conditions with
high inflation and increasing interest rates.
Although these risks appear to have stabilised
towards the end of the year, the key risks that
could affect 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 2023.
Workspace recognises that climate change
is having an impact on our business and will
continue to do so. 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 carbon economy
in the form of increasing regulation and
changes in customer demand. We are
actively managing our climate change risk
and have put in place mitigation measures
for the most material impacts including the
recruitment of a Sustainability Reporting
and Engagement Manager.
Further details of the framework can
be found on pages 178 to 179.
PRINCIPAL RISKS AND UNCERTAINTIES
EMERGING RISKS
Emerging risks are discussed monthly and
promptly escalated to the Board as required.
Emerging risks considered during this year
included: employee recruitment in specialist
areas; geopolitics, war and regional instability
in Ukraine and the Middle East; availability of
materials due to ongoing instability of
shipping routes; the new Building Safety Act;
the macroeconomic environment including
inflation, higher interest rates and potential
impact on property valuations and operating
performance.
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.
During the year we extended our £335m
bank debt facilities by a further 12 months
leaving no material debt maturities until
August 2025.
As of 31 March 2024, the Group had cash
and undrawn credit facilities of £145m 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 sets out
recommendations and recommended
disclosures for reporting on climate-related
financial risks and opportunities. The
Group’s TCFD disclosures can be found
on pages 94 to 105.
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 98 to 101.
EMPLOYEES
The health, safety and wellbeing of our
employees remains a top priority. For the
majority of our employees, we are able to
offer a flexible working environment to
enable a healthy work-life balance alongside
a competitive benefits package for all.
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There has been no
significant change to the
principal risks this year. The
principal risks are reviewed
in detail bi-annually.
Key: Principal risks Page
1
CUSTOMER DEMAND 72
2
FINANCING 73
3
VALUATION 73
4
ACQUISITION PRICING 74
5
CUSTOMER PAYMENT
DEFAULT
75
6
CYBER SECURITY 75
7
RESOURCING 76
8
THIRD-PARTY
RELATIONSHIPS
77
9
REGULATORY 77
10
CLIMATE CHANGE 78
PROBABILITY (POST-MITIGATION) ProbableUnlikely
No change
Low IMPACT
Severe
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRINCIPAL RISKS
1
2
3
4
5
6
7
8
9
10
IMPACT
SEVERE
PROBABILITY (POST-MITIGATION)
POSSIBLE
CHANGE FROM LAST YEAR
No change
RISK APPETITE
MEDIUM
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
1. Net rental income
2. Trading profit after
interest
5. Like-for-like rent roll
growth
6. Like-for-like occupancy
8. Total property return
Non-financial
1. Customer enquiries
2. Viewings
3. Offer letters
4. Lettings
5. Renewals
Principal risk
Opportunities for growth could be missed
without a clear brand positioning strategy
to meet the evolving demands of target
customers. Macroeconomic factors including
political instability and geopolitical tensions,
weak economic growth, inflationary pressures
and higher interest rates could also impact our
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
different work space offerings, 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 staff 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 offer and the content and
messaging are regularly reviewed to remain
relevant and appealing.
CUSTOMER DEMAND
1
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IMPACT
SEVERE
PROBABILITY (POST-MITIGATION)
UNL IKE LY
CHANGE FROM LAST YEAR
No change
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
LOW
LINK TO STRATEGY
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
2. Trading profit after
interest
4. Dividend per share
9. Total shareholder return
RISK APPETITE
MEDIUM
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
3. EPRA NTA per share
5. Like-for-like rent roll
growth
7. Property valuation
8. Total property return
9. Total shareholder return
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 88.
Principal risk
Macroeconomic uncertainty, reductions
in occupancy or pricing, or failure to meet
Energy Performance Certificate (EPC) targets
could have an impact on asset valuations,
whereby property yields increase and
valuations fall. This may result in a reduction
in return on investment and negative impact
on covenant testing.
Risk impact
– Financing covenants linked to loan to value
(‘LTV’) ratio.
– Impact on share price.
– 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 the majority of our debt
facilities so that our interest payment
profile is broadly stable.
– During the year we put in place a £100m
interest rate hedge to further fix our
interest costs.
– Loan covenants are monitored and reported
to the Board on a monthly basis and we
undertake detailed cash flow monitoring
and forecasting.
– During the second half of the year we
extended the maturity of our £335m
bank debt facilities by a further year,
providing the Group with adequate
funds for future plans.
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 independent
valuations of all our properties.
– We manage and invest in our properties,
planning and undertaking upgrades where
necessary, to ensure they are compliant
with current and future Minimum Energy
Efficiency Standards (MEES) for EPCs.
– Alternative use opportunities, including
mixed-use developments, are actively
pursued across the portfolio.
FINANCING
2
VALUATION
3
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
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IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
POSSIBLE
CHANGE FROM LAST YEAR
No change
RISK APPETITE
MEDIUM
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
RELEVANT KPIS
Financial
3. EPRA NTA per share
7. Property valuation
8. Total property return
9. Total shareholder return
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.
ACQUISITION PRICING
4
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
The Biscuit Factory, Bermondsey
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IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
POSSIBLE
CHANGE FROM LAST YEAR
No change
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.
– We’re committed to continue the adoption
of the NIST Cybersecurity Framework to
enhance our cyber security maturity. This
adoption will strengthen risk management,
improve controls, fortify incident response,
and ensure consistent protection and
recovery, validated through external
independent assessments.
CYBER SECURITY
6
RISK APPETITE
LOW
LINK TO STRATEGY
Delivering operational excellence
RELEVANT KPIS
Financial
2. Trading profit after
interest
4. Dividend per share
8. Total property return
9. Total shareholder return
Non-financial
4. Lettings
5. Renewals
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
POSSIBLE
CHANGE FROM LAST YEAR
No change
RISK APPETITE
LOW
LINK TO STRATEGY
Delivering operational excellence
RELEVANT KPIS
Financial
1. Net rental income
2. Trading profit after
interest
4. Dividend per share
8. Total property return
9. Total shareholder return
Principal risk
There remains uncertainty around the
macroeconomic environment given
broader geopolitical events, and interest
rate pressures. This could result in further
pressure on rent collection figures.
Risk impact
– Negative cash flow and increasing
interest costs.
– Breach of financial covenants.
Mitigation
– Rent collection and customer payment
levels have remained strong throughout the
year, 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 staff maintain relationships with
customers and can identify early signs
of potential issues.
CUSTOMER PAYMENT DEFAULT
5
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IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
LOW
CHANGE FROM LAST YEAR
No change
Principal risk
Ineffective 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’s objectives and grow the
business. Inadequate resourcing may also
result in management being spread too thinly
and a decline in effectiveness.
Risk impact
– Increased costs from high staff 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 people teams run a broad
training and development programme
designed to ensure employees are
supported and encouraged to progress
with learning and study opportunities.
– The HR function was strengthened in
2022 by the appointment of a Recruitment
Manager whose role is to overview the
entire recruitment process to ensure that we
have a diverse and wide ranging talent pool.
RESOURCING
7
COMPANY VALUES
RISK APPETITE
MEDIUM
LINK TO STRATEGY
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
1. Net rental income
2. Trading profit after
interest
4. Dividend per share
5. Like-for-like rent roll
growth
6. Like-for-like occupancy
8. Total property return
9. Total shareholder return
Non-financial
1. Customer enquiries
2. Viewings
3. Offer letters
4. Lettings
5. Renewals
6. Employee volunteering
days
Kennington Park, Oval
We have a strong internal culture which
encourages independent thought and initiative
which is articulated in our four key values:
Know
your stuff
Show
we care
Find
a way
Make
it fun
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
– The HR team has also introduced a new
candidate applicant tracking system to track
the source of applications. This will allow us
to better manage the process and diversify
our talent from a range of application
sources. At the same time, we have revised
our internal application process for existing
employees with 35 individuals being internally
promoted during this period and about
30% of new starters being recruited directly
without the use of recruitment agencies.
– We have engaged external search agencies
to identify and rigorously assess potential
candidates for the new CEO and NED
appointments.
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IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
LOW
CHANGE FROM LAST YEAR
No change
IMPACT
MEDIUM
PROBABILITY (POST-MITIGATION)
LOW
CHANGE FROM LAST YEAR
No change
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 offering to customers
or could lead to significant disruptions
and delays in any refurbishment or
redevelopment projects.
Risk impact
– Decline in customer confidence.
– Increased project or operational costs.
– Fall in customer demand.
– Weaker cash flow.
– Reputational damage.
Principal risk
A failure to keep up to date and plan for
changing regulations in key areas such as
health and safety and sustainability, could
lead to fines or reputational damage.
Risk impact
– Increased costs.
– Reputational damage.
Mitigation
– Health and safety is 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.
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.
– 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 used the TCFD framework to govern
and assess risk to our business from climate
change and have built a robust mitigation
plan to minimise impact. Our net zero
carbon pathway offers a robust response
to transition risk arising from climate
change. However, we also closely monitor
and manage physical risk arising from
climate change, with details of our
mitigation strategy provided on
page 104 and 105.
THIRD-PARTY RELATIONSHIPS
8
REGULATORY
9
RISK APPETITE
LOW
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
1. Net rental income
2. Trading profit after
interest
4. Dividend per share
5. Like-for-like rent roll
growth
6. Like-for-like occupancy
8. Total property return
9. Total shareholder return
Non-financial
5. Renewals
RISK APPETITE
LOW
LINK TO STRATEGY
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
2. Trading profit after
interest
4. Dividend per share
9. Total shareholder return
Non-financial
4. Lettings
5. Renewals
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
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IMPACT
HIGH
PROBABILITY (POST-MITIGATION)
POSSIBLE
CHANGE FROM LAST YEAR
No change
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.
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 effectiveness by our Risk
Management Group and Environmental
Sustainability Committee.
CLIMATE CHANGE
10
RISK APPETITE
LOW
LINK TO STRATEGY
Delivering operational excellence
Sustainable from the inside out
RELEVANT KPIS
Financial
2. Trading profit after
interest
4. Dividend per share
9. Total shareholder return
Non-financial
4. Lettings
5. Renewals
– 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 carbon
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
offset costs.
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Leroy House, Islington
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CONTINUED
INCOME AND
DIVIDEND
GROWTH FROM
OUR SCALABLE
OPERATING
PLATFORM
BUSINESS REVIEW
The Frames, Shoreditch
TOTAL RENT ROLL
£143.4m
TRADING PROFIT AFTER INTEREST
£66.0m
PROPERTY VALUATION
£2,446m
Our strategy
Pages 35 to 38
There are clear links between our
market trends and our strategy.
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CUSTOMER ACTIVITY
We have seen resilient customer demand, despite the early Easter impacting enquiries in the
fourth quarter, with 1,238 lettings completed in the year with a total rental value of £31.3m.
FY
2023/24
FY
2022/23
Monthly Average
Q4
2023/24
Q3
2023/24
Q2
2023/24
Q1
2023/24
Enquiries 788 798 818 759 837 738
Viewings 524 518 589 488 527 491
Lettings 103 110 114 104 108 87
Good activity levels have continued into the first quarter of 2024/25, with 725 enquiries,
537 viewings and 92 new lettings in April 2024.
Alongside our new lettings, we have seen strong renewal activity in the year, with over 700
customers renewing for a £2.4m (12%) uplift in annual rent.
Mare Street Studios, Hackney
RENT ROLL
Total rent roll, representing the total
annualised net rental income at a given date,
was up 2.4% (£3.3m) in the year to £143.4m
at 31 March 2024.
Total Rent Roll £m
At 31 March 2023 140.1
Like-for-like portfolio 9.7
Completed projects (0.3)
Projects underway and design stage (0.1)
South East Office (0.2)
Non-core 0.2
Disposals (6.0)
At 31 March 2024 143.4
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 and non-core properties
at their current rent roll and occupancy),
was £194.6m at 31 March 2024.
Like-for-like portfolio
The like-for-like portfolio represents 78%
of the total rent roll as at 31 March 2024.
It comprises 43 properties with stabilised
occupancy excluding recent acquisitions,
buildings impacted by significant
refurbishment or redevelopment activity,
or contracted for sale.
We have continued to move pricing forward
across our like-for-like portfolio with rent
per sq. ft. increasing by 10.4% in the year
to £44.27, with like-for-like occupancy
marginally down by 1.0% to 88.1% in the year,
resulting in an overall increase in like-for-like
rent roll of 9.6% (£9.7m) to £111.2m.
We have seen ERV per sq. ft. increase by 3.4%
in the year. If all the like-for-like properties
were at 90% occupancy at the CBRE
estimated rental values at 31 March 2024,
the rent roll would be £126.8m, £15.6m higher
than the actual rent roll at 31 March 2024.
Like-for-like
Six Months Ended
31 Mar
2024
30 Sep
2023
1
31 Mar
2023
1
Occupancy 88.1% 88.5% 89.1%
Occupancy change
2
(0.4%) (0.6%) 0.6%
Rent per sq. ft. £44.27 £42.82 £40.08
Rent per sq. ft. change 3.4% 6.8% 5.3%
Rent roll £111.2m £108.0m £101.5m
Rent roll change 3.0% 6.4% 4.9%
1. Restated for the transfer in of Castle Lane, Mare Street Studios, Westbourne Studios, Wilson Street, Lock Studios
and Mirror Works and the transfer out of Poplar Business Park and Atelier House (part of Centro).
2. Absolute change.
BUSINESS REVIEW CONTINUED
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BUSINESS REVIEW CONTINUED
Completed projects
There are six projects in the completed
projects category. Rent roll reduced overall
by £0.3m in the year to £7.1m. An underlying
increase of £0.6m in rent roll was offset
by a £0.9m reduction at Evergreen Studios,
Richmond, following the expiry of a short
leaseback of the building by the developer.
If the buildings in this category were all
at 90% occupancy at the ERVs at 31 March
2024, the rent roll would be £10.0m,
an uplift of £2.9m.
Projects underway – refurbishments
We are currently underway on nine larger
refurbishment projects that will deliver
390,000 sq. ft. of new and upgraded space.
As at 31 March 2024, rent roll was £9.3m,
down £0.7m in the year.
Assuming 90% occupancy at the ERVs
at 31 March 2024, the rent roll at these nine
buildings once they are completed would
be £21.1m, an uplift of £11.8m.
Projects at design stage
These are properties where we are well
advanced in planning a refurbishment or
redevelopment that has not yet commenced.
As at 31 March 2024, the rent roll at these
properties was £6.2m, up £0.6m.
South East office
As at 31 March 2024, the rent roll of the
South East office portfolio, comprising
nine buildings, was £6.9m, down £0.2m.
Assuming 90% occupancy (or current
occupancy if higher) at the ERVs at
31 March 2024, the rent roll would
be £9.7m, an uplift of £2.8m.
Non-core
As at 31 March 2024, the rent roll of the
non-core portfolio was £2.7m, up £0.2m.
Disposals
During the year, there was £143m exchanged
or completed sales. In aggregate, disposals
have delivered £118m of proceeds (net of
sales costs) in the year (including £10m
for the deferred consideration of Riverside,
Wandsworth), at a combined net initial
yield of 5.3%.
In April, we exchanged on the sale of
20-30 Greyfriars Road, Reading and Cygnet
House, Staines for a combined consideration
of £4.6m, in line with the March 2024 valuation.
In May, we completed on the sale of Poplar
Business Park for £21.5m which we exchanged
for sale in January.
PROFIT PERFORMANCE
Trading profit after interest for the year was
up 8.7% (£5.3m) on the prior year to £66.0m.
£m
31 Mar
2024
31 Mar
2023
Net rental income 126.2 116.6
Administrative expenses
– underlying (22.0) (20.1)
Administrative expenses
– share based costs
1
(3.3) (1.4)
Net finance costs (34.9) (34.4)
Trading profit
after interest 66.0 60.7
1. These relate to both cash and equity settled costs.
Net rental income was up 8.2% (£9.6m)
to £126.2m.
£m
31 Mar
2024
31 Mar
2023
Underlying rental income 122.3 113.1
Unrecovered service
charge costs (4.0) (4.3)
Empty rates and other
non-recoverable costs (9.5) (9.3)
Services, fees,
commissions and
sundry income 1.4 0.5
Underlying net
rental income 110.2 100.0
Acquisitions 13.4 10.7
Disposals 2.6 5.9
Net rental income 126.2 116.6
The £9.2m increase in underlying rental
income to £122.3m reflects the strong
increase in average rent per sq. ft. achieved
over the last year. Total net rental income also
benefited from increased rents from recent
acquisitions which have continued to let up
well in the year.
Unrecovered service charge costs decreased
by £0.3m, with the majority of service charge
costs recovered from customers, despite the
unusually high levels of inflation we have seen
in the UK over the last year.
There was a small increase in empty rates
and other non-recoverable costs which were
up £0.2m to £9.5m. Net revenue from services,
fees, commissions and sundry income was up by
£0.9m, including increased hospitality revenue.
Underlying administrative expenses increased
by £1.9m to £22.0m, reflecting the high levels
of wage inflation seen in the UK in the period.
Share-based costs increased by £1.9m to
£3.3m driven by higher vesting levels and
assumptions with the Workspace portfolio
performing strongly relative to the London
IPD index.
Net finance costs increased by £0.5m to
£34.9m in the year reflecting the increase
in SONIA over the last two years offset by
a reduction in average net debt following
asset disposals in the period and an increase
in capitalised interest reflecting the increase
in activity on major projects over the year.
The average debt balance over the year
was £53.0m lower than in the prior year,
whilst the average interest cost increased
from 3.7% to 3.8%.
Evergreen Studios, Richmond Parkhall, Dulwich
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BUSINESS REVIEW CONTINUED
Loss before tax was £192.8m compared
to £37.5m in the prior year.
£m
31 Mar
2024
31 Mar
2023
Trading profit
after interest 66.0 60.7
Change in fair value of
investment properties (255.3) (93.1)
Loss on sale of
investment properties (2.3) (0.7)
Exceptional costs (1.2) (4.3)
Other items – (0.1)
Loss before tax (192.8) (37.5)
Adjusted underlying
earnings per share 34.1p 31.7p
The change in fair value of investment
properties, including assets held for sale,
was a decrease of £255.3m compared to
a decrease of £93.1m in the prior year.
The loss on sale of investment properties
of £2.3m was driven by costs associated
with disposals in the year.
Exceptional costs include one-off items
relating to the implementation of our new
finance and property management system,
and in the prior year relating to the
acquisition and integration of McKay.
Adjusted underlying earnings per share,
based on EPRA earnings adjusted for
non-trading items and calculated on a
diluted share basis, was up 7.6% to 34.1p.
The calculation of adjusted, basic, diluted
and EPRA earnings per share is shown
in note 8 to the financial statements.
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 19.0p per
share, taking the full year dividend to 28.0p
(2023: 25.8p), to be paid on 2 August 2024
to shareholders on the register at 5 July 2024.
The dividend will be paid as a REIT Property
Income Distribution (PID) net of withholding
tax where appropriate.
PROPERTY VALUATION
At 31 March 2024, our property portfolio was
independently valued by CBRE at £2,446m,
an underlying decrease of 9.5% (£256m)
in the year. The main movements in the
valuation are set out below:
£m
Valuation at 31 March 2023 2,741
Capital expenditure 71
Disposals (110)
Underlying revaluation (256)
Valuation at 31 March 2024 2,446
Leroy House, Islington
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BUSINESS REVIEW CONTINUED
WALTHAM
FOREST
REDBRIDGE
HARINGEY
BARNET
BRENT
CAMDEN
EALING
NEWHAM
GREENWICH
LEWISHAM
SOUTHWARK
LAMBETH
WANDSWORTH
WIMBLEDON
RICHMOND
UPON THAMES
TOWER HAMLETS
HACKNEY
ISLINGTON
CITY OF LONDON
CITY OF
WESTMINSTER
HAMMERSMITH
AND
FULHAM
KENSINGTON
AND
CHELSEA
ENFIELD
HOUNSLOW
EARLS COURT
PADDINGTON
BATT E RSEA
VICTORIA
WATERLOO
KENNINGTON
BETHNAL
GREEN
LONDON
BRIDGE
KING’S
CROSS
OLD
STREET
SHOREDITCH
ISLINGTON
STRATFORD
FARRINGDON
CANARY
WHARF
There was an underlying revaluation decrease of 3.1% (£78m) in the second half of the year
compared to a decrease of 6.6% (£178m) in the first half. A summary of the full year valuation
and revaluation movement by property type is set out below:
£m
Valuation
31 March
2024
Underlying revaluation decrease
Full Year H2 H1
Like-for-like properties 1,833 162 49 113
Completed projects 137 19 7 12
Refurbishments 319 46 16 30
Redevelopments 19 5 1 4
South East office 86 14 5 9
Non-core 52 10 – 10
Total 2,446 256 78 178
Like-for-like properties
There was an 8.1% (£162m) underlying decrease in the valuation of like-for-like properties
to £1,833m. This was driven by a 78bps outward shift in equivalent yield (£233m), offset
by a 3.4% increase in the ERV per sq. ft. (£71m).
ERV growth has returned to a lower, historically more normal level of annual increase, with
pricing at most centres now back at or above pre-Covid levels. We saw stronger growth in ERV
for smaller space, which represents the majority of our lettings activity, with an increase of 6.2%
in the year for units under 1,000 sq. ft., compared to larger spaces where ERVs increased by
1.3%. This reflects our approach to implement a wide range of smaller unit refurbishments
and subdivisions to align our spaces with customer demand.
31 Mar
2024
31 Mar
2023
1
Change
ERV per sq. ft. £49.43 £47.82 3.4%
Rent per sq. ft. £44.27 £40.08 10.4%
Equivalent yield 7.0 % 6.2% 0.8%
2
Net initial yield 5.5% 4.6% 0.9%
2
Capital value per sq. ft. £643 £694 (7.3)%
1. Restated for the transfer in of Castle Lane, Mare Street, Westbourne Studios, Wilson Street, Lock Studios and Mirror Works
and the transfer out of Poplar Business Park and Centro – Atelier House.
2. Absolute change.
A 2.5% increase in ERV per sq. ft. would increase the valuation of like-for-like properties by
approximately £44m while a 25bps increase in equivalent yield would decrease the valuation
by approximately £64m.
Like-for-like
Refurbishments
Redevelopments
Non-core
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Completed projects
There was an underlying decrease of 12.2%
(£19m) in the value of the six completed
projects to £137m. The overall valuation metrics
for completed projects are set out below:
31 Mar
2024
ERV per sq. ft. £34.69
Rent per sq. ft. £29.30
Equivalent yield 7.3%
Net initial yield 4.6%
Capital value per sq. ft. £431
Current refurbishments and redevelopments
There was an underlying decrease of
12.6% (£46m) in the value of our current
refurbishments to £319m and a reduction
of 20.8% (£5m) in the value of our current
redevelopments to £19m.
The decreases in respect of refurbishments
largely reflected an 85bps outward
movement in equivalent yield, with
redevelopment valuations also impacted
by a decline in expected residential values
and increases in expected build costs.
South East office
There was a 14% (£14m) underlying decrease
in the valuation of the South East office
portfolio to £86m with 152bps outward shift
in equivalent yield, offset by a 3.5% increase
in ERV per sq. ft. The overall valuation metrics
are set out below:
31 Mar
2024
ERV per sq. ft. £29.00
Rent per sq. ft. £22.84
Equivalent Yield 10.4%
Net Initial Yield 7.9%
Capital Value per sq. ft. £243
BUSINESS REVIEW CONTINUED
REFURBISHMENT ACTIVITY
A summary of the status of the refurbishment pipeline at 31 March 2024 is set out below:
Projects Number Capex spent Capex to spend
Upgraded and new
space (sq. ft.)
Underway 9 £55m £49m 390,000
Design stage 8 £0m £454m 717,000
Design stage (without planning) 4 £0m £161m 265,000
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 September 2024. Our adaptive
re-use of the existing building creates 70% less embodied carbon compared to a new build
scheme. We have also recently commenced major upgrades and extensions at Chocolate
Factory, Wood Green, and at The Biscuit Factory, Bermondsey.
We obtained vacant possession of Atelier House, at the northern end of our Centro property,
in December 2023, which will allow us to progress with our planned conversion of the building
to a business centre.
Pall Mall Deposit, Ladbroke Grove
Over the past year,
we have successfully
completed a wide range of
projects delivering strong
income returns.
Graham Clemett
Chief Executive Officer
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Leroy House, Islington
BUSINESS REVIEW CONTINUED
SUSTAINABILITY
We have an inherently green property
portfolio with energy intensity already 29%
lower than industry best practice for net zero
carbon offices. Further improving the energy
efficiency of our buildings is key in helping
us to achieve our target of being a net zero
carbon business. The Workspace portfolio is
currently 52% EPC A and B rated, an increase
of 11% 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 11% reduction in operational energy
intensity across the like-for-like portfolio and
a 36% reduction in gas use.
In December, we signed a Corporate
Purchase Power Agreement to supply around
two thirds of our electricity demand over
the next 10 years from a newly constructed
solar plant.
CASH FLOW
A summary of cash flows is set out below:
£m
31 Mar
2024
31 Mar
2023
Net cash from operations
after interest
1
63 70
Dividends paid (51) (44)
Capital expenditure (71) (60)
Purchase of investment
properties – (201)
Net debt acquired – (162)
Property disposals and
cash receipts 118 49
Other (12) 4
Net movement 47 (344)
Opening debt (net of cash) (902) (558)
Closing debt (net of cash) (855) (902)
1. Excludes £8.8m of VAT receipt (2023)/payment (2024)
relating to the sale of Riverside included in ‘Other’.
There is a reconciliation of net debt in note 16(b)
in the financial statements.
The overall decrease of £47m in net debt
reflects the disposals made in the period.
NET ASSETS
Net assets decreased in the year by £239m
to £1,549m. EPRA net tangible assets (NTA)
per share at 31 March 2024 was down
13.7% (£1.27) to £8.00.
EPRA NTA per share
£
At 31 March 2023 9.27
Adjusted trading profit
after interest 0.34
Property valuation deficit (1.32)
Dividends paid (0.26)
Other (0.03)
At 31 March 2024 8.00
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 year was
(10.9)% compared to (3.8)% in the prior year
ended March 2023. The total accounting
return comprises the change 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.
Clerkenwell Workshops, Clerkenwell
By prioritising
refurbishment, we breathe
new life into old buildings,
creating high-quality,
sustainable work spaces.
Sonal Jain
Head of Sustainability
Salisbury House, Moorgate
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BUSINESS REVIEW CONTINUED
FINANCING
As at 31 March 2024, the Group had £4m of available cash and £141m 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 194.0 335.0 2026
Total 859.0 1,000.0
The majority of the Group’s debt comprises
long-term fixed-rate committed facilities
including 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 sustainability-linked
Revolving Credit Facilities (RCFs) totalling
£335.0m which were £194.0m drawn as
at 31 March 2024. The maturity of the bank
facilities was successfully extended by a
further year in November 2023 with £135m
now maturing in April 2026 and £200m in
December 2026. The average maturity of
drawn debt at 31 March 2024 was 3.6 years
(31 March 2023: 4.1 years).
In February 2024, £100m of the floating rate
bank borrowings were swapped to an all in
fixed rate of 6.1% for two years. At 31 March
2024, the Group’s effective interest rate was
3.7% based on SONIA at 5.2%, with 89%
(£765m) of the debt at fixed or hedged rates.
The average interest cost of our fixed-rate
borrowings was 3.3% and our un-hedged
floating-rate bank borrowings had an average
margin of 1.8% over SONIA. A 1% change in
SONIA would change the effective interest
rate by 0.1% (at current debt levels).
At 31 March 2024, loan to value (LTV) was
35% (31 March 2023: 33%) and interest cover,
based on net rental income and interest paid
over the last 12 month period, was 3.7 times
(31 March 2023: 3.8 times), providing good
headroom on all facility covenants. Our net
debt to earnings ratio (calculated as net debt
divided by trading profit before interest,
but excluding depreciation and amortisation),
improved from 9.3 times to 8.3 times during
the year.
FINANCIAL OUTLOOK FOR 2024/25
Over the past year, we have seen strong rental
growth driven by increased pricing and stable
occupancy. Rental income in 2024/25 will
be underpinned by the growth in like-for-like
rent roll we have seen over the last year,
with like-for-like rent roll growing by 6% in
the second half of last year on an annualised
basis. We continue to see good demand
and expect continued growth in rent roll
in 2024/25. Rental income growth will also
be supported by the letting up of recently
completed projects.
The high levels of inflation we have seen over
the last year, which have impacted on both
our service charge and administrative costs,
are reducing and are expected to have less
impact in the coming year, albeit wage
inflation remains significantly above
historic norms.
We expect capital expenditure to be
maintained at a similar level to last year,
around £60–70m, as we continue to progress
with planned asset management projects,
including the refurbishments of Leroy House,
Chocolate Factory and The Biscuit Factory.
This will be largely offset by recycled capital
from asset disposals.
The £118m of proceeds from disposals of
non-core properties received over the last year
has reduced our floating-rate debt, which
currently has an effective interest rate of 7%.
Our average interest rate has been reduced
further by the £100m of floating rate debt we
have swapped to fixed at an effective rate of
6%. With planned capital expenditure largely
offset by asset disposals, we expect this to
result in a reduction in interest costs in the
current year.
The Chocolate Factory, Wood Green
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BUSINESS REVIEW CONTINUED
PROPERTY STATISTICS
Half Year ended
31 Mar
2024
30 Sep
2023
31 Mar
2023
30 Sep
2022
Workspace Portfolio
Property valuation £2,446m £2,505m £2,741m £2,863m
Number of locations 77 79 86 87
Lettable floorspace (million sq. ft.) 4.5 4.7 5.2 5.4
Number of lettable units 4,678 4,718 4,910 4,901
Rent roll of occupied units £143.4m £141.9m £140.1m £134.7m
Average rent per sq. ft. £38.21 £36.81 £32.86 £30.03
Overall occupancy 83.0% 83.5% 81.5% 84.0%
Like-for-like number of properties 43 42 38 38
Like-for-like lettable floor space (million sq. ft.) 2.9 2.9 2.7 2.7
Like-for-like rent roll growth 3.0% 6.4% 3.4% 3.6%
Like-for-like rent per sq. ft. growth 3.4% 6.8% 5.2% 4.0%
Like-for-like occupancy movement (0.4%) (0.6%) (0.5%) 0.1%
1. The like-for-like category has been restated in the current financial year for the transfer in of Castle Lane, Mare Street
Studios, Westbourne Studios, Wilson Street, Lock Studios and Mirror Works and the transfer out of Poplar Business Park
and Atelier House (part of Centro).
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 107 was approved by the Board of Directors on 4 June 2024
and signed on its behalf by:
Graham Clemett Dave Benson
Chief Executive Officer Chief Financial Officer
Brickfields, Hoxton
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COMPLIANCE STATEMENTS
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 September 2023.
In January 2024, the Board reviewed
the business plan for the five years to
31 March 2029.
The business plan was stress tested against
various scenarios including a severe but
realistically possible downside scenario based
on the following key assumptions:
– A further deterioration in the macro-
economic environment, 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 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 2029.
– 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
historic levels.
– Continued elevated levels of cost inflation.
The Group’s activities, strategy and
performance are explained in the Strategic
Report on pages 1 to 107.
Further detail on the financial performance
and financial position of the Group
is provided in the financial statements
on pages 230 to 256.
The Directors have conducted an extensive
review of the appropriateness of adopting
the Going Concern basis. More details can be
found on page 233. Following this review
and having made appropriate enquiries, the
Directors have a reasonable expectation that
the Group and the Company have adequate
resources and sufficient headroom on the
Group’s bank loan facilities to continue for at
least the next twelve months. For this
reason, the Directors believe that it is
appropriate to continue to adopt the Going
Concern basis in preparing the Group’s
accounts.
– Rates at which the Group could refinance
debt significantly higher than current pricing.
– SONIA rates remaining elevated, 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 107, including a
description of the Group’s strategy and
business model on pages 35 to 37 and 9 to 11.
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 3.4 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 71 to 78. 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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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 interest cover is at its
lowest, net rental income would need
to reduce by 11% compared to the year
to 31 March 2024. As at 31 March 2024
the portfolio has significant levels of
income reversion based on current
estimated rentals values.
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 2024.
Changes in the economic
and regulatory UK
environment impact the
availability and pricing
of debt.
– Financing £935m of the Group’s debt facilities
(£794m drawn as at 31 March 2024) are
due for repayment within the viability
period. Under the severe scenario
modelled these facilities are assumed
to be refinanced at higher pricing levels
than would currently be expected.
Liquidity and covenant headroom
is maintained under this scenario.
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 Company can withstand a
significant downturn in the economy
and demand.
In the scenarios tested, the most significant
impacts on the viability of the Group would be
in relation to liquidity headroom resulting from
an inability to refinance existing debt facilities
at pricing levels that, combined with weak
rental income growth, would not put pressure
on loan covenants. 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 35% as at 31 March 2024.
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. On this basis, the
Directors have 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.
COMPLIANCE STATEMENTS CONTINUED
RISK SENSITIVITY ANALYSES
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The table below, and the information it refers to, sets out our position on non-financial and sustainability 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 9 to 11 and the description of our non-financial key
performance indicators can be found on pages 69 to 70.
POLICIES AND DUE DILIGENCE OUTCOMES OF POLICIES AND IMPACTS OF ACTIVITIES
RELATED PRINCIPAL RISKS
(Pages 71 to 78)
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.
– We disclose our climate-related risks and opportunities, targets and KPIs
and management processes in line with the TCFD recommendations.
– See pages 44 to 54 and 180 to 185 for details on our climate and
environmental activities during the year.
– See pages 44 to 54 and page 185 for details
of our commitment to environmental matters,
including our net zero carbon pathway.
– Our climate-related financial disclosures
can be found on pages 94 to 105.
– Our Green Finance Framework, along with the
allocation report, is on our website.
– This year we entered a 10-year Corporate Power
Purchase Agreement with Statkraft, Europe’s largest
generator of renewable energy, to source two-thirds
of our electricity from solar energy – see page 28
for more details.
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.
– All direct employees and contractors are paid at real Living Wage rates,
specifically real London Living Wage for our London operations since
April 2022.
– See pages 55 to 65 for details on our social-related activities during the year.
– See pages 55 to 65 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 38 to 65 for
more details)
EMPLOYEES – Our Code of Conduct 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 58, 158, 160 and 185 for more details on our Equal Opportunities
and Dignity at Work Policy, and Diversity and Inclusion Policy.
– In July 2021, we introduced a Hybrid Working Policy in recognition of the
importance of work life balance. See page 163 for more details on our
Hybrid Working Policy.
– Employees receive induction training and regular reminders on the
Code of Conduct.
– See pages 55 to 59 and 126 to 127 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.
Risk 7 – Resourcing
COMPLIANCE STATEMENTS CONTINUED
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
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POLICIES AND DUE DILIGENCE OUTCOMES OF POLICIES AND IMPACTS OF ACTIVITIES
RELATED PRINCIPAL RISKS
(Pages 71 to 78)
HEALTH & SAFETY – Our Health & Safety Policy sets out our commitment to the health, safety
and wellbeing of our employees, customers, visitors and others who
may be affected by our activities and to fully comply with all health and
safety legislation and contractual obligations applicable to our business.
– The Group’s Health & Safety Committee meets twice per year. The Board
receives regular reports and reviews our health & safety processes at least
annually, and the Executive Committee receives monthly reports. See
page 77 for more details on our health and safety policies and procedures.
– To ensure we meet our statutory and contractual obligations, Workspace
continue to invest in our Computer Aided Facilities Management (CAFM)
systems. All planned and reactive work is planned and recorded in our
CAFM system.
– 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 and the Head of Health and Safety.
– 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 comprehensive and robust auditing arrangements includes a rolling
programme of internal site health and safety audits. All Workspace premises
are subject to such audits. These arrangements are supplemented with
random inspections and site visits. Workspace periodically commissions
external providers to review our health and safety processes, procedures
and internal auditing arrangements. The information gathered is used to
evaluate the effectiveness of our arrangements and controls.
– December 2023 saw Adrian Brough join Workspace
as our new Head of Health and Safety. Adrian,
a Chartered Health and Safety Practitioner, with
many years’ experience in a wide range of sectors
has recently undertaken a systematic review
of our arrangements and has identified various
improvements. A plan to realise these improvements
has been devised and approved by the Workspace
Executive Committee. 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.
– Our Health and Safety Policy was formally reviewed
in February 2024.
– We continue to successfully deliver our
comprehensive employee health and safety training.
– Workspace have recently purchased a licence for
an organisation wide electronic ‘permit to work’
solution. This significant investment offers numerous
benefits which include real time monitoring of
contractors on our sites and improved due diligence
in regard the checking of qualifications and
competencies of those appointed to carry out work
on behalf of Workspace.
– For the eighth consecutive year, there have been no
contractor-related accidents or incidents that have
affected our customers.
Risk 9 – Regulatory
COMPLIANCE STATEMENTS CONTINUED
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT CONTINUED
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POLICIES AND DUE DILIGENCE OUTCOMES OF POLICIES AND IMPACTS OF ACTIVITIES
RELATED PRINCIPAL RISKS
(Pages 71 to 78)
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 staff
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. 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 trafficking 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 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 trafficking
in our business and supply chains.
– We take a zero-tolerance approach to modern
slavery and other breaches of fundamental
human rights.
– No incidences of human rights abuse or modern
slavery have been identified (2023: Nil).
Risk 7 – Resourcing
Risk 8 – Third-Party
Relationships
Risk 9 – Regulatory
ANTI-BRIBERY
AND CORRUPTION
– Our Anti-Bribery and Corruption Policy, which is reviewed by the Board
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 offered or offering 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
effective systems to counter bribery.
– All staff 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 (2023: Nil).
Risk 9 – Regulatory
POLITICAL AND
CHARITABLE
DONATIONS AND
EXPENDITURE
– Our policy is not to make any political donations or incur any political
expenditure. 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
(2023: Nil).
Risk 9 – Regulatory
COMPLIANCE STATEMENTS CONTINUED
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT CONTINUED
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POLICIES AND DUE DILIGENCE OUTCOMES OF POLICIES AND IMPACTS OF ACTIVITIES
RELATED PRINCIPAL RISKS
(Pages 71 to 78)
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 a high value on data
privacy, and privacy is embedded throughout the
organisation. Regular reports are provided to the
Executive Committee and the Board.
– Staff are aware of their duties in relation to data
privacy. Mandatory data protection training is
provided to all staff at induction and on an annual
basis. We also provide more tailored, role-specific
training to staff 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
(2023: 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 to the independent
telephone line (2023: Nil). An open and transparent
culture means any concerns are raised directly to
the HR team or members of the Executive
Committee.
Risk 7 – Resourcing
Risk 9 – Regulatory
COMPLIANCE STATEMENTS CONTINUED
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COMPLIANCE STATEMENTS CONTINUED
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,
Workspace has provided information to
stakeholders on its climate-related risks and
opportunities, in turn helping them to make
informed decisions.
We have 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 net zero carbon commitment, which
ensures we are closely managing our
transition risks and building resilience.
The following section includes our
climate-related financial disclosures for
purposes of the Listing Rules and section
414CB of the Companies Act 2006, including
details on climate change scenarios and
how they may affect 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, taking into account Section C
of the TCFD Annex entitled “Guidance for
All Sectors” and (where appropriate) Section
E of the TCFD Annex entitled “Supplemental
Guidance for Non-Financial Groups”.
TCFD PILLAR AND
RECOMMENDATION RECOMMENDED DISCLOSURES
COMPLIANCE
STATUS PROGRESS TO DATE 2024/25 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 goal.
– Joint Audit and ESG meeting
held in January 2024 which
reviewed ESG policies and
related assurance.
– 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 97). Disclosure on
potential impact and
resilience of strategy
on page 98.
– 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 different
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
effectiveness 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
efficiency 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
TCFD
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The role of the Board
Our Chief Executive Officer 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.
Climate-related issues are regularly
considered by the Board as part of broader
decision-making processes regarding
strategy, risk management, budgeting,
business planning and overseeing the Group’s
performance objectives. To do this, the Board
is assisted by the ESG Committee comprising
of five independent Non-Executive Directors,
the Chief Executive Officer and the Chief
Financial Officer. 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: net zero pathway review, renewable
procurement strategy compliance with
changes to the Minimum Energy Efficiency
Standard (MEES) and effectiveness of our
climate-related policies. See page 181 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 net zero
carbon, renewable procurement and evolving
sustainability legislative requirements.
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 Towers 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. These 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 net zero
commitment. Anything beyond 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.
Climate risk remained a principal business
risk this year and the Board reviewed the
mitigation strategy and effectiveness 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 different 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 20% 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 pages 190 to 192 for further details.
Management responsibility
The Head of Portfolio Management is the
Executive owner of our climate strategy and
reports to the Board ESG committee on all
climate-related issues. 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 effects 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 efficiency 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.
COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
1. GOVERNANCE 2. STRATEGY
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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 offset
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 on
the bottom left).
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 179). This helped us narrow
down the material risks and opportunities
applicable to Workspace as shown on
page 97, 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 affecting 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 made a net zero carbon
commitment in line with the UK’s
commitment in Climate Change Act 2008
(2050 Target Amendment) Order 2019,
thereby minimising our risk. We are also
well positioned to capture the transition
opportunities, such as operational cost
efficiencies, lower cost of capital and
changing customer demands.
COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
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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 efficiency 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
efficiency or offsetting.
– Increased costs of raw materials.
– Increased costs associated with offsetting
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 efficiencies
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 4 buildings and risk
of localised flash flooding due to heavy
precipitation across 10 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 4 buildings and localised flash
flooding across 10 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 4 buildings and
localised flash flooding across 10 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.
COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
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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 life cycle of our
properties: 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 upgrades 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 there is no material
financial impact from climate-related issues,
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 54)
and this has enabled us to forward plan
investments on interventions such as energy
efficiency 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 has enabled
us to test the resilience of our strategy and
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 97). The geographic concentration
of our portfolio in London and low
vulnerability of assets to acute risks means
that the overall exposure to physical climate
risks is low, even under a 4°C scenario.
Our strategy and financial planning effectively
addresses the transition risk identified in
the 1.5°C scenario. Our sustainable business
model, whereby our carbon and energy
intensity is lower compared to the industry
average and our focus on repurposing older
buildings to meet high sustainability
standards ensures we are building resilience
across the business in the near to medium
term. Our robust operational platform, allows
us to proactively manage environmental
performance of our assets and mitigate
both physical and transition risks.
Given our long-term ownership of buildings,
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 (see pages 49 and 50), ensures we
are aligning our business to a 1.5°C warming
scenario and mitigating any potential risks.
Our net zero carbon
pathway ensures we are aligning
our business to a 1.5°C warming
scenario and mitigating any
potential risks.
Enterprise risk management framework
Risk management continues to be an integral
part of all our activities. Risks and opportunities,
including climate-related 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 179. Our processes for
identifying, assessing and managing climate-
related risks are fully integrated into our
overall risk management framework.
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 efficiently capture,
communicate and action any risk issues
identified.
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3. RISK MANAGEMENT
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IMPACT
Low Severe
Almost certain
LIKELIHOOD
Unlikely
4
3
2
1
1 2 3 4
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 that we will continue
to manage effectively. These are captured
in the tables on pages 100-101 along with
current mitigation strategy for the two
climate scenarios we have assessed.
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
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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 – LIKE LY 50-79%
2 – POSSIBLE 21-49%
1 – UNLIKELY <20%
Risk level:
Low
Moderate
High
RISK SCORING MATRIX
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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
– 25% of the Workspace portfolio is rated C and 23% is rated D and E.
Additional investment of £55–70m will be required to meet EPC A/B across
the portfolio by 2030 (c.£9–12m 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 c. £5-6m.
– 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 10.5% of portfolio to EPC A/B this year.
– A rolling programme of EPC and net zero audits is 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, of the building regulations.
– If the requirements were to get more stringent in future (say 50% reduction
or inclusion of offsetting for upfront carbon at planning stage), we would
need to design buildings differently, 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 25% of our customers factor in
sustainability as one of the top criteria in their choice of office space.
– We are rapidly decarbonising our portfolio in line with our net zero pathway,
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 efforts 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 efforts to explore new materials and technologies will help further
reduce embodied carbon of our developments.
MARKET – EMISSIONS OFFSET
– Our current emissions is around 23,500 tonnes of CO
2
e. In line with our
net zero pathway, we expect to reduce our emissions by 50% by 2030.
– Applying UCL projected cost of carbon at $100 per tonne* worst case
scenario, this could cost us up to £200k annually from the point we
achieve our net zero carbon target.
– Continue to drive progress on our net zero pathway to eliminate
scope 1 and 2 emissions.
– Continued efforts to explore new materials and technologies to reduce
embodied carbon of our developments and hence limit offsetting needed
for scope 3 emissions.
*Source: https://www.ucl.ac.uk/news/2021/jun/ten-fold-increase-carbon-offset-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 4 of our buildings. 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,
10 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
sufficient 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, affecting 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 efficient 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
affecting 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 effective.
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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 103).
– Total electricity consumption, including
proportion generated from renewables
(page 103).
– Proportion of electricity sourced from
renewable sources (page 106).
– Total fuel consumed on site (page 103).
– Building emissions intensity by floor area
(page 103).
– Total emissions from water consumption
(page 103).
– Total emissions from waste, waste recycled
and diverted from landfill (page 103).
– EPC split of the portfolio by floor area
(page 54).
– Number of buildings with sustainability
certification (page 46).
– Number of energy efficiency projects
implemented and associated capital
expenditure (page 45).
– Number of buildings exposed to flooding
(page 101).
– ESG metrics linked to remuneration
and performance against these
(pages 209 to 210).
– Internal carbon price (page 100).
Pages 44 to 54 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 49). Significant contributors
to our operational carbon emissions are the
electricity and gas consumed within our
buildings and by improving the energy
efficiency 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 103 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 efficiency initiatives
throughout the portfolio, whilst actively
engaging with both our site staff and customers.
Our main target is to deliver a net zero carbon
business (see pages 49 to 50 for the scope
of our commitment and underpinning targets).
This is underpinned by the following emissions
reduction targets:
– Aim to reduce our total greenhouse
gas emissions by 50% by 2030.
– Aim to fully decarbonise heating from
our portfolio by 2030.
– Drive significant reduction in absolute scope
3 emissions from capital goods and tenant
consumption, such that we are able to
reduce our overall emissions footprint
by 50% by 2030.
– Source 100% energy from renewable
sources.
– Undertake whole life carbon assessment of
all development and refurbishment projects.
– Note: we are revising our targets in line with
the updated net zero standard from the
Science Based Targets Initiative and aim to
publish our long-term net zero goal of 90%
reduction in emissions by next financial
year. In addition, we also monitor our
emissions from water and waste, and have
set performance improvement targets
(see pages 46 to 47).
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4. METRICS AND TARGETS
50%
REDUCTION IN ABSOLUTE
EMISSIONS BY 2030
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GREENHOUSE GAS (‘GHG’) EMISSIONS AND ENERGY USE DATA FOR STREAMLINED ENERGY & CARBON REPORTING (SECR)*
Source of emissions
2019/20 2022/23 2023/24
2023/24 vs 2022/23
% change
2023/24 vs 2019/20
% change
Scope 1 (Direct) 3,451 3,188 2,039 -36% -41%
Gas (tCO
2
e) 2,620 2,336 1,502 -36% -43%
Fugitive Emissions (tCO
2
e) 828 852 537 -37% -35%
Vehicle Emissions (tCO
2
e) 3 0 0 0% -100%
Scope 2 (Energy Indirect) 7,144 6,482 6,470 -0.2% -9%
Electricity (location based) (tCO
2
e) 7,02 1 6,300 6,304 0.07% -10%
Electricity (market based) (tCO
2
e) – 0 0 0% 0%
Purchased Heat (location based) (tCO
2
e) 123 182 166 -9% 34%
Purchased Heat (market based) (tCO
2
e) 123 182 166 -9% 34%
Vehicle Emissions (tCO
2
e) 0 0 0.3 0% +100%
Total Scope 1 & 2 (location based) 10,595 9,670 8,509 -12% -20%
Energy consumption used to calculate above emissions (kWh) 42,429,912 46,441,779 39,579,452 -15% -7%
Intensity Ratio: Net Lettable Area tCO
2
e/sq. ft. 0.00268 0.00182 0.00164 -10% -39%
Intensity Ratio: Gross Internal Area tCO
2
e/sq. ft. 0.00191 0.00134 0.00120 -10% -37%
Scope 3 (Other Indirect) 20,667 16,615 14,938 -10% -28%
Purchased Electricity Transmission & Distribution (tCO
2
e) 596 576 545 -5% -8%
Customer Direct Energy (tCO
2
e) 2,928 3,296 2,760 -16% -6%
Water Supply (tCO
2
e) 91 34 44 32% -51%
Water Treatment (tCO
2
e) 187 61 51 -18% -73%
Waste Management (tCO
2
e) 82 64 56 -13% -32%
Heat – Transmission & Distribution (tCO
2
e) 6.5 10.4 9 -16% 34%
Embodied carbon in development projects (tCO
2
e) 8,982 5,744 4,495 -22% -50%
Purchased goods and services (tCO
2
e) 7,647 6,511 6,574 1% -14%
Employee Commuting (tCO
2
e) 84 288 374 30% 346%
Business Travel (tCO
2
e) 74 31 29 -5% -61%
Total Scope 1, 2 & 3 (tCO
2
e) 31,272 26,285 23,447 -11% -25%
Total energy consumption – whole building (kWh) 55,120,583 63,677,033 53,089,368 -17% -4%
Total gas use – whole building (kWh) 15,617,931 16,137,792 9,781,267 -39% -37%
Total electricity use – whole building (kWh) 38,801,849 46,475,822 42,386,431 -9% 9%
Total purchased heat – whole building (kWh) 700,803 1,063,419 921,670 -13% 32%
Self-generated renewable electricity (kWh) 129,533 191,629 196,437 3% 52%
* Note: All figures reported relate to emissions and energy consumed in the United Kingdom.
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Reporting period:
1 April 2023 – 31 March 2024
Reporting Frequency – Annual, aligned
with financial reporting
Regulatory:
Schedule 7 of the Large and medium-sized
Companies and Groups (Accounts and
Reports) Regulations 2008
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.38% of NLA as at April
2023), we have estimated usage and
corresponding emissions have been included
under our scope 3 reporting.
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 106 to 107.
– 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
Performance
We achieved a 12% reduction in scope 1 and
scope 2 emissions across the portfolio. This
is underpinned by a reduction in Workspace
procured energy consumption by 15%, of
which significant savings of 36% was made
in gas use. The overall impact in emissions
reductions is lower due to a 7% increase in
grid electricity emissions factor this year.
The reduction in energy use was driven
by investment in high efficiency heat pump
installation across a number of properties and
optimisation of system controls and setpoints.
We also rolled out a number of energy
efficiency upgrades across the portfolio such
as LED lighting, presence detection sensors,
smart BEMS and ran several energy awareness
campaigns with customers.
Granular energy data analysis, active
management of energy use, controls
optimisation and continued roll out of energy
efficiency upgrades across the portfolio, have
all contributed towards delivering such an
impressive reduction.
As per Annex F of the Government’s SECR
guidance, the carbon intensity metric
recommended for the property sector is
tCO
2
e/sq. ft. This year, we have delivered a
savings of 10% in our emissions per sq. ft. NLA.
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). We also signed a long-term power
purchase agreement with a new solar plan
in Devon to procure over two-thirds of
our electricity.
Energy efficiency actions taken
during 2023/24
We have proactively identified and delivered
a range of energy efficiency projects across
our portfolio (invested £14m across 50
properties), such as LED and PIR lighting
upgrades, installation of secondary glazing
and a rolling programme of high efficiency
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 Facilities
Management teams to improve energy
management practices and reduce GHG
emissions. The Optergy portal is now live
at 46 sites and enables us to view and monitor
our energy consumption profiles, down to
the unit level.
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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 efficiency improvements.
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, we have included
estimations for gas consumption where we
have been made aware of tenants managed
gas supplies, and added corresponding GHG
emissions to previous year’s reported GHG
figures as well. GHG emissions calculated from
‘tenant direct’ electricity and gas consumption
are included in our scope 3 reporting.
On page 51, we present the energy use
intensity for each building in our portfolio.
The energy use is normalised by the total
internal area of each asset, revealing the
relative performance of individual buildings
and allowing us to benchmark it against
industry best practice. This normalisation
using total internal area allows us to take
into account extensive usage of common areas
provided as amenity spaces for our customers,
ensuring a comprehensive assessment of
energy efficiency of our buildings.
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
use of our company cab.
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 office construction,
480 kgCO
2
e/m
2
for logistics construction,
196 kgCO
2
e/m
2
for office retrofits involving
heat decarbonisation, 77kgCO
2
e/m
2
for light
office retrofits).
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. 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 flights and
car mileage claimed for business purposes
by our employees.
Emissions from commuting include carbon
emissions from homeworking in addition to
office commuting. Following our flexible
working policy implementation, we assumed
the Head Office employees to be working in
the office 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 Affairs)
2023 factors.
We are continually striving
to improve our environmental
and emissions data and are pleased
with the high visibility of scope 1
and scope 2 emissions across
our business.
Sonal Jain
Head of Sustainability
COMPLIANCE STATEMENTS CONTINUED
TCFD CONTINUED
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SASB SUSTAINABILITY ACCOUNTING STANDARD – REAL ESTATE METRIC
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 103, falling within our scope 1 and 2 emissions,
covers 98% for our office portfolio and 59% of our industrial portfolio's total nettable floor area,
as at 1 April 2023, 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 103. A portion 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 103.
(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 184 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 44 to 55 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 92% of our portfolio.
(2) 100% of our office properties and 59% 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. 41% 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 office properties and 100% 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. 0% 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 efficient design brief and adaptive landscaping around
our sites (page 47). We are also rolling out metering to gain better coverage of our water data.
COMPLIANCE STATEMENTS CONTINUED
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TOPIC ACCOUNTING METRIC CODE COMMENT
MANAGEMENT
OF TENANT
SUSTAINABILITY
IMPACTS
(1) Percentage of new leases that contain a cost
recovery clause for resource efficiency 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 57% of our total sales volume in 2023/24.
(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) 59% of tenant spaces are submetered for grid electricity consumption.
(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 36 sustainability-themed customer
events ranging from energy savings awareness to recycling and zero-waste workshops.
CLIMATE CHANGE
ADAPTATION
Area of properties located in 100-year flood zones, by
property subsector
IF-RE-450a.1 1,601,363 sq. ft. lettable area of offices and 65,418 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 94 to 102.
ACTIVITY METRIC CODE COMMENT
Number of assets, by property subsector IF-RE-000.A 71 offices
3 industrial assets
1 other (leisure)
Leasable floor area, by property subsector IF-RE-000.B 4,508,235 sq. ft. of offices
147,136 sq. ft. of industrial assets
98,255 of leisure assets
Percentage of indirectly managed assets, by property subsector IF-RE-000.C 2% of office space floor area is indirectly managed
41% of industrial floor area is indirectly managed
Average occupancy rate, by property subsector IF-RE-000.D 82% average occupancy rate across offices
96% average occupancy rate across industrial properties
COMPLIANCE STATEMENTS CONTINUED
SASB SUSTAINABILITY ACCOUNTING STANDARD – REAL ESTATE METRICS CONTINUED
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HOW GOOD
GOVERNANCE
ENSURES ‘IT ALL
HAPPENS AT
WORKSPACE’
FOR THE
LONG TERM
IN THIS SECTION
Workspace’s governance fosters
environments where our employees and our
customers can thrive and achieve their full
potential.
Our culture promotes collaboration,
innovation, and excellence. We are as driven,
diverse and innovative as our customers.
OVERVIEW
109 Governance highlights in 2024
110 Chair’s introduction to Governance
114 UK Corporate Governance Code 2018
BOARD LEADERSHIP AND COMPANY PURPOSE
116 CEO introduction
117 Our Board
121 Board activities 2023/24
131 Section 172(1) statement
133 Key Board decisions in 2023/24
DIVISION OF RESPONSIBILITIES
135 Company Secretary introduction
136 Board roles and responsibilities
138 Our governance framework
139 How we govern
COMPOSITION, SUCCESSION AND EVALUATION
146 Chair of the Nominations Committee
introduction
148 Nominations Committee Chair’s letter
149 The role of the Nominations Committee
150 Nominations Committee activities in 2023/24
AUDIT, RISK AND INTERNAL CONTROL
166 Chair of the Audit Committee introduction
168 Audit Committee Chair’s letter
170 The role of the Audit Committee
172 Significant matters considered by the
Committee
174 Developing a robust Viability Statement
175 Fair, balanced and understandable reporting
175 External audit
178 Risk management and internal controls
ESG COMMITTEE REPORT
180 Chair of the ESG Committee introduction
182 ESG Committee Chair’s letter
185 ESG policies, procedures and related
assurance
REMUNERATION
186 Chair of the Remuneration Committee
introduction
188 Remuneration Committee Chair’s letter
191 Consideration of the experience of our
stakeholders
193 Summary of Executive Directors’ Total
Remuneration
195 Aligning our remuneration principles with our
purpose and strategy and the experience
of all our stakeholders
198 Our Remuneration Policy
202 Annual report on remuneration
218 Report of the Directors
221 Statement of Directors’ responsibilities in
respect of the annual report and the financial
statements
How we embed our culture
Pages 112 to 113
Diversity and inclusion
Pages 158 to 165
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EMPLOYEE ENGAGEMENT
Further developed our employee engagement
programme to amplify the employee voice in
the boardroom.
An engaged workforce helps
us deliver for our customers.
Duncan Owen
Non-Executive Chair
+8.5%
DIVIDEND GROWTH
73%
Read more about our employee engagement
Pages 25 to 126
GOVERNANCE HIGHLIGHTS IN 2024
BOARD PERFORMANCE NEW BOARD APPOINTMENTS
Appointed Lawrence Hutchings as CEO on
a date to be confirmed and David Stevenson
as a new Non-Executive Director from
1 June 2024.
FAVOURABLE ENGAGEMENT SCORE
FROM 2024 STAFF SURVEY
Read more about the external performance review
Pages 155 to 156
DIVIDEND
28.0p
2024 28.0
25.8
21.5
2023
2022
EXECUTIVE LEADERSHIP ASSESSMENT
Focused on building a strong pipeline of talent
by appointing Heidrick & Struggles to conduct
a leadership assessment programme for
members of the Executive Committee.
10-year
Solar energy deal
Read more about the deal
Page 133
Read more about the
process we followed
Pages 151 to 152
SOLAR ENERGY DEAL
Entered a 10-year Corporate Power Purchase
Agreement to supply two-thirds of the Group’s
electricity demand from renewable sources.
REDUCING OUR IMPACT
-20%
REDUCTION IN SCOPE 1 AND 2 EMISSIONS
2019/20 TO 2023/24
David Stevenson
Independent Non-Executive Director
Duncan Owen
Non-Executive Chair
CHAIR’S INTRODUCTION TO GOVERNANCE
A strong foundation of
corporate governance underpins
our business and operations,
ensuring accountability to
all our stakeholders.
QUICK LINKS
Chair’s introduction to governance Page 110
Board leadership and company purpose Page 116
Division of responsibilities Page 135
Composition, succession and evaluation Page 146
Audit, risk and internal control Page 166
ESG Committee report Page 180
Remuneration Page 186
Report of the Directors Page 218
Statement of Directors’ responsibilities Page 221
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CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
Dear shareholder,
This is my first Chair’s governance letter,
having assumed the role of Chair in July
2023. I would like to thank the Board, the
Executive Committee and all Workspace staff
for all of their assistance during my first year
as Chair. A strong foundation of corporate
governance remains a priority for the Board
as we seek to deliver the Company’s long-
term strategy.
Board changes and succession planning
My predecessor, Stephen Hubbard, stepped
down from the Board in July 2023 after nine
years on the Board. I would like to thank
Stephen for his significant contribution to
the growth of the Company over his tenure.
A key focus this year has been the search for
a new CEO. In January 2024, Graham Clemett
announced his intention to retire as CEO
during 2024, once a successor was found and
once an appropriate handover is completed.
After a rigorous selection process, I am
delighted that Lawrence Hutchings has been
appointed as CEO and will be joining us on a
date to be confirmed. Read more about our
CEO appointment process on page 151.
During the year we also appointed David
Stevenson as a new Non-Executive Director,
with effect from 1 June 2024. Read more
about David and our NED appointment
process on page 152.
Long-term succession planning remains
a priority for the Board. This year, the
Nominations Committee requested an
executive leadership assessment for
members of the Executive Committee.
Read more about the executive leadership
assessment on pages 120 and 152.
Sustainability
The Board remains focused on the
long-term sustainability of the Company
and its business. In December 2023, the
Board approved the Company’s entry
into a 10-year Corporate Power Purchase
Agreement (‘CPPA’) with Statkraft, Europe’s
largest generator of renewable energy, to
supply around two-thirds of the Group’s
expected electricity demand for the next 10
years with effect from 1 February 2024. This
agreement marks the first clean energy CPPA
made by a London office provider to date,
sourcing electricity directly from a renewable
energy generator. This move further solidifies
Workspace’s position as a market leader
in providing sustainable work spaces and
accelerating our transition to being net
zero carbon. Read more about the CPPA
on pages 28 and 184.
External Board performance review
This year the Board participated in an
external Board performance review,
facilitated by Fidelio Partners Board
Development & Executive Search Ltd
(‘Fidelio’). The external performance review
included assessment of the effectiveness of
the Board and its Committees as a whole as
well as the effectiveness of the Chair and
Non-Executive Directors. I am pleased to
report that the Board and its Committees, as
well as the Chair and Non-Executive Directors,
were considered to be working effectively.
Read more about the external Board
performance review on page 155.
Employee engagement
Having taken over the role of Non-Executive
Director for employee engagement from
Stephen Hubbard, I have enjoyed meeting
more of our staff and hearing their feedback
and ideas. We have continued the successful
employee feedback sessions introduced by
Stephen, and they continue to be a valuable
forum for hearing the employee voice.
I have also been particularly keen that other
members of the Board have the opportunity
to hear from staff directly and this year Rosie
Shapland and Lesley-Ann Nash joined me at
the sessions. Read more about the impact of
our employee feedback sessions and our
employee engagement more generally
on pages 25 and 126 to 127.
Looking forward
The Board continues to believe in the
importance of governance practices that
support and align with our business and
strategy. In particular, the Board is taking
on board the new provisions of the UK
Corporate Governance Code 2024, the
majority of which will start to apply from
next year. We remain focused on the
continued evolution of our governance
framework to maintain our high standards
of business conduct.
Duncan Owen
Non-Executive Chair
4 June 2024
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A strong foundation of
corporate governance remains
a priority for the Board as we
seek to deliver the Company’s
long-term strategy.
BREAKFAST AND LUNCH SESSIONS
The Chair and Non-Executive Directors meet
with staff a number of times a year over an
informal breakfast or lunch.
Cultural insight
These informal sessions promote an
environment where staff feel they can give
their honest feedback directly to Board
members. For example, this year staff
commented that customers often seek
our advice on furnishing their units.
Outcome and Actions
The Chair and Non-Executive Directors
report back to the Board on topics and
feedback discussed. This year we have
taken forward a number of suggestions
from these sessions, including how we can
assist customers with furniture provision.
‘TOWN HALL’ EVENTS
Our CEO, CFO and members of the Executive
Committee lead ‘town hall’ events to provide
business updates to employees. Staff have the
opportunity to ask questions and make comments,
via an anonymous facility if they wish.
Cultural insight
In ‘town hall’ sessions this year, staff
commented that our reinstatements process
could be confusing for customers, and
sometimes resulted in good quality fit-outs
being unnecessarily removed and replaced.
Outcome and Actions
This year we streamlined our customer
reinstatements process, including added
flexibility for fit-outs to remain if they are
good quality.
SITE VISITS
Members of the Board regularly visit our
business centres and engage with our centre
staff to gain insight into their day-to-day roles
supporting our customers.
Cultural insight
This year, centre teams suggested that our site
access systems could be modernised to make
access control easier for customers and staff.
Outcome and Actions
Any feedback received during site visits
is passed on to the relevant Executive
Committee member to consider. Following
the feedback regarding access control, we
have continued roll-out of our new access
control app.
ANNUAL EMPLOYEE SURVEY
The annual staff survey seeks detailed
feedback from staff in a wide range of areas.
Cultural insight
Our survey results revealed that our staff care
deeply about diversity & inclusion among our
employee population, customers, suppliers
and other stakeholders.
Outcome and Actions
Over the last year we have developed an
Equity, Diversity & Inclusion framework,
informed by feedback from the staff survey
and with input from a range of teams. See
page 58 for more details.
CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
THE BOARD
ASSESSES
CULTURE AND
MONITORS HOW
IT IS EMBEDDED
WHY WE DO IT
An engaged and motivated workforce
helps us deliver for our customers.
HOW WE DO IT
The Board continues to develop how it
assesses and monitors our culture and how
our culture is embedded through a variety of
channels as described on the following pages.
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STAFF SUGGESTION BOARD
We operate an online staff suggestion board,
allowing our employees to share ideas and
feedback for improvements to our business.
Cultural insight
Our online suggestion board allows our staff
to share day-to-day feedback and comments.
For example staff used the online Board to
suggest that our process for onboarding
suppliers could be time consuming.
Outcome and Actions
Suggestions are reviewed by the Executive
Committee and passed on to department
heads to consider. This year, a new supplier
onboarding system was developed in
response to feedback received via the
suggestions board.
DIVERSITY & INCLUSION
The Board and the Nominations Committee
regularly monitor diversity at Workspace.
Our employees are able to self-report a
variety of characteristics via our HR system
(around 98% of staff have self-reported),
with aggregate data reviewed by our
Executive Committee.
Cultural insight
Our review of our diversity data this
year revealed increases in the number
of employees identifying as LGBTQIA+,
those from nationalities other than British
and those whose first language is not English.
Outcome and Actions
The Board and Executive Committee
continue to further diversity and inclusion
initiatives at Workspace. This year, we have
implemented new recruitment software
which can be used to implement initiatives
such as anonymising CVs. Read more about
our diversity initiatives on pages 163 to 164.
We have also set a target for ethnic diversity
within our Executive Committee and Senior
Managers of 16% by December 2027 (see
page 162 for more details).
REMUNERATION
The Remuneration Committee reviews
the Group’s employee pay structures and
their alignment with our purpose, values
and strategy.
Cultural insight
This year the Committee remained particularly
mindful of the challenges faced by our staff in
the current economic environment.
Outcome and Actions
It was agreed that for 2024/25, staff salaries
would increase by 5%, as well as that payment
being accelerated to April. Read more on
page 191.
WHISTLEBLOWING REPORTS
Our Whistleblowing Policy, applicable to all
staff, encourages openness in reporting
misconduct.
Cultural insight
Staff feel able to report misconduct without
fear of repercussions.
Outcome and Actions
Any whistleblowing reports made are
treated seriously and immediately
investigated, with appropriate remedial
action taken where required.
INFORMAL FEEDBACK
Any significant informal staff feedback
received is reported to the Board by the
Executive Committee.
Cultural insight
A number of staff commented on how much
they valued our employee health cash plan.
Outcome and Actions
When we decided to end our arrangement
with our current cash plan provider, we made
it a priority to implement an alternative. Our
new cash plan with BUPA was launched in
April 2024.
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Our employees are our
eyes and ears, dealing
with our customers and
other stakeholders daily.
87%
RESPONSE RATE TO 2024
EMPLOYEE SURVEY
73%
FAVOURABLE ENGAGEMENT
SCORE FROM 2024 SURVEY
3
EMPLOYEE SESSIONS WITH THE
CHAIR AND NON-EXECUTIVE
DIRECTORS
11
BOARD SITE VISITS
6
TOWN HALL EVENTS
CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
THE BOARD ASSESSES CULTURE AND MONITORS HOW IT IS EMBEDDED CONTINUED
UK CORPORATE
GOVERNANCE CODE 2018
Compliance statement
The Board confirms that, for the year ended 31 March 2024,
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 effect 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.
We are aware of the publication of the new UK Corporate
Governance Code 2024, the majority of which will apply to us
from 1 April 2025. The Board and its Committees have spent
time reviewing the 2024 Code to assess our continuing
compliance and we have already started a number of
initiatives to address the applicable changes.
Principles of the UK Corporate
Governance Code 2018
More
information
Board leadership and company purpose 114
Division of responsibilities 114
Composition, succession and evaluation 115
Audit, risk and internal control 115
Remuneration 115
BOARD LEADERSHIP AND COMPANY PURPOSE
Pages 116 to 134
Our focus as a Board is always on
delivering the Company’s strategy for
the benefit of all our stakeholders.
Graham Clemett
Chief Executive Officer
Principal A
A successful company is led by an effective
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 117
CEO succession
Page 151
Board performance
review
Page 156
Principal 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.
96%
OF EMPLOYEES BELIEVE OUR VALUES
ALIGN PERFECTLY WITH OUR CULTURE
Our purpose
Pages 18 and 123
Our strategy
Page 35
Sustainability
Page 39
Principal 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 effective
controls, which enable risk to be assessed and
managed.
Our business model
Page 9
Our governance
framework
Page 138
Principal risks
and uncertainties
Page 71
Principal D
In order for the company to meet its
responsibilities to shareholders and
stakeholders, the board should ensure
effective engagement with, and encourage
participation from, these parties.
Our stakeholders
Pages 18 to 25 and
125 to 128
Section 172(1) statement
Page 131
Principal 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 18
Sustainability
Page 39
Whistleblowing Policy
Page 93
DIVISION OF RESPONSIBILITIES
Pages 135 to 145
A clear division between
Board roles
provides accountability.
Carmelina Carfora
Company Secretary
Principal F
The chair leads the board and is responsible
for its overall effectiveness 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 effective contribution of all non-executive
directors, and the chair ensures that directors
receive accurate, timely and clear
information.
Board roles and
responsibilities
Page 136
Chair’s governance
letter
Page 111
Board performance
review
Pages 155 to 156
Principal 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 136
Non-Executive
Directors
Page 139
The relationship
between the Board
and the Executive
Committee
Page 141
Principal H
Non-executive directors should have
sufficient time to meet their board
responsibilities. They should provide
constructive challenge, strategic guidance,
offer specialist advice and hold management
to account.
Board roles and
responsibilities
Page 136
Non-Executive
Directors
Page 141
Principal 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
effectively and efficiently.
Our governance
framework
Page 138
Information flow
to the Board
Page 144
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CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
REMUNERATION
Pages 186 to 217
AUDIT, RISK AND INTERNAL CONTROL
Pages 166 to 179
COMPOSITION, SUCCESSION AND EVALUATION
Pages 146 to 165
The Audit Committee plays a key role in
promoting the maintenance of a strong
and transparent control environment.
Rosie Shapland
Chair of the Audit Committee
Principal M
The board should establish formal and
transparent policies and procedures
to ensure the independence and the
effectiveness of internal and external audit
functions. The board should satisfy itself on
the integrity of financial and narrative
statements.
Audit Committee
Report
Page 166
Principal N
The board should present a fair, balanced
and understandable assessment of the
company’s position and its prospects.
Fair, balanced and
understandable
reporting
Page 175
Principal 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 138
Audit Committee
Report
Page 166
Principal risks
and uncertainties
Page 71
Our focus is on a Remuneration
approach that motivates our people and
supports our strategic objectives.
Lesley-Ann Nash
Chair of the Remuneration Committee
Principal 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 188
Remuneration
at a glance
Page 191
Our remuneration
policy
Page 198
Principal 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 188
Our remuneration
policy
Page 198
Principal 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 188
Our approach
to fairness and
wider workforce
considerations
Page 203
The right balance of experience and
skills within our Board and senior
management is vital.
Duncan Owen
Chair of the Nominations Committee
Principal J
Appointments to the board should be
subject to a formal, rigorous and transparent
procedure, and an effective 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.
CEO succession
Page 151
Appointment
of new NED
Page 152
Inclusion and
diversity
Page 158
Principal 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 154
Principal L
Annual evaluation of the board should
consider its composition, diversity and how
effectively members work together to
achieve objectives. Individual evaluation
should demonstrate whether each director
continues to contribute effectively.
Board performance
review
Page 155
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CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED
UK CORPORATE GOVERNANCE CODE 2018 CONTINUED
£2.4bn
PROPERTY VALUATION
5%
PAY INCREASE
FOR EMPLOYEES
16%
TARGET SET FOR ETHNIC MINORITY
REPRESENTATION IN EXECUTIVE
AND SENIOR MANAGEMENT BY 2027
Graham Clemett
Chief Executive Officer
BOARD LEADERSHIP AND COMPANY PURPOSE
Our focus as a Board is always
on delivering the Group’s
strategy for the benefit
of all our stakeholders.
QUICK LINKS
Our Board Page 117
Board and Committee meeting attendance Page 120
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD
Duncan Owen
Non-Executive Chair
Graham Clemett
Chief Executive Officer
Dave Benson
Chief Financial Officer
Rosie Shapland
Non-Executive Director
Lesley-Ann Nash
Non-Executive Director
Manju Malhotra
Non-Executive Director
Nick Mackenzie
Non-Executive Director
David Stevenson
Non-Executive Director
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Board meeting attendance
Page 120
Composition, skills and diversity
of the Board
Pages 118 to 120 and 159
1
4 5 6 7 8
3
Our diverse and experienced
Board supports the delivery
of our strategy.
Duncan Owen
Non-Executive Chair
2
NON-EXECUTIVE CHAIR EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
DUNCAN OWEN
INDEPENDENT NON-EXECUTIVE DIRECTOR
GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
1
DAVE BENSON
CHIEF FINANCIAL OFFICER
Committee membership
•
REMUNERATION
•
NOMINATIONS (CHAIR)
•
ESG
1
Committee membership
•
ESG
•
EXECUTIVE (CHAIR)
•
INVESTMENT (CHAIR)
•
DISCLOSURE (CHAIR)
Committee membership
•
ESG
•
EXECUTIVE
•
INVESTMENT
•
DISCLOSURE
Appointed
Board: July 2021
Chair: July 2023
Appointed
Board: July 2007
CEO: September 2019
Appointed
April 2020
Current external appointments
Duncan is a Non-Executive Director and
Chair-elect at Link PLC, Asia’s largest REIT,
where he is a member of their Nomination,
Sustainability and Finance and Investment
Committees. He is also Chair of Sellar, the
large-scale London developer and asset
manager of large multiple-use schemes such
as the Shard and Paddington Square, where
he is Chair of their Investment Committee.
Current external appointments
Graham does not have any current
external appointments.
Current external appointments
Dave does not have any current
external appointments.
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 Office 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.
1. Duncan assumed the role of Chair of the Board in July 2023.
2. Duncan stepped down as Chair of ESG Committee
on 1 April 2024.
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 seventeen 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, the majority as Group Financial
Controller. He was a Non-Executive Director
and Senior Independent Director at The
Restaurant Group from 2016 until December
2023. 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.
1. On 25 January 2024, Graham announced his intention
to retire as CEO during 2024.
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.
Led by our Chair, Duncan Owen, 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.
Details of individual attendance at Board
meetings held during the year are set out
on page 120.
More information on the skills and the
experience of the Board members can
be found on page 159.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
21 3
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR
ROSIE SHAPLAND
SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR
LESLEY-ANN NASH
INDEPENDENT NON-EXECUTIVE DIRECTOR
MANJU MALHOTRA
INDEPENDENT NON-EXECUTIVE DIRECTOR
NICK MACKENZIE
INDEPENDENT NON-EXECUTIVE DIRECTOR
Committee membership
•
REMUNERATION
•
NOMINATIONS
•
AUDIT (CHAIR)
•
ESG
Committee membership
•
REMUNERATION (CHAIR)
•
NOMINATIONS
•
AUDIT
•
ESG
Committee membership
•
NOMINATIONS
•
AUDIT
•
ESG (CHAIR)
Committee membership
•
NOMINATIONS
•
ESG
Appointed
November 2020
1
Appointed
January 2021
1
Appointed
January 2022
1
Appointed
January 2022
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.
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 Non-Executive Director on the
board of Homes England where she chairs
their Nominations and Remuneration
Committee, and a Non-Executive Director on
the board of BusinessLDN, where she chairs
their audit and remuneration committees.
Current external appointments
Manju is a Non-Executive Director and
Audit Committee Chair at abrdn UK
Smaller Companies Growth Trust plc
and a Non-Executive Director at London
& Partners, an international trade and
investment agency for London.
Current external appointments
Nick is CEO at Greene King, the pub
retailer and brewer.
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.
Relevant skills, business experience
and contribution
Lesley-Ann was previously a Director in the
Cabinet Office 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.
Relevant skills, business experience
and contribution
Manju was CEO at Harvey Nichols until
31 December 2023. 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.
1. Manju assumed Chair of the ESG Committee
on 1 April 2024.
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
has recently been appointed as Chair of
British Beer & Pub Association and is also
an advisory board member of WiHTL.
5 6 7
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
4
A foundation of strong
governance is essential for the
Board to carry out its role.
Carmelina Carfora
Company Secretary
NON-EXECUTIVE DIRECTOR
DAVID STEVENSON
INDEPENDENT NON-EXECUTIVE DIRECTOR
Committee membership
•
NOMINATIONS
•
ESG
Appointed
June 2024
Current external appointments
David is a Non-Executive Director at listed
funds Gresham House Energy Storage,
Aurora and Castelnau. He is also a director
at investor relations specialist Doceo.tv.
Relevant skills, business experience
and contribution
David has been an investment columnist
for the Financial Times for over 15 years and
also writes regular columns for Citywire and
Moneyweek, as well as for Investment Week
and the Investor’s Chronicle in previous
years. In addition, David has built up a
number of media businesses, including
corporate comms business The Rocket
Science Group, fintech news service AltFi
and most recently, www.etfstream.com,
a fast-growing brand focused on the ETF
industry.
BOARD MEMBERS MEETING ATTENDANCE
Board Audit Remuneration Nominations ESG
Duncan Owen
1
7/ 7 – 4/4 3/3 4/4
3
Graham Clemett 7/ 7 – – – 4/4
3
Dave Benson 7/ 7 – – – 4/4
3
Rosie Shapland 7/7 5/5
3
7/ 7 3/3 4/4
3
Lesley-Ann Nash 7/ 7 5/5
3
7/ 7 3/3 4/4
3
Manju Malhotra 7/ 7 5/5
3
– 3/3 4/4
3
Nick Mackenzie 7/7 – – 3/3 4/4
3
Stephen Hubbard
2
3/3 – 3/3 – 1/1
1. Duncan Owen was appointed as Chair of the Board on 6 July 2023.
2. Stephen Hubbard stepped down from the Board with effect from the close of the Company’s AGM on 6 July 2023.
3. The Audit Committee meeting in January 2024 was a joint meeting with the ESG Committee.
CARMELINA CARFORA
COMPANY SECRETARY
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.
Diversity and Inclusion at Workspace
Pages 158 to 165
8
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
OUR BOARD CONTINUED
Page
STRATEGY 121
OPERATIONS 122
PURPOSE, VALUES AND CULTURE 123
STAKEHOLDERS 125
FINANCE 129
REPORTING 129
RISKS 129
SUCCESSION 130
GOVERNANCE 130
BOARD ACTIVITIES
2023/24
STRATEGY
ANNUAL STRATEGIC
REVIEW
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
The Board held its annual
strategic review in
September 2023. 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, and further
presentations were made
by Executive Committee
members at the Board
meeting in January 2024, at
which the five-year plan was
approved. See page 17 for
further details.
STRATEGY
DEVELOPMENT
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
During 2023/24, members
of the Executive Committee
held workshops with senior
managers to ascertain views
on the Group’s vision and
strategic direction. This
engagement helped inform
strategy presentations
given to the Board and
culminated in an externally
facilitated strategy workshop
in February 2024. During
this, the Executive
Committee and 18 senior
managers discussed and
challenged the Group’s
vision and strategy. Outputs
have been fed back to the
Board and teams throughout
the business.
7
BOARD MEETINGS
Our strategy
Pages 35 to 38
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
SUSTAINABILITY AGENDA
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
The Board ESG Committee
provides a dedicated forum
for discussion of ESG-related
matters. During the year,
discussions included ESG
strategy and governance,
monitoring progress against
our science-based targets to
transition to net zero carbon
and approving a 10-year
Corporate Power Purchase
Agreement to supply
two-thirds of the Group’s
electricity demand for
the next 10 years from
renewable energy sources.
Throughout the year, the
Board also received regular
updates from the
sustainability team on
the Group’s sustainability
activities and reviewed
assurance plans for ESG
policies and procedures.
STRATEGY CONTINUED
Sustainability
Pages 39 to 65
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 improving the
overall portfolio offering and
the customer experience,
monitored 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 18
to 24 and 128.
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.
PORTFOLIO MANAGEMENT
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
The Board has been kept
up to date 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 45 and 65.
During the year the Board
also approved the disposals
of a number of non-core
assets for a total of
£143 million.
OPERATIONS
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
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. The Board sets the
Group’s strategy, makes
decisions and engages with
our stakeholders through
the lens of our purpose.
The Board has continued to
monitor how our purpose is
articulated and understood
by our stakeholders, and
how our values are
embedded throughout our
business. This is achieved
through regular engagement
with all stakeholders, more
information on which can
be found on pages 18 to 28.
The Board also approves
the Group’s key policies
and practices to ensure
they support our purpose.
The Executive Committee
is responsible for
communicating these policies
throughout our business.
VALUES
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
Our purpose informs our
values: ‘know your stuff’,
‘show we care’, ‘find a way’
and ‘make it fun’.
The Board encourages all
employees to live our values
in their day-to-day work for
the Group and especially
in their dealings with
each other and all our
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.
We also hold shadowing
days where employees
from different teams are
paired up and spend time
shadowing each other to
learn how we can all work
together more effectively.
This year, 116 people
shadowed each other.
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. The Board
monitors how our culture is
embedded by the Executive
Committee in a number of
ways. Read more on pages
112 and 113.
This is underpinned by our
compliance policies and
Code of Conduct, which
are reviewed by the
Board annually.
Our values
Page 23
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
This year Carmelina,
our Company Secretary,
and I shadowed each other.
It was interesting to learn
more about how she
supports our Board and to be
able to show her how I deal
with customer enquiries.
I felt we both learnt a lot and
came away understanding
each other’s roles better and
really appreciating how much
we all contribute to the
success of the Company.
Brittney Wallace
Enquiries Agent
PURPOSE, VALUES AND CULTURE CONTINUED
Q
What is our Workspace Way training?
A
_
Our Workspace Way training helps us
think about how we work together, live our
values and, ultimately, support our
customers. We talk about inter-departmental
processes, learn and understand other teams’
challenges and discuss how we can further
improve collaboration between teams. Our
sessions this year have focused in particular
on how we can all add value to our internal
and external customers. This year, 258 people
completed the training. As well as attending
the training session, all staff make a promise
to complete a shadowing day with a
colleague during the year.
Q
How does the employee shadowing work?
A
_
We pair up every employee with a
colleague from a different team. Each person
spends half a day shadowing the other,
seeing the work they do and the challenges
they face. After the shadowing, staff reflect
on what they have learned and how aspects
of their own role or working style might have
an impact upon their colleague and what
improvements could be made.
Q
What’s next?
A
_
We have just launched a new learning
management system (LMS), which enables
us to enhance our blended learning solution
and ultimately create a great learning culture.
The long-term goal for our LMS is to enable
self-guided learning and clear career
pathways. This year, we will be focusing
on expanding our career pathways,
developing content for the LMS, launching
an apprenticeship programme and
supporting Workspace employees with
changes to finance and customer systems.
Q
How does our training embed our culture?
A
_
We offer a wide range of training to all
employees every year; from upskilling and
operational courses to training on key areas
of our internal Code of Conduct, such as
anti-bribery and data protection, to our
Workspace Way training, which is focused
on how we can build on our open and
collaborative culture.
The aims of our training programme are
to educate our staff on our culture of
integrity, transparency and openness,
while encouraging independent thought and
taking initiative. We aim to ensure all training
supports the business goals and ambitions
but also drives active collaboration through
our shared values and common sense
of purpose.
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EMBEDDING
OUR CULTURE
Adam Austin
Learning and Development Manager
WHY WE DO IT
We want all our staff to live
our culture and values.
HOW WE DO IT
Training that promotes our culture.
BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
STAKEHOLDERS
INVESTOR RELATIONS CALENDAR OF EVENTS 2023/2024
Investor events Investor meetings Investor tours
April – Q4 business update
3
May – Global real estate conference 23
June – Full-year results
– Investor roadshow
– Global real estate conference
29
July – AGM & Q1 update 1
August 1
September – Global real estate conference 1
October – Q2 business update
November – Half-year results
– Investor roadshow
18
December 3
January – Q3 business update
– Global real estate conference
6
February
March – Q4 business update
– Global real estate conference
12
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
and 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 engagement,
including formal
announcements, the 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 markets
days, business media
outreach, industry events,
as well as ad hoc contact
with stakeholders to ensure
our strategy and value
creation are well understood
by the market and wider
stakeholder community.
See page 27 for details of
the topics raised by investors.
During 2023/24, we engaged
with 165 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
Corporate Communications
and Investor Relations team
and Group Financial
Controller. Key investor
engagement during the
year included the following:
– 97 investor meetings
(in-person and virtual).
– 19 site tours.
– 6 real estate conferences
attended globally.
– Annual General Meeting.
Duncan Owen has engaged
with shareholders following
his appointment as Chair
in July 2023 and after the
announcement that Graham
Clemett intends to retire
as CEO during 2024. For
further details, see page 151.
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.
2023 2024
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BOARD ACTIVITIES 2023/24 CONTINUED
97
Investor meetings
STAKEHOLDERS CONTINUED
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
difficulty 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 2023 AGM was held on 6
July 2023 and all resolutions
passed with over 95% of
votes in favour. Our 2024
AGM will be held at the
Company’s Eventspace
venue at 29 Finsbury Circus,
London, EC2M 5SD on
Thursday 25 July 2024
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 2024 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 offers and
offers 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.
Following a competitive
audit tender in 2023, BDO
LLP (BDO) have been
identified as the proposed
new External Auditor for the
year ending 31 March 2025,
subject to final shareholder
approval at the next AGM on
25 July 2024. More detailed
information on the selection
and appointment process
can be found on page 177.
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.
Duncan Owen is our
designated Non-Executive
Director responsible for
employee engagement, as
the Board considers this the
most effective method to
ensure the employee voice is
heard at the very top of the
organisation. This year, we
held three breakfast or lunch
sessions with employees.
Duncan attends these
sessions with one or more
additional Non-Executive
Director. See pages 25 and
127 for further details of the
Chair breakfast and lunch
sessions and topics raised.
Duncan and the other
Non-Executive Directors in
attendance report back to
the Board after every session
to ensure the feedback
gained from our staff is
effectively communicated
to the Board as a whole.
Throughout the year, the
Board held its meetings
across the Company’s
portfolio. The Strategy Day
in September was held at
Salisbury House, and the
Board meeting in March
was held at the Barley Mow
Centre, with Board members
given a full site tour by the
Centre Managers. In the
current year, the first Board
meeting scheduled took
place at Centro Buildings.
Employee engagement
Pages 25 to 26
Investor engagement
Page 27
Our people are at the heart
of our business, supporting
our customers and other
stakeholders every day.
Claire Dracup
Director of People & Culture
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
This year, Non-Executive Directors Lesley-
Ann Nash and Rosie Shapland joined me at
the October 2023 and March 2024 sessions.
We have also added flexibility to the timings,
introducing lunchtime sessions as well as
breakfasts, so that our employees can attend
at times convenient to them. As a Board we
also receive regular updates from the
Executive Committee on employee feedback,
including formal feedback from our annual
staff survey and informally via conversations
between staff and members of the Executive
Committee. I’ve really enjoyed seeing
Workspace’s dynamic culture and values
in action.
Q
What were the themes raised this year?
A
_
Our people shared the issues and ideas
for improvement that they hear from our
customers on a day-to-day basis. Topics
discussed included furniture provision,
improving our processes for customers
moving within Workspace and more
effectively communicating with all people
who work in our centres, all of which are now
being actively looked at, or have been
addressed. Employees also reported that
sustainability continues to be a key priority
for our customers.
Q
What does the Board want to focus on
in the next year?
A
_
We are looking to further amplify
the employee voice in the boardroom by
continuing to invite other Directors to the
employee engagement sessions. We will also
continue to focus on diversity and inclusion,
as we build on our existing initiatives in this
space. I very much look forward to continuing
my engagement with our people in the
coming year.
Q
How have you found your first year as
Non-Executive Director for employee
engagement?
A
_
I took over the role of Non-Executive
Director for employee engagement when
I became Chair in July 2023. I believe it
is vital that the Board has the opportunity
to regularly hear the perspective of
employees. I have continued with the
successful programme of employee sessions
started by my predecessor Stephen Hubbard,
which as always have included a mix of
employees from different job roles, ensuring
I hear a wide mix of views from across the
business. I have found it invaluable to listen
directly to our employees’ feedback and
ideas particularly their views on our culture
and their ideas on how to better serve our
customers.
Q
How do you ensure the employee voice
is heard in the boardroom?
A
_
I report back to the Board on the key
themes raised after each session, but I am
also keen that the other Non-Executive
Directors have the opportunity to hear
directly from our employees.
STAKEHOLDERS CONTINUED
127
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MAKING SURE
THE EMPLOYEE
VOICE IS HEARD
Duncan Owen
Non-Executive Chair
WHY WE DO IT
Our people deal with our customers
every day so it’s important the Board hears
their perspective.
HOW WE DO IT
Members of the Board hear directly from
our employees at breakfast and lunch sessions.
BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
STAKEHOLDERS CONTINUED
BUSINESS RELATIONSHIP
ENGAGEMENT
COMMUNITY AND
ENVIRONMENT
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
are collated and fed back to
the Board, and incorporated
into decision making.
This year we launched a
new supplier onboarding
portal in response to
feedback from suppliers
and employees that our
previous process could
be time consuming.
Business relationship
engagement
Pages 19 to 24 and 27
Relevant stakeholders
•
COMMUNITIES
•
ENVIRONMENT
The Board remains
committed to reaching our
target of becoming a net
zero carbon business. All
new Board members receive
an induction on the Group’s
approach to sustainability.
Our Board-level ESG
Committee provides a forum
for the Board to dedicate
discussion to the progress
with our sustainability
objectives and to review
updates from the
sustainability team. The
Board is also regularly
updated on our wellbeing
initiatives, community and
social impact work and
our fundraising activities for
our charity partner, Single
Homeless Project. This year
the Board approved the
Group’s entry into the
10 year Corporate Power
Purchase Agreement
(see page 28 for details).
Community engagement
Page 28
Employees on the Workspace
Walk to raise money for Single
Homeless Project.
128
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
We support our local
communities through our social
impact work and fundraising
for our charity partner.
Sonal Jain
Head of Sustainability
FINANCE
STRUCTURE, FORECASTS,
BUDGETS
DIVIDEND
PAYMENTS
Relevant stakeholders
•
INVESTORS
The Board regularly reviews
the Group’s financial
structure and rolling
forecasts. The Board
approved the Group’s
2023/24 budget.
Relevant stakeholders
•
INVESTORS
The Board recommended
the payment of the final
dividend paid to
shareholders in August 2023
and it approved the payment
of the interim dividend paid
to shareholders in February
2024.
FINANCING
Relevant stakeholders
•
INVESTORS
The Board discussed
arrangements relating to
interest rate hedging and
the extension of the Group’s
RCF. See page 86 for
further details.
REPORTING RISKS
PRINCIPAL RISKS
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
The Board discussed the
Group’s principal risks
which could impact the
implementation of the
Group’s strategy and
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.
FULL, HALF-YEAR AND
TRADING STATEMENTS
VIABILITY AND GOING
CONCERN STATEMENTS
Relevant stakeholders
•
INVESTORS
The Board considered and
approved the full and
half-year results and trading
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
Pages 88 to 89
Going concern statement
Page 88
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
SUCCESSION
EXTERNAL PERFORMANCE
REVIEW
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
The Board participated in an
external Board performance
review facilitated by Fidelio.
NED FEES
During the year, the
Nominations Committee
reviewed the fees payable to
Non-Executive Directors.
Having reviewed market
practice, the Committee
concluded that an increase in
Non-Executive Director fees
of 4% should be
recommended (following a
5% salary increase for
employees). See page 215 for
more information.
DIVERSITY & INCLUSION
Relevant stakeholders
•
PEOPLE
•
INVESTORS
The Board discussed and
approved the Company’s
gender pay gap report,
which was published in
March 2024 and can be
found at https://www.
workspace.co.uk/investors/
about-us/governance/
our-policies/gender-pay-
gap-report-2023.
In line with the Parker
Review, the Board approved
the Company’s target of 16%
ethnic diversity among the
individuals within its
Executive Committee and
senior managers, by
December 2027. See page
162 for more detail.
REGULATORY AND LEGAL
UPDATES
Relevant stakeholders
•
INVESTORS
The Board discussed legal
updates and advice from the
Company’s legal advisers.
The Board also heard regular
legal and governance
updates from the Company
Secretary and Sustainability
teams, including on the new
amendments to the UK
Listing Regime, the new UK
Corporate Governance Code
2024 and forthcoming
ESG-related regulation.
COMMITTEE MEMBERSHIP
AND TERMS OF REFERENCE
Relevant stakeholders
•
INVESTORS
During the year, the Board
considered the structure
of its Committees.
The Board also considered
the schedule of matters
reserved to the Board (see
page 138) and the terms of
reference applicable to each
Committee.
WORKFORCE POLICIES
AND PRACTICES
Relevant stakeholders
•
PEOPLE
The Board 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
effective 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 90 to 93.
All policies are available to
employees 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 staff in key areas
such as anti-bribery and
data protection.
GOVERNANCE
APPOINTMENT
OF NEW CEO
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
In May 2024, the Board
approved the appointment
of Lawrence Hutchings to
succeed Graham Clemett
as CEO, on a date to be
confirmed.
APPOINTMENT OF
NEW NON-EXECUTIVE
DIRECTOR
Relevant stakeholders
•
CUSTOMERS
•
PEOPLE
•
INVESTORS
•
PARTNERS AND SUPPLIERS
•
COMMUNITIES
•
ENVIRONMENT
In April 2024 the Board
approved the appointment
of David Stevenson as an
Independent Non-Executive
Director. David joined the
Board on 1 June 2024.
Diversity and inclusion
Pages 158 to 165
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
BOARD ACTIVITIES 2023/24 CONTINUED
SECTION 172(1) STATEMENT
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.
Key Board decisions
Pages 113 to 134
The likely consequences
of any decision in the
long term
The interests of the
Company’s employees
The need to foster the
Company’s business
relationships with suppliers,
customers and others
The impact of the
Company’s operations
on the community and
the environment
The desirability of the
Company maintaining
a reputation for high
standards of business
conduct
The need to act fairly
as between members
of the Company
A. B. C. D. E. F.
Supporting our communities
Pages 60 to 65
Sustainability
Pages 39 to 65
TCFD
Pages 94 to 107
Employee engagement
Pages 25 to 26 and 126 to 127
Looking after our people
Pages 55 to 59
Diversity and inclusion
Pages 158 to 165
Customer proposition
Page 11
Customer and supplier
engagement
Pages 19 to 24, 27 and 128
Anti-bribery & corruption and
modern slavery
Page 92
Our purpose
Page 18
Our business model
Pages 9 to 11
Our strategy
Pages 35 to 38
Dividend
Page 82
Compliance policies
Pages 90 to 93
Culture and values
Pages 26 and 112 to 113
Whistleblowing
Page 93
Internal controls
Pages 178 to 179
Shareholder engagement
Pages 27 and 125 to 126
AGM
Page 126
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
– 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 are 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
180 to 185).
– The Board directly
engages with employees
and investors, and it
receives feedback from
the CEO and CFO on
meetings with investors,
analysts and debt finance
providers (see pages
125 to 126).
– 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 128).
– Duncan Owen, Chair
of the Board, alongside
other Non-Executive
Directors, holds focus
groups with employees
in his role as the
designated Non-
Executive Director for
employee engagement
(see page 127).
– A stakeholder impact
analysis, setting out the
expected impacts of the
proposed decision on
different 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.
– 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 made by
the Board.
– A Board strategy day
is held each year where
the Board discusses
long-term strategy
(see page 121).
– The Board regularly
considers the Company’s
purpose, values and
policies related to
business conduct
(see page 123).
– 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
pages 178 to 179).
– The Board considers
stakeholder interests
when determining the
level of dividend.
– The Board monitors the
short, medium and
long-term impact of key
decisions through regular
updates from the
Executive Committee.
– Feedback and
engagement from
stakeholder groups is
collated and used to
inform future decision
making.
HOW THE BOARD CONSIDERS SECTION 172(1) MATTERS
BOARD INFORMATION BOARD DISCUSSION AND DECISION MAKING MONITORING
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
SECTION 172(1) STATEMENT CONTINUED
KEY BOARD DECISIONS
IN 2023/24
CEO SUCCESSION NED APPOINTMENT CORPORATE POWER
PURCHASE AGREEMENT
RELEVANT
SECTION 172(1)
DECISION
CRITERIA
A
F
E
D
C
B
A
F
E
D
C
B
A
F
E
D
C
B
RELEVANT
STAKEHOLDERS
•
EMPLOYEES
•
CUSTOMERS
•
SUPPLIERS
•
INVESTORS
•
COMMUNITIES
•
DEBT FINANCE PROVIDERS
•
EMPLOYEES
•
CUSTOMERS
•
SUPPLIERS
•
INVESTORS
•
COMMUNITIES
•
CUSTOMERS
•
INVESTORS
•
COMMUNITIES
STAKEHOLDER
IMPACTS
The appointment of a new
CEO has an impact on all
stakeholder groups, given
their responsibility for
leading the business and
implementing strategy for
the long-term success of the
Company. The Board was
conscious of this
throughout the new CEO
selection and appointment
process.
The Non-Executive Directors
perform an important role
overseeing and
constructively challenging
the Executive Committee as
the Company seeks to
deliver long-term value to all
stakeholders.
Sustainability continues to
be of vital importance to
our customers and the
communities we serve. We
also know that our business
needs to be sustainable for
the long term to build value
for our investors. All Board
decisions are made in the
context of the Company’s
commitment to
sustainability and its net
zero carbon pathway.
DECISION
The Board approved the
appointment of Lawrence
Hutchings as CEO, on a date
yet to be confirmed. His
deep real estate experience
makes him the ideal person
to lead the Company for the
benefit of all stakeholders.
Read more about the
appointment on page 151.
The Board approved the
appointment of David
Stevenson as a Non-
Executive Director with
effect from 1 June 2024.
David brings a wealth of
experience in capital
markets and optimising
digital strategies. Read more
about the appointment on
page 152.
After considering the
positive impact a Corporate
Power Purchase Agreement
(CPPA) would have on our
customers, investors and
communities who all care
deeply about sustainability,
the Board approved the
Company’s entry into the
CPPA with Statkraft. Read
more on page 28.
LINK TO
STRATEGY
1. DRIVING CUSTOMER-LED
GROWTH
2. DELIVERING OPERATIONAL
EXCELLENCE
3. SUSTAINABLE FROM THE
INSIDE OUT
1. DRIVING CUSTOMER-LED
GROWTH
2. DELIVERING OPERATIONAL
EXCELLENCE
3. SUSTAINABLE FROM
THE INSIDE OUT
1. DRIVING CUSTOMER-LED
GROWTH
2. DELIVERING OPERATIONAL
EXCELLENCE
3. SUSTAINABLE FROM THE
INSIDE OUT
New Board appointments
Pages 151 to 152
Some of the key decisions considered
by the Board in 2023/24, and how the Board
had regard to Section 172(1) matters when
discussing them, are outlined to the right
and on the following page.
A
F
E
D
C
B
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
SECTION 172(1) STATEMENT CONTINUED
INTEREST RATE HEDGE DISPOSALS SUPPLIER PROCESSES
RELEVANT
SECTION 172(1)
DECISION
CRITERIA
A
F
E
D
C
B
A
F
E
D
C
B
A
F
E
D
C
B
RELEVANT
STAKEHOLDERS
•
INVESTORS
•
DEBT FINANCE PROVIDERS
•
EMPLOYEES
•
CUSTOMERS
•
SUPPLIERS
•
INVESTORS
•
COMMUNITIES
•
EMPLOYEES
•
SUPPLIERS
STAKEHOLDER
IMPACTS
With interest rates remaining
high, the Board is aware of
the importance of prudent
management of financing
costs, particularly the
Company’s £194m of
floating-rate bank debt.
The right mix of buildings
within our portfolio is
essential for the interests of
all our stakeholders,
generating value for
investors, quality work space
for our customers and
employment opportunities
for local communities and
our suppliers.
We received feedback from
our employees and our
suppliers that our previous,
largely paper based,
supplier onboarding
process was outdated and
inefficient.
DECISION
The Board approved the
entry into derivative
arrangements to effectively
fix the interest rate payable
on £100m of our floating-
rate bank facilities, reducing
finance costs for the next
two years. Read more about
the interest rate hedge on
page 86.
During the year, the Board
discussed and approved the
disposals of a number of
non-core assets for a total of
£143m, balancing the impact
on staff, customers and
suppliers at those sites with
the overall benefit to all
stakeholder groups of
maintaining the right mix of
buildings in our portfolio.
Read more on page 81.
Based on the feedback
received, it was clear that
both our staff and our
suppliers would benefit
from improvements to our
onboarding processes and
a project was initiated to
make them faster and
easier. Our new supplier
portal was launched in
March 2024, and the
Board was kept updated
on progress.
LINK TO
STRATEGY
2. DELIVERING OPERATIONAL
EXCELLENCE
1. DRIVING CUSTOMER-LED
GROWTH
2. DELIVERING OPERATIONAL
EXCELLENCE
3. SUSTAINABLE FROM THE
INSIDE OUT
2. DELIVERING OPERATIONAL
EXCELLENCE
During a year with such a
challenging market backdrop,
we have continued to make
disposals of non-core assets to
ensure Workspace continues
to have the right portfolio to
deliver our strategy and
generate future value for
all our stakeholders.
Richard Swayne
Investment Director
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
SECTION 172(1) STATEMENT CONTINUED
Carmelina Carfora
Company Secretary
DIVISION OF RESPONSIBILITIES
The strong mix of knowledge
and skills amongst our highly
experienced Board members
and a clear division between
executive and non-executive roles
provides accountability and
an outside perspective.
QUICK LINKS
Board roles and responsibilities Page 136
Our governance framework Page 138
How we govern Page 139
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The roles and responsibilities of the Chair and the Chief
Executive Officer are separate, with a clear division of
responsibilities between them. The Chair is responsible
for the leadership of the Board, and the Chief Executive
Officer manages and leads the business.
Our governance framework can be found on page 138.
In addition, the role specifications described on the following
pages set out the clear division of responsibility between
Executive and Non-Executive members of the Board.
BOARD ROLES
AND RESPONSIBILITIES
NON-EXECUTIVE
CHAIR:
DUNCAN OWEN
– Leading the effective
operation and governance
of the Board.
– Setting agendas which
support efficient and
balanced decision making.
– Ensuring the Board plays a
full and constructive part
in the development of the
Group’s strategy and
making sure that there
is sufficient time for
boardroom discussion.
– Ensuring effective Board
relationships and fostering
a culture that supports
constructive debate.
– Facilitating the effective
contribution of the
Non-Executive Directors
and monitoring that all
Directors receive accurate,
timely and clear
information.
– Overseeing the annual
Board performance review
and identifying key actions
required.
– With the Nominations
Committee, ensuring
the Board remains
appropriately balanced
to deliver the Group’s
strategic objectives and
confirming that the
Nominations Committee
meets the requirements
of good corporate
governance.
– Promoting effective
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:
DUNCAN OWEN
– Representing the Board,
alongside other Non-
Executive Directors, 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,
MANJU MALHOTRA,
NICK MACKENZIE AND
DAVID STEVENSON
– 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 effectiveness of risk
management systems
and internal controls.
– Serving on or chairing
various Committees
of the Board.
Board of Director’s biographies
Pages 118 to 120
DIVISION OF RESPONSIBILITIES CONTINUED
BOARD OF DIRECTORS
Duncan Owen
Non-Executive Chair
Graham Clemett
Chief Executive Officer
Dave Benson
Chief Financial Officer
Rosie Shapland
Non-Executive Director
Lesley-Ann Nash
Non-Executive Director
Manju Malhotra
Non-Executive Director
Nick Mackenzie
Non-Executive Director
David Stevenson
1
Non-Executive Director
Carmelina Carfora
Company Secretary
1. David Stevenson joined the Company with effect on 1 June 2024.
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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’s
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,
staff 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
effectiveness 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
effectiveness 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.
Executive Committee
Pages 142 to 143
DIVISION OF RESPONSIBILITIES CONTINUED
BOARD ROLES AND RESPONSIBILITIES CONTINUED
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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
146, 186, 166 and 180. 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 performance review
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 https://www.
workspace.co.uk/investors/
about-us/governance/
board-responsibilities.
Further information on the
matters reserved and the
relationship between the
Board and the Executive
Committee can be found
on page 141.
OUR GOVERNANCE
FRAMEWORK
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.
DIVISION OF RESPONSIBILITIES CONTINUED
Nominations Committee
Chaired by Duncan Owen
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
–
Su
pports the development
of an inclusive and diverse
talent pipeline, and
reviews supporting
initiatives to increase
diversity
–
Mo
nitors that the Board
has the appropriate
knowledge, skills and
experience to operate
effectively and deliver
our strategy
–
Re
commends to the Board
the appointment of a
Non-Executive Director
for employee engagement
Pages 146 to 165
Audit Committee
Chaired by Rosie Shapland
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, which are
reviewed by the Board
Pages 166 to 179
ESG Committee
Chaired by Manju Malhotra
1
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
–
En
sures reporting of ESG
issues is in line with market
best practice
- Monitors the establishment
and effectiveness of
appropriate ESG-related
policies and procedures
- Informs the workings of
other Board Committees
with ESG considerations
Pages 180 to 185
Remuneration Committee
Chaired by Lesley-Ann Nash
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
–
Con
siders senior
management remuneration
presented by the CEO
– Reviews workforce
remuneration and related
policies
–
Re
views remuneration
policies and practices to
ensure they support clarity,
simplicity, transparency
and alignment with culture
Pages 186 to 217
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.
Supporting Committees
The Executive Committee operates a number of operational and supporting Committees that provide oversight
on key business activities and risk.
1. Manju Malhotra was appointed Chair of the Committee with effect from 1 April 2024. Duncan Owen was Committee Chair throughout the financial year ended 31 March 2024.
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 long-term value to our shareholders and other stakeholders.
The Board delegates certain matters to its four principal Committees:
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Page
NON-EXECUTIVE DIRECTORS 139
ELECTION AND RE-ELECTION OF DIRECTORS 140
RELATIONSHIP BETWEEN THE BOARD AND THE
EXECUTIVE COMMITTEE
141
COMPOSITION OF THE EXECUTIVE COMMITTEE 142
INFORMATION AND SUPPORT TO THE BOARD 144
HOW WE GOVERN
NON-EXECUTIVE DIRECTORS
The Non-Executive Directors
have a broad mix of business
skills, knowledge and
experience acquired across
different 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 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 Officer,
as head of executive
management, as set out
on pages 136 to 137.
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 the time of appointment
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 the
expected time commitment
can only be accepted
following approval of
the Board.
Board biographies
Pages 118 to 120
Board appointments
Pages 150 to 152
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62.5%
Board independence
as of the date of this Report
DIVISION OF RESPONSIBILITIES CONTINUED
NON-EXECUTIVE DIRECTORS CONTINUED
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
118 to 120). The Board
considers guidance
published by institutional
investors and proxy advisers
as to the maximum number
of public appointments
which can be managed both
effectively and efficiently.
Executive Directors may
accept a non-executive role
at another company with the
approval of the Board.
The Board is satisfied that
each of the Non-Executive
Directors can devote
sufficient time to the
Company’s business
to discharge their
responsibilities effectively.
The Non-Executive Directors
offer strategic guidance to
Board discussions and they
provide independent
decisions to their respective
Board and Committee duties
(see the table on page 120 for
Board meeting attendance).
ELECTION AND RE-ELECTION OF DIRECTORS
In accordance with the Code,
all of the Directors will
submit themselves for
election or re-election at the
AGM on 25 July 2024.
Following the Board
performance review, detailed
on pages 155 to 156, and
taking into account the
Directors’ skills and
experience (set out on pages
118 to 120), the Board
believes that the election or
re-election (as applicable) of
the Directors is in the best
interests of the Company.
The Board has considered
their commitments and it
has concluded that the
Non-Executive Directors
have sufficient time to meet
their Board responsibilities.
The explanatory notes in the
Notice of Meeting for the
AGM also states the reasons
why the Board believes that
the Directors proposed for
election or re-election at the
AGM should be reappointed.
Manju Malhotra was
appointed as Chair of the
Board ESG Committee in
April 2024.
Mr Clemett and Mr Benson
each have service contracts,
details of which can be
found on page 216.
None of the Non-Executive
Directors have service
contracts. The Non-
Executive Directors are
given letters of appointment.
The appointments of Rosie
Shapland, Lesley-Ann Nash,
Manju Malhotra, Nick
Mackenzie and David
Stevenson may be
terminated by either the
Company, or any one of
them, giving three months’
notice in writing. The
appointment of Duncan
Owen may be terminated
by either him or the
Company giving six
months’ notice in writing.
The terms and conditions
of appointment of the
Non-Executive Directors,
including the expected time
commitment, are available
for inspection at the
Company’s registered office.
Annual General Meeting
Page 126
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DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
The Board is satisfied
that the Non-Executive
Directors can devote
sufficient time to the
Company’s business.
Duncan Owen
Chair
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 2024, the
Board comprised the Chair,
four Non-Executive Directors
(all of whom are
independent) and two
Executive Directors. David
Stevenson joined the Board
on 1 June 2024 as an
independent Non-Executive
Director. 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
effectiveness of the
governance framework.
THE RELATIONSHIP BETWEEN
THE BOARD AND THE
EXECUTIVE COMMITTEE
DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
Our strategy
Pages 35 to 38
BOARD OF DIRECTORS
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.
THE EXECUTIVE COMMITTEE
The Executive Committee is responsible for managing
the business, making day-to-day operational decisions
and delivering the strategy set by the Board.
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.
– Review of the 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.
KEY RESPONSIBILITIES:
– Develop the Group’s strategy and budget for approval
by the Board.
– Receive regular feedback from centre staff 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.
– Discuss updates on the Group’s sustainability
strategy.
– Consider regulatory developments.
– Focus on the effectiveness of risk management
and control procedures.
OUR STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
AS AT THE DATE OF THIS REPORT,
THE BOARD COMPRISES EIGHT PEOPLE
The Chair, five Non-Executive Directors
and two Executive Directors
Female 3
Male 5
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COMPOSITION OF
THE EXECUTIVE
COMMITTEE
DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
Board skills and diversity
Page 159
Executive Committee skills and experience
Pages 143
142
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DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
EXECUTIVE DIRECTOR
GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
EXECUTIVE DIRECTOR
DAVE BENSON
CHIEF FINANCIAL OFFICER
CARMELINA CARFORA
COMPANY SECRETARY
WILL ABBOTT
CHIEF CUSTOMER OFFICER
CLAIRE DRACUP
DIRECTOR OF PEOPLE & CULTURE
PAUL HEWLETT
DIRECTOR OF STRATEGY &
CORPORATE DEVELOPMENT
LEO SHAPLAND
HEAD OF PORTFOLIO
MANAGEMENT
RICHARD SWAYNE
INVESTMENT DIRECTOR
Specific responsibilities:
Marketing, brand
development, digital strategy
and customer engagement.
Specific responsibilities:
HR, training and staff
development, internal
culture, health and safety,
management of the customer
experience improvement
programme, management
of the head office, personal
assistants and admin teams,
Chair of the Social
Sustainability Committee and
responsible for delivery of all
social sustainability initiatives.
Specific responsibilities:
Corporate strategic initiative
development and execution;
investor relations strategy.
Specific responsibilities:
Asset management,
development and
refurbishment, and
operational performance of
the portfolio including leasing
and renewals, management
of the centre and facilities
teams and ESG matters.
Specific responsibilities:
Investment strategy,
acquisitions and disposals,
and valuations.
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 moved to BSkyB before
working in digital media,
FMCG, financial services
and travel sectors. Prior
to Workspace, Will was
Marketing Director at Insurer
Hiscox, and latterly was Chief
Marketing officer of Neilson
Active Holidays.
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. Claire
joined the Executive
Committee in April 2020.
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.
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 offices.
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 worked
for Cushman & Wakefield
Investors and LFF Real
Estate Partners. He is
qualified as a Chartered
Surveyor and holds the
Investment Management
Certificate.
For full details of Graham, Dave
and Carmelina’s responsibilities
and experience, go to
pages 118 to 120.
1 765
2
3
4
8
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Employees below Board level are
regularly invited to present to the
Board on operational topics. This year,
this included:
– Presentations on the Group’s
strategy, presented by the Head of
Portfolio Management, Director of
Strategy and Corporate Development
and Chief Customer Officer;
– A number of updates on investor
relations by our Director of Strategy
& Corporate Development;
– Updates on our brand strategy from
our Chief Customer Officer;
– Feedback from our annual customer
survey, presented by our Customer
Insight Manager;
– Sustainability updates from our
Head of Sustainability; and
– Updates on IT systems and
cyber security.
BOARD PRESENTATIONS
The Chair, alongside other Non-
Executive Directors, held several
meetings with staff as part of his role
as Non-Executive Director responsible
for employee engagement.
Our annual employee survey also
collected feedback from staff during
the year, and the Executive Committee
report to the Board on key themes.
Further details on these and the
Group’s other employee engagement
initiatives during the year can be found
on pages 25 to 26 and 126 to 127.
Feedback from these initiatives was
then presented to the Board.
EMPLOYEE ENGAGEMENT
DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
INFORMING THE BOARD OF HOW
IT ALL HAPPENS AT WORKSPACE
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 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 staff
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 new 2024
UK Corporate Governance
Code, amendments to the
Listing Rules, and updates
on forthcoming ESG laws,
regulations and 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 120.
At the direction of the Chair,
Carmelina is responsible for
advising the Board on
matters of corporate
governance and compliance
with Board procedures.
SCHEDULED BOARD INPUTS 2023/2024
One-to-one meetings are held between
new Directors and senior management
as part of the induction process. The
CEO and the CFO also regularly meet
with senior management individually
and at team meetings to discuss
operations and performance, after
which the CEO and/or the CFO will
report back to the Board on matters
that require discussion.
SENIOR MANAGEMENT MEETINGS
AD HOC BOARD INPUTS IN 2023/24
Presentations from brokers | External speakers on market trends | Updates from legal advisers
7
Board meetings
11
Presentations
3
Staff breakfast and lunch sessions
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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
2024, the Board met formally
on seven occasions, including
a strategy day in September
2023. 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 Stifel in July
and JP Morgan in September
2023. The Group’s property
valuer, CBRE, presented to
the Board in May 2023 and
November 2023.
The CBRE presentation
covered the valuation of the
property portfolio and the
wider market in which the
Group operates.
The Directors are expected
to attend all meetings of the
Board, the Committees on
which they serve and the
AGM, and to devote
sufficient time to the Group’s
affairs, 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.
DIVISION OF RESPONSIBILITIES CONTINUED
HOW WE GOVERN CONTINUED
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.
– Diversity and inclusion.
– Conflicts of interest.
– Market updates and trends.
HOW THE BOARD DISCHARGES ITS RESPONSIBILITIES TRAINING AND DEVELOPMENT
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Our Board training and
development programme
builds Director expertise.
Carmelina Carfora
Company Secretary
13
BOARD TRAINING SESSIONS
AND UPDATES IN 23/24
Duncan Owen
Chair of the Nominations Committee
COMPOSITION, SUCCESSION AND EVALUATION
The Nominations Committee
knows that the right balance
of knowledge, experience
and skills within our Board,
Committees and senior
management is vital to deliver
our strategy for the long-term
benefit of our stakeholders.
QUICK LINKS
Membership and attendance at
Nominations Committee meetings Page 147
Chair’s letter Page 148
Role of the Nominations Committee Page 149
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
MEMBERSHIP AND ATTENDANCE
AT NOMINATIONS COMMITTEE MEETINGS
MEMBER SINCE MEETINGS ATTENDED
Duncan Owen (Chair) 2021
3/3
Rosie Shapland 2020
3/3
Lesley-Ann Nash 2021
3/3
Manju Malhotra 2022
3/3
Nick Mackenzie 2022
3/3
More information on the skills and experience of all
Committee members can be found on pages 118 to 120.
KEY TOPIC ACTIVITY OUTCOME
CEO SUCCESSION Duncan Owen, supported by Heidrick &
Struggles, led the rigorous process for the
appointment of a successor to Graham
Clemett, who will be stepping down from
the Board during 2024.
On the recommendation of the Committee,
Lawrence Hutchings has been appointed
as CEO of the Company, the date of which
is to be confirmed. Read more about the
selection and appointment process on
page 151.
APPOINTMENT OF A NEW
NON-EXECUTIVE DIRECTOR
An external search consultancy was used
to facilitate the appointment of a new
Non-Executive Director and provide access
to a strong and diverse candidate pool.
On the recommendation of the Committee,
the Board appointed David Stevenson as a
new Non-Executive Director with effect
from 1 June 2024. Read more about the
selection and appointment process on
page 152.
APPOINTMENT OF MANJU
MALHOTRA AS CHAIR OF THE
BOARD ESG COMMITTEE
Following Duncan Owen’s appointment
as Chair of the Board, the Committee
reviewed the chairship of the Board ESG
Committee in line with guidance that the
Chair of the Board should not also be the
Chair of an ESG Committee.
Manju Malhotra was appointed as Chair
of the Board ESG Committee with effect
from 1 April 2024. Read more about
Manju’s appointment on page 183.
EXTERNAL BOARD
PERFORMANCE REVIEW
As part of the three-year external Board
performance review cycle, this year the
Board and Committee performance review
was facilitated externally. This year, for the
first time, the performance review also
assessed the individual Non-Executive
Directors, and the Chair as well as the
Board as a whole.
The Board, its Committees, the Non-
Executive Directors and the Chair were all
considered to be working effectively, with
a number of recommendations and actions
identified to further develop the
effectiveness of the Board in future. Read
more about the performance review and
recommendations on pages 155 to 156.
EXECUTIVE LEADERSHIP
ASSESSMENT
The Committee maintained its focus on
building a strong and diverse pipeline of
talent, and in particular this year focused
on members of the Executive Committee.
Heidrick & Struggles were appointed to
conduct a thorough assessment of
members of the Executive Committee, the
results of which were reported back to, and
discussed, by the Committee. Read more
on page 154.
DIVERSITY AND INCLUSION In line with the recommendations of the
Parker Review, the Board discussed an
appropriate target for ethnic diversity
among the Company’s Executive
Committee and senior management.
The Board set a target of 16% ethnic
minority representation among its
Executive Committee and senior
managers by December 2027.
Read more on page 162.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEAR
Board skills and diversity
Page 159
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE
CHAIR’S LETTER
The Committee has reviewed the composition
of the Board and its Committees to ensure
they continue to evolve and align with our
strategic pillars (see page 154) and with the
developing and ever changing external
environment. With this in mind and with the
continuing support in developing our Board
from Fidelio Partners Board Development &
Executive Search Ltd (‘Fidelio’), an independent
external consultancy, we commenced the
search for a new Non-Executive Director.
Fidelio’s commitment to identifying the most
qualified and inclusive candidates for the role
resulted in a strong and diverse shortlist of
candidates presented to the Board. We are
pleased that David Stevenson was appointed
with effect from 1 June 2024. David has a
wealth of experience in capital markets and
we are confident that he brings additional
skills that complement an effective and
experienced Board who are focused on
delivering stakeholder value.
We aim for our Board to have a wide range of
backgrounds, skills and experience. We value
a diversity of outlook, approach and style in
our Board members. We believe that a
balanced Board is stronger and better
equipped to consider matters from a broader
perspective. The appointment of the new
CEO and Non-Executive Director reduces
the proportion of women on our Board from
the current 42.9% to 37.5%, thus below the
recommendation of the FTSE Women Leaders
Review and the target set out in the Listing
Rules. The rigorous search process for both
roles included a diverse mix of candidates and
this will remain our approach in the future
when considering Board appointments.
A Board needs a range of skills which also
includes an understanding of the business and
the environment in which we operate. Our
newly appointed Directors were appointed
on merit, valuing the unique contribution that
they will bring to the Board. Diversity &
inclusion within the Board, Executive
Committee and senior management remains
a high priority for the Board. This year, we
have continued to progress our diversity
& inclusion initiatives. In line with the
Parker Review, we have set a target of
16% representation among the group
comprising our Executive Committee and
senior managers. Read more about diversity
& inclusion, including our Parker Review
target, on pages 158 to 165.
The Nominations Committee remains
focused on the development of a diverse
pipeline of senior management and long-term
succession. In October 2023, Heidrick &
Struggles were appointed to conduct a
leadership assessment of all of the Company’s
Executive Committee members. Read more
about the assessment on page 154.
As part of our three-year Board performance
review cycle, this year an external Board
performance review was conducted,
facilitated by Fidelio. I am pleased to report
that the Board and its Committees, as well as
the Chair and Non-Executive Directors, were
considered to be working effectively. Read
more about the external Board performance
review on pages 155 to 156.
Looking forward, the Committee will remain
focused on succession planning at Board
and senior leadership levels to ensure
the continued strength and diversity of
leadership at Workspace for the long term.
Duncan Owen
Chair of the Nominations Committee
4 June 2024
Dear shareholder,
I am pleased to present this review of the
activities of the Nominations Committee. This
is my first report since taking over as Chair of
the Committee in July 2023.
As I reported in my Chair’s Statement,
Graham Clemett informed the Board of his
intention to retire as the Chief Executive
Officer during 2024, once a successor had
been found and an appropriate handover
conducted. Graham has been on the Board
since 2007, joining as the Chief Financial
Officer and then assuming the role of Chief
Executive Officer in 2019.
The Committee commenced a rigorous and
extensive search for his successor, assisted by
the search firm Heidrick & Struggles. We are
delighted that Lawrence Hutchings will be
joining us in that capacity following
completion of a notice period at his current
role. Lawrence brings over 30 years’ deep
experience in the real estate industry and
significant expertise in customer-centric
operating businesses. We thank Graham for
his service to the Company and look forward
to welcoming Lawrence as our new Chief
Executive Officer shortly. The Board is
confident that Lawrence’s wealth of
knowledge and experience, alongside his
values and leadership style, makes him the
right person to lead the Company.
Board skills and experience
Pages 118 to 120
Duncan Owen
Chair of the Nominations Committee
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The Committee plays a vital
role in promoting effective
Board and leadership
succession, making sure it is
fully aligned to the Company
strategy. This year the key
focus has been the search
and selection of a new CEO
and appointment of a new
Non-Executive Director.
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
The Nominations Committee is responsible for ensuring 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
effectively both now and in the long term.
THE ROLE OF THE
NOMINATIONS COMMITTEE
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 154.
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.
How the Committee
operates
The Committee held three
meetings during the year,
primarily to progress the
appointment of our new CEO
and Non-Executive Director
and to review the results
of the external Board
performance review and
the Executive leadership
assessment.
– 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 Officer, 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
the Executive Committee.
The Nominations Committee
receives oversight from the
Chief Executive Officer on
the Company’s leadership
roles, which include the
Executive Committee
members and other
individuals considered
to form our senior
management.
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,
including the Executive
Committee.
– Facilitating a performance
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
and alignment to strategic
objectives of the business.
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
Page
CEO APPOINTMENT 151
APPOINTMENT OF A NEW NED 152
EXECUTIVE LEADERSHIP ASSESSMENT 154
PERFORMANCE OF THE NOMINATIONS COMMITTEE 154
BOARD COMPOSITION 154
BOARD PERFORMANCE REVIEW 155
DIVERSITY & INCLUSION 158
NOMINATIONS COMMITTEE
ACTIVITIES IN 2023/2024
AT A GLANCE: THE PROCESS AND PRINCIPLES WE FOLLOW WHEN APPOINTING NEW DIRECTORS
We only engage experienced external
search agencies which specialise in
Board roles and are recognised for their
commitment to diversity & inclusion.
The Committee, assisted by our
appointed search agency, discusses
and compiles a specification of the skills,
knowledge and experience required
for the role.
The executive search agency conducts
a search to identify a diverse pool
of candidates, whether internal or
external, with attributes that meet
the role specification.
The executive search agency conducts a
detailed assessment of the available
candidates and reviews an initial longlist
with Board members, following which a
shortlist is compiled.
The shortlisted candidates meet with the
Committee for a series of interviews and,
where appropriate, other forms of
assessment.
The Committee reflects on the
experience of all candidates, and makes
a recommendation to the Board as to
which candidate to appoint.
1. ENGAGE A SEARCH AGENCY 2. SPECIFICATION
4. ASSESSMENT
7. INDUCTION
5. INTERVIEW 6. SELECTION
3. SEARCH
All new Directors joining the Board
undertake a formal and personalised
induction programme, designed to
provide an understanding of the
Company’s business, strategy, culture,
environmental and social matters,
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. Directors are offered
follow-up sessions in any areas in which
they want to increase their knowledge.
We also offer 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.
Induction of new NED
Page 153
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
Heidrick & Struggles
facilitated discussions
between the Chair and
members of the Nominations
Committee, including the
specification for the role.
The key skills and experience
required for the role included
excellent judgement,
property expertise,
understanding of investment
markets, customer centricity,
strong operational focus,
ability to constructively
challenge while maintaining a
highly collaborative approach,
successful leadership in a
listed company with good
familiarity of corporate
governance requirements
and a deep understanding
of ESG, diversity & inclusion
and stakeholder interests.
Heidrick & Struggles
identified potential internal
candidates as well as
conducting an extensive
parallel search process to
identify external candidates.
Heidrick & Struggles’
commitment to identifying
the most qualified and
inclusive candidates for roles
resulted in a strong and
diverse shortlist for the CEO
appointment.
Heidrick & Struggles
conducted a detailed and
rigorous assessment of the
available candidates. An initial
list of candidates was
reviewed by Duncan Owen
and Rosie Shapland against
the specification agreed for
the role. Following this, a
shortlist of four candidates
was compiled.
The four preferred candidates
then met with all members of
the Committee in February
and March 2024 for a series of
interviews and presentations.
Following these, the
Committee reflected on
the experience and skills
of all the candidates.
After careful deliberation,
the Committee unanimously
recommended the
appointment of Lawrence
Hutchings as Chief Executive
Officer given his 30 years’
deep experience in the real
estate industry and significant
expertise in customer-centric
operating businesses.
The Board agreed with
the recommendation of
the Committee. Lawrence
is expected to join
Workspace following
completion of a notice
period at his current role.
SPECIFICATIONENGAGING A SEARCH
AGENCY
SEARCH ASSESSMENT INTERVIEW SELECTION
THE PROCESS WE FOLLOWED
Appointment of
Heidrick & Struggles
Following Graham Clemett’s
announcement that he would
retire as CEO during 2024,
the Nominations Committee
considered three search
agencies to assist them with
the search and identification
of a new CEO. Following this,
Heidrick & Struggles were
engaged by the Committee.
Heidrick & Struggles is an
external and independent
board consultancy firm which
specialises in building board
capability. Heidrick &
Struggles are signatories
to the Voluntary Code of
Conduct for executive search
firms and are committed to
ESG, diversity & inclusion.
Heidrick & Struggles also
supported with the Executive
leadership assessment
conducted this year (see page
154), but has no other
connection with the Company
or the individual Directors.
Diversity & inclusion
Page 158
RESPONSIBILITY
– Nominations Committee
RESPONSIBILITY
– Heidrick & Struggles
– Nominations Committee
RESPONSIBILITY
– Heidrick & Struggles
RESPONSIBILITY
– Heidrick & Struggles
– Chair
– Senior Independent
Director
RESPONSIBILITY
– Nominations Committee
RESPONSIBILITY
– Nominations Committee
– Board
CEO APPOINTMENT
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
Fidelio were asked to draw up
a detailed role specification.
This was reviewed with the
Chair who then engaged with
the Nominations Committee.
A final role specification was
then approved.
As identified in the external
Board performance review,
the key skills and experience
required included capital
markets expertise, experience
in setting and delivering
strategy, understanding
of SMEs, understanding
of technology and digital
capabilities, familiarity with
listed company requirement
and awareness of ESG and
stakeholder interests.
Fidelio conducted an
extensive search process
to identify a diverse range
of possible candidates.
Fidelio conducted a detailed
and rigorous assessment
of the available candidates.
An initial list of six candidates
was reviewed by Duncan
Owen and Rosie Shapland
against the specification
agreed for the role. Following
this review, a shortlist of four
candidates was compiled.
The four shortlisted
candidates were interviewed
by Duncan Owen and Rosie
Shapland. The two preferred
candidates then met with all
members of the Committee
in March 2024 for a series
of interviews. Following these
interviews, the Committee
reflected on the experience
and skills of all the candidates.
After careful deliberation,
the Committee unanimously
recommended the
appointment of David
Stevenson as Non-Executive
Director given his experience
in capital markets and in
optimising digital strategies.
The Board agreed with
the recommendation of the
Committee and David was
appointed as Non-Executive
Director with effect from
1 June 2024.
Appointment of Fidelio
Following the Board
performance review, which
identified that the Board
could be strengthened with
additional knowledge of
capital markets and digital
capabilities, Fidelio were
engaged to conduct the
selection process for a new
Non-Executive Director.
Fidelio are accredited by
the FTSE Women Leaders
Review for its contribution
to increasing and promoting
gender diversity in the
boardroom and are
signatories of the Standard
Voluntary Code of Conduct.
Fidelio were also engaged to
facilitate this year’s external
Board performance review,
but has no other connection
with the Company or the
individual Directors.
THE PROCESS WE FOLLOWED
SPECIFICATIONENGAGING A SEARCH
AGENCY
SEARCH ASSESSMENT INTERVIEW SELECTION
RESPONSIBILITY
– Nominations Committee
RESPONSIBILITY
– Fidelio
– Nominations Committee
RESPONSIBILITY
– Fidelio
RESPONSIBILITY
– Fidelio
– Chair
– Senior Independent
Director
RESPONSIBILITY
– Chair
– Senior Independent
Director
– Nominations Committee
RESPONSIBILITY
– Nominations Committee
– Board
APPOINTMENT OF A NEW NON-EXECUTIVE DIRECTOR
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NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
APPOINTMENT OF A NEW NON-EXECUTIVE DIRECTOR CONTINUED
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Induction of David Stevenson
Each newly appointed Director receives a comprehensive induction programme, designed
to give them an overview and understanding of the business, and their roles and responsibilities
as a Director of the Company.
INDUCTION
The induction for David
Stevenson began shortly
after the announcement of
his appointment on 25 April
2024. For David, the
induction programme is still
ongoing, and includes the
following elements:
– One-to-one meetings with
Executive Directors, the
Chair and each of the
Non-Executive Directors,
covering strategy,
operational and financial
matters, people and more.
– Briefings from the
Company Secretary and
the Head of Corporate
Communications on legal
governance matters and
shareholder relationships,
to be followed up by
sessions with the Company
brokers and external
advisers.
– Briefings from senior
executives and managers
across our key business
areas and operations,
including marketing, asset
management, investment,
brand development, ESG
and technology.
– Access to reference
materials including key
information on our
governance framework,
recent financial data,
investor relations and
policies supporting our
business practices,
including our share dealing
policies, conflicts of
interest procedure
and director’s duties.
– Tours of properties within
the portfolio with the
relevant asset
management teams.
– Follow up sessions will
be offered in all areas.
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
PERFORMANCE OF THE NOMINATIONS COMMITTEE BOARD COMPOSITION
The performance of the
Nominations Committee
was assessed during the
year. This year, the
Committee was subject to an
external performance review,
the outcomes of which are
listed below. From the
responses provided, it
was concluded that the
Nominations Committee
was operating effectively.
Outcomes
– Ensure that key points
from this review regarding
skill matrix and tenure are
considered by the
Nominations Committee.
– Keep under review the
progress of the executive
development programme.
– Ensure that the Committee
provides comfort to
shareholders that good
process is being followed
in terms of Board
appointments.
Following the performance
review, the Chair held
one-to-one sessions with
each Non-Executive Director
separately to discuss the
feedback and develop
action points.
See pages 155 to 156 for
further details of the external
Board performance review.
Reviewing the Board and
Committee composition
As part of the Board’s annual
performance 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 who are not only
able to offer 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
effective 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 sufficient
time to enable them to carry
out effectively their
responsibilities and duties
to the Board and the
Committees on which they
sit. They are sufficiently
independent of management
and are free from any other
circumstances or
relationships that could
interfere with the exercise
of their judgement.
With effect from the close
of the 2024 AGM, no
Non-Executive Directors
will have been on the Board
for more than six years.
As at 31 March 2024, the
Board comprised the Chair,
two Executive Directors and
four Non-Executive
Directors. David Stevenson
was appointed as a Non-
Executive Director with
effect from 1 June 2024.
Further details on the
independence of the
Directors and their election
and re-election can be
found on pages 139 to 140
and on pages 3 to 4 of the
2024 Notice of Annual
General Meeting.
In accordance with the Code,
all the Directors will retire
and offer themselves for
election or re-election by
shareholders at the 2024
Annual General Meeting.
The biographies of all
members of the Board,
outlining the skills and
experience they bring to
their roles, are set out on
pages 118 to 120.
Manju Malhotra was
appointed as Chair of the
Board ESG Committee with
effect from 1 April 2024.
Duncan Owen was appointed
as the Non-Executive
Director for employee
engagement in July 2023,
and is joined at his employee
engagement sessions by
other Non-Executive
Directors. Further details
can be found on page 127.
EXECUTIVE LEADERSHIP
ASSESSMENT
During the year, the
Nominations Committee has
continued to focus on the
ongoing development of
the Executive team and how
the Board works with the
Executive Committee.
In October 2023, the
Committee engaged
Heidrick & Struggles to
conduct an assessment
of all members of the
Executive Committee in
order to better understand
the strengths and
development needs for
each member, both on an
individual level and as a
group. Detailed feedback
was provided to members
of the Executive Committee
in early 2024.
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Key outcomes of the review
Page 156
INTERNAL BOARD
PERFORMANCE REVIEW
INTERNAL BOARD
PERFORMANCE REVIEW
EXTERNAL BOARD
PERFORMANCE REVIEW
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
BOARD COMPOSITION CONTINUED
BOARD PERFORMANCE REVIEW
As part of our three-year
Board performance review
cycle, Workspace
conducted an external Board
performance review for 2024
in line with best practice
corporate governance
requirements. This followed
internal reviews facilitated
by Fidelio in 2023 and 2022,
the outcomes of which are
detailed on page 157.
Having facilitated the 2023
and 2022 internal reviews,
and carrying out the 2021
external performance review,
Fidelio were appointed to
conduct this year’s external
performance review of the
Board, its Committees and
individual directors.
The performance review
focused on the overall
effectiveness of the
Workspace Board, building
on the prior external
performance review which
enabled the Board to
monitor progress on key
aspects of governance,
including the composition
of the Board. In addition, the
2024 performance review
provided a deep dive into
how effectively the Board
is contributing to strategy
and horizon scanning.
Fidelio were also engaged
during the year to conduct
the selection process for the
new Non-Executive Director.
They have no other
connection with the
Company or individual
Directors.
AN ESTABLISHED TIMELINE WITH INCREMENTAL IMPROVEMENTS MADE EACH YEAR
Chair’s performance review
for 2023/24
For the first time this year,
the Chair performance
review was carried out
externally by Fidelio. The
Senior Independent Director
chaired a meeting of
Non-Executive Directors
in March 2024, without the
Chair present, to discuss the
outcomes of the review with
Fidelio 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 effective
and shows a high level of
commitment in discharging
his responsibilities.
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
2023/24 as well as additional
ad hoc Board meetings. For
further details of attendance
at meetings see page 120.
The Non-Executive Directors
also meet with the Executive
Directors and members of
senior management during
the year.
The Directors gave careful
consideration to their
external time commitments
to confirm that they are able
to devote an appropriate
amount of time to their roles.
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 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. During the year,
the Nominations Committee
considered Duncan Owen’s
proposed appointment as
Non-Executive Director and
Chair-elect of Link REIT, and
concluded that this external
role would not compromise
his role as Chair of Workspace.
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 performance
review and the progress
made and also contributed
to the momentum and
potential of a relatively
new Board.
This internal performance
review covered the
effectiveness of the
Workspace Board, and how
this has developed over the
preceding year. Looking
ahead it had a clear focus on
the Board’s contribution to
strategy and horizon-scanning.
The 2023/24 external
Board performance review
was conducted against
the backdrop of a new
Board Chair. The external
performance review
focused on Board oversight
in the development of
the leadership team and
implementation of the
Company’s strategy.
The 2023/24 external
performance review
focused on leadership
and strategy.
2021/2022 2022/2023 2023/2024
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BOARD PERFORMANCE REVIEW PROCESS
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
TIMELINE: OCTOBER 2023
INTERVIEWS OUTCOMESFINDINGS PRESENTED
TIMELINE: OCTOBER–NOVEMBER 2023 TIMELINE: JANUARY 2024 TIMELINE: JANUARY 2024
Fidelio were engaged by the Committee
to undertake the external Board
performance review
Interviews with Board and Executive
Committee members
Findings presented to the Board
and implementation plan agreed
Key outcomes agreed
Having facilitated the 2023 and 2022 internal
reviews, and carrying out the 2021 external
performance review, Fidelio were well placed
to track the progress that Workspace has
made with regard to Board effectiveness
and to conduct an assessment of individual
Board members.
Fidelio met with Directors, the Company
Secretary and members of the Executive
Committee to discuss the performance
of the Board.
The report of Fidelio’s findings was
presented to the Board at the January 2024
Board meeting.
The feedback of this year’s external Board
performance review was positive and
concluded that the Board and its Committees
continued to work well, noting the highly
relevant experience the members of the Board
possess. In particular, it was noted that the
Board is moving at pace, particularly with
regard to strategy.
Process followed:
– Met with the Chair and Company Secretary
to define the scope and objectives of the
performance review.
– Held in-depth one-to-one interviews with
each Board Director and the Company
Secretary covering key aspects of
governance and effectiveness.
– Held discussions with each of the Executive
Committee members.
– Observed Board and Committee meetings
held during the year.
– Analysed and reviewed recent Board and
Committee papers, governance documents
and other relevant materials.
– Reviewed the new Board portal.
– Considered the governance arrangements
of key peers.
Interviews focused on the following
key areas:
– Board composition and skills – including the
appointments process for Board and senior
roles, induction and development of Board
members.
– Strategy and the Board’s contribution to its
formulation.
– Board contribution to value.
– Employees and engagement.
– Board materials and process.
– Effectiveness of the respective Board
Committees in contributing to the work of
the Board.
– Engagement with shareholders and other
stakeholders.
– Board development and learning.
Discussion focused on the following
key areas:
– The Board discussed the points raised by
the review as well as the recommendations
for increasing the effectiveness of the
Workspace Board.
– Individual feedback on the Directors was
provided to the Chair who after
consideration of the recommendations
from the Board evaluation process, met
with the Directors individually.
– Feedback on the Chair was also provided
in the report.
Specific development themes included:
– Maintain the focus and pace of the strategy
process.
– Signal clear Board interest in the strength of
the Executive bench and support the
executive development programme.
– Increase Board focus on the People Agenda.
– Continue to align Board composition to the
needs of the business (see page 154 for
details of the resulting appointment of David
Stevenson as a Non-Executive Director).
– Further develop Board papers and processes.
– Continue to enhance Committee effectiveness.
– Ensure firm understanding of the
shareholder perspective, and effective
engagement.
– Provide targeted ongoing Board learning.
EXTERNAL REVIEWER
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
PROGRESS AGAINST THE EXTERNAL BOARD EFFECTIVENESS REVIEW CONDUCTED IN 2023
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 2023
and this was attended by some members of the Executive Committee and external presenters. Actions from the strategy day
were then circulated to the Board, followed by further presentations by members of the Executive Committee to develop our
strategy. This culminated in a strategy workshop attended by the Executive Committee and senior management. This will remain
a focus for the Board going forward.
EMPLOYEE ENGAGEMENT Continue to focus on
effective workforce
engagement.
During the year, the Board 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 feedback meetings with staff during the year. This year, other Non-Executive Directors joined the Chair
at these meetings. Further details can be found on page 127.
The CEO provides the Board with oversight of the broader people agenda, succession planning, development and changes
in staff across the business. This includes updates from town hall meetings.
BOARD LEARNING Continuous learning for
Board members to enhance
understanding of the
Company and the business
it operates in.
The Board strategy day offers 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 to be covered that reflect strategic priorities or challenges.
Regular Board updates on compliance and regulatory matters 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 158 to 165.
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 continues to review our sustainability strategy, governance, and science-based targets to transition
to net zero. This year, a particular focus was the entry into the 10-year Corporate Power Purchase Agreement with Statkraft.
For more details, see page 28.
We have continued to progress our social impact through initiatives such as the InspiresMe programme and employee wellbeing
activities. Read more on pages 60 to 65 and 210.
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DIVERSITY AND
INCLUSION AT
WORKSPACE
WHY WE DO IT
A diverse workforce will contribute
to our long-term success and help
us achieve our strategy.
HOW WE DO IT
Read all about our D&I initiatives
on the following pages.
OVERVIEW
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 different perspectives and
inclusivity in these areas can bring, as well
as from variety in skills, industry experience
and personality.
Our Equal Opportunities and Dignity
at Work Policy applies both to the Board,
its Committees and the wider business.
Workspace’s purpose is to give businesses
the freedom to grow. We know that a Board,
Executive Committee and wider 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 35 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 also have
a Board diversity and inclusion policy,
detailed on page 160.
A Board, Executive Committee
and wider workforce made up
of people with a wide range of
backgrounds and experiences
enables us to consider matters
from a broader perspective.
Achieving a diverse and inclusive pipeline
Pages 163 to 165
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
NOMINATIONS COMMITTEE ACTIVITIES IN 2023/24 CONTINUED
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
BOARD DIVERSITY
BOARD AND COMMITTEE SKILLS AND EXPERIENCE 31 MARCH 2024
BOARD INDEPENDENCE
31 MARCH 2024
LENGTH OF TENURE FOR THE BOARD 31 MARCH 2024
Men (including those self-identifying as men)
57.1%
Women (including those self-identifying as women)
42.9%
Non-Executive Chair
1
Executive Directors
2
Independent Non-Executive Directors
4
GENDER DIVERSITY OF THE BOARD
1
31 MARCH 2024
AGE DIVERSITY OF THE BOARD
3
31 MARCH 2024
ETHNIC DIVERSITY OF THE BOARD
2
31 MARCH 2024
Identify as ethnic minority
28.6%
Do not identify not as ethnic minority 71.4%
1
6
50-59
60-69
Workspace is committed to diversity at Board level in its
widest sense. Diverse boards have been shown to lead to
better corporate culture and performance.
A wide range of backgrounds and experiences
Our Board comprises a mix of individuals with different
backgrounds, skills and experiences. As at 31 March 2024,
the Company met the targets set by the FTSE Women
Leaders Review and Parker Review.
A stable and effective Board
There is a mix of tenures among our Board of Directors,
bringing a balance of knowledge and experience of the
Company and fresh perspectives.
The right balance to drive growth
Our strong mix of experienced individuals with an appropriate
balance of skills are able to offer an external perspective on the
business alongside constructive challenge to our Executive
Committee as they deliver our strategic objectives.
1. Following the appointment of David Stevenson as Non-Executive Director, 37.5% of the Board identify as women.
2. Following the appointment of David Stevenson as Non-Executive Director, 25% of the Board identify as an ethnic minority.
3. Following the appointment of David Stevenson as Non-Executive Director, seven directors are 50-59 and one is 60-69.
DIVERSITY OF THE BOARD
BOARD EVOLUTION
4.9 years
AVERAGE TENURE AS OF 31 MARCH 2024
Executive
leadership
Property and
Real Estate
Financial
Corporate
governance
Customer and
Marketing
People
ESG
2007
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Executive Directors
Graham Clemett
Dave Benson
Non-Executive Directors
Duncan Owen
Rosie Shapland
Lesley-Ann Nash
Manju Malhotra
Nick Mackenzie
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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 differing
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.
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
BOARD DIVERSITY CONTINUED
PROGRESS AGAINST OBJECTIVESIMPLEMENTATIONPRINCIPLES
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.
Ensure the recruitment process, including advertisements
and use of recruitment agencies, allows for a diverse group
of potential candidates to be identified.
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.
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 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
performance review to ensure the Board is continuing to
enrich the business and contribute to its long-term success.
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 is identified for the role.
The Board will continue to engage executive search firms that
have signed up to the Standard Voluntary Code of Conduct.
The HR team has been tasked with continuing to progress our
existing initiatives to support development of a diverse
pipeline of talent (see page 163 for further details) as well as
delivering the new initiatives detailed on pages 163 to 164.
In January 2024, the Board discussed this year’s external
Board performance review 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. For more information on
the outcomes of the Board performance review, please
see pages 155 to 156.
42.9% female representation on our Board as at 31 March
2024 (2023: 37.5%). 28.6% ethnic minority representation
on our Board as at 31 March 2024 (2023: 25%). With the
appointment of David Stevenson as a Non-Executive Director
with effect from 1 June 2024, these figures have changed
to 37.5% and 25% respectively.
In 2024, the Board has recruited a new CEO and a new
Non-Executive Director. A thorough recruitment and
selection process was undertaken for each. Candidate briefs
were prepared and a diverse long and shortlist was presented
for both the CEO and Non-Executive Director positions. In
making these appointments, the Board considered its Diversity
& Inclusion Policy, to actively seek diverse candidates.
During 2023/24, Heidrick & Struggles and Fidelio were
each engaged by the Board as executive search firms.
Both Heidrick & Struggles and Fidelio are signed up to the
Standard Voluntary Code of Conduct in order to provide
sufficient support to the Board in enhancing diversity.
During the year, we continued to introduce and progress
a number of initiatives aimed at achieving a diverse and
inclusive pipeline of talent. See pages 163 to 164 for more
details on our diversity initiatives.
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GENDER AND ETHNIC DIVERSITY OF THE BOARD AND THE EXECUTIVE COMMITTEE
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
The Board is fully supportive of the recommendations of both
the FTSE Women Leaders Review and the Parker Review, and
of the targets set out in LR9.8.6R(9). We recognise that a
group that is diverse in nature, irrespective of gender, ethnicity,
skills, experience and background, is able to provide differing
perspectives and challenge to debates and decisions.
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
2024.
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.
Footnotes 1 and 2 provide information on changes since
31 March 2024 following the appointment of David Stevenson
as Non-Executive Director.
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.
THE GROUP MET THE THREE
LR 9.8.6R(9) TARGETS
AS AT 31 MARCH 2024
At least one of the
senior Board positions
should be held by a woman
Status: Achieved
ROSIE SHAPLAND IS SENIOR
INDEPENDENT DIRECTOR
At least one member of
the Board should be from
an ethnic minority
Status: Achieved
2
MEMBERS OF THE WORKSPACE
BOARD ARE FROM A MINORITY
BACKGROUND
At least 40% of
individuals on the Board
should be women
Status: Achieved
1
42.9%
OF THE WORKSPACE
BOARD ARE WOMEN
1
GENDER
Number of
Board
members
Percentage of
the Board
1
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) 4 57.1% 3 6 75%
Women (including those
self-identifying as women) 3 42.9% 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
2
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) 5 71.4% 4 8 100%
Mixed/Multiple Ethnic Groups 0 0% 0 0 0%
Asian/Asian British 1 14.3% 0 0 0%
Black/African/Caribbean/
Black British 1 14.3% 0 0 0%
Other ethnic group, including
Arab 0 0% 0 0 0%
Not specified/prefer not to say 0 0% 0 0 0%
1. Between 31 March 2024 and the date of this Report, David Stevenson has been
appointed to the Board as a Non-Executive Director, following which the Board
comprises 37.5% women and 62.5% men.
2. Between 31 March 2024 and the date of this Report, David Stevenson has been
appointed to the Board as a Non-Executive Director, following which the Board
comprises 75% White British or other White members, 12.5% Asian/Asian British
members and 12.5% Black/African/Caribbean/Black British members.
Further information on the
composition of the Board can be
found on page 117 and on the
composition of the Executive
Committee on page 142.
BOARD AND EXECUTIVE COMMITTEE DIVERSITY
EXECUTIVE COMMITTEE EVOLUTION
5.2 years
AVERAGE TENURE
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
The tables below set out the gender
and ethnic diversity of the individuals
comprising our Executive Committee
and senior managers.
In line with the FTSE Women Leaders Review
and the Parker Review, we consider senior
managers to be those employees deemed to
be senior managers of the Group who report
directly to an Executive Committee member.
In respect of the UK Corporate Governance
Code 2018, we consider the Executive
Committee to be our ‘senior management’
as defined by the Code.
GENDER DIVERSITY OF EXECUTIVE
COMMITTEE AND SENIOR MANAGERS
AS AT 31 MARCH 2024
PARKER REVIEW TARGET
In line with the guidance published by the
Parker Review, the Board has set a target of
16% minority ethnic representation within the
group comprising our Executive Committee
and senior managers, as defined by the
Parker Review, by 31 December 2027.
16%
THE BOARD HAS SET A TARGET OF 16%
MINORITY ETHNIC REPRESENTATION WITHIN
THE GROUP COMPRISING OUR EXECUTIVE
COMMITTEE AND SENIOR MANAGERS
GENDER DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2024
The charts below show the gender, ethnicity
and age diversity of all our employees.
This 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 159. 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 2024, calculated in
accordance with sections 414C(9) and (10)(b)
of the Companies Act 2006.
AGE DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2024
ETHNIC DIVERSITY OF ALL EMPLOYEES
AS AT 31 MARCH 2024
EXECUTIVE COMMITTEE AND SENIOR MANAGER DIVERSITY WIDER WORKFORCE DIVERSITY
ETHNIC DIVERSITY OF EXECUTIVE
COMMITTEE AND SENIOR MANAGERS
AS AT 31 MARCH 2024
2024
Female: 189
57.4%
Male: 140
42.6%
2024
18–29: 95
28.8%
30–39: 126
38.3%
40–49: 68
20.7%
50–59: 26
7.9%
60–69: 14
4.3%
70–79: 0
0%
2024
Female
37.5%
Male
62.5%
2024
Minority ethnic
12.5%
White
87.5%
2024
White: 229
69.6%
English/Welsh/Scottish/Northern Irish/British 153
White – Irish 8
White – Other 68
Black: 26
7.9%
Black/African/Caribbean/Black British –
Caribbean
14
Black/African/Caribbean/Black British – African 10
Black/African/Caribbean/Black British – Other 2
Asian: 40
12.16%
Asian/Asian British – Indian 15
Asian/Asian British – Bangladeshi 4
Asian/Asian British – Pakistani 3
Asian/Asian British – Chinese 4
Asian/Asian British – Other 14
Mixed: 31
9.42%
Mixed – White and Black Caribbean 6
Mixed – White and Black African 6
Mixed – White and Asian 5
Mixed – Other 13
Mixed 1
Other ethnic group: 3
0.91%
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CULTURE RECRUITMENT AND SELECTION
– 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 staff
in order to improve the
quantity and quality of
data available to us.
– In 2022 we hired a
Recruitment Manager into
a new role to oversee our
entire recruitment activity
and procedures.
– The use of organisations
such as the White Ensign
and Sapphire Partners
(see page 165 for more
details) and the employee
referral scheme allow us
to promote social mobility.
We have had 15 hires this
year from the employee
referral scheme.
– We have introduced new
software to track the
source of our candidate
applications and CV
anonymisation to
eradicate unconscious
bias.
– 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
– Our Board and Executive
Committee are regularly
updated on our progress
with diversity initiatives
and external guidance
and recommendations
for improving diversity.
– We offer flexible working
options (including hybrid
working) to support
employees with family
and/or caring
commitments.
– We have 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.
– We provide unconscious
bias and harassment
training for all employees.
year we intend to
introduce further training
for line managers.
– 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 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 a diverse group of
potential candidates to be identified at both Board and
Executive level.
Our initiatives to achieve this are detailed to the right and
overleaf and further details on Board and Executive level
succession planning can be found on page 150.
45
INTERNAL PROMOTIONS
IN 2023/24
ACHIEVING A DIVERSE
AND INCLUSIVE PIPELINE
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
TRAINING AND DEVELOPMENT
Diversity & inclusion remains
high on the agenda of our
Board and Executive
Committee. In the coming
year we will continue to
advance all our initiatives to
encourage gender diversity
at all levels, and particularly
in our more senior positions.
In particular, in the next year
we plan to:
– Continue to widen the
pool of candidates from
which we recruit by
introducing apprenticeship
schemes, encouraging use
of the staff referral scheme
and continuing to work
with job centres, charities
and universities to reach
candidates that may not
come through more
traditional recruitment
methods.
– Use our new recruitment
software to produce and
analyse more detailed
information, and to
implement new
recruitment initiatives such
as standardising language
used in job adverts and
anonymising CVs.
– Continue our focus on
internal development and
promotions, including
further development of
our career progression
pathways and
implementing a new
learning management
system to enhance our
training and development
provision.
– Continue to improve
awareness of diversity
at all levels, by rolling out
enhanced D&I training for
the Executive Committee,
hiring managers and all
staff and increasing the
use of external speakers
to bring different
perspectives.
– Introduce a D&I working
group to provide a forum
for discussion of ideas with
staff representatives from
across the organisation,
with feedback to be
elevated to the Executive
Committee.
– Implementing
recommended changes
to our parental leave
policies following
completion of our
benchmarking exercise
this year.
We identify employees
who have strong
potential for
development and put
training plans in place
for them.
– We promote progressive
career development
through encouraging
lateral job moves where
opportunities arise.
– We hold bi-monthly
meetings between the HR
team and senior managers
with a view to identifying
opportunities for staff
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 offer
employees opportunities
to learn and develop skills
such as organisation,
people management
and managing difficult
situations.
– We offer Institute of
Leadership & Management
training for line managers.
– We support staff with
further studies by
sponsoring external
learning and development
where appropriate. We
have had 45 internal
promotions this year.
– We have implemented
‘career pathways’, for our
centre team roles, to make
it clearer to staff how they
can progress their careers
at Workspace.
OUR FUTURE PLANS
Our Sustainability approach
to diversity & inclusion
Pages 55 to 57
Deep Dive: Diversity & Inclusion
Page 58
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Q
What recruitment initiatives have you
introduced this year?
A
We have started working with Sapphire
Recruitment, a charity that helps individuals
from disadvantaged backgrounds. They have
already assisted us in finding candidates for
some of our roles. We have also partnered
with the White Ensign Association, an
organisation that helps military veterans in
finding employment and are advertising roles
with our local job centre. We’re really pleased
with the interest that’s been generated so far.
We have also recently launched our new
recruitment system. This pushes out job
vacancies to sites such as LinkedIn and Indeed
and on our website, so that we are less reliant
on using recruitment agencies and reach a
wider range of candidates. The system will
also enable us to anonymise CVs, reducing
unconscious bias when reviewing candidates.
Q
Why did you decide to introduce
these initiatives?
A
We want to attract the best talent from
all across London. We are aware that not
everyone knows about or has access to the
agencies we traditionally use. These initiatives
allow us access to potential candidates who
may not otherwise know about Workspace.
This is the reason we have also started to
partner with universities who run programmes
relevant to jobs in our field, building
awareness of Workspace among students who
are about to start looking for their first job.
Q
Why is having a diverse workforce important?
A
Workspace operates across all of London,
and we want to be the best company we can
be. Having a diverse workforce allows us to
make decisions with input from those with
different approaches and views. This will
allow us to engage more with our customers
and the communities we work in, as well as
reflecting the society we live in.
Q
What are your plans for the next year
for further improving diversity?
A
In the next year we are looking at
apprenticeships targeted at 16–18 year olds
who are just leaving school or college, and
facilitating their training. We also hope to
grow our presence on sites such as Glass Door
and Indeed, to showcase Workspace as a
business and reach a wider pool of candidates.
We are also in the process of organising
guest speakers, for example those with lived
experience of disability or transitioning to
a different gender identity to further raise
awareness throughout our workforce.
GETTING THE
RIGHT BALANCE
FOR GROWTH
Ben Saunders
Head of People
Hasti Patel
Recruitment Manager
WHY WE DO IT
We want to attract the widest range
of candidates possible for our positions.
HOW WE DO IT
Introducing new recruitment initiatives
to widen our pool of talent.
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COMPOSITION, SUCCESSION AND EVALUATION CONTINUED
DIVERSITY & INCLUSION AT WORKSPACE CONTINUED
Rosie Shapland
Chair of the Audit Committee
AUDIT, RISK AND INTERNAL CONTROL
AUDIT COMMITTEE REPORT
The Audit Committee plays
a key role in promoting the
maintenance of a strong and
transparent control environment
at Workspace.
QUICK LINKS
Membership and attendance at Audit Committee meetings Page 167
Key topics considered Page 167
Chair’s letter Page 168
Role of the Audit Committee Page 170
Significant matters considered Page 172
Developing a robust Viability Statement Page 174
Fair, balanced and understandable Page 175
External audit Page 175
Risk management and internal controls Page 178
166
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
KEY TOPIC ACTIVITY OUTCOME
PORTFOLIO VALUATION – Considered the objectivity and
independence of the external valuers.
– Discussed the presentation of the portfolio
valuation by the external valuers.
– Considered use of valuers following
McKay acquisition.
CBRE continued to value the entire portfolio,
including the additional properties from the
McKay acquisition.
FINANCIAL AND
NARRATIVE REPORTING
– Reviewed the interim reporting and the
Annual Report and Accounts.
– Considered key judgements, estimates
and assumptions in the preparation
of the financial statements.
The Committee recommended to the Board that
the Annual Report and Accounts as a whole was
fair, balanced and understandable.
The Committee concurred with management’s
key judgements, estimates and assumptions.
EXTERNAL AUDIT – Reviewed and discussed reports from
KPMG, summarising their findings arising
from the 2022/23 audit and the half-year
review of the results of the Group for the
six months ended 30 September 2023.
– Assessed the independence and
objectivity of the external auditors.
– Carried out an audit tender process.
The Committee was satisfied that the audit
remained effective and there were no matters
impacting the auditor’s independence or
objectivity.
The Committee carried out a robust audit tender
process which resulted in the recommendation that
BDO be appointed as our new external auditor.
CHANGES TO PRINCIPAL
RISKS
– Reviewed and discussed the Group’s
principal risks.
No changes to principal risks were made during
the year.
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 effectiveness of the
Company’s control environment and the
Company’s process for self-certification
of the operating effectiveness of controls.
Annual cyber threat exercises have been
introduced to evaluate both technical and
corporate internal processes.
Control owners certified the effectiveness
of controls for which they are responsible.
No significant issues were identified from
these reviews.
The Group’s Head of Security and Risk
Management commenced a programme of
internal controls and assurance during the year.
GOVERNANCE – Reviewed terms of reference.
– Discussed assessment of the
effectiveness of the Audit Committee.
An external review of the Audit Committee’s
performance was carried out during the year
which concluded that the Committee continues
to operate effectively.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEAR
MEMBER SINCE MEETINGS ATTENDED
Rosie Shapland 2020
5/5
Lesley-Ann Nash 2021
5/5
Manju Malhotra 2022
5/5
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 2023 to
review the full and half-year results and the joint meeting of the Audit and ESG
Committee meeting held in January 2024.
3. The Audit Committee meeting in January 2024 was a joint meeting with the
ESG 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
above. More information on the skills and the experience of all
Committee members can be found on pages 118 to 120.
MEMBERSHIP AND ATTENDANCE
AT AUDIT COMMITTEE MEETINGS
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
A thorough and robust process was
undertaken and BDO have attended meetings
during the 31 March 2024 audit process for
transitioning purposes before taking
responsibility from the half year onwards.
Further details on the process we adopted
can be found on page 177.
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 affairs. 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 172.
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 material issues that the
Committee considered during the year can
be found on page 167.
Climate change
As the Group is committed to being net
zero carbon, 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 Audit and ESG Committees held a joint
meeting to discuss the Company’s progress
against these requirements and the
associated assurance we receive. More
information can be found on page 185.
Cyber security
Cyber security remains a focus area for the
Committee. The Head of Technology, Chris
Boultwood, attended the November Audit
Committee to give an assessment of cyber
risk and update on progress made in
protecting the Group against evolving
threats. A further cyber update was
provided by the CFO at the March meeting.
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 potential 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 88 to 89.
Dear shareholder,
I am pleased to present this year’s Audit
Committee Report. The report is intended to
provide shareholders with an understanding
of the broad role we have throughout the
year as well as the work carried out to
provide assurance on the integrity of the
Annual Report and Financial Statements
for the year ended 31 March 2024. 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.
External Auditor
In last year’s Audit Committee Report, we
disclosed our intention to undertake a full
tender process for the Company’s external
audit contract. I chaired the selection
Sub-Committee, and following the outcome
of the process in January 2024, I am pleased
to report that the Board approved the
appointment of BDO LLP as the Company’s
External Auditor for the coming financial
year ending 31 March 2025.
This appointment remains subject to approval
by shareholders at the AGM on 25 July 2024.
The role of the Audit Committee
Pages 170 to 171
Developing a robust Viability Statement
Page 174
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 affairs.
AUDIT COMMITTEE
CHAIR’S LETTER
Rosie Shapland
Chair of the Audit Committee
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Risk, control and assurance
The Group has several processes in
place to provide effective 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
effectiveness, are managed and evaluated.
During the year we went live on our new
finance and property management system.
The Audit Committee received regular
updates from the CFO and Group Financial
Controller on progress through the year as
the system was embedded in the business
and commissioned a post-implementation
controls review by Grant Thornton.
As is common following a project of this
nature, the review identified a number of
opportunities to enhance our processes
and control environment in relation to the
new system. The Committee is satisfied that
appropriate mitigating monitoring and review
controls exist and a comprehensive action
plan is in place to deliver these enhancements.
Between the Audit Committee and the full
Board, we have reviewed the effectiveness
of the Group’s risk management and internal
control systems. We have not identified any
significant failings or weaknesses.
In January 2024, the Audit Committee held
a joint meeting with the 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 effectiveness
of these policies and procedures.
Both Committees were satisfied that the
Company’s policies and procedures in this
area operate effectively, and that adequate
assurance is undertaken.
We do not have a formal internal audit
function, a matter which is kept under review
by the Audit Committee. The Group has 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 bi-annual principal risk reviews
and mapped out our internal and external
assurance activities. We also evolved our
internal assurance programme with seven
independent control reviews carried out
during the year by the Head of Security
and Risk Management.
Looking forward, we will consider the
implications of the RICS mandatory
requirement for the periodic rotation of UK
external valuers which comes into force in
May 2026 following a two year transition.
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
4 June 2024
2024 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
170. For the year ended 31 March 2024, the
Committee confirmed to the Board it was
satisfied that the Annual Report and Accounts
was fair, balanced and understandable.
Committee effectiveness
The performance of the Audit Committee
was assessed this year through an external
review. The recommendations and actions
from this review are listed below. I am
pleased that this concluded we operate
effectively and that the Board takes
assurance from the quality of our work.
Recommendations
– Ensure a smooth transition in auditors.
– Encourage management to bring topics/
challenges/projects to the Committee
at an earlier stage.
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 104 for more details.
Jointly, with the ESG Committee, review the
programme of activity being undertaken to
ensure the effectiveness of ESG policies and
procedures.
Continue to focus on the Company’s
protection against cyber threats.
Consider the changes to the UK
Corporate Governance Code, particularly the
new requirements with respect to material
risk management and internal controls which
will impact future reporting periods.
Monitor any issues highlighted by
Grant Thornton as part of their post
implementation review for our new
systems, including the review of progress
in resolving such issues.
Consider the mandatory requirement,
introduced by RICS, for periodic rotations of
UK external valuers which comes into effect
in May 2026.
MONITORING FUTURE DEVELOPMENTS
Fair, balanced and understandable reporting
Page 175
AUDIT, RISK AND INTERNAL CONTROL CONTINUED
AUDIT COMMITTEE CHAIR’S LETTER CONTINUED
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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 effectiveness
and to annually assess their independence and objectivity.
The Audit Committee also reviews and monitors the Group’s
risk management and internal controls framework.
THE ROLE OF THE
AUDIT COMMITTEE
– 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 five
occasions, in May, June
and November 2023 and in
January and March 2024.
– 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.
– There was a further
meeting in May 2024
where matters relating to
the 2024 Annual Report &
Accounts were discussed.
– 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 Officer, the Chief
Financial Officer, the
Group Financial Controller,
the Head of Technology
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.
– The Chair of the
Committee also meets
regularly with the head
External Audit partner,
during the year, and
specifically before
Committee meetings.
– All of this, along with
ongoing challenge,
debate and engagement,
allows the Committee
to discharge its
responsibilities effectively.
HOW THE COMMITTEE OPERATES
FORWARD PLANNING
Subjects include climate change, ESG effectiveness, reviewing and responding to changes in the UK Corporate Governance Code
AUDIT COMMITTEE
Assess and discuss topics with senior management and the External Auditor
Regular inputs received from: Workspace management and the External Auditor
Ahead of Audit Committee
meetings, I meet with the lead
external audit partner to
discuss relevant matters.
AUDIT, RISK AND INTERNAL CONTROL CONTINUED
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
THE ROLE OF THE AUDIT COMMITTEE CONTINUED
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 172.
– Review the
appropriateness of
accounting policies
and practices.
– Reviewed the Group’s
internal controls in relation
to the financial reporting
process. Further detail
on our risk management
and internal controls
processes can be found
on pages 178 and 179.
– 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 88 to 89.
– 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 35 to 38 and
9 to 11 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 175 to 176.
– Assess the effectiveness
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.
– 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 176
for more information on
our process for maintaining
their independence.
– Agree the remuneration
of the External Auditors.
– Complete a robust audit
tender process when
required.
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 effectiveness of
the Group’s overall risk
management processes
that inform the Board’s
decision making, including
the design, implementation
and effectiveness 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 178 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 71 to 78
for information on the
Committee’s consideration
of principal risks.
– Review the effectiveness
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 93 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 92
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
changes to the Code,
specifically regarding
the internal control
environment.
– Keeping up to date on
investor, shareholder
and market sentiment
(with advice from the
Company’s brokers).
– Keeping up to date with
regulatory and legislative
matters relevant to the
Group including
developments in
accounting standards.
– Considering ESG matters
in all decision making.
– Develop and approve the
Committee timetable and
planner which detail the
areas of focus for the
Committee each year.
– Discuss the assessment
of the effectiveness
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 178 to 179
AUDIT COMMITTEE RESPONSIBILITIES
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Page
VALUATION OF THE INVESTMENT PROPERTY PORTFOLIO 172
DEVELOPING A ROBUST VIABILITY STATEMENT 174
FAIR, BALANCED AND UNDERSTANDABLE REPORTING 175
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.
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.
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 assets held for
sale, the uncertainty relating
to collection of trade
receivables, accounting for
disposals made during the
year and the impairment in
investments in subsidiary
undertakings for the Parent
Company.
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.
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
SIGNIFICANT MATTERS CONSIDERED BY THE COMMITTEE CONTINUED
PORTFOLIO VALUATION CONTINUED
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 affect 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 affect the valuation.
– other inputs used by the
valuers are reviewed and
discussed.
£2.4bn
PROPERTY VALUATION
77
LOCATIONS
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RESPONSIBILITY
Risk Management Group
Executive Committee
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
RESPONSIBILITY
Risk Management Group
Executive Committee
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;
and
– the quantum of risk
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
RESPONSIBILITY
The Board
Risk Management Group
Audit Committee
Executive Committee
Heads of Department
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
AUDIT, RISK AND INTERNAL CONTROL CONTINUED
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; and
– reassessment of key risks and their potential impact on the business model.
RISK ASSESSMENT CONCLUSIONSSCENARIO SENSITIVITY ANALYSISRISK IDENTIFICATION
STAGE 1 STAGE 2 STAGE 3 STAGE 4
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THE PROCESS WE FOLLOWED
AUDIT, RISK AND INTERNAL CONTROL CONTINUED
Our strategy
Pages 35 to 38
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.
THE PROCESS WE FOLLOWED
COMMITTEE REVIEW Audit Committee review
The Committee reviewed the Annual Report at an early stage,
and throughout the process, to enable sufficient time for
comment and review and to check overall balance and
consistency.
REPORT Report from the CFO and Group Financial Controller
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.
ASSESS Fair, balanced and understandable assessment
A fair, balanced and understandable assessment looking at
the Annual Report and Accounts as a whole was prepared by
the management team and circulated to the Committee. This
assessment highlights factors which support the responsibility
of the Committee.
EXTERNAL REVIEW External Audit Review
The External Auditor presented the results of its audit work to
the Committee.
RECOMMEND Recommendation to Board and Board’s conclusion
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.
AUDIT AND NON-AUDIT FEES
2023–2024
£714k
Audit
Non-audit
£617k
£97k
AUDIT AND NON-AUDIT FEES
2022–2023
£440k
Audit
Non-audit
£370k
£70k
AUDIT AND NON-AUDIT FEES
2021–2022
£335k
Audit
Non-audit
£280k
£55k
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 for the year
ended 31 March 2024.
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 238. This year, the
non-audit services performed
by KPMG included the review
of the Group’s half-year
results.
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 effectiveness of
the audit throughout the
year taking into account:
– the detailed audit strategy
for the year and coverage
of any risks (including
how risks to audit quality
have been addressed),
scope and level of fees
for the audit;
EXTERNAL AUDIT
– the quality, knowledge and
expertise of the audit
engagement team;
– insight around the key
accounting and audit
judgements;
– the quality of reporting and
discussions at the Audit
Committee meetings; and
– the outcome of the review
of effectiveness 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 effectiveness of the audit
process. This includes
reviewing the FRC AQR
results for KPMG as part
of the audit strategy
discussion. The Chair of the
Committee also meets with
the audit partner during the
year and specifically, ahead of
Audit Committee meetings.
The Audit Committee
applies the ‘Audit
Committees and the External
Audit: Minimum Standard’
and this Report sets out the
extent to which we have
complied during the year.
FAIR, BALANCED AND
UNDERSTANDABLE REPORTING
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
EXTERNAL AUDIT CONTINUED
As part of the effectiveness review following the March 2023 year end, a questionnaire was
issued to Committee members, regular attendees of the Committee and those involved in the
external audit process.
QUESTIONS WERE POSED AROUND THE FOLLOWING SUBJECTS:
SUBJECT SCOPE
EFFECTIVENESS Effectiveness and quality 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 2022/23 financial year.
EFFICIENCY Efficiency and performance of the audit team as well as
relevant and qualified specialists involved in the audit process
and continuity of staff during the audit process.
COMMUNICATION Communication and engagement between the senior
management team, the finance team, KPMG and the
Committee to assess whether it is based on a good
understanding of the business and whether recommendations
have been acted upon.
CONTACT Quality and regularity of contact with the audit team outside
of the audit.
Outcomes
From its discussions during
the year, the challenges
presented to the External
Auditor and a review of the
reporting received, including
the FRC AQR findings, 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
effectiveness 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 of its
effectiveness review at its
meeting in November 2023
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 continue the focus
on improving communications.
The Committee’s relationship
with the External Auditor is
one of openness and
professionalism.
AUDITOR INDEPENDENCE AND OBJECTIVITY
In addition to the annual
review of effectiveness, 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 sufficiently 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; and
– they consider that they
have maintained audit
independence throughout
the year.
The Committee is satisfied
that the External Auditor is
independent.
The Audit Committee will
continue to review the
effectiveness and the
independence of the
External Auditor each year.
The Group has complied with
the Competition and Markets
Authority Order 2014 relating
to audit tendering and the
provision of non-audit
services during the financial
year ended 31 March 2024.
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.
An external audit tender was
conducted in 2023 and BDO
LLP (BDO) were identified as
the proposed new External
Auditor subject to
shareholder approval. More
information can be found
on page 177.
THE EFFECTIVENESS OF EXTERNAL AUDIT
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
EXTERNAL AUDIT CONTINUED
EXTERNAL AUDIT TENDER
SELECTION CRITERIA
AUDIT TENDER
PLANNING
SHORTLISTING FIRMS PROPOSAL
DOCUMENTS
MEETINGS &
PRESENTATIONS
RECOMMENDATION
The selection Sub-Committee
prepared a list of key
selection criteria.
The key selection criteria
included:
– audit quality;
– audit approach and
experience of the real
estate sector;
– quality and approach of
the lead partner and key
members of their team;
– technical expertise and a
pragmatic, commercial
approach to resolving
issues;
– approach to client service;
– independence of the audit
firm; and
– proposed audit transition
plans.
Meetings were held between
management and Sub-
Committee members and
audit firms to determine
their capabilities and fit
with the Company.
A number of firms were
considered, including
challenger firms and the
incumbent, but after
discussions it was mutually
agreed with KPMG that they
would not participate in the
tender process.
Agreement of shortlist of two
audit firms by the selection
Sub-Committee.
Confirmation of participation
by audit firms.
Tender documents and
supporting information were
sent to the two participating
firms.
Both firms submitted a
detailed proposal document
which included:
– their approach to ensuring
overall audit quality;
– background and
experience of the firm,
lead partner and team; and
– their approach to
managing the audit
including matters of
judgement, new and arising
audit topics and the
transition to a new
audit team.
As part of the tender process,
the firms were invited to a
series of meetings and
interviews with senior
managers of Workspace.
Presentations were made to
the Sub-Committee by both
of the prospective firms.
Detailed reviews of the
tender documents submitted
by each of the audit firms
took place which included
the most recent FRC AQR
findings. Their presentations
were considered as well as
taking into account views of
colleagues who had met with
members of the audit teams
from each firm during the
process.
References were followed
up for key team members
from both firms.
The selection Sub-
Committee identified
BDO as the proposed
new External Auditor.
Recommendation for the
appointment of the new
auditor at the next AGM
was made to the Audit
Committee.
The Audit Committee
reviewed the proposal
and recommended it to
the Board for approval.
Induction period
commenced with BDO
attending key meetings
with KPMG during the
2024 audit year-end process.
KPMG has been Workspace’s
auditor since 2018. In last
year’s Annual Report the
Company stated it would be
placing the external audit
out to tender, to make an
appointment for the year
ending 31 March 2025.
The Audit Committee
resolved to appoint a
selection Sub-Committee,
authorised to carry out the
tender process and to make
its recommendations to
the Audit Committee. It
consisted of Rosie Shapland,
Chair of the Audit
Committee, Lesley-Ann
Nash, member of the Audit
Committee, Dave Benson,
Chief Financial Officer, Andy
Dodson, Group Financial
Controller and Carmelina
Carfora, Company Secretary.
RESPONSIBILITY
– Board
– Audit Committee
– Sub-Committee
RESPONSIBILITY
– Sub-Committee
RESPONSIBILITY
– Sub-Committee
RESPONSIBILITY
– Sub-Committee
RESPONSIBILITY
– Sub-Committee
– Senior Managers
RESPONSIBILITY
– Board
– Audit Committee
– Sub-Committee
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AUDIT, RISK AND INTERNAL CONTROL CONTINUED
EXTERNAL AUDIT CONTINUED
As required by the Code,
the Audit Committee has a
formal policy governing the
engagement of our External
Auditor 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
are confined to a more
limited scope of work than
that defined by the Audit
Committee’s terms of
reference.
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
Officer, 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.
SAFEGUARDING AUDITOR INDEPENDENCE
The Committee, on behalf
of the Board, keeps under
review the effectiveness 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 effective.
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 effectiveness of the
risk management and
internal control systems.
No significant control
failings or weaknesses
were identified during
the period under review.
As noted on page 169, a
post-implementation review
of our new finance and
property management
system identified a number
of opportunities to enhance
our processes and control
environment in relation to the
new system. The Committee
is satisfied that appropriate
mitigating monitoring and
review controls exist and a
comprehensive action plan
is in place to deliver these
enhancements.
The Directors confirm that
the processes described
below have been in place
during the 2023/24 financial
year and up to the date of
approval of the Annual
Report and Accounts.
Audit Committee
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
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
effective 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 monthly process for,
reporting and reviewing
financial performance,
against its business plan;
– monthly performance
packs are approved by the
CEO and distributed to
the Board
– in April 2022, the Board
formed an ESG Committee
which reviews the Group’s
environmental and social
related risks;
– the Audit and ESG
Committee’s met jointly in
January 2024 to discuss
policies, procedures and
assurance; and
– the Audit Committee
reviews technology risks
including IT systems and
cyber risk, to ensure that
the Group’s IT function
effectively 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.
RISK MANAGEMENT AND
INTERNAL CONTROLS
This assessment is further
described in the Strategic
Report
Pages 71 to 78
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OUR RISK MANAGEMENT FRAMEWORK
The Audit Committee oversees the Group’s
risk management framework with the
Board retaining overall responsibility for
risk appetite and strategy, in particular for
risks relating to valuation, development
and real estate. The overall risk
management framework is reflected below.
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 Management Group
– Chaired by the Head of Security and Risk Management and 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.
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
effectiveness of controls.
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.
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, RISK AND INTERNAL CONTROL CONTINUED
RISK MANAGEMENT AND INTERNAL CONTROLS CONTINUED
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
chairing our Risk
Management Group and
the ongoing maintenance
of our risk management
and control processes.
As part of our evolving
internal assurance processes,
the Head of Security and
Risk Management has
commenced a series of
departmental control
reviews across the business
with seven completed during
the year. No significant
issues were identified from
these reviews.
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 office 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
effectiveness of controls for
which they are responsible
and to provide details of
further actions to address
any identified
ineffectiveness. No
significant issues were
identified during the year.
INTERNAL AUDIT
Whistleblowing policy
Page 93
OUR RISK MANAGEMENT PROCESS
Identification
– Risks are identified when projects are
being considered or through being
raised organically by members of staff.
– Identified risks are captured in Risk
Registers.
– A Risk Owner is assigned to each
risk and has responsibility for
assessing and monitoring that risk.
Assessment
– 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.
Response
– 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 effectively.
Monitoring and reporting
– Risks are regularly monitored
by the Risk Owners.
– Control owners regularly certify
that their controls continue to
operate effectively.
– 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.
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Duncan Owen
Chair of the ESG Committee
ESG COMMITTEE REPORT
The ESG Committee is
dedicated to guiding the business
toward sustainable success and
responsible leadership. By fully
integrating environmental, social,
and governance principles
into the business strategy and
decision-making processes,
our aim is to deliver value
for all our stakeholders.
QUICK LINKS
Membership and attendance at ESG Committee meetings Page 181
Key topics considered by the Committee during the year Page 181
Former Chair’s letter Page 182
Governance of ESG matters at Workspace Page 183
Spotlight on Renewable energy procurement Page 184
ESG policies, procedures and related assurance Page 185
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ESG COMMITTEE REPORT CONTINUED
MEMBERSHIP AND ATTENDANCE
AT ESG COMMITTEE MEETINGS
MEMBER SINCE MEETINGS ATTENDED
Duncan Owen (Chair) 2022 4/4
1
Rosie Shapland 2022 4/4
1
Lesley-Ann Nash 2022 4/4
1
Manju Malhotra 2022 4/4
1
Nick Mackenzie 2022 4/4
1
Graham Clemett 2022 4/4
1
Dave Benson 2022 4/4
1
Stephen Hubbard 2022 1/1
2
1. There were two ESG Committees held in January 2024. One meeting was
a joint meeting with the Audit Committee.
2. Stephen Hubbard stepped down from the Board with effect from the close
of the Company’s AGM on 6 July 2023.
As at 31 March 2024, The Committee consisted of five
independent Non-Executive Directors, the Chief Executive
Officer and the Chief Financial Officer (biographies are
available on pages 118 to 120). 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 four
meetings. These took place in April 2023, September 2023,
January 2024 and a joint ESG and Audit committee meeting
as well in January 2024.
KEY TOPIC ACTIVITY OUTCOME
CLEAR AND CREDIBLE PATH
TO NET ZERO CARBON
– Evaluated Workspace’s progress on the
net zero pathway.
– Discussed the suitability of interim
decarbonisation milestones and its
inclusion in Executive Directors’ targets.
– Reviewed the action plan supporting
near-term decarbonisation targets and
the associated investment plan.
– Reviewed the proposal for the renewable
energy procurement strategy.
– Considered dependencies crucial for the
successful delivery of the long-term net
zero carbon commitment.
Ensured Workspace continues to have a
credible path to net zero, supported by a
robust investment plan. The Committee’s
approval of Workspace’s renewable energy
procurement strategy marks a significant
achievement in advancing towards our net
zero target.
EVIDENCING LONG-TERM
COMMITMENT TO SOCIAL
WELFARE
– Assessed Workspace’s strategy for
delivering positive impact across all
stakeholders, aligned with the B Corp
framework.
– Examined the methodology for
measuring and reporting social impact.
– Deliberated on incorporating social value
and Diversity & Inclusion KPIs into
Executive Directors’ targets.
Reinforcement of the commitment to
generate value for all stakeholders. Greater
business buy in and accountability was
achieved by adoption of social value and
Diversity & Inclusion KPIs into Executive
Director’s targets.
ACTIVE MANAGEMENT OF ESG
RISKS AND OPPORTUNITIES
– Evaluated the materiality of various ESG
issues, weighing risks and opportunities
for Workspace to identify priorities.
– Assessed the effectiveness of climate risk
management and internal controls.
– Received a briefing on upcoming
regulatory changes and evaluated
compliance readiness.
Ensured Workspace’s sustainability
strategy is future proofed against evolving
regulatory and market risks. The
materiality review also helped identify key
opportunity areas to prioritise.
MAINTAINING HIGH STANDARDS
OF CORPORATE GOVERNANCE
AND REPORTING
– Proposed ESG objectives for Executive
Directors to the Remuneration Committee
and assessed outcomes at year end.
– Collaborated with the Audit Committee
to review all ESG policies and assurance
programmes for effectiveness.
– Reviewed and approved the information
reported on sustainability.
Existence of a robust governance
framework for sustainability matters, with
business-wide accountability in delivering
strategic priorities. Reaffirmed our
commitment to transparent and effective
sustainable practices, by championing
adoption of best practice sustainability
disclosure.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEAR
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ESG COMMITTEE REPORT CONTINUED
Duncan Owen
Chair of the ESG Committee
ESG COMMITTEE
CHAIR’S LETTER
Workspace’s sustainability strategy is
underpinned by the philosophy of stakeholder
value. As a Committee, we have aimed to
adopt a balanced score card to inform
decision making, ensuring business is
prioritising environmental and social impact,
whilst delivering value for all its stakeholders.
Throughout the year, the Committee has
effectively delivered on several tasks we had
set out: closely monitoring progress made on
net zero carbon transition, setting new
strategy for renewable energy procurement,
reviewing social impact and customer
engagement strategies and conducting
a critical review of ESG policies and
procedures. The Committee also conducted
a detailed review of material ESG issues and
sustainability disclosures. I detail on page 181
an overview of the activities which we have
carried out.
Net zero carbon transition
Climate action continues to be a key priority
for the business, requiring business-wide
transformation. In 2019, Workspace signed up
to the Better Buildings Partnership (‘BBP’)
Climate Commitment to deliver a net zero
carbon real estate portfolio. 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. These targets have been
approved by the Science Based Targets
Initiative (SBTi) and cover both our
operational emissions (scope 1 and 2) and our
embodied carbon emissions (scope 3).
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
decarbonisation of its portfolio. 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 12% compared to last year and
the landmark initiative to secure a renewable
power purchase agreement, sourcing
two-thirds of its electricity from a solar plant
in Devon.
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. Each year we
hold a joint meeting with the Audit
Committee to review the ESG policies and
effectiveness of the assurance 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.
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 revisit 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, we realise that nature
and ecological crisis goes hand in hand with
climate mitigation and warrants a robust
business response.
This will form a key part of Committee
activity in the coming year, in addition to
continuing to further evolve our approach to
social impact and its scalability.
Dear shareholder,
I am pleased to present the report of the ESG
Committee for the year ended 31 March 2024.
The ESG Committee was established in April
2022 to bolster the Board’s oversight of
environmental and social issues. Recognising
the growing significance of ESG matters and
the imperative to lead the business into a
sustainable future, the Board deemed it
prudent to create a dedicated forum for
in-depth oversight of business sustainability
strategy.
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.
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As the Chair of the ESG
Committee, guiding the business
towards a sustainable future
has been my steadfast principle.
I take immense pride in the
heightened environmental and
social impact we’ve achieved this
year, creating value for all our
stakeholders. Sustainability
is now authentically embedded
in our business culture, with the
entire workforce mobilised,
as it rightfully should be.
ESG COMMITTEE REPORT CONTINUED
ESG COMMITTEE CHAIR’S LETTER CONTINUED
As we embark on the third year of our
journey, I am delighted to share the news that,
starting April 2024, Manju Malhotra will assume
the role of Chair for the ESG Committee.
With a wealth of experience in understanding
business ESG drivers and a personal
commitment to maximising stakeholder
value, Manju is exceptionally well-suited to
lead the Committee and guide its strategic
direction. Her passion for sustainability and
proven expertise will undoubtedly contribute
to the continued success of the Committee
in fostering a sustainable and responsible
future for the business.
Duncan Owen
Chair of the ESG Committee
4 June 2024
GOVERNANCE OF ESG MATTERS AT WORKSPACE
BOARD OF DIRECTORS
ESG COMMITTEE
Chaired by Manju Malhotra
NOMINATIONS COMMITTEE
Chaired by Duncan Owen
REMUNERATION COMMITTEE
Chaired by Lesley-Ann Nash
AUDIT COMMITTEE
Chaired by Rosie Shapland
Key responsibilities:
– Ensuring requisite strength
of Board ESG expertise
Key responsibilities:
– Integrity of ESG reporting
and targets
– Strategic risk management,
including reputational risk
Key responsibilities:
– Detailed scrutiny and
oversight of ESG
– Ensuring adequate resource
– Driving Board focus
on ESG
Key responsibilities:
– Aligning compensation with
ESG goals
– Ensuring clarity of ESG
metrics and KPIs
The role of the Board
The Chief Executive Officer 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 five independent
Non-Executive Directors, the Chief Executive
Officer and the Chief Financial Officer 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
Workspace’s sustainability strategy 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 is responsible for creating
sustainability 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
Committees, cross-function groups comprising
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
relevant teams 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 created in
September 2022 and are available on the
Company’s website at www.workspace.co.uk/
investors/about-us/governance/board-committees.
Performance of the ESG Committee
As part of the Board effectiveness review
undertaken this year, the ESG Committee’s
performance was assessed through an external
evaluation. The outcomes and actions of this
evaluation are listed below. It was concluded that
the ESG Committee was operating effectively.
Outcomes
– Consider how to shift Committee focus from
learning to deliberation and decision making.
– Ensure that the ‘S’ of the ESG is well understood
by the Committee and therefore the Board.
– Keep under review whether the Committee
should continue to comprise the whole Board,
and at which point a smaller Committee may be
able to do heavy lifting or add greater value.
Actions
– Format of Committee meetings and supporting
papers was reviewed to ensure the members are
provided with comprehensive contextual
information as pre-read, allowing for greater time
deliberating key issues and implications.
– Allow for dedicated time in the Committee
agenda to receive a detailed briefing on social
strategy and set increasingly progressive social
impact targets.
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I am thrilled to step into the role of
Chair of the ESG Committee. With
Workspace already built on robust
sustainability foundations, I am
looking forward to the opportunity
to offer effective oversight and
steer the Committee in setting
a strategic course for the future.
Manju Malhotra
Non-Executive Director
ESG COMMITTEE REPORT CONTINUED
SPOTLIGHT
ON RENEWABLE
ENERGY
PROCUREMENT
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This year we achieved a major milestone in
our net zero carbon transition by signing a
long-term agreement to source two-thirds
of our electricity from a newly constructed
solar plant in Devon. Thereby also
contributing to the UK’s clean energy
capacity. This agreement marks the first
clean energy power purchase agreement
made by a London office provider to date.
This move further solidifies Workspace’s
position as a market leader in providing
sustainable work spaces and will help our
customers in achieving their own
sustainability ambitions by significantly
reducing their emissions.
This agreement clearly
demonstrates how our scale as
an operator of five million sq. ft.
of work space, our focus on
sustainability and our strong
financial position have allowed
us to take an important
leading step in our industry.
The deal delivers significant
value for our stakeholders and
underpins the long-term
energy security for the Group
and our customers.
Dave Benson
Chief Financial Officer
2/3rd
OF ELECTRICITY DEMAND WILL BE MET BY SOLAR PLANT
ESG COMMITTEE REPORT CONTINUED
ENVIRONMENTAL
Climate change policy Ensures that we conduct our business in a climate responsible way
Environmental policy Ensures that we conduct our business in an environmentally responsible way
Net zero pathway Ensures that we have quantifiable emission reduction targets and a clear plan to achieve net zero
carbon in alignment with a 1.5°C future
Sustainable development brief Sets minimum requirements for our development and refurbishment projects on energy, carbon, waste,
water, materials, nature and wellbeing
Green finance framework A framework used by Workspace to issue a green debt instrument including green bonds, private
placement, and green loans
Climate risk management A climate risk register to ensure the business has a robust process to assess and manage climate risk.
The document is published externally in the form of Task Force on Climate-Related Financial
Disclosures (TCFD) in the annual report
SOCIAL
Health and safety policy Ensures that we deliver on our 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 affected by our activities
Supplier Code of Conduct Sets out Workspace’s principles for ethical conduct and behaviour in business practices. The Supplier
Code of Conduct also ensures that our 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 trafficking for Workspace’s operations
and amongst its suppliers
Equal opportunities and dignity at
work policy
Sets out Workspace’s expectations and standards regarding equal opportunities and dignity at work.
The policy also outlines managerial and staff responsibilities to ensure the business’ principles are
observed
Social impact framework Sets out Workspace’s strategy for delivering positive stakeholder impact. The framework is published
externally in the annual report
GOVERNANCE
ESG-linked remuneration To ensure ESG is treated as a strategic priority for the business, with leadership accountability
Risk management framework A five-step approach to ensure we have a robust process to assess and manage risks. This is used to
inform our ESG risk register, enabling us to assess, monitor and manage material ESG 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 staff 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
staff will be protected from retribution
Inclusion and diversity policy Ensures that we are committed to supporting diversity and to creating an inclusive culture
Once a year, Workspace holds a joint
meeting of the Audit Committee and the
ESG Committee. The primary objective
of this meeting is to review and approve
a comprehensive assurance programme
designed to evaluate the effectiveness
of policies and processes related to
ESG matters.
The table on the right lists the policies and
procedures that support the implementation
of Workspace’s ESG strategy. These policies
ensure that Workspace conducts its business
in an environmentally and socially
responsible manner. Additionally, the risk
management framework has been applied
to establish a robust process for assessing
and managing all ESG risks.
The Committees’ detailed review of all
ESG policies and the related assurance
programme confirmed that all policies
are being effectively implemented.
ESG POLICIES,
PROCEDURES AND
RELATED ASSURANCE
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Workspace has a robust
assurance programme, supported
by internal and external checks to
ensure compliance with policies.
Rosie Shapland
Senior Independent
Non-Executive Director
Lesley-Ann Nash
Chair of the Remuneration Committee
Our focus is on maintaining
a remuneration approach that
motivates our people and supports
our strategic objectives.
QUICK LINKS
Membership and attendance at Remuneration Committee
meetings Page 187
Chair’s letter Page 188
Remuneration at a glance Page 189
REMUNERATION
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REMUNERATION CONTINUED
MEMBERSHIP AND ATTENDANCE AT
REMUNERATION COMMITTEE MEETINGS
KEY TOPIC ACTIVITY OUTCOME
EXECUTIVE
AND SENIOR
MANAGEMENT
REMUNERATION
FRAMEWORK
The Committee reviewed annual bonus outcomes
for 2022/23 and considered the outcome of the
2020 LTIP grant, which vested at 50% of maximum
in June 2023. Performance metrics and targets
were determined in line with our remuneration
structure. For the 2023/24 financial year, the
Committee also reviewed the targets for the
annual bonus and 2023 LTIP grant.
After careful consideration, the performance measures
and targets for the 2023 LTIP were revised to better align
with Workspace’s evolving strategy. Restricted Share
Awards were introduced and awarded in June 2023
(excluding Executive Directors), replacing the
performance based LTIP structure. This ensures
employees below Board level are rewarded appropriately
for their continued contribution to the business.
REFLECTING
ESG TARGETS
UNDER THE
ANNUAL BONUS
AND THE LTIP
Recognising sustainability is inherent to the
values of the Company and is heavily reflected
in remuneration. With this in mind and as part of
our ongoing objectives, we had the opportunity
to better align the 2023 LTIP with our strategic
plan. The LTIP measures and weightings that were
agreed are Total Shareholder Return (TSR) (25%),
Earnings Per Share (EPS) (25%), Total Accounting
Return (TAR) (25%) and Environmental Social and
Governance (ESG) (25% – the first time we
introduced this measure in our LTIP).
The Committee identified precise ESG metrics and
targets for inclusion in the Company’s variable pay as
part of the 2023 Remuneration Policy Review. After
careful consideration, ESG, as a performance measure,
was introduced in the 2023 LTIP, with a 25% weighting.
We have also retained our sustainability metric within the
annual bonus. Meetings were held with investors where
the Committee Chair and Company Secretary explained
the rationale for the selected ESG performance metrics
and targets, details of which were also disclosed in the
2023 Annual Report.
GENDER
PAY GAP
The Remuneration Committee continues to
monitor the requirements under the Equality
Act 2010. Any employer with more than 250
employees on 5 April each year (the ‘Snapshot
Date’) is required to publish a gender pay gap
report. Having reached this threshold for the first
time at the Snapshot Date of 5 April 2022, we
published our first gender pay gap report in
March 2023.
As of 5 April 2023, 283 employees were employed and
therefore the Company was required to publish a further
gender pay gap report in March 2024. The Committee
evaluated the data presented by the HR team, illustrating
that the Company does have a gender pay gap in hourly
pay and bonus on both mean and median measures.
The main reason for the gap continues to be that
proportionally more men are employed at the upper
quartile and actions being undertaken to address the
gender pay gap were discussed 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.
In response to ongoing cost of living pressures, the
Committee agreed that employees would receive a 5%
salary increase, effective from 1 April 2024. Most members
of the Executive Committee were awarded a 4% increase.
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 revisions.
A review of the results of the external performance
review 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 and Gender Pay Gap Report.
KEY TOPICS CONSIDERED BY THE COMMITTEE DURING THE YEAR
MEMBER SINCE MEETINGS ATTENDED
Lesley-Ann Nash (Chair) 2021 7/7
Duncan Owen
1
2023 4/4
Rosie Shapland 2020
7/7
Stephen Hubbard
2
2014 3/3
1. Duncan Owen became a member of the Committee in July 2023 and
he attended all meetings from this date.
2. Stephen Hubbard retired as a Director of the Company in July 2023 and
he attended 3/3 meetings up to this point.
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 above. More
information on the skills and experience of all Committee
members can be found on pages 118 to 120.
Support for the Remuneration Committee
During the year, we sought external support from PwC and
internal support from the CEO and CFO, 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.
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REMUNERATION CONTINUED
Lesley-Ann Nash
Chair of the Remuneration Committee
REMUNERATION COMMITTEE
CHAIR’S LETTER
We are confident that the link between pay
and performance at Workspace is clearly
evident, with a focus on how our variable pay
structures directly drive all of our strategic
priorities and reflect alignment with our
different stakeholders. More information
on this can be found on pages 191 to 192.
I would like to take this opportunity to thank
our shareholders for their support for our
Directors’ Remuneration Policy which was
overwhelmingly approved at the 2023 AGM
by 99.8% of voting shares. Coupled with the
99.9% support we received for our 2023
Directors’ Remuneration Report, we believe
this reflects shareholder confidence in our
balanced approach to executive remuneration.
The Committee remains focused on its role in
promoting performance to develop long-term
value for all stakeholders and continues to be
guided by its key principles which are detailed
on page 195.
Business performance
This year we have continued to see robust
demand from businesses for the truly flexible
offer we provide in our vibrant locations.
This can be seen in our results with net rental
income up 8.2%, driven by increased pricing
and stable occupancy.
Throughout the year, we have continued
to focus on operational excellence and have
actively managed our portfolio to meet
changing customer needs. We completed a
large number of smaller unit refurbishments
and subdivisions, which deliver strong
immediate returns, as well as making good
progress on our larger projects. As expected,
our property valuations were down as a result
of movement in market yields. However,
we have maintained a conservative level
of gearing, with the continuing disposal
of non-core properties further
strengthening our balance sheet.
The experience of our stakeholders
In reviewing the outcomes for 2023/24
remuneration for our Executive Directors,
the Committee actively considered the wider
context, such as the experience of all the
Company’s stakeholders during the year,
including our shareholders, employees,
customers and suppliers.
Throughout the year, we have been
mindful of the challenges that our employees
continue to face in the current economic
environment. In this context, the Company
agreed that for 2024/25, staff salaries would
increase by 5%, with the increase being
accelerated to be paid from April 2024.
This follows a 6% increase in 2023/24, with
a minimum uplift of £3,000 for staff earning
below £50,000. More information about
other benefits and pay that are offered to
employees can be found on page 197.
In addition, this year we have reviewed
a number of our family-related policies.
We have increased maternity and paternity
pay, introduced total reward statements
so that employees have greater visibility of
their remuneration package and introduced
charity giving so that employees can make
use of salary sacrifice arrangements to
donate to their chosen charities. We have
also launched two new benefits to replace
our previous employee health cash plan,
giving staff access to annual health checks,
consultations on mental health and nutrition
and a cash plan enabling staff to claim
reimbursements for certain health-related
expenses, such as optical and dental services.
Last year, we published our inaugural gender
pay gap report and this year’s report can
be found on our website. The Board and the
Committee continue to be fully committed to
creating a diverse and inclusive culture that
attracts the best individuals to our Company.
Dear shareholders,
As Chair of the Remuneration Committee
and on behalf of the Board, I am pleased
to present our 2024 Remuneration Report.
The report this year is split into:
– Remuneration at a glance: highlighting
simply and transparently how executive
pay incentivises the delivery of our strategy
and promotion of our values, and how this
cascades down the organisation – pages
195 to 197.
– A summary of our current Directors’
Remuneration Policy for Executive
Directors approved by shareholders
at our 2023 AGM – pages 198 to 201.
– The Annual Report on Directors’
remuneration explaining the remuneration
outcomes for 2023/24 and the
implementation of pay for 2024/25 –
pages 202 to 217.
In producing this year’s Remuneration
Report, the Committee has sought to
present a clear and concise statement of
our key decisions in respect of reward and
recognition at Workspace, including how
our approach to pay cascades throughout
the organisation.
8.7%
INCREASE IN TRADING PROFIT
AFTER INTEREST
8.5%
INCREASE IN DIVIDEND PER SHARE
COMPARED TO PRIOR YEAR
86.1%
CUSTOMER SATISFACTION
99.8%
2023 REMUNERATION POLICY VOTE
Gender pay gap report
Page 130
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REMUNERATION CONTINUED
We have also relaunched our InspiresMe
programme, providing work experience
and careers advice for students and
disadvantaged young people in our
communities and contributed £66,199 to
our charity partner, Single Homeless Project.
A more detailed summary of how the
remuneration outcomes align with the
experience of our other stakeholders
is set on page 191.
Remuneration outcomes in 2023/24
The formulaic outcome under the bonus
was 67.1% of maximum which equates to
100.7% of salary for the CEO and 80.5% of
salary for the CFO. This results in £538,500
to the CEO and £296,300 to the CFO.
This reflects strong performance across our
annual bonus measures, in particular in profit,
sustainability and customer satisfaction.
With ESG so high up the Company’s agenda,
we are pleased that this metric has paid out
in full. Further details of the outcomes are
set out on page 207. Of the bonus award,
33% will be deferred in shares for three
years under the Deferred Bonus Plan.
Vesting of 2021 LTIP
The LTIP awards granted to Graham Clemett
and Dave Benson in 2021 were subject to
performance conditions measured over the
three financial years from 1 April 2021 to
31 March 2024. The vesting of 50% of this
award 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 IPD Benchmark.
Having tested the performance conditions,
TPR performance was above upper quartile,
meaning this element vested in full. TSR,
however, was ranked within the 25th
percentile, meaning that this element
did not pay out. Therefore, the overall
formulaic outcome is 50%.
This equates to a total of £342,377 for
Graham Clemett and £235,600 for Dave
Benson (these figures include dividend
equivalents). The net vested shares will
be subject to a two-year holding period.
Following evaluation of the formulaic
outcomes for both the annual bonus and
LTIP, the Committee considered the results
against the underlying performance of the
Company in what continues to be challenging
market conditions, as well as the experience
of our stakeholders over the performance
period, and determined no adjustments
to outcomes were required.
Proposed implementation of policy
for 2024/25
As I set out at the beginning of this
statement, the renewal of our Directors’
Remuneration Policy received
overwhelmingly strong support from our
shareholders at the 2023 AGM. We believe
this policy remains fit for purpose as it
continues to align with our strategic priorities.
Base salary
The CEO will receive a base salary increase
of 4%, which is below the level awarded to
the wider workforce, and this took effect
from 1 April 2024.
The CFO will receive an increase of 8.7%,
taking his salary to £400,000.
The CFO’s package has slipped below his
peers over the last few years. The increase in
salary will place his total compensation in line
with the lower quartile of the industry peer
group. The Committee remains conscious
of ensuring that any salary increase that is
awarded to Executive Directors is typically
the same level, if not below that of the
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 2024. The full tables can be found
on pages 193 and 194.
Graham Clemett
Chief Executive Officer
2023/24
£000
Fixed pay Base salary 535.0
Pension
1
53.5
Benefits
2
21.8
Total fixed 610.3
Variable pay
Annual bonus
3
538.5
LTIP
4,5
342.4
Other (SAYE, SIP) 4.5
Total variable 885.4
Total 1,495.7
of which share price growth 0
Dave Benson
Chief Financial Officer
2023/24
£000
Fixed pay Base salary 368.0
Pension
1
36.8
Benefits
2
0
Total fixed 404.8
Variable pay
Annual bonus
3
296.3
LTIP
4,5
235.6
Other (SAYE, SIP) 4.5
Total variable 536.4
Total 941.2
of which share price growth 0
1. Pension: During 2023/24 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 2023/24, the
Committee set a minimum deferral requirement of 33% of the bonus earned. For 2023/24, this deferral was equivalent
to £177,705 for Mr Clemett and £97,779 for Mr Benson.
4. None of the LTIP single figure is attributable to share price growth.
5. The 2023/24 figure includes the estimated value of 50% of the 2021 LTIP shares that vested based on performance to
31 March 2024. The share price used is the three-month average to 31 March 2024 of £5.11. 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 2021 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 CONTINUED
wider workforce. However, this exception
is important to the Committee, given that
the CFO has been in role for the last four
years and has made a strong contribution
over this period, assisting the CEO in the
succesful management of the Company
through the challenges of COVID, securing of
new finance facilities including the issue of a
Green Bond and the recent implementation of
a new finance and admin system. In addition,
we remain mindful of his role as we transition
our new CEO. For these reasons, the
Committee concluded that this salary
increase is appropriate. Executive Director
salary increases took effect from 1 April 2024.
Annual Bonus 2024/25
The Committee regularly reviews the
targets and weightings of incentives to
ensure that they continue to align to
Workspace’s strategic priorities and support
the Company’s culture and values. Following
its review, the Committee determined that for
the 2024/25 annual bonus, the performance
measures would remain unchanged from
2023/24 but a slight change to the weightings
should apply to ensure there is a greater focus
on our strategic financial objectives.
In addition, the Committee reviewed how our
sustainability strategy is reflected across our
incentives, with ESG metrics representing
20% of award within the annual bonus and
25% within the LTIP. Given the shorter-term
nature of the annual bonus, it was determined
that going forward, the sustainability
objective should represent 10% of award and
would focus on the people and community
support elements of our ESG strategy. The
targets to be set for 2024/25 would
encompass customer advocacy of our
sustainability credentials, increasing our
social value and championing diversity and
inclusion. Further, in light of the headwinds
on climate change and associated regulations,
we believe that prioritising resilience and
reducing energy intensity usage within our
portfolio will be crucial to protecting long-
term shareholder value. As a consequence,
ESG, as a performance measure within the
LTIP, representing 25% of the award, would
focus on increasing EPC A/B rated space
and reducing scope 1 and 2 emissions.
Therefore, for 2024/25 the annual bonus
performance measures and weightings
will be: Financial objectives (Trading profit
after interest (50%), Strategic financial
(20%, previously 10%)), Sustainability
(10%, previously 20%), Operational efficiency
(10%) and Customer satisfaction (10%).
The Committee believes these measures
appropriately incentivise the Directors to
deliver in-year performance that is aligned
to each of the three pillars of our strategy.
We set out further evidence of this alignment
on pages 195 to 197.
Targets for the annual bonus are set at the
beginning of the year and will be disclosed
in full at the end of the performance year.
See page 212 for further details.
2024 LTIP
Following a review last year, the Committee
amended the measures for the LTIP in order
to further improve alignment between the
performance conditions and the Company’s
strategy. This year, the Committee
determined that these measures remain fit for
purpose, therefore the measures for the 2024
LTIP award, due to be granted in June, will
remain unchanged from the previous year’s
grant, with the exception of a small
adjustment to the targets of the Total
Accounting Return measure. The measures
and weightings that will apply are as follows:
Total Shareholder Return (TSR) relative to
FTSE 350 Real Estate companies (excluding
agencies) (25%), Total Accounting Return
(TAR) (25%), Earnings Per Share Growth
(EPS) (25%) and Environmental, Social and
Governance (ESG) metrics (25%).
As with previous awards, a performance
underpin applies to this award which allows
the Committee to reduce vesting if the outturn
is inconsistent with the overall performance
of the business, individual performance or
wider considerations. Further details of the
LTIP that will be granted in June 2024 can
be found on page 213.
Chief Executive Officer (CEO) Succession
In January 2024, we announced Graham
Clemett’s intention to retire from his role as
Chief Executive Officer. As Graham serves his
notice period, he will continue to receive his
base salary, benefits and pension. In addition,
he will remain eligible for a 2024/25 annual
bonus, which will be pro-rated for time
served, and a 2024 LTIP award, subject
to performance and time proration. All
remuneration received by Graham in relation
to his retirement, including the treatment of
his outstanding incentives, will be in
accordance with our approved policy. In line
with the policy, he will also be subject to
post-cessation shareholding requirements.
A key focus of the Committee since Graham’s
announcement has been the remuneration
arrangements for our new Chief Executive
Officer. Lawrence Hutchings was announced
as the new CEO and he will take up the role
on a date to be confirmed. The terms of the
remuneration package for Lawrence comply
fully with the Directors’ Remuneration Policy
that was approved by shareholders at the
2023 AGM. Further information in respect of
Lawrence’s remuneration upon taking up the
role of CEO is provided throughout the Report.
Remuneration Committee Effectiveness
For the year ending 31 March 2024, the
Company was required to undertake an
external Board performance review, similar to
that carried out in 2020/21 to identify
opportunities to further strengthen Board
performance and contribution. Fidelio
Partners has carried out the Board
performance review and presented their
findings to the Board in January 2024.
As part of the process, Fidelio has produced
specific feedback for the Remuneration
Committee, highlighting areas in which the
Committee operates strongly and we are
responding to areas identified for improvement.
Overall it was confirmed that the Committee
continued to operate effectively.
Concluding remarks
The Committee remains aware of the scrutiny
on executive pay, and we continue to assess
our current remuneration policy to ensure
that it drives the right behaviours and
continues to evolve in line with our strategy
and wider stakeholders.
I want to thank you for your ongoing support
in the year and I hope you will join the Board
in supporting our Directors’ Remuneration
Report at the upcoming 2024 AGM.
Lesley-Ann Nash
Chair of the Remuneration Committee
4 June 2024
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REMUNERATION CONTINUED
Our people
Mindful of the challenging
economic environment
faced by our employees,
the Committee oversaw the
decision to award salary
increases of 5% for all
employees below the
Executive Committee. The
introduction of the restricted
share awards for senior
employees below Board
level, in 2023, 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 also set
objectives in order to increase
our social value contribution.
Our target during the year
was to generate £700,000 of
social value. We successfully
delivered a series of
enhanced employee
wellbeing programmes
and employment and skills
initiatives for employees
such as helplines for stress
and wellbeing. 72% of
respondents in our current
staff survey confirmed that
Workspace cares about
employee wellbeing.
Furthermore, we successfully
launched our apprenticeship
programme, supporting
six apprentices this year.
In addition, a number of
initiatives were rolled out this
year to drive greater diversity
and inclusion within the
business. This includes
119 hours of diversity
and inclusion training to
employees. We also aim
to achieve equal gender
split across all professional
training opportunities and
internal promotions.
Following on from the year
end employee survey, 85.5%
of employees agree that
Workspace is an inclusive
employer, up from 80%
last year.
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
constructive and positive
feedback.
In 2023, 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 relative TSR condition
remains an important
measure in ensuring
outcomes from the LTIP align
with the experience of our
shareholders. Participants
are only rewarded if returns
exceed that achieved
elsewhere in the sector.
Total Accounting Return as a
measure, reflects the creation
of value for shareholders in
the form of dividends paid
and growth in Asset Value.
The use of an ESG measure
strongly aligns to the
sustainability pillar of
our strategy.
CONSIDERATION OF THE EXPERIENCE
OF OUR STAKEHOLDERS
OUR PURPOSE, STRATEGY AND STAKEHOLDERS
Stakeholder experiences in 2024
Pages 191 to 192
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REMUNERATION CONTINUED
CONSIDERATION OF THE EXPERIENCE OF OUR STAKEHOLDERS CONTINUED
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. All
of our suppliers are required
to comply with our supplier
code of conduct, setting
minimum standards of
sustainability performance
and ethical conduct.
Our communities
Our buildings positively
impact communities: by
providing high-quality,
affordable 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
offer employment support
to disadvantaged young
people. This year, we
partnered with 10 local
schools to deliver skills and
employability workshops,
reaching over 300
beneficiaries. We also
worked with our customers
to offer work placement
opportunities to 25 students.
As part of our annual bonus
sustainability metrics, we
focused on a number of
social impact initiatives
which include adopting
responsible business
practices to support our
people to achieve their best,
rolling out programmes
focused on wellbeing, skills,
employment and local
community impact. During
the year, our employees
devoted 1,440 hours of time
to volunteer work. The
delivery of our social value
objectives have generated a
total of £847,000, versus our
target of £700,000, this year.
The environment
Sustainability is at the heart
of our strategy and this is
reflected in incentives for
our Executive Directors.
Whilst sustainability
objectives were already part
of our annual bonus, in 2023
the Committee approved the
introduction of ESG metrics
for the LTIP from the 2023
grant. During the year, we
achieved an 11% reduction in
energy use intensity across
the like-for-like portfolio
compared to last year.
This is mainly driven by a
35% reduction in gas use
across the portfolio due in
the main to electrification and
operational improvements.
In addition, 10.5% of the
portfolio has been upgraded
to an EPC A/B rating this
year. The measures include
key objectives which directly
support our strategy
in focusing on creating
sustainable environments.
We signed a long-term
contract to procure two-
thirds of our electricity
from a solar plant in Devon,
contributing 21.1GW of
additional renewable
capacity to the UK grid.
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. In addition,
we held a number of
engagement initiatives
with our customers to drive
sustainable behaviours and
supported them with their
own sustainability
aspirations. Such
sustainability initiatives
were well received by our
customers, with 79% of
customers agreeing that
Workspace is a socially and
environmentally responsible
business.
Sustainability underpins
all that we do at Workspace.
By introducing ESG performance
measures within our annual bonus
and LTIP, we directly support our
strategy and focus on creating
sustainable environments.
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REMUNERATION CONTINUED
GRAHAM CLEMETT
CHIEF EXECUTIVE OFFICER
Fixed components
of executive pay
£000
Base salary
535.0
Pension
53.5
Benefits
21.8
Total fixed
610.3
Variable components
of executive pay
£000
Annual bonus
538.5
LTIP
342.4
Other – SAYE, SIP
4.5
Total variable
885.4
Single figure for 2023/24
1,495.7
SUMMARY OF EXECUTIVE
DIRECTORS’ TOTAL
REMUNERATION
ANNUAL BONUS
OUTCOMES UNDER THE 2023/24 ANNUAL BONUS
Measure:
Threshold
(0% Payable)
Maximum
(100% payable)
Outcome Weighting
(% of award) (% of award)
CEO actual
£000
Trading profit after interest
£64.9m £68.6m
50%21.9%
175.7
Actual: £66.3m
1
Strategic financial objectives
0% 100%
10%7.5%
60.2
Actual: 75%
Sustainability objectives
0% 100%
20%20%
160.5
Actual: 100%
Operational efficiency
0% 100%
10%7.7%
61.8
Actual: 77%
Customer satisfaction
80% 86%
10%10%
80.3
Actual: 86.1%
Bonus outturn
67.1% 538.5
As a percentage of salary
100.7%
1. Adjusted by £0.3m due to exceptional costs in relation to CEO transition.
LTIP
OUTCOMES UNDER THE 2021 LTIP PERFORMANCE MEASURES OVER THE PERIOD 1 APRIL 2021 TO 31 MARCH 2024
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%
299.0
of which share price:
£NIL
Actual: 25th percentile
Total property return (TPR)
versus IPD
MEDIAN UPPER QUARTILE 50%
50%
43.4
Dividend equivalent:
Actual: 95th percentile
Total
50% 100% 342.4
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REMUNERATION CONTINUED
DAVE BENSON
CHIEF FINANCIAL OFFICER
Fixed components
of executive pay
£000
Base salary
368.0
Pension
36.8
Benefits
0
Total fixed
404.8
Variable components
of executive pay
£000
Annual bonus
296.3
LTIP
235.6
Other – SAYE, SIP
4.5
Total variable
536.4
Single figure for 2023/24
941.2
SUMMARY OF EXECUTIVE
DIRECTORS’ TOTAL
REMUNERATION
ANNUAL BONUS
OUTCOMES UNDER THE 2023/24 ANNUAL BONUS
Measure:
Threshold
(0% Payable)
Maximum
(100% payable)
Outcome Weighting
(% of award) (% of award)
CFO actual
£000
Trading profit after interest
£64.9m £68.6m
50%21.9%
96.7
Actual: £66.3m
1
Strategic financial objectives
0% 100%
10%7.5%
33.1
Actual: 75%
Sustainability objectives
0% 100%
20%20%
88.3
Actual: 100%
Operational efficiency
0% 100%
10%7.7%
34.0
Actual: 77%
Customer satisfaction
80% 86%
10%10%
44.2
Actual: 86.1%
Bonus outturn
67.1% 296.3
As a percentage of salary
80.5%
1. Adjusted by £0.3m due to exceptional costs in relation to CEO transition.
LTIP
OUTCOMES UNDER THE 2021 LTIP PERFORMANCE MEASURES OVER THE PERIOD 1 APRIL 2021 TO 31 MARCH 2024
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%
205.8
of which share price:
£NIL
Actual: 25th percentile
Total property return (TPR)
versus IPD
MEDIAN UPPER QUARTILE 50%
50%
29.8
Dividend equivalent:
Actual: 95th percentile
Total
50% 100% 235.6
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REMUNERATION CONTINUED
ALIGNING OUR REMUNERATION PRINCIPLES WITH OUR PURPOSE AND STRATEGY 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 We design our measures to incentivise the right behaviours,
that are consistent with our strategy. Performance measures
applicable to the 2024 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 reinforces
the importance of 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 clearly 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, explicitly 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.
OUR PURPOSE, STRATEGY AND STAKEHOLDERS
Our remuneration approach is aligned to our purpose, values and
strategy, thereby incentivising delivery for customers and the environment,
and the creation of long-term value for all of our stakeholders.
Stakeholder experiences in 2024
Pages 191 to 192
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ALIGNING OUR PURPOSE AND STRATEGY WITH OUR REMUNERATION PRINCIPLES AND THE EXPERIENCE OF ALL OUR STAKEHOLDERS CONTINUED
HOW OUR VARIABLE PAY ALIGNS TO OUR STRATEGIC PILLARS
Our annual bonus and LTIP are closely aligned to our strategic priorities. They each demonstrate a clear focus on operational performance, customers and the environment.
Sustainability
10%
Financial measures
Trading profit
after interest
50%
Operational efficiency
10%
Customer satisfaction
10%
Strategic
financial
20%
Total Shareholder Return
(TSR) relative to FTSE 350
Real Estate companies
(excluding agencies)
25%
Total accounting return (TAR)
25%
Earnings per share (EPS)
Growth
25%
Environmental, Social and
Governance (ESG) measures
25%
– Our investors
– Our partners & suppliers
– Our investors
– The environment
– Our communities
– Our people
– Our partners & suppliers
– Our investors
– Our customers
– Our people
– Our investors
– Our customers
– The environment
Total Shareholder Return (TSR) relative to FTSE 350 Real Estate
companies (excluding agencies)
TSR is paramount to Workspace because it shows the value that our
shareholders receive from investing in Workspace. We aim to create
maximum value for our shareholders therefore it is important to ensure
outcomes from the LTIP align with the experience of our shareholders,
with participants only rewarded if returns exceed those achieved elsewhere
within the sector.
Total Accounting Return (TAR)
TAR is important to Workspace as it ensures we reward the creation of value
for shareholders in the form of dividends paid and growth in net asset value.
Earnings Per Share (EPS) growth
EPS growth is a key headline measure of Workspace’s financial
performance, with outcomes better aligned to our success in active
portfolio management and investment.
Environmental, Social and Governance (ESG) measures
ESG measures demonstrate our commitment to long-term Company
strategy focusing on creating sustainable environments.
ELEMENT OF
REMUNERATION
WHY IT IS IMPORTANT TO DELIVER OUR STRATEGIC PRIORITIES
AND SUPPORT OUR STAKEHOLDERS
LINK TO DIFFERENT
STAKEHOLDERS
2024/25
ANNUAL BONUS
LINK TO STRATEGIC
PRIORITIES
– Being sustainable
from the inside out
– Driving customer-led
growth
– Driving customer-led
growth
– Delivering operational
excellence
– Delivering operational
excellence
– Being sustainable
from the inside out
– Delivering operational
excellence
– Driving customer-led
growth
– Delivering operational
excellence
– Driving customer-led
growth
– Delivering operational
excellence
– Being sustainable
from the inside out
2024 LTIP
Trading profit after interest
Trading profit after interest is a
key measure for Workspace
and determines dividend
growth, and also the returns we
provide to our shareholders.
Sustainability
The sustainability objectives incentivise the Executive Directors
to deliver progress against our three-pillar sustainability strategy.
Operational efficiency
Optimising value and service is an important part of our business
and a key part of our strategic pillar to deliver operational excellence.
Customer satisfaction
Customers are at the heart of Workspace and the use of customer
satisfaction objectives demonstrates our commitment to providing
the best value to our customers.
Strategic financial
Strategic financial objectives
allow us to cover key drivers of
our commercial success that
would otherwise not be captured
under trading profit after interest.
MEASURES (% of award)
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REMUNERATION CONTINUED
ALIGNING OUR PURPOSE AND STRATEGY WITH OUR REMUNERATION PRINCIPLES AND THE EXPERIENCE OF ALL OUR STAKEHOLDERS CONTINUED
WORKSPACE’S APPROACH TO REMUNERATION AND HOW WE INCENTIVISE AT ALL LEVELS WITHIN THE COMPANY
ALL EMPLOYEES
ALL EMPLOYEES
ALL EMPLOYEES
EXECUTIVE DIRECTORS ONLY REST OF EMPLOYEES
ALL EMPLOYEES
EXECUTIVE DIRECTORS ONLY REST OF EMPLOYEES
CERTAIN SENIOR STAFF AND OTHER STAFF MEMBERS
ALL EMPLOYEES
ALL EMPLOYEES
Salaries are set to reflect market value of the role and aid recruitment and retention.
From April 2024, we awarded a 5% increase to all staff, below the Executive Committee. For more details on Executive Director and Executive Committee salary
increases, see pages 187 and 190.
Employees are eligible for a 2:1 match on employee pension contributions of 3% or 5% of salary. Payments are made through salary sacrifice.
We want to create an environment that promotes healthy behaviours and ensures that employees have access to advice and information to improve their health and wellbeing.
Employees at all levels are eligible for company-funded healthcare, an enhanced company sick pay scheme, and have access to a medical advice and information service.
All colleagues have free 24/7 access to our employee assistance programme, which provides counselling and support to them and their households. We have delivered
mental health awareness training to all employees, and we direct employees to relevant support services.
All colleagues have access to a variety of additional voluntary benefits to suit their lifestyle. We have introduced two new benefits to replace our previous employee cash
plans, giving staff access to annual health checks, mental health and nutritional consultation. Colleagues can choose from a range of deals and discounts all year round,
and can donate to their chosen charities directly from their pay.
All colleagues are eligible for the annual bonus programme. The bonus award is designed to reward the delivery of targets and objectives directly linked to the financial
and strategic performance of the Group set each year. All employees are set objectives as part of our appraisal process and these are agreed with the relevant Head of
Department to ensure alignment across the Company.
Deferral of part of bonus into shares aligns the interests of Executive Directors
and shareholders.
Not applicable. Discretionary annual grant of shares that vest subject to continued
employment and performance conditions measured over three years.
Not applicable. Bonus deferral applies to Executive Directors only.
Executive Directors do not receive RSAs as they participate in the LTIP.
Any colleague can become a shareholder in our Company and share in our success by participating in our SAYE scheme. All colleagues have the option to buy shares
in Workspace at a discounted price (after a three-year or five-year saving period elapses).
The Company will award a number of shares based on an agreed value. In September 2021, the Company offered a free share award of £2,000 to all employees.
RSAs are awarded to certain senior staff and other members of staff at the discretion
of the Committee.
REMUNERATION ELEMENT
ANNUAL
BONUS
SHARE
OWNERSHIP
BENEFITS
PENSION
ALL EMPLOYEES
EXECUTIVE DIRECTORS DO NOT RECEIVE AN RSA
Health and
wellbeing
benefits
Flexible
benefits
Cash
Deferral
LTIP
Restricted
Share Awards
(RSAs)
Save As You
Earn (SAYE)
Share Incentive
Plan (SIP)
Rest of employees
1
327
Executive Directors
2
BASE SALARY
1. As at 31 March 2024.
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REMUNERATION CONTINUED
In this section we provide a summary of the
key elements of the Remuneration Policy for
Executive Directors approved by
shareholders at our 2023 AGM. In addition,
we have set out how the Policy was operated
in 2023/24 (which was as intended) and how
it is intended to be operated in 2024/25.
You can find the full policy at
www.workspace.co.uk
OUR REMUNERATION
POLICY
REMUNERATION POLICY TABLE
The table below describes the Policy in relation to the components of remuneration for Executive Directors.
#
KEY ELEMENT
To provide market
competitive
pensions.
To reflect market
value of the role
and an individual’s
experience,
performance and
contribution.
To provide market
competitive
benefits.
OPERATION
OPERATION IN THE YEAR
ENDING 31 MARCH 2025
OPERATION IN THE YEAR
ENDED 31 MARCH 2024
OPPORTUNITY
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.
Directors participate in a defined
contribution pension scheme or
may receive a cash allowance in
lieu of pension contribution.
Benefits typically include car
allowance, private health
insurance, and death in service
cover. Where appropriate, other
benefits may be offered including
allowances for relocation.
In addition, Directors are eligible
to participate in all employee
share plans, currently the SAYE
and SIP.
Proposed salary:
CEO: £556,400
CFO: £400,000
(effective from 1 April 2024)
For further details, see
page 190.
When Lawrence Hutchings
succeeds Graham Clemett
as CEO (the date of which
is to be confirmed), his
annual salary as CEO
will be £560,000.
Salary:
Graham Clemett
(CEO):
£535,000
Dave Benson
(CFO):
£368,000
CEO and CFO:
In line with 2023/2024
When Lawrence Hutchings
succeeds Graham Clemett
as CEO (the date of which
is to be confirmed), he will
receive a cash allowance in
lieu of pension of 6% of
salary for the first year of
employment and 10% of
salary thereafter.
Graham Clemett
(CEO):
10% of salary
Dave Benson
(CFO):
10% of salary
No change.
When Lawrence Hutchings
suceeds Graham Clemett
as CEO (the date of which
is to be confirmed) he will
be eligible to receive
benefits in line with
the policy.
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.
Up to 10% of salary.
For individuals
with less than a
year’s service with
Workspace, this will
be 6% of salary.
Benefits may vary
by role and individual
circumstance, and are
reviewed periodically.
There is no overall
maximum.
Includes car
allowance, private
health insurance
and other benefits.
BENEFITS
PENSION
BASE SALARY
2024–2025
2025–2026
2026–2027
2027–2028
2028–2029
FIXED COMPONENTS OF EXECUTIVE PAY
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REMUNERATION CONTINUED
OUR REMUNERATION POLICY CONTINUED
REMUNERATION POLICY TABLE CONTINUED
Performance is measured
relative to financial,
operational and strategic
objectives in the year
aligned with the
Company’s strategic plan.
Performance measures
and weightings are
reviewed each year to
ensure they remain
appropriate and reinforce
the business strategy. At
least 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.
KEY ELEMENT
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.
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.
Maximum Opportunity:
Graham Clemett (CEO):
Up to 150% of salary
Dave Benson (CFO):
Up to 120% of salary
Performance conditions
and weightings:
(As % of award)
– Trading Profit (50%)
– Strategic Financial (10%)
– Sustainability (20%)
– Operational efficiency
(10%)
– Customer satisfaction
(10%)
Executive Directors
awarded bonuses of:
Graham Clemett (CEO):
100.7% of salary
Dave Benson (CFO):
80.5% of salary
Deferral of 33% of bonus
earned.
See page 207 for further
details on bonus outcomes.
Maximum Opportunity:
Graham Clemett (CEO): Up to 150% of salary
Dave Benson (CFO): Up to 120% of salary
Performance conditions and weightings:
(As a % of award)
– Trading Profit (50%)
– Strategic Financial (20%)
– Sustainability (10%)
– Operational efficiency (10%)
– Customer satisfaction (10%)
See page 212 for more details.
The Committee is of the opinion that the targets
used for the annual bonus are commercially sensitive
and will be disclosed in next year’s Annual Report.
Actual targets, performance achieved and awards
made are published at the end of the financial year
so shareholders can fully assess the basis for any
payouts.
The annual bonus opportunity for Graham Clemett
will proceed on the usual timetable and will be
pro-rated to reflect the proportion of FY25 that was
spent in employment.
When Lawrence Hutchings succeeds Graham Clemett
as CEO (the date of which is to be confirmed), his
eligibility to participate in the Company’s Annual
Bonus Plan, at the discretion of the Committee, will
be subject to the attainment of applicable
performance conditions. The bonus opportunity for
Lawrence, for the financial year of the Company in
which he commences his employment will be time
pro-rated to reflect the proportion of the relevant
financial year in which he is employed.
ANNUAL BONUS
OPERATION
OPERATION IN YEAR
ENDING 31 MARCH 2025
OPERATION IN THE YEAR
ENDED 31 MARCH 2024
PERFORMANCE METRICS
2024–2025
2025–2026
2026–2027
2027–2028
2028–2029
VARIABLE COMPONENTS OF EXECUTIVE PAY
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REMUNERATION CONTINUED
OUR REMUNERATION POLICY CONTINUED
REMUNERATION POLICY TABLE CONTINUED
VARIABLE COMPONENTS OF EXECUTIVE PAY CONTINUED
KEY ELEMENT
2024–2025
2025–2026
2026–2027
2027–2028
2028–2029
OPERATION CURRENT SHAREHOLDINGS
1
Shareholding guideline for Executive Directors of 200% of salary.
Post-cessation shareholding requirement of 200% of salary for two
years post-departure. In the event that 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.
SHAREHOLDING
REQUIREMENT
Graham Clemett (CEO): 209% of salary
Dave Benson (CFO): 123% of salary
Graham Clemett’s post-cessation shareholding requirement will apply
in line with the policy.
Lawrence Hutchings will be expected to build up and maintain a shareholding
in the Company with shares equivalent to 200% of basic salary.
1. Based on a share price of £5.0332 being the average share price over the year to 31 March 2024
and salaries of £535,000 and £368,000 for Graham Clemett and Dave Benson respectively.
To reward and align
to the delivery of
sustained long-term
performance and to
align the interests
of participants with
those of
shareholders
The Committee may
grant annual awards
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
(in circumstances
listed in the annual
bonus column above),
up to the end of the
holding period.
Dividend equivalents
may be accrued on
shares in respect
of the performance
and holding period.
LONG TERM
INCENTIVE
PLAN (LTIP)
Maximum Opportunity:
Graham Clemett (CEO):
200% of salary
Dave Benson (CFO):
200% of salary
Performance conditions and
weightings for the 2023 LTIP:
25% Total Shareholder Return
(TSR) relative to FTSE 350
Real Estate companies
(excluding agencies), 25%
Total Accounting Return
(TAR), 25% Earnings Per
Share (EPS) Growth and 25%
Environmental Social and
Governance (ESG).
The 2020 LTIP vested in the
year at 50% of the award.
See page 211 for further
details on outcomes.
Grant sizes for:
Graham Clemett (CEO): 200% of salary
Dave Benson (CFO): 200% of salary
No change to maximum LTIP opportunities
or the performance conditions.
Graham Clemett will be granted a 2024 LTIP award
which will be pro-rated for time served at the point
of vesting in June 2027.
When Lawrence Hutchings succeeds Graham
Clemett as CEO (the date of which is to be
confirmed), his first ordinary course grant of an
award under the Company’s LTIP is expected to
take place in June 2025. The normal maximum
award is equal to 200% of salary.
On joining the Company, a buyout award of shares
will be awarded to Lawrence Hutchings. This will be
granted as soon as practicable after the
commencement of employment. Further details can
be found on page 213.
OPERATION
IMPLEMENTATION
FOR 2024/25
OPERATION
FOR 2023/24
PERFORMANCE METRICSOPPORTUNITY
Normal maximum
award of up to
200% of salary
per annum. An
award of 300% of
salary per annum
may be made
in exceptional
circumstances.
Awards will be based on
a combination of financial,
share price and strategic
measures aligned with the
Company’s strategic plan.
A performance underpin
will apply which allows
the Committee to reduce
vesting if performance
is inconsistent with the
overall performance of
the business. The
Committee may, in the
context of the underlying
business strategy, use
different measures and/or
vary the weightings of the
measures. The Committee
would consult with major
shareholders prior to
making any significant
changes.
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REMUNERATION CONTINUED
OUR REMUNERATION POLICY CONTINUED
Based on our proposed Remuneration Policy,
we set out to the right 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.
POSSIBLE PAYOUTS
UNDER POLICY
SINGLE FIGURE SCENARIOS
Graham Clemett, CEO Dave Benson, CFO
Salary as at 1 April 2024. Salary as at 1 April 2024.
Current contribution rate of 10% of
salary.
Current contribution rate of 10% of
salary.
As provided in the single figure table
on page 193.
As provided in the single figure
table on page 194.
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.
Impact of 50% share price
appreciation over three years
(on the LTIP).
Impact of 50% share price
appreciation over three years
(on the LTIP).
BASE SALARY BASE SALARY
PENSION PENSION
BENEFITS BENEFITS
ANNUAL BONUS ANNUAL BONUS
LTIP LTIP
SHARE PRICE GROWTH SHARE PRICE GROWTH
F
ixed pay
On
-target
M
aximum
M
aximum with
50
% share price
a
ppreciation
0
3,5003,0002,5002,0001,5001,000500
£000
F
ixed pay
On
-target
M
aximum
M
aximum with
50
% share price
a
ppreciation
0
3,5003,0002,5002,0001,5001,000500
£000
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REMUNERATION CONTINUED
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 188 to
190 will be put forward at the 2024 AGM of
the Company on 25 July 2024.
ANNUAL REPORT
ON REMUNERATION
WHAT WE PAID OUR DIRECTORS IN 2023/24
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 constituents
and FTSE 350 Real Estate companies, and the size of the Company
compared to these peers. The Committee is pleased to report that
in the context of delivering strong performance, above on-target
remuneration has been achieved over recent years.
Bottom
quartile
Bottom
quartile
Third
quartile
Third
quartile
Second
quartile
Second
quartile
Top
quartile
Top
quartile
FTSE 350
Real Estate
FTSE 250
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.
CHART A (II) — DAVE BENSON
CHIEF FINANCIAL OFFICER
Positioning of total remuneration of the
Company relative to market benchmarks.
OUR SHAREHOLDING REQUIREMENTS
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.
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 £5.0332 being the average share price over the
year to 31 March 2024 and salaries of £535,000 and £368,000 for Graham Clemett
and Dave Benson respectively.
CHART B
OUR SHAREHOLDING
REQUIREMENT HAS BEEN MET
Owned outright or vested.
Unvested and not subject to performance.
Subject to performance.
CEO
CFO
% of salary
0 400%300%200%100%
MINIMUM SHAREHOLDING
REQUIREMENT
OVERALL LINK TO REMUNERATION AND EQUITY OF THE
EXECUTIVE DIRECTORS
Table A below sets out the single figure for 2023/24, 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
2023/24 single figure (£000) 1,495.7 941.2
Shares held at start of year 141,930 39,765
Shares held at end of year 189,322 64,988
Value of shares at start of year (£000)
1
620.2 173.8
Value of shares at end of year (£000)
2
971.2 333.3
Difference (£000) (351.0) (159.5)
1. Based on a closing share price on 31 March 2023 of £4.37.
2. Based on a closing share price on 31 March 2024 of £5.13.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
OUR APPROACH TO FAIRNESS AND WIDER WORKFORCE CONSIDERATIONS
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, Duncan Owen, 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 staff briefings held by
the CEO and other members of the Executive
team. Mr Hubbard, our previous Chair,
held one meeting in the financial year and
Mr Owen, who took over as Chair in July 2023,
held three meetings since his appointment.
Lesley-Ann Nash and Rosie Shapland also
joined Duncan in these meetings. 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 staff,
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 163 to 164.
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 Government
auto-enrolment rules.
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THE YEAR ON YEAR CHANGE IN OUR DIRECTORS’ REMUNERATION
TABLE B
2024 2023 2022 2021
Director
Salary/
fees
Taxable
benefits
Annual
variable
Salary/
fees
Taxable
benefits
Annual
variable
Salary/
fees
Taxable
benefits
Annual
variable
Salary/
fees
Taxable
benefits
Annual
variable
Executive Directors
Graham Clemett 3% -3% 20% 3% 4% -11% 2% 1% 157% 9% -15% -54%
Dave Benson 3% n/a -22% 3% n/a 10% 2% n/a 157% n/a n/a n/a
Non-Executive Directors
Duncan Owen
1
172% n/a – 73% n/a – n/a n/a – n/a n/a –
Stephen Hubbard
2
-67% n/a – 6% n/a – 10% n/a – 198% n/a –
Rosie Shapland 0% n/a – 31% n/a – 194% n/a – n/a n/a –
Lesley-Ann Nash 0% n/a – 15% n/a – 345% n/a – n/a n/a –
Nick Mackenzie
3
0% n/a – 491% n/a – n/a n/a – n/a n/a –
Manju Malhotra
3
0% n/a – 491% n/a – n/a n/a – n/a n/a –
All other employees
4
-7% -20% -6% 19% -4% -11% 5% -24% 58% 5% -5% -5%
1. Duncan Owen joined the Board in July 2021 and assumed the role of Chair in July 2023.
2. Stephen Hubbard stepped down from the Board on 6 July 2023 and therefore the above information reflects his time in role.
3. Nick Mackenzie and Manju Malhotra joined the Board in January 2022, and therefore were paid a partial fee in the prior year.
4. The 2024 and 2023 figures have been impacted by the acquisition of McKay. The majority of employees received a minimum of 6% payrise in April 2023 and 5% payrise in April 2024.
The table to the right 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 to the right 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 311 (2023: 291). All employees are
eligible for consideration for an annual bonus.
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
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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 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 31 Mar 2024
Graham Clemett
1
– – – – – 1,349.9 764.4 1,080.0 1,440.3 1,495.7
Jamie Hopkins
2
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) – – – – – – 33% 83% 72% 67.1%
Jamie Hopkins (% of maximum opportunity) 97.2% 95.3% 100% 100% 95.8% – – – – –
LTIP vesting
Graham Clemett (% of maximum opportunity) – – – – – 87.24% 0% 0% 50% 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 40x
to employee median 128x 79x 72x 48x 33x 43x 15x 23x 29x 29x
to employee upper quartile
3
– – – – 23x 23x 11x 15x 20x 18x
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
100
200
300
400
500
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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 205), this is the second 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
2024
2023
Option A
Option A
40:1
43:1
29:1
29:1
18:1
20:1
Option A, as set out under the reporting
regulations, was used to calculate remuneration
for 2024, as well as 2023 and 2022.
The UK employees included are those
employed on 31 March 2024 and remuneration
figures are determined with reference to the
financial year ended on 31 March 2024.
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. 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
2023/24 financial year.
25th
percentile
50th
percentile
75th
percentile
Salary £33,750 £48,000 £40,000
Total pay
and benefits £37,750 £51,498 £82,463
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 made 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 2024 and the prior year.
Graham Clemett, CEO Dave Benson, CFO
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
Fixed pay
Base salary
535.0 519.2 368.0 357.3
Pension
1
53.5 51.9 36.8 35.5
Benefits
2
21.8 22.5 0 0
Total fixed 610.3 593.6 404.8 392.8
Variable pay
Annual bonus
3
538.5 448.6 296.3 380.2
LTIP
4,5
342.4 398.1 235.6 274.0
Other – SAYE, SIP
6
4.5 0 4.5 0
Total variable 885.4 846.7 536.4 654.2
Total 1,495.7 1,440.3 941.2 1,047.0
Of which share price growth 0 0 0 0
1. Pension: During 2023/24 each of Messrs Clemett and Benson received a cash allowance in lieu of pension contribution.
Due to an administrative error, Mr Benson’s pension in 2022/23 has been restated to reflect an underpayment of £321.25.
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 and 2023/24,
the Committee set a minimum deferral requirement of 33% of the bonus earned. For 2023/24, this deferral was equivalent
to £177,705 for Mr Clemett and £97,779 for Mr Benson. Deferred shares are subject to continued service only.
4. The 2023/24 figure includes the estimated value of 50% of the 2021 LTIP shares that vested based on performance to
31 March 2024. The share price used is the three-month average to 31 March 2024 of £5.11. 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 2021 LTIP award – this figure includes
accrued dividends on vested shares.
5. With regards to the 2020 LTIP which vested in June 2023, the 2022/2023 figures have been updated to reflect the share
price on the date of vesting on 19 June 2023 of £4.981.
6. An SAYE award was granted in 2023 to both Mr Clemett and Mr Benson, exercisable after three years.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
For 2023/24 the maximum bonus
opportunity for the Executive Directors
was 150% of salary for the CEO and 120%
of salary for the CFO. 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
PAYOUT IN RESPECT
OF 2023/24 (AUDITED)
ANNUAL BONUS PAYOUT IN RESPECT OF 2023/24
ANNUAL BONUS
OUTCOMES UNDER THE 2023/24 ANNUAL BONUS
Measure:
Threshold
(0% payable)
Maximum
(100% payable)
Formulaic outcome and
opportunity as a % of award
Trading profit after interest
£64.9m £68.6m 21.9%
50%
Actual: £66.3m
1
Strategic financial objectives
0% 100% 7. 5%
10%
Actual: 75%
Sustainability objectives
0% 100%
20%
20%
Actual: 100%
Operational efficiency
0% 100% 7.7%
10%
Actual: 77%
Customer satisfaction
80% 86% 10%
10%
Actual: 86.1% of this element
Total 67.1%/100%
Outcome (£000)
Graham Clemett, CEO
Bonus outturn
£538.5
£177.7
of which is deferred bonus
Outcome (£000)
Dave Benson, CFO
Bonus outturn
£296.3
£97.8
of which is deferred bonus
1. Adjusted by £0.3m due to exceptional costs in relation to CEO transition.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
A summary of the strategic financial, operational efficiency and sustainability objectives is
shown below. Full details for each performance measure are set out on pages 208 and 210.
STRATEGIC FINANCIAL, OPERATIONAL EFFICIENCY
AND SUSTAINABILITY OBJECTIVES 2023/24
1
2
3
STRATEGIC FINANCIAL, OPERATIONAL EFFICIENCY, SUSTAINABILITY OBJECTIVES (AUDITED)
Reduction in the large voids in our like-for-like portfolio
Capital recycling (excluding £82m already exchanged)
Raise spontaneous brand awareness
Agreement and implementation of Centro business
development plan
Yavica (finance and property management) implementation
Centre and asset management reorganisation
Rollout of new dilapidations process
Improve the cleaning and facilities provision at centres
Reduce operational energy intensity
Improve customer advocacy of our sustainability credentials
Increase our social value contribution
Champion diversity and inclusion
Strategic financial
objectives
Operational efficiency
objectives
Sustainability
objectives
ACTIVITY OPPORTUNITY OUTCOME
10%
10%
20%
7.5%
7.7%
20%
Page 209
Page 209
Page 210
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
STRATEGIC FINANCIAL OBJECTIVES – OUTCOME 7.5%/10%
1
Target Achievement
Reduction in the large voids
in our like-for-like portfolio
– 25% to 50% reduction in
large voids
– An overall reduction of 59% in the large voids in the like-for-like portfolio was achieved during the year.
Capital recycling (excluding
£82m already exchanged)
– £20m to £50m exchanged or sold – During the year, the total value of exchanged or sold was £61.1m (excluding the £82m portfolio sold in June 2023).
Since the year end, we also exchanged on the sale of the former McKay head office in Reading for £4m.
Raise spontaneous
brand awareness
– Overall brand awareness score
between 14% to 17%
– The overall brand awareness score was 13% in FY24, versus 14% in FY23. The score for this financial year saw a small
drop relative to last year. However, Workspace continues to lead competitors on prompted brand awareness, with
60% of the survey sample aware of Workspace.
Implementation of Centro
business development plan
– Plan to be agreed and in progress – Centro, which consists of 212,000 square foot, was acquired in two tranches in 2017 and 2018. Since acquisition,
a number of projects, including upgrades to common parts and meeting rooms in some parts of the campus have
been completed. We have now obtained vacant possession of Atelier House at the north end of this site and are
progressing with the roll-out of our business centre model in this building.
OPERATIONAL EFFICIENCY OBJECTIVES – OUTCOME 7.7%/10%
Target Achievement
Yavica (finance and property
management) implementation
– Successfully implemented – Overall, we fully achieved six of the ten objectives set at the start of the year, with three having been partially
achieved and one remaining a work in progress. Consequently, we therefore achieved 75% of the objectives
set for the year.
Centre and asset management
reorganisation
– Implemented and operating
effectively
– We have now successfully completed a major reorganisation of our centre management teams who now report
into a Head of Centre Management to improve our focus on customer service.
Rollout of new
dilapidations process
– Implement a new dilapidations
process, across the business
– A new dilapidations process has been successfully rolled out across the business. A series of process improvements
have been made in order to significantly enhance the experience of customers when they leave or move within the
portfolio. This includes offering customers the option of allowing the Workspace team to manage the reinstatement
works. This, together with the other process improvements, has received a positive response from our customers.
Improve cleaning and facilities
provision at centres
– Following the customer survey,
overall satisfaction ranging from
78% to 81% or above
– Customer surveys are conducted annually, by an independent third party. The overall facilities satisfaction score
was 79%, an increase in satisfaction based on ‘agree’ and ‘strongly agree’ responses received, versus 78.3% in FY23.
2
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
SUSTAINABILITY OBJECTIVES – OUTCOME: 20%/20%
3
Target Achievement
Reduce operational
energy intensity
– 4% to 7% reduction – An 11% reduction in the like-for-like energy use intensity has been achieved across the portfolio, compared to the
previous year. This was mainly driven by a 36% reduction in gas use across the portfolio as a result of electrification
and operational improvements.
– There has also been a 7% reduction in landlord procured electricity consumption.
Improve customer advocacy
of our sustainability
credentials
– 71% to 74% – The year-end customer survey revealed that 79% of customers agree that Workspace is a socially and
environmentally responsible business, and this score is up from 71% last year.
– An enhanced customer engagement and communications workstream, centre staff training on ESG and ongoing
operational improvements across the portfolio have all contributed towards this improved target. In December 2023,
the Company entered into a Corporate Power Purchase Agreement with Statkraft, Europe’s largest generator of
renewable energy, to supply around two-thirds of the Group’s expected electricity demand for 10 years, from
February 2024. This, together with a portfolio-wide energy savings campaign in February 2024, have been
positively received.
Increase our social
value contribution
– £600,000 to £700,000 – A number of social impact initiatives were rolled out during the year. This included enhanced customer and
employee wellbeing programmes, employment and skills initiatives, charity support and inclusive business practices.
– The delivery of the social value objectives has generated a total of £827,000, with a significant contribution coming
from lettings in kind, wellbeing initiatives and diversity and inclusion programmes.
– The successful launch of our apprenticeship programme, supporting six apprentices during the year.
– Our community skills and employment programme InspiresMe, has now been successfully delivered across
ten of our key centres.
Champion diversity
and inclusion
– Maintain at 80% or greater – The year-end employee survey revealed an inclusivity score of 85.5%, up from 80.0% last year.
– Diversity and inclusion initiatives rolled out during the year include 119 hours of diversity and inclusion training
for employees. We have launched a new recruitment policy and software to enable a bias free recruitment process.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
LTIP AWARD VESTING IN RESPECT OF 2023/24 (AUDITED) LTIP AWARDS MADE DURING THE 2023/24 FINANCIAL YEAR (AUDITED)
The 2021 LTIP awards measured performance over the period 1 April 2021 to 31 March 2024.
Details of the performance targets and achievement against them are set out below.
On this basis, 50% of the 2021 LTIP will vest.
The 2022 LTIP awards are based on the same targets and weightings as the 2021 LTIP award
shown below, measured over the period 1 April 2022 to 31 March 2025.
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
25th
Percentile
0%/50%
Total property return
(TPR) versus IPD
MEDIAN UPPER QUARTILE
95th
Percentile
50%/50%
LTIP (% maximum)
vesting
50%/100%
CEO CFO
Number of shares vesting
(audited)
58,521 40,270
Under the current Policy, conditional share awards under the LTIP are granted to a maximum of
200% of salary. Awards under the 2023 LTIP are subject to the performance conditions detailed
in Table E below measured over the period 1 April 2023 to 31 March 2026.
TABLE E
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%
The following awards were granted during the year under the 2023 LTIP:
Performance share award
Director
Date of grant
Market price at
date of award
1
Number
of shares
Face value
£ % of salary
Graham Clemett 22 June 2023 £4.9347 216,750 1,069,600 200%
Dave Benson 22 June 2023 £4.9347 149,188 736,200 200%
1. The share price for calculating the levels of awards was £4.9347, the average mid-market closing price over the three dealing
days 19, 20 and 21 June 2023, in accordance with the LTIP rules.
Deferred shares were granted (as conditional share awards) under the 2022/23 bonus of 31,995
shares to Mr Clemett and 27,115 shares to Mr Benson (33% of bonus awarded) on 26 June 2023.
The share price on the date of grant was £4.59 which represented the average mid-market
closing price.
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
HOW WE WILL APPLY THE POLICY IN 2024/25
BASE SALARY
The CEO will receive a base salary increase of 4%, which is
below the level awarded to the wider workforce, and this took
effect from 1 April 2024. The CFO will receive an increase of
8.7%, taking his salary to £400,000.
The CFO’s package has slipped below his peers over the
last few years. The increase in salary will place his total
compensation in line with the lower quartile of the industry
peer group. The Committee remains conscious of ensuring
that any salary increase that is awarded to Executive
Directors is typically the same level, if not below that of
the wider workforce. However, this exception is important
to the Committee, given that the CFO has been in role for
the last four years and has made a strong contribution over
this period, assisting the CEO in the successful management
of the Company through the challenges of COVID, securing of
new finance facilities including the issue of a Green Bond and
the recent implementation of a new finance and property
system. In addition, we remain mindful of his role as we
transition our new CEO. For these reasons, the Committee
concluded that this salary increase is appropriate. Executive
Director salary increases took effect from 1 April 2024.
Salaries will be as follows:
CEO CFO CEO designate
£556,400 £400,000 £560,000
The salary for the CEO designate is in line with that of the
outgoing CEO.
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.
Lawrence Hutchings will receive a cash allowance in lieu of
pension of 6% of salary for the first year of employment and
10% of salary thereafter.
ANNUAL BONUS
There is no change to the annual bonus
maximum potential in 2024/25, and this
will continue to be 150% of salary for the
CEO and 120% of salary for the CFO.
33% of the total bonus paid will be
deferred into shares for three years.
Dividend equivalents may be accrued
on deferred shares.
Whilst the Committee is of the opinion
that the targets used for the annual
bonus are commercially sensitive, we
remain committed to best practice
disclosure. We therefore set out below
some examples of the objectives that
the Committee will consider in respect
of evaluating the strategic financial and
operational efficiency and sustainability
objectives.
Operational efficiency objectives will
include elements which optimise value
and service such as centre and asset
management and improved customer
facilities and employee engagement.
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
increasing our social value impact and
championing diversity and inclusion.
Lawrence Hutchings will be eligible to
participate in the Company’s Annual
Bonus Plan, at the discretion of the
Committee, subject to the attainment
of applicable performance conditions.
The bonus opportunity will be time
pro-rated to reflect the proportion
of the relevant financial year in which
he is employed.
Full disclosure on the targets,
performance achieved and resulting
bonus payouts for 2024/25 will be
provided in next year’s report.
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
2024/25 ANNUAL BONUS AND LINK TO STRATEGY
Link to strategy
Measure:
Financial objectives (Trading
profit after interest (50%),
Strategic financial (20%))
Measure:
Sustainability (10%)
Measure:
Operational efficiency
(10%)
Measure:
Customer satisfaction
(10%)
BONUS
WEIGHTING:
10%
BONUS
WEIGHTING:
10%
BONUS
WEIGHTING:
70%
BONUS
WEIGHTING:
10%
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
HOW WE WILL APPLY THE POLICY IN 2024/25 CONTINUED
LONG-TERM INCENTIVE PLAN (LTIP)
Following careful consideration, the performance measures of the 2024 LTIP remain
unchanged from 2023.
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% p.a. See below
Maximum (100% vesting) Upper Quartile 10% p.a. 8% p.a. See below
Due to market conditions, targets under the TAR measure have been amended following
careful consideration by the Committee.
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
Increase in percentage of EPC A or B rated space 18% 24% 50%
Reduction in total Scope 1 and 2 emissions 24% 30% 50%
Graham Clemett will be granted a 2024 LTIP award which will be pro-rated for time served at
the point of vesting in June 2027.
When Lawrence Hutchings succeeds Graham Clemett as CEO (the date of which is to be
confirmed), his first ordinary course grant of an award under the Company’s LTIP is expected
to take place in June 2025. The normal maximum award is equal to 200% of salary.
CEO SUCCESSION – BUYOUT AWARD
On leaving his current employer, Lawrence Hutchings will forfeit various incentive awards.
As a consequence, the Company will, in accordance with the Director’s Remuneration Policy,
make a ‘buy-out’ award to compensate Lawrence for the loss of his awards. The buy-out award
is to be structured as follows:
A) An award over shares with a value at grant date of £250,000. The award would be subject
to a vesting period of three years from the date of commencement of employment and
would not be subject to vesting conditions other than a requirement to remain in
employment throughout the vesting period.
B) An award over shares with a value as at the date of grant of £250,000. The award would be
subject to a vesting period of three years from the date of commencement of employment.
Vesting would be subject to a requirement to remain in employment throughout the vesting
period and to the same performance conditions that apply to awards made under the
Company’s ordinary course LTIP grant to Executive Directors for the financial year in
which Lawrence commences employment with the Company.
WEIGHTING:
25%
WEIGHTING:
25%
WEIGHTING:
25%
2024 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
LINK TO STRATEGY
Driving customer-led growth
Delivering operational excellence
Sustainable from the inside out
WEIGHTING:
25%
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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 2024 and the prior year:
TABLE F
Duncan Owen Stephen Hubbard Nick Mackenzie Rosie Shapland Lesley-Ann Nash Manju Malhotra Damon Russell
Non-Executive Director
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
2023/24
£000
2022/23
£000
Base fee 163.8 55.0 66.7 200.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 – 19.2
Additional fees 2.8 6.3 – – – – 21.6 21.6 10.8 10.8 – – – 2.7
Total 166.6 61.3 66.7 200.0 55.0 55.0 76.6 76.6 65.8 65.8 55.0 55.0 – 21.9
1. Expenses incurred by Non-Executive Directors represent the cost to the Group, being gross of taxation. In 2023/24 Nick Mackenzie, Manju Malhotra, Lesley-Ann Nash and Duncan Owen were reimbursed for out of pocket expenses incurred in attending
meetings, in connection with the discharge of their duties of £90.15, £429.40, £18.60 and £44.80 respectively.
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
2024 and 4 June 2024.
TABLE G
31 March
2024
31 March
2023
Chair
Duncan Owen 20,010 9,410
Executive Directors
Graham Clemett 189,322 141,930
Dave Benson 64,988 39,765
Non-Executive Directors
Rosie Shapland Nil Nil
Lesley-Ann Nash Nil Nil
Nick Mackenzie 12,400 12,400
Manju Malhotra Nil Nil
Past Directors
Stephen Hubbard
1
See note 41,500
1. Stephen Hubbard stepped down for the Board on 6 July 2023. As at date of leaving, Stephen Hubbard held 41,500 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. On 19 June
2023, Mr Benson acquired a further 48,044 shares following the vesting of the 2020 LTIP.
Table H below shows the Executive Directors’ interest in shares.
TABLE H
Executive Director Typ e
Owned
outright
or vested
2
Unvested and
not subject to
performance
3
Subject to
performance
4
Total
Graham Clemett Shares 189,322 123,525 382,100 694,947
Market value options
1
Nil 4,556 Nil 4,556
Dave Benson Shares 64,988 90,098 262,977 418,063
Market value options
1
Nil 4,556 Nil 4,556
1. Market value options include SAYE options outstanding and not yet matured as at 31 March 2024. 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
217 for further details.
2. The total shares owned outright or vested.
3. This figure includes the deferred bonus shares awarded in 2021, 2022 and 2023 for Mr Clemett and the deferred bonus
shares awarded in 2021, 2022 and 2023 for Mr Benson and the number of shares vesting, (gross), pursuant to the 2021
LTIP award. 50% of the 2021 LTIP will vest.
4. The interest in shares of 382,100 for Mr Clemett consists of LTIP awards made in 2022 and 2023. The interest in shares
of 262,977 for Mr Benson consists of LTIP awards made in 2022 and 2023, details of which can be found on page 217
in this report.
Graham’s post cessation shareholding requirement will apply in line with the policy.
214
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Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
The fees for Non-Executive Directors are reviewed and agreed annually. The fees, which
are effective from 1 April 2024, are set out in the table below. The increase in Chair and
Non-Executive Director fees are in line with the increase awarded to the CEO and below
that of the wider workforce.
2024/25 fee 2023/24 fee % change
Chair £208,000 £200,000 4%
NED base fee £57,200 £55,000 4%
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%
ADDITIONAL INFORMATION
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 a Non-Executive
Director of The Restaurant Group PLC. Mr Clemett stepped down as a director on 21 December
2023 and was paid an annual fee of £67,720 up to and including that date.
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 2023 and 31 March 2024.
CHART D
EMPLOYEE REMUNERATION
2024
2023
DISTRIBUTION TO SHAREHOLDERS
2024
2023
£34.0m £53.8m
£29.5m £49.4m
+15% +9%
The estimated total dividend as reported in the financial statements for the year to 31 March
2024 was £36.5m.
Payments for loss of office (audited)
None.
Payments to past Directors (audited)
None.
NON-EXECUTIVE DIRECTOR FEES
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REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
ADDITIONAL INFORMATION 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 £107,490 (based on hourly rates). PwC LLP provided no
other services during the financial year.
Voting at the Company’s AGM
The table below sets out the results of the most recent shareholder votes on the Policy Report
and the advisory vote on the 2022/23 Annual Report on Remuneration at the 2023 AGM on
6 July 2023. 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 (2023 AGM) 99.77% 0.23% 168,571,004 396,722 2,506
Annual Report on
Remuneration (2023 AGM) 99.88% 0.12% 159,849,863 186,978 8,933,391
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.
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 Effective date of contract From Company From Director
Graham Clemett Chief Executive Officer 31 July 2007 12 months 12 months
Dave Benson Chief Financial Officer 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
Duncan Owen 22 July 2021 (27 February 2023) 2023 6 months
Rosie Shapland
6 November 2020 (6 November
2023) 2023 3 months
Lesley-Ann Nash 1 January 2021 (1 January 2024) 2023 3 months
Manju Malhotra 26 January 2022 (n/a) 2023 3 months
Nick Mackenzie 26 January 2022 (n/a) 2023 3 months
David Stevenson 1 June 2024 (n/a) 2024 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 office.
Mr Hubbard retired from the Company on 6 July 2023.
Mr Owen, as Chair designate, signed a new letter of appointment dated 27 February 2023 which
became effective at the conclusion of the AGM on 6 July 2023. Reappointment letters for each
of Rosie Shapland and Lesley-Ann Nash were both dated 21 September 2023 and took effect
from 6 November 2023 and 1 January 2024 respectively.
David Stevenson was appointed as a Director with effect from 1 June 2024. David will
be subject to election by shareholders at the forthcoming AGM being held on 25 July 2024.
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Strategic Report Our Governance Financial Statements Additional Information
REMUNERATION CONTINUED
ANNUAL REPORT ON REMUNERATION CONTINUED
ADDITIONAL INFORMATION 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
01/04/2023
Granted
during
the year
Lapsed
during
the year
Vested
in year
At
31/03/2024
Exercise
price
Normal exercise date
From To
Graham Clemett 107 – – – 107 18.09.18
228 – – – 228 30.08.2]
233 – – – 233 05.09.22
235 – – 235 29.09.24
3,389 – 3,389 – – £5.31 01.09.23 01.03.24
– 4,556 – – 4,556 £3.95 01.09.26 01.03.27
Dave Benson 5,649 – 5,649 – – £5.31 01.09.25 01.03.26
– 4,556 – – 4,556 £3.95 01.09.26 01.03.27
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 award 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 4 June 2024.
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
4 June 2024
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 2024 is detailed below.
As of 31 March 2024, around 2.2% and 1.8% 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.
EXECUTIVE SHARE PLANS
Limit
Actual
ALL-SHARE PLANS
Limit
Actual
5%
10%
1.8%
2.2%
Outstanding LTIP awards
Details of current awards outstanding to Graham Clemett and Dave Benson are detailed below.
Executive Director
At 1 April 2023
Performance
2
Lapsed during
the year
Performance
Vested during
the year
Performance
At 31 March 2024
Performance
Graham Clemett
18/06/2020 139,638 69,819 69,819 –
24/06/2021 117,043 – – 117,043
24/06/2022 165,350 – – 165,350
22/06/2023 – – – 216,750
Dave Benson
18/06/2020 96,089 48,045 48,044 –
24/06/2021 80,541 – – 80,541
24/06/2022 113,789 – – 113,789
22/06/2023 – – – 149,188
1. Awards will vest subject to the satisfaction of performance conditions detailed on page 211 over the three-year performance
period.
2. LTIP awards made to the Executive Directors. In June 2020, 2021, 2022 and 2023 awards were in respect of 200% of salary
based on a share price at date of award of £7.0767, £8.6117, £6.2800 and £4.9347 respectively. The 2021 LTIP awards vested
at 50%.
3. On the 22 June 2023, LTIP awards of 216,750 and 149,188 were granted to Mr Clemett and Mr Benson respectively.
217
Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
REPORT OF THE DIRECTORS
The Directors present their report on
the affairs of the Group together with the
audited financial statements for the year
ended 31 March 2024.
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 office at Canterbury
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 page 256.
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 9.0 pence was paid
in February 2024 (2023: 8.4 pence) and the
Board is recommending the payment of a
final dividend of 19.0 pence (2023: 17.4 pence)
per share to be paid on 2 August 2024 to
shareholders whose names are on the Register
of Members at the close of business on 5 July
2024. This makes a total dividend of
28.0 pence (2023: 25.8 pence) for the year.
Disclosure of information to auditors
The Directors who held office at the date
of approval of this Directors’ Report confirm
that, so far as they are each aware, there
is no relevant audit 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
Officer 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
Officers.
The Company purchased and maintained
Directors’ and Officers’ 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 55 to 59 and 163 to 164.
Details of how we reward our employees can
be found on pages 188 and 197 and in notes 23
and 24 to the financial statements.
Share capital
As at 31 March 2024, the Company’s issued
share capital comprised a single class of
191,910,392 ordinary shares of £1.00 each.
Details of the Company’s issued share capital
are set out on page 252.
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.
Substantial shareholdings in the Company
As at 31 March 2024 and 24 May 2024, the following interests in voting rights over the issued
share capital of the Company had been notified:
Shareholder
31 March 2024 24 May 2024
Number of shares Percentage held Number of shares Percentage held
The London & Amsterdam
Trust Company Limited
53,749,281 28.01% 53,749,281 28.01%
BlackRock, Inc. 27,218,988 14.18% 27,426,363 14.29%
Ameriprise/Threadneedle 10,860,812 5.66% 11,014,211 5.74%
Janus Henderson Investors 10,723,660 5.59% 10,524,674 5.48%
The Vanguard Group Inc 7,438,163 3.88% 7,541,475 3.93%
Man Group 4,077,973 2.12% 6,768,591 3.53%
218
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Strategic Report Our Governance Financial Statements Additional Information
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
offer themselves for election or re-election
(as applicable) at the AGM on 25 July 2024.
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 office.
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 2023 Annual General Meeting to make
market purchases of its own ordinary shares.
This authority will expire at the conclusion of
the 2024 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
2023 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 2023. This
authority will expire at the conclusion of the
2024 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 office 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 office or
employment that occur because of
a takeover bid.
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 193, 194, 196
and 211.
There is no further information required to be disclosed under LR9.8.4R.
REPORT OF THE DIRECTORS CONTINUED
219
Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
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 108 to 217
Principal risks and uncertainties, pages 71 to 78
Culture, purpose, values and strategy Strategic Report, pages 10, 26 and 35 to 38
Corporate Governance Report, pages 112 to 113 and 123
Directors Directors’ biographies, pages 118 to 120
Our Board, pages 117 to 120
Directors’ training and development Corporate Governance Report, page 145
Diversity & inclusion Corporate Governance Report, pages 158 to 165
Employee share schemes Note 23 to the financial statements
Engagement with employees Strategic Report, pages 25 to 26
Stakeholder engagement, pages 126 to 127
Section 172(1) Statement, pages 131 to 134
Engagement with suppliers, customers and others Strategic Report, pages 19 to 24 and 27 to 28
Our stakeholders, page 128
Section 172(1) Statement, pages 131 to 134
Financial risk management Note 18 to the financial statements
Principal risks and uncertainties, pages 71 to 78
Future developments Chair’s Statement, page 14
CEO’s Statement, page 16
Our business model, pages 9 to 11
Our strategy, pages 35 to 38
Greenhouse gas emissions and energy consumption GHG/SECR Emissions, page 103
Political donations and expenditure Compliance Statements, page 92
Post balance sheet events Note 29 to the financial statements
Principal risks and uncertainties Principal risks and uncertainties, pages 71 to 78
Research and development The Company does not undertake research and development activities
The Directors’ Report has been approved by
the Board of Directors and signed on its
behalf by
Carmelina Carfora
Company Secretary
4 June 2024
REPORT OF THE DIRECTORS CONTINUED
220
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Strategic Report Our Governance Financial Statements Additional Information
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
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 affairs 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 and reliable and, in
respect of the Parent Company financial
statements only, 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
sufficient 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 differ from
legislation in other jurisdictions.
In accordance with Disclosure Guidance
and Transparency Rule (‘DTR’) 4.1.16R, the
financial statements will form part of the
annual financial report prepared under DTR
4.1.17R and 4.1.18R. The auditor’s report on
these financial statements provides no
assurance over whether the annual financial
report has been prepared in accordance with
those requirements.
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; and
– 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.
Signed on behalf of the Board on 4 June 2024
by:
Graham Clemett
Chief Executive Officer
Dave Benson
Chief Financial Officer
221
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Strategic Report Our Governance Financial Statements Additional Information
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC
1. OUR OPINION IS UNMODIFIED
We have audited the financial statements of Workspace Group PLC (“the Company”) for the
year ended 31 March 2024 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 234 to pages 237 for the Group and Note A on pages 258 to 259, 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 affairs as at 31 March 2024 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 sufficient 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 seven financial years ended 31 March 2024. 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
£26.0m (2023:£28.0m)
1.03% (2023: 0.99%) of Total Group assets
Coverage 100% (2023:100%) of Total Group assets
Key audit matters vs 2023
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 effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. We summarise below the key audit
matters (unchanged from 2023), 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 CONTINUED
2. KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT CONTINUED
The risk Our response
Valuation of investment
property (Group)
Investment properties:
(£2,408.5 million; 2023:
£2,643.3 million)
Assets Held for Sale:
(£65.7 million; 2023:
£123.0 million)
Refer to page 166
(Audit Committee
Report), page 235
(accounting policy) and
page 242 (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 independently valued by a qualified external 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. Whilst comparable market
transactions can provide valuation evidence, the flexible office 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, primarily the database of tenancy contracts, which is
reviewed by the external valuer alongside their own analysis, factoring
in various elements such as occupancy and letting trends, and
consideration for expected voids based on available market evidence,
experience and market sentiment. For some properties, the relatively
short average lease length in the Workspace portfolio and reduced
market comparable information for such flexible office 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 sensitive to the accuracy of source
data and how it is interpreted and used for other assumptions in
the valuation.
The effect of these matters is that, as part of our risk assessment,
we determined that the valuation of investment property 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. The financial statements
(note 10) disclose the sensitivity estimated by the Group.
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 effective
means of obtaining audit evidence.
Our procedures, assisted by our own property valuation specialist, included:
Assessing valuer’s credentials: We assessed the external valuer’s objectivity, independence,
professional qualifications and experience through research, assessing terms of engagement,
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 assessing whether the valuation
report is in accordance with the Royal Institution of Chartered Surveyors Valuation – Global
Standards and accounting standards, 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 and yields, we evaluated and
challenged the appropriateness of the key assumptions upon which these valuations were
based, including those relating to estimated rental value and yields, by making a comparison
to our own understanding of the market and to industry benchmarks.
We assessed the appropriateness of adjustments made by the external valuer to the tenancy
data provided by management.
Retrospective review: We performed a retrospective review by comparing disposals during
the year to the latest valuation performed and investigated material differences.
Test of detail: We compared a sample of key inputs used in the valuations, such as rental
income and lease length, to lease contracts.
Our results
We found the resulting estimate of valuation of investment properties to be acceptable
(2023: 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
(£1,189.6 million; 2023:
£1,313.2 million)
Refer to page
166(Audit Committee
Report), page 258
(accounting policy and
financial disclosures).
Low risk, high value:
The carrying amount of the Parent Company’s investments in
subsidiaries represents 74.4% (2023: 70.8%) 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
effect 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 the current year balance sheet within the group
consolidation, to identify whether their net assets, being an approximation of their minimum
recoverable amount, were in excess of their carrying amount and if not, we challenged
management on potential impairment indicators and their assessment thereof.
Methodology choice: For those investments in subsidiaries where an indicator of impairment
was identified, we evaluated whether the methodology used to determine the recoverable
amount of investments was acceptable under the relevant accounting standards.
Our results
We found the investments in subsidiaries balance, and the related impairment charge,
to be acceptable (2023: We found the Company’s conclusion that there is no impairment
of investments in subsidiaries to be 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 £26.0 million
(2023: £28.0 million), determined with reference to a benchmark of total Group assets,
of which it represents 1.03% (2023: 0.99%).
Materiality for the Parent Company financial statements as a whole was set at £17.2 million
(2023: £18.5 million), determined with reference to a benchmark of Company total assets,
of which it represents 1.08% (2023: 1%).
In addition, we applied materiality of £3.0 million (2023: £2.9 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% (2023: 75%) of materiality for the financial statements
as a whole, which equates to £19.5 million (2023: £21.0 million) for the Group and £12.9 million
(2023: £13.8 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 £1.3 million (2023: £1.4 million) for the Group and exceeding
£0.86 million (2023: £0.93 million) for the Parent Company; or £0.15 million (2023: £0.15 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
£2,531.4m (2023: £2,839.1m)
GROUP MATERIALITY
£26.0m (2023: £28.0m)
£26.0m
Whole financial statements
materiality (2023: £28.0m)
Total Group assets
£19.5m
Whole financial statements
performance materiality
(2023: £21.0m)
£3.0m
Materiality applied to Group
components of adjusted trading
profit after interest. (2023: £2.9m)
£1.3m
Misstatements reported to the
audit committee (2023: £1.4m)
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 affect 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 94 to 107, and considered consistency with
the financial statements and our audit knowledge.
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 affect 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 affect the Group’s and
Company’s available financial resources, liquidity and covenant compliance over this period were:
– A reduction in occupancy, reflecting weaker customer demand for office space;
– A reduction in the pricing of new lettings, resulting in a reduction in average rent per sq. ft.;
– Elevated levels of counterparty risk, with bad debt significantly higher than historic levels;
– Continued elevated levels of cost inflation;
– SONIA rates remaining elevated, impacting the cost of variable rate borrowings; and
– 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.
We considered whether these risks could plausibly affect 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 to 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 related statement under the Listing Rules set out on page 88 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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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC 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. 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 effect 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. As the Group is regulated, our assessment of risks involved gaining an
understanding of the control environment including the entity’s procedures for complying
with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert
to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect 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 effect 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 effect: 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 non-compliance 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
non-compliance with all laws and regulations.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC 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 Risk Management and Internal Controls on page 178 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 88 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 effectiveness 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.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WORKSPACE GROUP PLC CONTINUED
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.
9. RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities
As explained more fully in their statement set out on page 221, 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 under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s
report provides no assurance over whether the annual financial report has been prepared in
accordance with those requirements.
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
4 June 2024
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CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
Revenue | 1 | ||
| Direct costs | 1 | ( | ( |
Net rental income | 1 | ||
Administrative expenses | 2 | ( | ( |
Trading profit | |||
Loss on disposal of investment properties | 3(a) | ( | ( |
Other expenses | 3(b) | ( | ( |
Change in fair value of investment properties | 10 | ( | ( |
Impairment of assets held for sale | ( | ( | |
Operating loss | ( | ( | |
Finance costs | 4 | ( | ( |
Exceptional finance costs | 4 | ( | |
Loss before tax | ( | ( | |
Taxation | 6 | ( | |
Loss for the financial year after tax | ( | ( | |
Basic loss per share | 8 | ( | ( |
Diluted loss per share | 8 | ( | ( |
1
1. Direct costs in 2024 includes impairment of receivables of £0.8 m (2023: £1. 1 m). See note 1 for additional information.
| 2024 | 2023 | ||
| Notes | £m | £m | |
Loss for the financial year | ( | ( | |
| Other comprehensive income: | |||
| Items that may be reclassified subsequently | |||
| to profit or loss: | |||
Change in fair value of other investments | |||
Fair value of derivative | |||
| Items that will not be reclassified subsequently | |||
| to profit or loss: | |||
Pension fund movement | 24 | ||
Other comprehensive income in the year | |||
Total comprehensive loss for the year | ( | ( |
The notes on pages 233 to 256 form part of these financial statements.
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CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2024
| 2024 | 2023 | ||
| Notes | £m | £m | |
| Non-current assets | |||
Investment properties | 10 | ||
Intangible assets | |||
Property, plant and equipment | 11 | ||
Other investments | 12 | ||
Derivative financial instruments | |||
Deferred tax | |||
| Current assets | |||
Trade and other receivables | 13 | ||
Assets held for sale | |||
Cash and cash equivalents | 14 | ||
Total assets | |||
| Current liabilities | |||
Trade and other payables | 15 | ( | ( |
Borrowings | 16(a) | ( | |
( | ( | ||
| Non-current liabilities | |||
Borrowings | 16(a) | ( | ( |
Lease obligations | 17 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets |
| 2024 | 2023 | ||
| Notes | £m | £m | |
| Shareholders’ equity | |||
Share capital | 20 | ||
Share premium | 20 | ||
Investment in own shares | 22 | ( | ( |
Other reserves | 21 | ||
Retained earnings | |||
Total shareholders’ equity |
The notes on pages 233 to 256 form part of these financial statements.
Company registration number: 02041612
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
| Attributable to owners of the Parent | |||||||
| Total | |||||||
| Investment | share- | ||||||
| Share | Share | in own | Other | Retained | holders’ | ||
| capital | premium | shares | reserves | earnings | equity | ||
| Notes | £m | £m | £m | £m | £m | £m | |
Balance at 31 March 2022 | ( | ||||||
Loss for the financial year | ( | ( | |||||
Other comprehensive income for the year | |||||||
Total comprehensive income/(loss) | ( | ( | |||||
| Transactions with owners: | |||||||
Shares issued | 20 | ||||||
Dividends paid | 7 | ( | ( | ||||
Share based payments | 23 | ||||||
Balance at 31 March 2023 | ( | ||||||
Loss for the financial year | ( | ( | |||||
Other comprehensive income for the year | |||||||
Total comprehensive income/(loss) | ( | ( | |||||
| Transactions with owners: | |||||||
Dividends paid | 7 | ( | ( | ||||
Share based payments | 23 | ||||||
Balance at 31 March 2024 | ( | ||||||
The notes on pages 233 to 256 form part of these financial statements.
| 2024 | 2023 | ||
| Notes | £m | £m | |
| Cash flows from operating activities | |||
Cash generated from operations | 19 | ||
Interest paid | ( | ( | |
Net cash inflow from operating activities | |||
| Cash flows from investing activities | |||
Purchase of investment properties | ( | ||
Capital expenditure on investment properties | ( | ( | |
Proceeds from government grant | |||
| Proceeds from disposal of investment properties | |||
(net of sale costs) | |||
| Proceeds from disposal of assets held for sale | |||
(net of sale costs) | |||
Purchase of intangible assets | ( | ( | |
Purchase of property, plant and equipment | ( | ( | |
Other expenses | ( | ( | |
Settlement of defined benefit pension scheme | ( | ||
Net cash inflow/(outflow) from investing activities | ( | ||
| Cash flows from financing activities | |||
Finance costs for new/amended borrowing facilities | ( | ( | |
| Repayment of bank borrowings and Private | |||
Placement Notes | 16(h) | ( | ( |
Draw down of bank borrowings | 16(h) | ||
Settlement of share schemes | ( | ||
Dividends paid | 7 | ( | ( |
Net cash (outflow)/inflow from financing activities | ( | ||
Net decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at start of year | 14 | ||
Cash and cash equivalents at end of year | 14 |
The notes on pages 233 to 256 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
The Company is a public limited company which is listed on the London Stock Exchange and
is incorporated and domiciled in the UK
The registered number of the Company is 02041612.
BASIS OF PREPARATION
accordance with FRS101; these are presented on pages 257 to 260.
The Directors are required to assess the appropriateness of applying the going concern basis in
the preparation of the financial statements. The current macroeconomic issues, have heightened
concerns around the UK economy and increase the risk of an economic downturn. In this context,
the Directors have fully considered the business activities and principal risks of the Company
and Group. Further details of the principal risks can be found on pages 71 to 78.
Consideration of climate change
In preparing the financial statements, the Directors have considered the impact of climate change,
particularly in the context of the risks identified in the TCFD disclosure on pages 94 to 105 this
year. There has been no material impact identified on the financial reporting judgements and
estimates. In particular, the Directors considered the impact of climate change in respect
of the following areas:
– the potential impact on the valuation of our investment properties due to transition risks;
– going concern and viability of the Group over the next three years; and
– the capital expenditure required to upgrade our assets’ EPC ratings and deliver
our net zero targets.
Whilst there is currently minimal medium-term impact expected from climate change, the
Directors are aware of the ever-changing risks attached to climate change and will regularly
assess these risks against judgements and estimates made in the preparation of the Group’s
financial statements.
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IAS 12 (amended) | Deferred Tax related to Assets and Liabilities arising |
| from a Single Transaction | |
IAS 12 (amended) | International Tax Reform (Pillar Two Model Rules) |
IAS 8 (amended) | Accounting Policies, Changes in Accounting Estimates |
| and Errors: Definition | |
| IAS 1 (amended) and IFRS Practice | Presentation of Financial Statements and IFRS Practice |
| Statement 2 | Statement 2 Making Materiality Judgements |
IFRS 17 | Insurance Contracts |
IFRS 9 | Comparative Information |
IAS 1 (amended) | Classification of Liabilities as Current or Non-Current; |
| Non-Current Liabilities with Covenants; Deferral of | |
| Effective Date Amendment | |
IAS 7 and IFRS 7 (amended) | Supplier Finance Arrangements |
IAS 21 (amended) | Lack of Exchangeability |
IFRS 16 (amended) | Lease Liability in a Sale and Leaseback |
SIGNIFICANT JUDGEMENTS AND CRITICAL ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting
principles requires the use of estimates and judgements that affect the reported amounts of
assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on management’s best knowledge
of the amount, event or actions, actual results ultimately may differ from those estimates.
The Group’s significant accounting policies are stated below. Not all of these accounting policies
require management to make subjective or complex judgements or significant estimates. The
following is intended to provide an understanding of the significant estimates within the accounting
policies that management consider critical because of the assumptions or estimation involved
in their application and their impact on the consolidated financial statements.
Critical Estimate: Investment property valuation
The Group uses the valuation performed by its independent valuer as the fair value of its
investment properties. The valuation is based upon the key assumptions of estimated rental
values and market-based yields. With regard to redevelopments and refurbishments, future
development costs and an appropriate discount rate are also used. In determining fair value, the
valuers make reference to market evidence and recent transaction prices for similar properties.
Management consider the significant assumptions to the valuation of investment properties
to be estimated rental values and market-based yields. Sensitivities on these assumptions are
provided in note 10.
MATERIAL ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of these consolidated financial
statements are set out below. These policies have been consistently applied to all years
presented unless stated otherwise.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
1. ANALYSIS OF NET RENTAL INCOME AND SEGMENTAL INFORMATION
2024 | 2023 | |||||
| Direct | Net rental | Direct | Net rental | |||
| Revenue | costs | income | Revenue | costs | income | |
| £m | £m | £m | £m | £m | £m | |
Rental income | 145.0 | (4.9) | 140.1 | 136.7 | (4.2) | 132.5 |
Service charges | 32.6 | (37.5) | (4.9) | 30.0 | (35.7) | (5.7) |
Empty rates and other non-recoverable costs | – | (10.2) | (10.2) | – | (10.6) | (10.6) |
| Services, fees, commissions | ||||||
and sundry income | 6.7 | (5.5) | 1.2 | 7.5 | (7.1) | 0.4 |
184.3 | (58.1) | 126.2 | 174.2 | (57.6) | 116.6 |
1
1
1. There are two properties within the current period (prior period: none) that are non-rent producing.
Included within direct costs for rental income is a charge of £0.8m (2023: £1.0m) and within
direct costs for service charges is a charge of £nil (2023: £0.1m) for expected credit losses
in respect of receivables from customers in the period.
| 2024 | 2023 | |
| £m | £m | |
Depreciation 1 (note 11) | 1.7 | 1.6 |
Staff costs (including share based costs) 1 (note 5) | 30.5 | 25.3 |
Repairs and maintenance expenditure on investment properties | 3.7 | 5.4 |
Trade receivables impairment (note 13) | 0.8 | 1.1 |
Amortisation of intangibles | 0.6 | 0.7 |
Audit fees payable to the Company’s Auditor | 0.8 | 0.4 |
| 2024 | 2023 | |
| £000 | £000 | |
| Audit fees: | ||
Audit of Parent Company and consolidated financial statements | 507 | 330 |
Audit of subsidiary financial statements | 110 | 40 |
617 | 370 | |
| Fees for other services: | ||
| Audit-related assurance services | 97 | 70 |
Total fees payable to Auditor | 714 | 440 |
| 2024 | 2023 | |
| £m | £m | |
| Total administrative expenses are analysed below: | ||
Staff costs | 14.8 | 13.4 |
Equity-settled share based payments | 3.1 | 1.4 |
Cash-settled share based payments | 0.2 | – |
Other | 7.2 | 6.7 |
Total administrative expenses | 25.3 | 21.5 |
| 2024 | 2023 | |
| £m | £m | |
Proceeds from sale of investment properties (net of sale costs) | 12.3 | 7.0 |
Proceeds from sale of assets held for sale (net of sale costs) | 96.2 | 52.1 |
Book value at time of sale | (110.8) | (59.8) |
Loss on disposal | (2.3) | (0.7) |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
| 2024 | 2023 | |
| £m | £m | |
Change in fair value of deferred consideration | – | (0.1) |
Other expenses | (1.2) | (3.7) |
(1.2) | (3.8) |
| 2024 | 2023 | |
| £m | £m | |
Interest payable on bank loans and overdrafts | (15.0) | (11.9) |
Interest payable on other borrowings | (19.3) | (19.0) |
Amortisation of issue costs of borrowings | (1.7) | (2.0) |
Interest payable on leases | (2.1) | (1.9) |
Interest capitalised on property refurbishments (note 10) | 3.0 | 0.2 |
Interest receivable | 0.2 | 0.2 |
Finance costs | (34.9) | (34.4) |
Exceptional finance costs | – | (0.6) |
Total finance costs | (34.9) | (35.0) |
5. EMPLOYEES AND DIRECTORS
| 2024 | 2023 | |
| Staff costs for the Group during the year were: | £m | £m |
Wages and salaries | 26.2 | 23.3 |
Social security costs | 3.4 | 3.8 |
Other pension costs (note 24) | 1.3 | 1.0 |
Equity-settled share based costs (note 23) | 3.1 | 1.4 |
34.0 | 29.5 | |
Less costs capitalised | (3.5) | (4.2) |
30.5 | 25.3 |
| 2024 | 2023 | |
| The monthly average number of people employed during the year was: | Number | Number |
Head office staff (including Directors) | 166 | 154 |
Estates and property management staff | 152 | 137 |
318 | 291 |
The emoluments and pension benefits of the Directors are determined by the Remuneration
Committee of the Board and are set out in detail in the Directors’ Remuneration Report on
pages 186 to 217.
Total Directors’ emoluments for the financial year were £2.9m (2023: £3.0m), comprising
of £2.2m (2023: £2.2m) of Directors’ remuneration, £0.6m (2023: £0.7m) gain on exercise
of share options and £0.1m (2023: £0.1m) of cash contributions in lieu of pension in respect
of two Directors (2023: two).
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
6. TAXATION
| 2024 | 2023 | |
| £m | £m | |
| Current tax: | ||
UK corporation tax | – | – |
Adjustments to tax in respect of previous periods | – | – |
– | – | |
| Deferred tax: | ||
On origination and reversal of temporary differences | (0.3) | 0.3 |
(0.3) | 0.3 | |
Total taxation (credit)/charge | (0.3) | 0.3 |
Taxation chargeable in the year relates to income from non-REIT activities such as overage,
meeting room income and utilities recharges.
The tax on the Group’s loss for the year differs from the standard applicable corporation
tax rate in the UK of 25% (2023: 19%). The differences are explained below:
| 2024 | 2023 | |
| £m | £m | |
Loss before taxation | (192.8) | (37.5) |
| Tax at standard rate of corporation tax in the UK of 25% | ||
(2023: 19%) | (48.2) | (7.1) |
| Effects of: | ||
REIT exempt income | (19.2) | (12.1) |
Changes in fair value not subject to tax as a REIT | 63.8 | 17.7 |
Share based payment adjustments | 0.5 | (0.3) |
Unrecognised losses carried forward | 2.7 | 1.8 |
Other non-taxable expenses | 0.1 | 0.3 |
Total taxation (credit)/charge | (0.3) | 0.3 |
The Group is a Real Estate Investment Trust (‘REIT’). The Group’s UK property rental business
(both income and capital gains) is exempt from UK corporation tax. The Group estimates that as
the majority of its future profits will be exempt from tax, future tax charges are likely to be low.
Profits arising from any residual business activities (e.g. trading activities and interest income),
after the utilisation of tax losses, are subject to corporation tax at the main rate of 25% for the
period (increased from 19% in the previous period).
The Group currently has an unrecognised asset in relation to tax losses from the non-REIT
business carried forward of £8.9m (2023: £6.2m) calculated at a corporation tax rate of 25%
(2023: 25%).
7. DIVIDENDS
| 2024 | 2023 | |||
Payment date | Per share | £m | £m | |
| For the year ended 31 March 2022: | ||||
Final dividend | August 2022 | – | 27.8 | |
| For the year ended 31 March 2023: | ||||
Interim dividend | February 2023 | 8.4p | – | 16.1 |
Final dividend | August 2023 | 33.3 | – | |
| For the year ended 31 March 2024: | ||||
Interim dividend | February 2024 | 9.0p | 17.3 | – |
Dividends for the year | 50.6 | 43.9 | ||
Timing difference on payment of withholding tax | 0.1 | (0.4) | ||
Dividends cash paid | 50.7 | 43.5 |
The Directors are proposing a final dividend in respect of the financial year ended 31 March 2024
of 1 9.0 pence per ordinary share, which will absorb an estimated £3 6. 5 m of retained earnings
and cash. If approved by the shareholders at the AGM, it will be paid on 2 August 2024 to
shareholders who are on the register of members on 5 July 2024. The dividend will be paid as a
REIT Property Income Distribution (‘PID’) net of withholding tax where appropriate.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
8. EARNINGS PER SHARE
| 2024 | 2023 | |
| Earnings used for calculating earnings per share: | £m | £m |
Basic and diluted earnings | (192.5) | (37.8) |
Decrease in fair value of investment properties | 251.2 | 88.0 |
Impairment of assets held for sale | 4.1 | 5.1 |
Loss on disposal of investment properties | 2.3 | 0.7 |
EPRA earnings | 65.1 | 56.0 |
| Adjustment for non-trading items: | ||
Other expenses | 1.2 | 3.8 |
Exceptional finance costs | – | 0.6 |
Taxation | (0.3) | 0.3 |
Trading profit after interest | 66.0 | 60.7 |
Earnings have been adjusted to derive an earnings per share measure as defined by the European
Public Real Estate Association (‘EPRA’) and an adjusted underlying earnings per share measure.
| 2024 | 2023 | |
| Number of shares used for calculating earnings per share: | Number | Number |
| Weighted average number of shares | ||
(excluding own shares held in trust) | 191,676,994 | 190,470,363 |
Dilution due to share option schemes | 1,537,856 | 1,129,310 |
| Weighted average number of shares | ||
for diluted earnings per share | 193,214,850 | 191,599,673 |
In pence: | 2024 | 2023 |
Basic loss per share | (100.4p) | (19.9p) |
Diluted loss per share | (100.4p) | (19.9p) |
EPRA earnings per share | 34.0p | 29.4p |
| Adjusted underlying earnings per share | 34.1p | 31.7p |
1
1. Adjusted underlying earnings per share is calculated by dividing trading profit after interest by the diluted weighted average
number of shares of 193,214,850 (2023: 191,599,673).
The diluted loss per share for the period to 31 March 2024 has been restricted to a loss of
100.4p per share, as the loss per share cannot be reduced by dilution in accordance with
IAS 33 Earnings per Share.
9. NET ASSETS PER SHARE AND TOTAL ACCOUNTING RETURN
| 2024 | 2023 | |
| Number of shares used for calculating net assets per share: | Number | Number |
Shares in issue at year end | 191,910,392 | 191,638,357 |
Less own shares held in trust at year end | (139,649) | (152,550) |
Dilution due to share option schemes | 1,637,759 | 1,201,277 |
| Number of shares for calculating diluted | ||
adjusted net assets per share | 193,408,502 | 192,687,084 |
EPRA Net Asset Value Metrics
The Group measures financial position with reference to EPRA Net Tangible Assets (NTA),
Net Reinvestment Value (NRV) and Net Disposal Value (NDV).
March 2024 | March 2023 | |||||
| EPRA | EPRA | EPRA | EPRA | EPRA | EPRA | |
| NRV | NTA | NDV | NRV | NTA | NDV | |
| £m | £m | £m | £m | £m | £m | |
IFRS Equity attributable to shareholders | 1,548.9 | 1,548.9 | 1,548.9 | 1,787.7 | 1,787.7 | 1,787.7 |
| Fair value of derivative | ||||||
financial instruments | (0.2) | (0.2) | – | |||
Intangibles per IFRS balance sheet | – | (2.2) | – | – | (2.0) | – |
| Excess of book value of debt | ||||||
over fair value | – | – | 59.3 | – | – | 86.6 |
Purchasers’ costs | 166.4 | – | – | 186.4 | – | – |
EPRA measure | 1,715.1 | 1,546.5 | 1,608.2 | 1,974.1 | 1,785.7 | 1,874.3 |
EPRA measure per share | £8.87 | £8.00 | £8.32 | £10.24 | £9.27 | £9.73 |
Total accounting return
| 2024 | 2023 | |
| Total Accounting Return | £ | £ |
Opening EPRA net tangible assets per share (A) | 9.27 | 9.88 |
Closing EPRA net tangible assets per share | 8.00 | 9.27 |
Decrease in EPRA net tangible assets per share | (1.27) | (0.61) |
Ordinary dividends paid in the year | 0.26 | 0.23 |
Total return (B) | (1.01) | (0.38) |
Total accounting return (B/A) | (10.9%) | (3.8%) |
The total accounting return for the year comprises the movement 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 total return for the year ended 31 March 2024 was -10.9%
(31 March 2023: -3.8%).
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FOR THE YEAR ENDED 31 MARCH 2024
10. INVESTMENT PROPERTIES
| 2024 | 2023 | |
| £m | £m | |
Balance at 1 April | 2,643.3 | 2,366.7 |
Purchase of investment properties | – | 426.6 |
Capital expenditure | 68.4 | 55.8 |
Change in value of lease obligations | – | 3.7 |
Capitalised interest on refurbishments (note 4) | 3.0 | 0.2 |
Disposals during the year | (12.5) | (5.5) |
Change in fair value of investment properties | (251.2) | (88.0) |
| Disposed properties tenant incentives recognised | ||
in advance under IFRS 16 | 1.4 | – |
Less: Classified as assets held for sale | (43.9) | (116.2) |
Balance at 31 March | 2,408.5 | 2,643.3 |
Investment properties represent a single class of property, being business accommodation
for rent in and around London.
Investment properties include buildings with a carrying amount of £317.2m (2023: £321.9m)
for which there are lease obligations of £34.7m (2023: £34.7m). Investment property lease
commitment details are shown in note 17.
During the prior period, the Group acquired McKay Securities Limited (formerly McKay
Securities PLC) adding 32 properties in and around London to the portfolio.
Three of the properties classified as held for sale at the end of the prior year were not sold
during the year. These are retained within current assets as they are still expected to sell within
the next 12 months to 31 March 2025 and have been subject to an impairment charge of £2.6m
following the valuation carried out at 31 March 2024. One of them exchanged during the year.
Six (2023: Ten) additional properties were reclassified as held for sale at year-end. Four of
these properties have exchanged for sale and are likely to complete within the next 12 months.
The transfer value is their year-end valuation per CBRE.
Disposed properties tenant incentives relate to disposed properties during the year, where there
were tenant lease incentives accounted for under IFRS 16.
Capitalised interest is included at a rate of capitalisation of 6.8% (2023: 3.9%). The total amount
of capitalised interest included in investment properties is £18.1m (2023: £15.1m).
The change in fair value of investment properties is recognised in the consolidated income statement.
Valuation
The Group’s investment properties are held at fair value and were revalued at 31 March 2024
by the external valuer, CBRE Limited, a firm of independent qualified valuers, in accordance with
the Royal Institution of Chartered Surveyors Valuation – Global Standards. All the properties are
revalued at period end regardless of the date of acquisition. In line with IFRS 13, all investment
properties are valued on the basis of their highest and best use. For like-for-like properties, their
current use equates to the highest and best use. For properties undergoing refurbishment or
redevelopment, most of these are still being used for business accommodation in their current
state. However, the valuation at the balance sheet date includes the impact of the potential
refurbishment and redevelopment as this represents the highest and best use.
The Executive Committee and the Board both conduct a detailed review of each property
valuation to assess whether appropriate assumptions have been applied and that valuations
are appropriate. Meetings are held with the valuers to discuss and challenge the valuations,
to confirm that they have considered all relevant information.
The valuation of like-for-like properties (which are not undergoing significant refurbishment or
redevelopment) is based on the income capitalisation method which applies market-based yields
to the Estimated Rental Values (‘ERVs’) of each of the properties. Yields are based on current
market expectations depending on the location and use of the property. ERVs are based on
estimated rental potential considering current rental streams and market comparatives whilst
also considering the occupancy and timing of rent reviews at each property. Although occupancy
and rent review timings are known, and there is market evidence for transaction prices for similar
properties, there is still a significant element of estimation and judgement in estimating ERVs.
As a result of adjustments made to market observable data, the significant inputs are deemed
unobservable under IFRS 13.
When valuing properties where Workspace is carrying out a major refurbishment, the residual
value method is used. The completed value of the refurbishment is determined as for like-for-like
properties above. This is then adjusted for costs to complete and developers profit margin.
A discount factor is applied to reflect the time period to complete construction and make
allowance for construction and market risk to arrive at the residual value of the property.
The discount factor used is the property yield that is also applied to the estimated rental value
to determine the value of the completed building. Other risks such as unexpected time delays
relating to planned capital expenditure are assessed on a project-by-project basis, looking
at market comparable data where possible and the complexity of the proposed scheme.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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10. INVESTMENT PROPERTIES CONTINUED
Valuation continued
Redevelopment properties are also valued using the residual value method. The proposed
redevelopment which would be undertaken by a residential developer is valued based on the
market value for similar sites and then adjusted for costs to complete, developer’s profit margin
and a time discount factor. Allowance is also made for planning and construction risk depending
on the stage of the redevelopment. If a contract is agreed for the sale/redevelopment of the site,
the property is valued based on agreed consideration.
For all methods, the valuers are provided with information on tenure, letting, town planning and
the repair of the buildings and sites.
The reconciliation of the valuation report total to the amount shown in the consolidated balance
sheet as non-current assets, investment properties, is as follows:
| 2024 | 2023 | |
| £m | £m | |
Total per CBRE valuation report | 2,446.5 | 2,741.1 |
Deferred consideration on sale of property | (0.6) | (0.5) |
Head leases treated as leases under IFRS 16 | 34.7 | 34.7 |
Tenant incentives recognised under IFRS 16 | (6.4) | (8.8) |
Less: Reclassified as assets held for sale | (65.7) | (123.2) |
Total investment properties per balance sheet | 2,408.5 | 2,643.3 |
The Group’s investment properties are carried at fair value and under IFRS 13 are required to be
analysed by level depending on the valuation method adopted. The different valuation methods
are as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2 – Use of a model with inputs (other than quoted prices included in Level 1) that are
directly or indirectly observable market data.
Level 3 – Use of a model with inputs that are not based on observable market data.
As noted in the significant judgements and critical estimates section, property valuations are
complex and involve data which is not publicly available and involves a degree of judgement.
All the investment properties are classified as Level 3, due to the fact that one or more
significant inputs to the valuation are not based on observable market data.
CBRE have made enquiries to ascertain any sustainability factors which are likely to impact
on value, consistent with the scope of their terms of engagement. Sustainability encompasses
a wide range of physical, social, environmental, and economic factors that can affect the value of
an asset, even if not explicitly recognised. This includes key environmental risks; such as flooding,
energy efficiency, climate, design, legislation and management considerations – as well as
current and historic land use. Where CBRE recognise the value impacts of sustainability, they
reflect their understanding of how market participants include sustainability factors in their
decisions and the consequential impact on market valuations.
The following table summarises the valuation techniques and inputs used in the determination
of the property valuation at 31 March 2024.
Key unobservable inputs:
ERVs – per sq. ft. | Equivalent yields | |||||
| Valuation | Valuation | Weighted | Weighted | |||
| Property category | £m | technique | Range | average | Range | average |
Like-for-like | 1,833.2 | A | £24–£81 | £49 | 4.9%–8.4% | 7.0% |
Completed projects | 137.4 | A | £25–£53 | £35 | 6.6%–7.2% | 7.3% |
Refurbishments | 318.5 | A/B | £24–£75 | £38 | 5.0%–9.9% | 7.3% |
Redevelopments | 18.9 | A/B | £18–£30 | £19 | 4.8%–8.7% | 7.4% |
South East Office | 72.2 | A | £25–£40 | £30 | 8.0%–11.4% | 10.4% |
Tenant incentives | (6.4) | N/A | – | – | – | – |
Head leases | 34.7 | N /A | – | – | – | – |
Total | 2,408.5 |
A = Income capitalisation method.
B = Residual value method.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
10. INVESTMENT PROPERTIES CONTINUED
Valuation continued
A key unobservable input for redevelopments at planning stage and refurbishments is developer’s
profit. The range is 10%–19% with a weighted average of 15%.
Costs to complete is a key unobservable input for redevelopments at planning stage with a range
of £273–£416 per sq. ft. and a weighted average of £325 per sq. ft.
Costs to complete are not considered to be a significant unobservable input for refurbishments
due to the high percentage of costs that are fixed.
Sensitivity analysis:
A +/- 10% movement in ERVs or a +/- 25 basis points movement in yields would result in the
following increase/decrease in the valuation.
£m | +/- 10% in ERVs | +/- 25 bps in yields |
Like-for-like | +183/-183 | -66/+71 |
Completed projects | +14/-14 | -5/+5 |
Refurbishments | +35/-35 | -15/+17 |
Redevelopments | +0/-0 | -0/+0 |
South East Office | +27/-27 | -9/+9 |
The following table summarises the valuation techniques and inputs used in the determination
of the property valuation at 31 March 2023.
Key unobservable inputs:
ERVs – per sq. ft. | Equivalent yields | |||||
| Valuation | Valuation | Weighted | Weighted | |||
| Property category | £m | technique | Range | average | Range | average |
Like-for-like | 1,886.9 | A | £21–£79 | £48 | 5.0%–7.7% | 6.2% |
Completed projects | 264.8 | A | £24–£51 | £34 | 5.8%–6.8% | 6.5% |
Refurbishments | 171.9 | A/B | £21–£53 | £35 | 4.5%–6.7% | 5.8% |
Redevelopments | 25.4 | A/B | £16–£35 | £28 | 4.8%–6.9% | 5.5% |
Acquisitions | 268.4 | A | £13–£70 | £34 | 5.2%–10.8% | 7.4% |
Tenant incentives | (8.8) | N/A | – | – | – | – |
Head leases | 34.7 | N /A | – | – | – | – |
Total | 2,643.3 |
A = Income capitalisation method.
B = Residual value method.
A key unobservable input for redevelopments at planning stage and refurbishments
is developer’s profit. The range is 10%–16% with a weighted average of 13%.
Costs to complete is a key unobservable input for redevelopments at planning stage
with a range of £262–£448 per sq. ft. and a weighted average of £356 per sq. ft.
Costs to complete are not considered to be a significant unobservable input for refurbishments
due to the high percentage of costs that are fixed.
Sensitivity analysis:
A +/- 10% movement in ERVs or a +/- 25 basis points movement in yields would result
in the following increase/decrease in the valuation.
£m | +/- 10% in ERVs | +/- 25 bps in yields |
Like-for-like | +189/-189 | -76/+83 |
Completed projects | +27/-27 | -10/+11 |
Refurbishments | +23/-23 | -10/+11 |
Redevelopments | +6/-6 | -3/+3 |
Acquisitions | +27-27 | -9/+9 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
11. PROPERTY, PLANT AND EQUIPMENT
| Equipment | |
| and fixtures | |
| Cost or valuation | £m |
1 April 2022 | 9.5 |
Additions during the year | 3.3 |
Disposals during the year | (0.3) |
Balance at 31 March 2023 | 12.5 |
Additions during the year | 0.5 |
Disposals during the year | (4.8) |
Balance at 31 March 2024 | 8.2 |
| Accumulated depreciation | |
1 April 2022 | 6.6 |
Charge for the year | 1.6 |
Disposals during the year | (0.1) |
Balance at 31 March 2023 | 8.1 |
Charge for the year | 1.7 |
Disposals during the year | (4.6) |
Balance at 31 March 2024 | 5.2 |
Net book amount at 31 March 2024 | 3.0 |
Net book amount at 31 March 2023 | 4.4 |
| 2024 | 2023 | |
| £m | £m | |
2.0% of share capital of Wavenet Limited | 3.2 | 2.1 |
3.2 | 2.1 |
| 2024 | 2023 | |
| Current trade and other receivables | £m | £m |
Trade receivables | 22.6 | 16.9 |
Less provision for impairment of receivables | (3.9) | (4.6) |
Trade receivables – net | 18.7 | 12.3 |
Prepayments, other receivables and accrued income | 16.9 | 22.3 |
Deferred consideration on sale of investment properties | 1.1 | 11.2 |
36.7 | 45.8 |
| 2024 | 2023 | |
| £m | £m | |
| Deferred consideration on sale of investment properties: | ||
Balance at 1 April | 11.2 | 0.6 |
Cash received | (10.1) | – |
Additions | – | 10.7 |
Change in fair value | – | (0.1) |
Balance at 31 March | 1.1 | 11.2 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
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13. TRADE AND OTHER RECEIVABLES CONTINUED
| 2024 | 2023 | |
| £m | £m | |
Balance at 1 April | 4.6 | 5.2 |
Increase in provision for impairment of trade receivables | 0.8 | 1.1 |
Receivables written off during the year | (1.5) | (1.7) |
Balance at 31 March | 3.9 | 4.6 |
14. CASH AND CASH EQUIVALENTS
| 2024 | 2023 | |
| £m | £m | |
Cash at bank and in hand | 4.1 | 12.0 |
Restricted cash | 7.5 | 6.5 |
11.6 | 18.5 |
£6.7m (2023: £6.5m) of the restricted cash relates to tenants’ deposit deeds which represent
returnable cash security deposits received from tenants which are held in ring-fenced bank
accounts in accordance with the terms of the individual lease contracts. The remaining balance
relates to restricted cash under terms of development projects funding.
| 2024 | 2023 | |
| £m | £m | |
Trade payables | 7.4 | 15.4 |
Other tax and social security payable | 4.8 | 15.9 |
Tenants’ deposit deeds | 8.2 | 6.5 |
Tenants’ deposits | 32.0 | 30.5 |
Accrued expenses | 28.5 | 26.1 |
Deferred income – rent and service charges | 12.1 | 13.4 |
93.0 | 107.8 |
| 2024 | 2023 | |
| £m | £m | |
| Current | ||
Bank loans (unsecured) | – | 49.8 |
| Non-current | ||
Bank loans (unsecured) | 192.3 | 197.2 |
Other loans (secured) | 64.1 | 63.9 |
3.07% Senior Notes (unsecured) | 79.9 | 79.9 |
3.19% Senior Notes (unsecured) | 119.9 | 119.8 |
3.6% Senior Notes (unsecured) | 99.9 | 99.9 |
Green Bond (unsecured) | 298.7 | 298.4 |
854.8 | 859.1 | |
Total borrowings | 854.8 | 908.9 |
| 2024 | 2023 | |
| £m | £m | |
Borrowings per (a) above Adjust for: | 854.8 | 908.9 |
Cost of raising finance | 4.2 | 5.1 |
859.0 | 914.0 | |
Cash at bank and in hand (note 14) | (4.1) | (12.0) |
Net debt | 854.9 | 902.0 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
16. BORROWINGS CONTINUED
| 2024 | 2023 | |
| £m | £m | |
Repayable within one year | – | 50.0 |
Repayable between one and two years | 80.0 | – |
Repayable between two and three years | 194.0 | 279.0 |
Repayable between three years and four years | 420.0 | – |
Repayable between four years and five years | 100.0 | 420.0 |
Repayable in five years or more | 65.0 | 165.0 |
859.0 | 914.0 | |
Cost of raising finance | (4.2) | (5.1) |
Total | 854.8 | 908.9 |
| Principal at | ||||
| period end | ||||
£m | Interest rate | Interest payable | Repayable | |
| Current | ||||
| Bank overdraft due within | ||||
one year or on demand | – | Base + 2.25% | Variable | On demand |
| Non-current | ||||
| Private Placement Notes: | ||||
3.07% Senior Notes | 80.0 | 3.07% | Half yearly | August 2025 |
3.19% Senior Notes | 120.0 | 3.19% | Half yearly | August 2027 |
3.6% Senior Notes | 100.0 | 3.60% | Half yearly | January 2029 |
Bank Loan | 125.0 | SONIA + 1.77% | Monthly | December 2026 |
Bank Loan | 69.0 | SONIA + 1.77% | Monthly | April 2026 |
Other Loan (Secured) | 65.0 | 4.02% | Quarterly | May 2030 |
Green Bond | 300.0 | 2.25% | Yearly | March 2028 |
| 859.0 |
| 2024 | |
Carrying amount of derivative | 0.2 |
Change in fair value of designated hedging instrument | 0.2 |
Notional amount £m | 100 |
Rate payable (%) | 4.285 |
Maturity | 31 January 2026 |
Hedge ratio | 1:1 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
16. BORROWINGS CONTINUED
| 2024 | 2024 | 2023 | 2023 | |
| Book value | Fair value | Book value | Fair value | |
| £m | £m | £m | £m | |
| Financial liabilities held at amortised cost | ||||
Bank loans | 192.3 | 192.3 | 247.0 | 247.0 |
Other loans | 64.1 | 61.6 | 63.9 | 63.5 |
Private Placement Notes | 299.6 | 285.4 | 299.6 | 287.8 |
Lease obligations | 34.7 | 34.7 | 34.7 | 34.7 |
Green Bond | 298.7 | 256.1 | 298.4 | 224.0 |
889.4 | 830.1 | 943.6 | 8 57.0 | |
Financial assets at fair value through other comprehensive income | ||||
Financial derivative | 0.2 | 0.2 | – | – |
Other investments | 3.2 | 3.2 | 2.1 | 2.1 |
3.4 | 3.4 | 2.1 | 2.1 | |
| Financial assets at fair value through profit or loss | ||||
Deferred consideration (including overage) | 1.1 | 1.1 | 11.2 | 11.2 |
1.1 | 1.1 | 11.2 | 11.2 |
| 2024 | 2023 | |
| Assets | £m | £m |
| a) Assets at fair value through profit or loss | ||
Deferred consideration (overage) | 0.6 | 0.5 |
0.6 | 0.5 | |
| b) Loans and receivables | ||
Cash and cash equivalents | 11.6 | 18.5 |
| Trade and other receivables excluding prepayments | 27.4 | 31.7 |
39.0 | 50.2 | |
| c) Assets at value through other comprehensive income | ||
Financial derivative | 0.2 | – |
Other investments | 3.2 | 2.1 |
3.4 | 2.1 | |
Total | 43.0 | 52.8 |
| 2024 | 2023 | |
| Liabilities | £m | £m |
| Other financial liabilities at amortised cost | ||
Borrowings | 854.8 | 908.9 |
Lease liabilities | 34.7 | 34.7 |
| Trade and other payables excluding non-financial liabilities | 76.1 | 78.5 |
965.6 | 1,022.1 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
16. BORROWINGS CONTINUED
| Bank loans and | ||
| borrowings | Lease liabilities | |
| £m | £m | |
Balance at 1 April 2023 | 908.9 | 34.7 |
| Changes from financing cash flows: | ||
Proceeds from bank borrowings | 156.0 | – |
Repayment of bank borrowings | (211.0) | – |
Finance costs for new/amended borrowing facilities | (0.8) | – |
Total changes from cash flows | (55.8) | – |
Amortisation of issue costs of borrowing | 1.7 | – |
Total other changes | 1.7 | – |
Balance at 31 March 2024 | 854.8 | 34.7 |
| Bank loans and | ||
| borrowings | Lease liabilities | |
| £m | £m | |
Balance at 1 April 2022 | 595.5 | 31.0 |
| Changes from financing cash flows: | ||
Proceeds from bank borrowings | 286.0 | – |
Repayment of bank borrowings | (150.0) | – |
Finance costs for new/amended borrowing facilities | (1.6) | – |
Finance costs assumed on asset acquisition | (1.6) | – |
Total changes from cash flows | 132.8 | – |
Exceptional finance costs | 0.6 | – |
Amortisation of issue costs of borrowing | 2.0 | – |
Debt assumed on asset acquisition | 178.0 | – |
Changes in leases | – | 3.7 |
Total other changes | 180.6 | 3.7 |
Balance at 31 March 2023 | 908.9 | 34.7 |
| 2024 | 2023 | |
| £m | £m | |
Within one year | 2.1 | 2.1 |
Between one and five years | 8.4 | 8.4 |
Between five and fifteen years | 17.2 | 19.0 |
Beyond fifteen years | 180.5 | 180.8 |
208.2 | 210.3 | |
Future finance charges on leases | (173.5) | (175.6) |
Present value of lease liabilities | 34.7 | 34.7 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY
The Group has identified exposure to the following financial risks:
– Market risk
– Credit risk
– Liquidity risk
– Capital risk management
The policies for managing each of these risks and the principal effects of these policies on the
results for the year are summarised below:
| 2024 | 2023 | |
| £m | £m | |
Cash and cash equivalents (note 14) | 11.6 | 18.5 |
Trade receivables – current (note 13) | 18.7 | 12.3 |
Deferred consideration – current (note 13) | 1.1 | 11.2 |
31.4 | 42.0 |
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY CONTINUED
(c) Liquidity risk continued
| Due | Due | Due | ||||
| Due | between | between | 3 years | Total | ||
| Carrying | within | 1 and 2 | 2 and 3 | and | contracted | |
| amount | 1 year | years | years | beyond | cash flows | |
| 31 March 2024 | £m | £m | £m | £m | £m | £m |
| Financial liabilities | ||||||
Private Placement Notes | 300.0 | 9.9 | 88.3 | 7.4 | 227.2 | 332.8 |
Bank loan | 125.0 | 4.4 | 4.4 | 131.1 | – | 139.9 |
Bank loan | 69.0 | 4.8 | 4.8 | 69.2 | – | 78.8 |
Green Bond | 300.0 | 6.8 | 6.8 | 6.8 | 306.3 | 326.7 |
Other loans | 65.0 | 2.6 | 2.6 | 2.6 | 72.8 | 80.6 |
Lease liabilities | 34.7 | 2.1 | 2.1 | 2.1 | 201.9 | 208.2 |
| Trade and other payables | 76.1 | 76.1 | – | – | – | 76.1 |
969.8 | 106.7 | 109.0 | 219.2 | 808.2 | 1,243.1 |
| Due | Due | Due | ||||
| Due | between | between | 3 years | Total | ||
| Carrying | within | 1 and 2 | 2 and 3 | and | contracted | |
| amount | 1 year | years | years | beyond | cash flows | |
| 31 March 2023 | £m | £m | £m | £m | £m | £m |
| Financial liabilities | ||||||
Private Placement Notes | 300.0 | 9.9 | 9.9 | 88.3 | 234.5 | 342.6 |
Bank loan | 123.0 | 7.3 | 7.3 | 128.2 | – | 142.8 |
Bank loan | 76.0 | 4.7 | 4.7 | 76.2 | – | 85.6 |
Bank loan | 50.0 | 51.5 | – | – | – | 51.5 |
Green Bond | 300.0 | 6.8 | 6.8 | 6.8 | 312.9 | 333.3 |
Other loans | 65.0 | 2.6 | 2.6 | 2.6 | 75.4 | 83.2 |
Lease liabilities | 34.7 | 2.1 | 2.1 | 2.1 | 204.0 | 210.3 |
| Trade and other payables | 78.5 | 78.5 | – | – | – | 78.5 |
1,027.2 | 163.4 | 33.4 | 304.2 | 826.8 | 1,327.8 |
19. NOTES TO CASH FLOW STATEMENT
Reconciliation of loss for the year to cash generated from operations:
| 2024 | 2023 | |
| £m | £m | |
Loss before tax | (192.8) | (37.5) |
Depreciation | 1.7 | 1.6 |
Amortisation of intangibles | 0.6 | 0.7 |
Letting fees amortisation | 0.3 | 0.5 |
Loss on disposal of investment properties | 2.3 | 0.7 |
Other expenses (note 3b) | 1.2 | 3.8 |
Net loss from change in fair value of investment property | 251.2 | 88.0 |
Impairment of assets held for sale | 4.1 | 5.1 |
Equity-settled share based payments | 3.3 | 1.4 |
Finance costs | 34.9 | 34.4 |
Exceptional finance costs | – | 0.6 |
| Changes in working capital: | ||
Increase in trade and other receivables | (2.9) | (6.4) |
(Decrease)/Increase in trade and other payables | (16.2) | 17.6 |
Cash generated from operations | 87.7 | 110.5 |
For the purposes of the cash flow statement, cash and cash equivalents include restricted cash
– tenants’ deposit deeds (note 14).
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Strategic Report Our Governance Financial Statements Additional Information
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
| 2024 | 2023 | |
| £m | £m | |
Issued: Fully paid ordinary shares of £1 each | 191.9 | 191.6 |
| 2024 | 2023 | |
| Movements in share capital were as follows: | Number | Number |
Number of shares at 1 April | 191,638,357 | 181,125,259 |
Issue of shares | 272,035 | 10,513,098 |
Number of shares at 31 March | 191,910,392 | 191,638,357 |
Share capital | Share premium | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Balance at 1 April | 191.6 | 181.1 | 295.5 | 295.5 |
Issue of shares | 0.3 | 10.5 | 1.1 | – |
Balance at 31 March | 191.9 | 191.6 | 296.6 | 295.5 |
| Equity- | |||||
| Other | settled share | ||||
| investment | Hedging | based | Merger | ||
| reserve | Reserve | payments | reserve | Total | |
| £m | £m | £m | £m | £m | |
Balance at 1 April 2022 | – | – | 23.9 | 8.7 | 32.6 |
Share based payments | – | – | 1.4 | – | 1.4 |
Issue of shares (note 20) | – | – | – | 56.6 | 56.6 |
Change in fair value | 0.4 | – | – | – | 0.4 |
Balance at 31 March 2023 | 0.4 | – | 25.3 | 65.3 | 91.0 |
Share based payments | – | – | 0.7 | – | 0.7 |
| Change in fair value of other investment | |||||
(note 12) | 1.1 | – | – | – | 1.1 |
| Change in fair value of derivative | |||||
financial instruments (cash flow hedge) | – | 0.2 | – | – | 0.2 |
Balance at 31 March 2024 | 1.5 | 0.2 | 26.0 | 65.3 | 93.0 |
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
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Strategic Report Our Governance Financial Statements Additional Information
23. SHARE BASED PAYMENTS
The Group operates a number of share schemes:
(a) Long Term Incentive Plan (‘LTIP’) and Restricted Share Awards (‘RSA’)
The LTIP scheme is a performance award scheme whereby shares are issued against
Group performance measures which are assessed over the three-year vesting period.
The performance measures for the 2021 and 2022 schemes are:
– Relative TSR
– Total Property Return compared to the IPD benchmark
The performance measures for the 2023 scheme are:
– Relative TSR
– Relative EPS growth
– Relative ESG metrics
– Relative TAR
The shares are issued at nil cost to the individuals provided the performance conditions are met.
Under the 2023 LTIP scheme, 365,938 performance shares and 430,962 restricted shares were
awarded in June 2023 to Directors and Senior Management (2022 LTIP scheme: 848,199
performance shares were awarded in June 2022).
Details of the movements for the LTIP scheme during the year were as follows:
| LTIP | |
| Number | |
At 1 April 2022 | 1,386,866 |
Granted | 848,199 |
Lapsed | (470,877) |
At 31 March 2023 | 1,764,188 |
Granted (LTIP) | 365,938 |
Granted (RSA) | 430,962 |
Exercised | (259,497) |
Lapsed | (276,699) |
At 31 March 2024 | 2,024,892 |
For the 2020 LTIP scheme, which vested in June 2023, the average closing share price at
the date of exercise of shares exercised during the year was £5.30 (2019 LTIP scheme: £nil).
A binomial model was used to determine the fair value of the LTIP grant for the Relative TSR
element of the schemes.
| November | June 2021 | ||||||
202 3 LTIP | 2022 | LTI P | 202 1 LTIP | LTIP | 2020 | LTIP | |
Share price at grant | 470p | 642p | 841p | 842p | 706p | ||
Exercise price | Nil | Nil | Nil | Nil | Nil | ||
Average expected life (years) | 3 | 3 | 3 | 3 | 3 | ||
Risk-free rate | 4.95% | 1.96% | 0.49% | 0.16% | 0.61% | ||
Average share price volatility | 33.9% | 41.5% | 42.6% | 39.5% | 35% | ||
Correlation | 52% | 46% | 47% | 45% | 46% | ||
TSR starting factor | 0.96 | 0.85 | 1.14 | 1.11 | 0.65 | ||
Fair value per option – Relative TSR element | 294p | 333p | 446p | 475p | 207p |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
23. SHARE BASED PAYMENTS CONTINUED
(b) Employee share option schemes
The Group operates a Save As You Earn (‘SAYE’) share option scheme. Grants under the SAYE
scheme are normally exercisable after three or five years’ saving. In accordance with UK practice,
the majority of options under the SAYE schemes are granted at a price 20% below the market
price ruling at the date of grant.
Details of the movements for the SAYE schemes during the year were as follows:
| SAYE | ||
| Weighted exercise | ||
Options outstanding | Number | price |
At 1 April 2022 | 327,381 | £5.65 |
Options granted | 132,890 | £5.59 |
Options lapsed | (173,364) | £5.75 |
At 31 March 2023 | 286,907 | £5.56 |
Options granted | 390,739 | £4.79 |
Options exercised | (12,538) | £5.31 |
Options lapsed | (226,668) | £5.44 |
At 31 March 2024 | 438,440 | £4.94 |
The average closing share price at the date of exercise for the SAYE options exercised (for the
three-year 2020 and the five-year 2018 schemes) during the year was £5.31 (2023: not applicable
because no shares were exercised).
The fair value has been calculated using the Black-Scholes model. Inputs to the model are
summarised as follows:
| 2024 | 2024 | 2023 | 2023 | |
| SAYE | SAYE | SAYE | SAYE | |
| 3 year | 5 year | 3 year | 5 year | |
Weighted average share price at grant | 479p | 479p | 559p | 559p |
Exercise price | 395p | 395p | 508p | 508p |
Expected volatility | 34% | 36% | 41% | 34% |
Average expected life (years) | 3 | 5 | 3 | 5 |
Risk free rate | 5% | 4% | 2% | 2% |
Expected dividend yield | 5% | 5% | 4% | 4% |
Possibility of ceasing employment before vesting | 25% | 25% | 25% | 25% |
The expected life is the average expected period to exercise. The risk free rate of return is the
yield on zero-coupon UK Government bonds of a term consistent with the assumed option life.
The expected dividend yield is based on the present value of expected future dividend
payments to expiry.
Fair values per share of these options were:
2024 | 2023 | |||
Grant date | Fair value of award | Grant date | Fair value of award | |
SAYE – three year | 18 July 2023 | 125p | 27 July 2022 | 144p |
SAYE – five year | 18 July 2023 | 133p | 27 July 2022 | 136p |
(c) Share Incentive Plan (‘SIP’)
All staff were granted £1,000 worth of shares in September 2015, £2,000 in August 2017,
£2,000 in September 2019 and £2,000 in September 2021. These shares are held in trust under
an HMRC-approved SIP. The shares can be exercised following three years of employment but
must be held for a further two years in order to qualify for tax advantages. No shares were
granted in the year (2023: nil), 5,400 (2023: 15,259) shares were exercised in the year and
3,290 (2023: 9,619) shares lapsed.
(d) Year-end summary
At 31 March 2024, in total there were 2,498,583 (2023: 2,111,777) share awards/options
exercisable on the Company’s ordinary share capital. These are analysed below:
| Ordinary | |||||
| Exercise | shares | Vested and | |||
| Date of grant | price | Number | exercisable | Exercisable between | |
| LTIP | |||||
18 June 2021 | – | 465,922 | – | 18.06.2024 | – |
24 June 2022 | – | 768,327 | – | 24.06.2025 | – |
22 June 2023 (LTIP) | – | 365,938 | – | 22.06.2026 | – |
22 June 2023 (RSA) | – | 424,706 | – | 22.06.2026 | – |
| SAYE | |||||
25 July 2019 – five year | £7.02 | – | – | 01.09.2024 | 01.03.2025 |
27 July 2020 – five year | £5.31 | 7,116 | – | 01.09.2025 | 01.03.2026 |
23 July 2021 – three year | £6.70 | 13,500 | – | 01.09.2024 | 01.03.2025 |
23 July 2021 – five year | £6.70 | 447 | – | 01.09.2026 | 01.03.2027 |
27 July 2022 – three year | £5.59 | 45,150 | – | 01.09.2025 | 01.03.2026 |
27 July 2022 – five year | £5.59 | 472 | – | 01.09.2027 | 01.03.2028 |
18 July 2023 – three year | £4.79 | 331,812 | – | 01.09.2026 | 01.03.2027 |
18 July 2023 – five year | £4.79 | 39,943 | – | 01.09.2028 | 01.03.2029 |
| SIP | |||||
| 29 September 2021 | – | 35,250 | – | 29.09.2024 | – |
Total | 2,498,583 | – |
1
1. The number of ordinary shares in the SIP scheme does not include 15,040 unallocated shares.
The share awards/options outstanding at 31 March 2024 had a weighted average remaining
contractual life of: LTIP – 1.4 years (2023: 1.4 years), SAYE – 2.4 years (2023: 1.5 years),
SIP – 0.2 year (2023: 1.0 year). The weighted average for the SIP scheme includes the
unallocated and exercisable shares from previous awards.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
23. SHARE BASED PAYMENTS CONTINUED
(e) Cash-settled share based payments
National Insurance payments due on the exercise of non-approved ESOS options and shares
from the LTIP are considered cash-settled share based payments.
The estimated fair value of the National Insurance cash-settled share based payments have been
calculated using the share price at the balance sheet date. At each balance sheet date, the Group
revises its estimates of the number of options that are expected to vest. It recognises the impact
of the revision to original estimates, if any, in the income statement.
(f) Share based payment charges
The Group recognised a total charge in relation to share based payments as follows:
| 2024 | 2023 | |
| £m | £m | |
Equity-settled share based payments | 3.1 | 1.4 |
Cash-settled share based payments | 0.2 | – |
3.3 | 1.4 |
The total liability at the end of the year in respect of cash-settled share based schemes was
£0.5m (2023: £0.3m).
| 2024 | 2023 | |
| Key management compensation: | £m | £m |
Short-term employee benefits | 4.5 | 4.5 |
Post-employment benefits | 0.2 | 0.2 |
Other long-term benefits | – | – |
Termination benefits | – | – |
Share based payment benefits | 1.0 | 1.0 |
Total | 5.7 | 5.7 |
| 2024 | 2023 | |
| £m | £m | |
Investment property construction | 18.8 | 34.4 |
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
Name | Company Number | Nature of business |
Workspace 12 Limited | 05764838 | Property Investment |
Workspace 13 Limited | 05834824 | Property Investment |
Workspace 14 Limited | 05834831 | Property Investment |
| Omnibus Workspace Limited | 01444827 | Non-trading |
| United Workspace Limited | 01749661 | Non-trading |
| Workspace Holdings Limited | 03729646 | Non-trading |
| Busworks Limited | 04108036 | Holding Company |
| LI Property Services Limited | 02134039 | Insurance Agents |
Workspace Management Limited | 02841232 | Property Management |
Workspace 1 Limited | 03726272 | Dormant |
Workspace 10 Limited | 02985018 | Dormant |
McKay Securities Limited | 00421479 | Property Investment |
| Baldwin House Limited | 00692181 | Non-trading |
Workspace Projects (KP) Limited | 14186009 | Property Investment |
| Workspace Glebe Limited | 05834811 | Dissolved |
| Glebe Three Limited | 05830231 | Dissolved |
| Workspace 11 Limited | 05764848 | Dissolved |
| Workspace 15 Limited | 05834840 | Dissolved |
| Anyspacedirect.co.uk Limited | 07117982 | Dissolved |
| Workspace Newco 1 Limited | 10195676 | Dissolved |
| Workspace Newco 2 Limited | 10195681 | Dissolved |
| Country of | |||
| Name | incorporation | Registered address | Nature of business |
Workspace 17 (Jersey) Limited | Jersey | 44 Esplanade, St Helier, | Holding |
| Jersey JE4 9WQ | Company | ||
| Workspace Salisbury Limited | Jersey | 44 Esplanade, St Helier, | Property |
| Jersey JE4 9WQ | Investment | ||
| Centro Property Limited | Guernsey | Martello Court, Admiral Park, | Non-trading |
| St Peter Port, Guernsey GY1 3HB | |||
| Stamfordham Road (IOM) | Isle of Man | 33-37 Athol Street, Douglas, | Non-trading |
| Limited | Isle of Man, IM1 1LB | ||
| Workspace 16 (Jersey) Limited | Jersey | Gaspé House, | Dissolved |
| 66-72 The Esplanade, St Helier, | |||
| Jersey JE2 3QT |
28. LEASES
The majority of the Group’s tenant leases are granted with a rolling six-month tenant break
clause, although property acquisitions have included customer leases which are much longer,
with fewer break clauses. The future minimum rental income under leases granted to tenants
are shown below.
| 2024 | 2023 | |
| Land and buildings: | £m | £m |
Within one year | 86.7 | 85.0 |
Between one and two years | 21.0 | 28.4 |
Between two and three years | 12.6 | 16.3 |
Between three and four years | 9.8 | 9.5 |
Between four and five years | 5.5 | 8.0 |
Beyond five years | 12.2 | 18.4 |
147.8 | 165.6 |
29. POST BALANCE SHEET EVENTS
The group completed the sales of Mallard Court in April 2024 and Poplar Business Park in May 2024
for a total consideration of £25.8m, the sales price for both are in line with the 31 March 2024
valuation. In addition, Cygnet House and 20-30 Greyfriars Road have exchanged for sale in
April 2024, with completion set for June 2024 and January 2025 respectively.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
Notes
2024
£m
2023
£m
Fixed assets
Investments C 1,189.6 1,313.2
1,189.6 1,313.2
Current assets
Debtors: amounts falling due within one year D 407.6 534.1
Cash and cash equivalents 2.5 7.0
410.1 541.1
Total assets 1,599.7 1,854.3
Current liabilities
Creditors: amounts falling due within one year E (149.1) (255.2)
Borrowings F – (50.0)
(149.1) (305.2)
Creditors: amounts falling due after more than one
year
Borrowings F (722.2) (719.4)
Total liabilities (871.3) (1,024.6)
Net assets 728.4 829.7
Capital and reserves
Share capital 191.9 191.6
Share premium 296.6 295.6
Investment in own shares (9.9) (9.9)
Other reserves G 91.3 90.6
Retained earnings
1
158.5 261.8
Total shareholders’ equity 728.4 829.7
1. Retained earnings for the Company include loss for the year of £53.6m (2023: £166.3m profit).
The notes on pages 258 to 260 form part of these financial statements.
The financial statements on pages 257 to 260 were approved by the Board of Directors
on 4 June 2024 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 2024
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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 effective.
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.
Significant judgements and critical estimates
As a result of a reduction in the valuation of investment properties owned by certain of its
subsidiaries in the year to March 2024, the Directors performed an impairment assessment and
recognised an impairment of £121.4m in the value of its investment in subsidiaries. The Directors
also identified that when the same impairment assessment was carried out for the prior year,
an impairment of £70.1m should have been recognised. The Directors have considered ‘IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors’ and reached a conclusion
that there was no material prior period error.
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
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 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
Loss for the year – – – – (53.6) (53.6)
Total comprehensive loss – – – – (53.6) (53.6)
Transactions with owners:
Dividends paid – – – – (50.6) (50.6)
Share based payments 0.3 1.0 – 0.7 0.9 2.9
Balance at 31 March 2024 191.9 296.6 (9.9) 91.3 158.5 728.4
The notes on pages 258 to 260 form part of these financial statements.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
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B. (LOSS)/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 loss attributable
to shareholders, before dividend payments, is £53.6m (2023: £166.3m profit). £89.5m of
dividends were received in the year from subsidiary undertakings (2023: £179.5m).
Dividend payments are disclosed in note 7 to the consolidated financial statements.
C. INVESTMENTS
Investment in
subsidiary
undertakings
£m
Cost
Balance at 31 March 2023 1,447.5
Additions in the year 0.7
Disposals in the year (137.2)
Balance at 31 March 2024 1,311.0
Impairment
Balance at 31 March 2023 134.3
Impairment in the year (121.4)
Disposals in the year (134.3)
Balance at 31 March 2024 121.4
Net book value at 31 March 2024 1,189.6
Net book value at 31 March 2023 1,313.2
An Impairment test has been performed at the year end by comparing the carrying amount of
100% investments with each individual subsidiaries financial information to identify whether their
net assets, being an approximation of their recoverable amount, are in excess of their fair value
less cost of disposal, as measured under level 3 of the fair value hierarchy detailed in note 10 of
the group financial statements. This has resulted in an impairment in the year of £121.4m, reflecting
the reduction in the valuation of the investment properties in three separate subsidiary entities.
D. DEBTORS
Amounts falling due within one year
2024
£m
2023
£m
Amounts owed by Group undertakings 406.1 533.5
Corporation tax asset 1.5 0.6
407.6 534.1
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 amounts owed by Group undertakings.
A. ACCOUNTING POLICIES CONTINUED
Material 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 differences 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.
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
E. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024
£m
2023
£m
Amounts owed to Group undertakings 145.2 250.8
Withholding tax 1.8 1.9
Accruals and deferred income 2.1 2.5
149.1 255.2
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
2024
£m
2023
£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 125.0 123.0
Green Bond 2.25% March 2028 300.0 300.0
Total borrowings 725.0 773.0
Less cost of raising finance (2.8) (3.6)
Net borrowings 722.2 769.4
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:
2024
£m
2023
£m
Repayable within one year – 50.0
Repayable between one and two years 80.0 –
Repayable between two and three years 125.0 203.0
Repayable between three and four years 420.0 –
Repayable between four and five years 100.0 420.0
Repayable in five years or more – 100.0
725.0 773.0
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 252 to 255 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 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
Share based payments 0.7 – 0.7
Balance at 31 March 2024 26.0 65.3 91.3
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MARCH 2024
31 March
2024
£m
31 March
2023
£m
31 March
2022
£m
31 March
2021
£m
31 March
2020
£m
Rents receivable 145.0 136.7 104.3 118.0 132.7
Service charges and other income 39.3 37.5 28.6 24.3 28.7
Revenue 184.3 174.2 132.9 142.3 161.4
Trading profit before interest 100.9 95.1 67.4 62.5 104.3
Net interest payable
1
(34.9) (34.4) (20.5) (23.8) (23.3)
Trading profit after interest 66.0 60.7 46.9 38.7 81.0
(Loss)/profit before taxation (192.8) (37.5) 124.0 (235.7) 72.5
(Loss)/profit after taxation (192.5) (37.8) 123.9 (235.7) 72.1
Basic (loss)/earnings per share (100.4)p (19.9)p 68.2p (130.3)p 40.0p
Dividends per share 28.0p 25.8p 21.5p 17.75p 36.16p
Dividends (total) 53.8 49.4 40.6 32.1 65.4
Investment properties 2,408.5 2,643.3 2,366.7 2,349.9 2,586.3
Other assets less liabilities (4.7) 46.4 (9.4) (65.5) (47.1)
Net debt (854.9) (902.0) (557.7) (564.9) (541.2)
Net assets 1,548.9 1,787.7 1,799.6 1,719.5 1,998.0
Gearing 55% 50% 31% 33% 27%
Loan to value 35% 33% 23% 24% 21%
EPRA Net Tangible Assets (NTA) £8.00 £9.27 £9.88 £9.38 £10.88
1. Excludes exceptional items.
31 March
2024
£m
31 March
2023
£m
31 March
2022
£m
31 March
2021
£m
31 March
2020
£m
Workspace Group:
Number of estates 77 86 57 58 59
Lettable floorspace (million sq. ft.) 4.5 5.2 4.0 3.9 3.9
Number of lettable units 4,678 4,910 4,482 4,196 4,009
Average unit size (sq. ft.) 946 1,065 844 942 922
Rent roll of occupied units £143.4m £140.1m £111.0m £103.9m £132.8m
Overall rent per sq. ft. £38.21 £32.86 £33.26 £33.90 £39.18
Overall occupancy 83.0% 81.5% 84.3% 77.8% 87.0%
Enquiries (number) 9,458 10,563 11,007 8,870 13,041
Lettings (number) 1,238 1,312 1,520 1,146 1,454
EPRA Measures
EPRA Earnings per share 34.0p 29.4p 26.2p 21.3p 44.5p
EPRA Net Tangible Asset per share £8.00 £9.27 £9.88 £9.38 £10.88
FIVE-YEAR PERFORMANCE (UNAUDITED)
2020–2024
PERFORMANCE METRICS (UNAUDITED)
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EPRA PERFORMANCE MEASURES (UNAUDITED)
Note 2024 2023
EPRA earnings (£m) 8 66.0 60.7
EPRA earnings per share (diluted) 8 34.1 31.7
EPRA reinstatement value 9 1,715.1 1,974.1
EPRA net reinstatement value per share 9 8.87 10.25
EPRA net tangible assets (£m) 9 1,546.5 1,785.7
EPRA net tangible assets per share 9 8.00 9.27
EPRA net disposal value 9 1,608.2 1,874.3
EPRA net disposal value per share 9 8.32 9.73
EPRA LTV (see below) (below) 36.9% 34.9%
EPRA Vacancy Rate (below) 13.8% 13.6%
EPRA Capital Expenditure (below) 71.4 482.6
Definitions for these metrics can be found on pages 265.
EPRA LT V Note
2024
£m
2023
£m
Loan borrowings 16a 859.0 914.0
Net payable 49.6 55.5
Cash and cash equivalents 14 (4.1) (12.0)
Net Debt 904.5 957.5
Investment properties at fair value 10 2,446.5 2,741.1
Intangibles 2.2 2.0
Total Property Value 2,448.7 2,743.1
LTV% 36.9% 34.9%
EPRA Vacancy Rate
2024
£m
2023
£m
Estimated rental value of vacant space excluding
major refurbishments and redevelopments
1
A 25.3 25.2
Estimated rental value of the total portfolio
1
194.6 194.6
Less: Major refurbishments and redevelopments 11.4 9.3
Total B 183.2 185.3
EPRA Vacancy Rate A/B 13.8% 13.6%
1. 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 and non-core properties at their current rent roll and occupancy.
Property related capital expenditure
All figures in £m
2024
£m
2023
£m
Acquisitions – 426.6
Major refurbishments & developments 38.3 9.9
Capitalised interest 3.0 0.2
Investment properties:
Incremental letting space – –
No incremental letting space 30.1 45.9
Tenant incentives – –
Total capital expenditure 71.4 482.6
Conversion from accrual to cash basis (2.1) (241.7)
Total capital expenditure on cash basis 69.3 240.9
EPRA like-for-like rental income
The table below sets out the like-for-like rental growth of the portfolio, in accordance with EPRA
Best Practices Recommendations.
2024
£m
2023
£m
Growth
£m
Growth
%
Net rental Income
EPRA like-for-like portfolio
1
97.3 88.2 9.1 10.3%
Refurbishments &
Redevelopments 12.9 11.8
Underlying Net Rental Income 110.2 100.0 10.2 10.2%
Acquisitions & Disposals 16.0 16.6
Net Rental Income Total 126.2 116.6 9.6 8.2%
1. For this purpose, the like-for-like portfolio comprises properties which have been owned and consistently in operation and not
affected by development or refurbishment activity during the current and prior reporting years, in line with EPRA Best
Practice Recommendations. The valuation of the like-for-like portfolio on this basis, as valued by our external valuers, is
£1,810m. As per Note 1 of the financial statements, management have determined that the Group operates a single operating
segment.
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PROPERTY PORTFOLIO 2024 (UNAUDITED)
Property name Postcode
Lettable floor area
sq. ft.
Net rent roll of
occupied units £
LIKE-FOR-LIKE
Archer Street Studios W1D 7AZ 14,984 893,607
Brickfields E2 8HD 56,441 2,744,018
Canalot Studios W10 5BN 47,786 1,362,129
Cannon Wharf SE8 5EN 32,619 575,892
Cargo Works SE1 9PG 71,459 3,911,941
Castle Lane SW1E 6DR 14,254 864,504
Centro Buildings NW1 0DU 183,436 7,459,847
China Works SE1 7SJ 68,809 2,735,358
Chiswick Studios W4 5PY 5,482 142,540
Clerkenwell Workshops EC1R 0AT 48,633 2,235,304
E1 Studios E1 1DU 40,430 1,016,836
East London Works E1 1DU 38,333 1,171,269
Edinburgh House SE11 5DP 63,145 2,674,773
Exmouth House EC1R 0JH 57,249 3,375,743
Fuel Tank SE8 3DX 35,189 693,713
338 Goswell Road EC1V 7LQ 41,490 1,587,718
Grand Union Studios W10 5AD 62,958 2,075,204
60 Gray’s Inn Road WC1X 8LU 36,139 1,836,280
Ink Rooms WC1X 0DS 22,235 1,119,140
Kennington Park SW9 6DE 350,574 10,733,180
Lock Studios E3 3YD 54,237 1,270,185
Property name Postcode
Lettable floor area
sq. ft.
Net rent roll of
occupied units £
Mare Street Studios E8 3JS 54,863 1,821,336
Metal Box Factory SE1 0HS 106,316 7,363,790
Mirror Works E15 2NH 39,965 816,195
Morie Street SW18 1SL 21,707 379,074
Peer House WC1X 8LZ 9,739 378,326
Pill Box E2 6GG 50,409 1,255,760
Rainbow Industrial Estate (part) SW20 0JK 21,180 507,743
Salisbury House EC2M 5QQ 214,355 11,494,376
ScreenWorks N5 2EF 63,994 1,949,732
The Biscuit Factory (Cocoa Studios) SE16 4DG 39,298 1,043,948
The Biscuit Factory (part) SE16 4DG 122,724 2,256,702
The Frames EC2A 4PS 51,864 3,068,832
The Leather Market SE1 3ER 147,145 6,473,403
The Light Box W4 5PY 78,489 2,066,920
The Light Bulb (part) SW18 4GQ 52,699 1,201,534
The Print Rooms SE1 0LH 45,368 2,496,279
The Record Hall EC1N 7RJ 57,015 3,306,884
The Shaftesbury Centre W10 6BN 12,627 309,778
The Shepherds Building W14 0EE 138,851 5,444,997
Vox Studios SE11 5JH 106,944 4,579,871
Westbourne Studios W10 5JJ 56,756 2,009,465
66 Wilson Street EC2A 2BT 11,893 461,472
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Strategic Report Our Governance Financial Statements Additional Information
Property name Postcode
Lettable floor area
sq. ft.
Net rent roll of
occupied units £
REFURBISHMENTS
Barley Mow Centre W4 4PH 81,143 2,009,155
Busworks N7 9DP 104,427 1,403,596
Centro Buildings (Atelier House) NW1 0DU 28,089 19,500
Corinthian House CR0 2BX 37,190 899,753
Evergreen Studios TW9 1QE 17,322 384,835
Fleet Street EC4A 2DQ 39,111 1,658,700
Riverside (Commercial) SW18 4LZ – –
Havelock Terrace SW8 4AS 58,164 1,268,548
Leroy House N1 3QP – –
Old Dairy EC2A 4HT 56,983 2,604,246
Pall Mall Deposit W10 6BL 59,826 1,582,751
Parkhall Business Centre SE21 8EN 116,229 2,095,993
Portsoken House EC3N 1LJ 47,084 1,672,929
Swan Court SW19 4JS 57,543 1,679,746
The Biscuit Factory (J Block) SE16 4DG 83,811 1,075,073
The Chocolate Factory (part) N22 6XJ 21,892 406,265
The Light Bulb (Phase 2) SW18 4GQ 17,226 305,522
The Mille TW8 9DW 93,006 1,881,787
Wenlock Studios N1 7EU 27,220 706,627
REDEVELOPMENTS
Q West TW8 0GP 54,960 706,736
Rainbow Industrial Estate (Phase 2) SW20 0JK 89,934 257,478
Thurston Road SE13 7SH 7,133 112,933
Property name Postcode
Lettable floor area
sq. ft.
Net rent roll of
occupied units £
SOUTH EAST OFFICE
Ashcombe House KT22 8LQ 17,522 155,115
Building 329 RG12 8PE 33,608 501,925
Crown Square GU21 6HR 47,365 737,316
Gainsborough House SL4 1TX 18,661 548,417
9 Greyfriars Road RG1 1NU 38,493 918,503
Prospero House RH1 1LP 48,934 1,208,782
Pegasus Place RH10 9AY 50,544 1,128,060
Rivergate House RG14 2PZ 60,817 1,079,445
The Switchback SL6 7RJ 36,817 637,339
NON-CORE
20-30 Greyfriars Road RG1 1NL 33,344 586,000
Cygnet House TW18 4RH 2,860 77,227
Five Acre Site CT19 5DR 60,536 330,895
Mallard Court TW18 4RH 22,176 435,885
Parma House/The Chocolate Factory N22 6XF 34,989 151,481
Poplar Business Park E14 9RL 65,418 1,148,889
The Planets GU21 6HR 98,255 –
PROPERTY PORTFOLIO 2024 (UNAUDITED) CONTINUED
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Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
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 LTV – Net debt plus net payables divided
by the market value of investment properties
and intangibles.
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.
EPRA Vacancy Rate – ERV of vacant space
divided by the ERV of the whole portfolio,
excluding major refurbishments and
redevelopments.
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.
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.
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 (‘TAR’) 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.
GLOSSARY OF TERMS
265
Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
INVESTOR INFORMATION
Registrar
All general enquiries concerning ordinary
shares in Workspace Group PLC should
be addressed to:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
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 office and headquarters
Canterbury Court
Kennington Park
1–3 Brixton Road London SW9 6DE
Registered number: 02041612
Telephone: +44 (0)20 7138 3300
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
266
Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
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Workspace Group PLC
Annual Report and Accounts 2024
Strategic Report Our Governance Financial Statements Additional Information
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