Workspace plans cut-price rights issue

BUSINESS landlord Workspace Group is to raise £63m in a deeply discounted rights issue, as part of plans to accelerate investment in its portfolio of buildings.

The one-for-four rights issue is being made at a price of 23p per new ordinary share, representing a 21 per cent discount to the stock’s Wednesday night close.

The firm said it plans to use the financing to “take advantage of attractively priced property acquisition opportunities.”

Workspace also said it had added HSBC to its syndicate of lenders, adding a further £62.5m facility. RBS, the firm’s other major creditor, had recently agreed a £125m refinancing deal with the company.

Chief executive Harry Platt told City A.M.: “We could’ve chosen to raise £30m and could’ve done it tighter, with the share price, or we could’ve done it at a premium even, I suspect. But the idea was to raise just the amount to accelerate our investment programme.

Platt said there was good demand from the company’s small- and medium-sized customers in London.

The company added that the underlying valuation of its properties at 15 June was up one per cent at £726.8m.

For the first quarter ended 30 June, total occupancy at Workspace’s properties rose 0.4 per cent to 84 per cent.

“We are now poised for the next exciting phase of growth as we accelerate our investment in the redevelopment potential of our London property portfolio,” added Platt.

Shares in Workspace closed down 0.85 per cent at 29p.

MEET THE ADVISERS: INVESTEC

DAVID ANDERSON
INVESTEC

David Anderson is working on the Workspace rights issue in London for Investec. The bank is acting as joint bookrunner, broker and underwriter alongside Espirito Santo. Rothschild is acting as corporate adviser and sponsor.

As associate director, David aids the development of Investec's corporate real estate franchise having previously advised on a number of deals in the sector, including transactions for London and Stamford, Wichford and Solitaire Group. He joined Investec in 2010 from KBC Peel Hunt.

He was joined on the deal by Keith Anderson, Investec’s co-head of corporate broking. Anderson recently completed £112m in fund-raising for Chemring. He joined Investec in 2002 having been previously at WestLB Panmure, where he was head of corporate broking and a member of the investment banking management committee. He is also a member of the Institute of Chartered Accountants of Scotland.

Research by Elizabeth Channing