SMALL BUSINESS & CUSTOMER RESEARCH UPDATE Matthew James Research Manager Thursday, 7 th June 2007

SMALL BUSINESS &CUSTOMER RESEARCH

UPDATE

Matthew JamesResearch Manager

Thursday, 7th June 2007

OVERVIEW

• SME Update

• Customer Survey

• Exit Survey

• Churn indicators

• Key relationships

SMALL BUSINESS

TRENDS

37% OF TOTAL GVA

“London and the South East make a disproportionately heavy contribution

to economic activity. In 2005, these two regions accounted for 37% of the

goods and services (measured by GVA) produced in the country, even

though only 30% of the working age population lived in this area.”

MIX OF BUSINESS ACTIVITY

“However, the economies of London and the South East stand out not only

because of their scale, but also in terms of the mix of business activity.

The industrial composition of output is noticeably different to that found

elsewhere in England & Wales, particularly in the case of London.”

LONDON’S CONTRIBUTION

Source: Barclays Business Customer Economic Focus, Jan 2007

SMALL BUSINESS TRENDS

VAT REGISTRATIONS

Source: Regional Competitiveness and State of the Regions, DTI, May 2007NB: Great Britain & Northern Ireland

179,

000

VAT Registrations per 10,000 of the population

60 59 56

0

10

20

30

40

50

60

70

2003 2004 2005

United Kingdom South East London


N

BUSINESS STARTS

Expecting to start a business in the next 3 years

1615

11

0

2

4

6

8

10

12

14

16

18

2004 2005 2006

United Kingdom South East London


%

Source: Global Entrepreneurship Monitor, 2006NB: Great Britain & Northern Ireland

REGISTRATIONS & DE-REGISTRATIONS


%


London: Registrations & De-registrations

33,400

32,955

35,750

35,320

33,915

30,825

32,625

31,760

32,145

30,230

20,000 25,000 30,000 35,000 40,000

2001

2002

2003

2004

2005

Registrations De-registrations

BUSINESS SURVIVAL RATES



3 Year Survival Rates

62.6

66.9

64

50

55

60

65

70

75

1995 1999 2002

UK England London

%

Year of business start

At end of 2005 – 4.342m

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1980 1983 1986 1988 1990 1992 1994 1996 1998 2000 2002 2003 2004 2005

Business Population (m)

Source: Small Business Service, 2006NB: Great Britain & Northern Ireland

EFFECT ON UK BUSINESS STOCK


REGIONAL SPLIT

Business Population: Regional Split

675,795

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

North East

North West

Yorkshire and the Humber

East Midlands

West Midlands

East of England

London

South East

South West

Source: Small Business Service, 2006NB: England ONLY


LONDON BUSINESSES

Source: Small Business Service, SME Statistics, 2006NB: ALL EMPLOYERS IN LONDON=164,555

London Businesses By Employees - ALL EMPLOYERS ONLY

1-466%

5-918%

10-199%

20 plus7%

1-4 5-9 10-19 20 plus


ANNUAL CUSTOMERSATISFACTION SURVEY

CONSIDERATIONS

• What are the key issues & areas for improvement?

• What are the actions?

• What are the key relationships?

• What do customers expect of Workspace? Do we deliver?

• Is there anything we don’t know but should?

CUSTOMER SURVEY

CUSTOMER SURVEY

CUSTOMER SURVEY: AIMS

1. Demographics

2. About business premises

3. Contact & communications

4. Assessment of brand values 5. Business performance

CUSTOMER SURVEY

RESPONDENT DEMOGRAPHICS

• 551 Response rate (390 paper, 161 online) – down on 677 in 2006

• 50% operate in creative industries or professional services

• More than 60% have occupied their current unit for less than 2 years

• More than 80% employ less than 10 people

• More than 50% have been trading for longer than 5 years

CUSTOMER SURVEY

BUSINESS TYPE

Respondents By Business Type

3.62

8.3

5.4

32.5

17.118.1

4

8.99.6

3.3

9.4

3.8

34.1

18.8

75.8

8.2

0

5

10

15

20

25

30

35

40

Ma

nu

fact

uri

ng

Tra

nsp

ort

,T

rave

l &S

tora

ge

Wh

ole

sale

&R

eta

il

Co

nst

ruct

ion

Cre

ativ

eIn

du

stri

es

Bu

s. &

Pro

fess

ion

al

Se

rvic

es

Oth

er

Se

rvic

es

Co

mm

un

ity,

He

alth

&E

du

catio

n

Ch

ari

ty,

Vo

lun

tary

,P

rofe

ssio

na

lO

rga

nis

atio

ns

2007 2006

%

ABOUT YOUR PREMISES

CUSTOMER SURVEY

• Cost & location remain most important factors in taking space

• 87% are satisfied with local service

• “It feels like a personal service - very good & friendly”

• “This is not a criticism of the staff (who are very good) but the standard of lift maintenance is appalling and needs to be addressed.”

• 80% would recommend current business premises

LOCAL CONTACT WITH WSG

CUSTOMER SURVEY

Contact with Local Management Team

61

73

65

29

21

26

10

7

10

0% 20% 40% 60% 80% 100%

2007

2006

2005

Happy with the contact I have Contact is sufficient Would welcome more

Consistently high year-on-year andconsistent across the portfolio

CUSTOMER SURVEY

SERVICE ISSUES

45% had experienced service issues over the last 12 months, but...

94

50

57

64

6

50

43

36

0% 20% 40% 60% 80% 100%

I was able to speak tosomeone at Workspace

regarding my issue

Any service issues havebeen resolved quickly

Any service issues havebeen resolved satisfactorily

The reasons for any actiontaken by Workspace were

fully explained to me

Agree Disagree

WORKSPACE VALUES

CUSTOMER SURVEY

To what extent do you agree with the following...

86

82

74

77

94

90

76

61

87

14

18

26

23

6

11

25

39

13

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Workspace provides good value for money

Workspace is committed to high standards of service

Workspace builds relationships with its customers

Workspace delivers all I expect from a landlord

Workspace staff are committed, reliable and honest

I feel I am fairly treated by Workspace

I feel I am valued as a customer

Workspace’s offer is about more than just business space

Overall, Workspace offers a competitive package

Agree Disagree

RESPONSIBLE COMPANY

CUSTOMER SURVEY

Workspace as a sustainable & responsible company

82

55

99

18

45

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Workspace recognises itsresponsibility to society

I am aware of the actionWorkspace is taking

It is important to me and mybusiness that my landlordbehaves in a responsible

manner

Agree Disagree

SATISFACTION WITH…

CUSTOMER SURVEY

SERVICE

87% are satisfied with the service they receive from Workspace

• “Very quick & efficient – always a friendly voice at the other end of the phone”

COMMUNICATIONS

93% are satisfied with communications from Workspace

• “Newsletter is good - nice to know what's going on. Idea of TradeLink is excellent”.

WORKSPACE AS A LANDLORD

91% are satisfied with Workspace as a landlord

• “The service is fuss free which for small businesses is ideal. We receive a friendly

service from the landlord and its staff. It’s a pleasure to be here.”

82% WOULD RECOMMEND WORKSPACE; 6% WOULD NOT

CUSTOMERBUSINESS OUTLOOK

Performance over LAST 12 months (SERT Benchmark)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WSG

SERT

WSG

SERT

WSG

SERT

Tur

nove

rA

vera

geE

mpl

oym

ent

Inve

stm

ent

Up Same Down

CUSTOMER PERFORMANCE

+52

+20

+32

+4

+35

+12

CUSTOMER SURVEY

Source: NatWest/SERT Quarterly Survey of Small Business in Britain, Q4 2006N=538

CUSTOMER PROSPECTS

Performance over NEXT 12 months (SERT Benchmark)

70

39

52

10

51

14

2

27

2

14

5

15

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WSG

SERT

WSG

SERT

WSG

SERT

Tu

rno

ver

Ave

rag

eE

mp

loym

en

tIn

vest

me

nt

Up Same Down

+68

+12

+50

-4

+46

-1

CUSTOMER SURVEY

Source: NatWest/SERT Quarterly Survey of Small Business in Britain, Q4 2006N=538

BUSINESS OUTLOOK

• Increasing competition (26%) and increasing business costs (20%) are seen as the biggest challenges facing customers

• Access to customers, location in relation to key contacts and ‘kudos’ of London address cited as most popular reasons for being in London

• 21% think they will benefit from the 2012 Olympics, and a further 25% are unsure

• Those that will benefit will do so either directly or indirectly.

• Directly by winning business arising as a result of the Games• Indirectly by the availability of projects normally taken by those involved in the Games

CUSTOMER SURVEY

EXIT RESEARCH

AIMS

EXIT RESEARCH

1. What proportion leave the portfolio & what proportion move within it

2. What types of businesses are leaving the portfolio

3. Why businesses leave the portfolio

4. Levels of satisfaction with Workspace

5. What tenants think of Workspace

AIMS:

60 interviews completed each quarter

SUMMARY OF FINDINGS

EXIT RESEARCH

• Over the last five surveys, on average 20% move to other WSG properties each quarter

• The number of tenants moving to another estate or business premises with a different landlord is about 50%

• No pattern by industry type, but the smallest at most risk

• 50% had been in their current premises for between one and three years

• 88% see their local manager or Workspace representative at least once a week

SUMMARY OF FINDINGS

EXIT RESEARCH

• Main reasons for leaving is COST - average is 38%

• On average 25% have experienced a service issue, but less than 10% said it contributed “a lot” to their decision to leave

• 95% believe experience has lived up to expectations… BUT, seemingly low expectations.

• What makes a good landlord (unprompted):

Give a good service 27% Listen to tenants 22%Don’t know 23% Charge fair rents 18% Be helpful/friendly 12%

KEY RELATIONSHIPS

> Those most likely to recommend are those who:

1. Agree that Workspace provides good value for money

2. Are satisfied with the contact at local level

3. Agree that Workspace delivers a competitive package

4. Are satisfied with Workspace Group as a landlord

5. Agree that any service issues have been resolved quickly

SUMMARY

CONSIDERATIONS

• What are the key issues & areas for improvement?

• What are the actions?

• What are the key relationships?

• What do customers expect of Workspace? Do we deliver?

• Is there anything we don’t know but should?

SUMMARY

Documents

SMALL BUSINESS & CUSTOMER RESEARCH UPDATE Matthew James Research Manager Thursday, 7 th June 2007