3rd Quarter & 9 Months Results

Workspace Group PLC
14 February 2000


                              WORKSPACE GROUP PLC
                                       
                        WORKSPACE REPORTS STRONG DEMAND
                             FOR BUSINESS SPACE AS
                          NEW PORTFOLIO PERFORMS WELL

Workspace  Group PLC ('Workspace'), today announces its third quarter  results
for  the  nine months ended 31 December 1999.  Workspace provides 5.7  million
sq.  ft  of  flexible  accommodation  to over  3000  small  and  medium  sized
enterprises ('SMEs') in London, the South East and the Midlands.

*    Pre-tax  profits up 40% to £2.7 million for the quarter (1998  Q3:  £1.9
     million)
          - up 25% to £6.3 million for the nine month period *
*    Earnings per share up 24.2% to 28.7p for the nine month period *
*    Turnover increased 46% to £8.6 million (1998 Q3: £5.9m)
*    Net Asset Value per share rose to £7.68 (30 September 1999: £7.65)
*    Rent roll increased by 44% to £25.01million  (31 March 1999: £17.4m)
*    £81m Tonex portfolio acquired in July performing very well
*    Refinancing and securitisation programme on track
*    Dr Chris Pieroni appointed as non-executive director

         * excluding profits arising on sale of properties and exceptional
           financing costs

Harry Platt, Chief Executive of Workspace, commented;

'  The 2 million sq. ft property portfolio that we acquired in July is bedding
down  well.  We have integrated the 23 business centres and estates  with  our
existing properties. This creates a strong branded network of Workspace  sites
throughout London and the South East. The new portfolio is responding ahead of
our expectations owing to our hands-on management style. We are achieving some
excellent new lettings and we are seeing rental growth.

'  Occupancy of our core portfolio remains high at over 90%. Demand for  space
continues  to  be  good,  with an encouraging flow of  new  enquires.  We  are
confident that the product and services that we offer our customers,  provides
them with a business environment in which they can flourish.

'   Looking  to  the  future,  we  are  strengthening  our  links  with  local
authorities.  We have formed successful joint ventures to create high  quality
business space for SMEs. We are keen to extend our activities in this area.

'  The  business  is  continuing  to perform well  and  we  remain  cautiously
optimistic about our future prospects.'


Date: 14th February 2000

For further information contact:
Harry Platt, Chief Executive, Workspace Group PLC           0207 247 7614
Mark Taylor, Finance Director, Workspace Group PLC          0207 247 7614
Jonathan Gillen, City Profile Group                         0207 726 8588
Simon Courtenay, City Profile Group                         0207 726 8588

Operating and Financial Review

Review of Activities

Good  progress  continues to be  made with  pre-tax profits  for  the  quarter
increasing by 40% to  £2.7 million  and earnings per share by 39.4%  to  12.4p
(excluding  profits  arising  on  the  sale  of  properties  and   exceptional
costs).  For  the three-quarter period similar  pre-tax profits  grew  by  25%
to £6.3 million and  earnings  per share by 24.2% to 28.7p.  Published pre-tax
profits  for  the   three-quarter  period  including  £0.35  million   profits
arising  on  the  sale of properties and  £0.94  million exceptional financing
costs, was £5.7 million.

Integration  of  the  Tonex  portfolio,  comprising   23  estates with  over 2
million sq. ft. acquired on 23  July 1999,  continued during the  quarter  and
is now complete. A  marketing  and  management programme  has been implemented
for those  properties which are intended  to be  held  long  term.   A  number
of lettings  have  been achieved  at  rentals in  excess of those  anticipated
at the time of acquisition. Disposal of certain  smaller estates, either  with
limited long  term  prospects  or  which  have potential for change of use has
begun. Two disposals (one  of  which is referred  to  below) have already been
agreed at values in excess of book value.

Good   progress  continues  to  be  made  on  the   core portfolio.  Occupancy
has been maintained at over 91% whilst  rentals continue to improve.  Overall,
including  new  acquisitions  and   major  refurbishment/development  schemes,
occupancy now stands at 87.62% with a rent roll of  £25.01  million, up nearly
1% in the  third  quarter alone and 44% during the nine month period.

Disposals

One  disposal was concluded in the quarter at a  surplus  of  £120,000  on the
March 1999 valuation: -

Name of              Description           Sale         Annual
Property                                   Price        Income
------------------------------------------------------------------------------
Malham Road          Single storey         £1.1m        £106,000
Industrial           light industrial
Estate,              estate: 23 units;
London, SE23         21,794 sq. ft


In addition Tysoe Studios, London EC1, which was recently acquired  as part of
the  Tonex portfolio,  was  sold  after the  quarter end for £1.33 million, an
exit yield  of  6% and  some £480,000 above book value.  Heads of  Terms  have
been  agreed  on  a further disposal of a small  property acquired as  part of
the Tonex portfolio.

Ferry Lane

The  Group  has previously reported that its property  at Ferry  Lane, Rainham
was destroyed by  fire in July  1999. Settlement terms have  now  been  agreed
with the  insurers. The  Group  is  currently reviewing all  options  for  the
future  of  the  site  including  rebuilding,  or  outright  sale  of the land
comprising some 1.5 acres.

Helix Business Park, Camberley

The  development  of  the Group's  small  unit  industrial estate,  undertaken
jointly with Surrey  Heath  District  Council, was completed in January  2000.
This  estate provides  20,000  square feet of accommodation in 20  units in  a
location  that  has  been  under  provided with starter accommodation.  We are
looking currently  for  further opportunities to provide space for  Small  and
Medium sized Enterprises.  We are  confident that we can strengthen  our links
with local authorities to help us achieve our aims.

Cash Flow and Financing

During  the  quarter  the  Group  secured the transfer of  its  principal debt
facility  of  £122  million (obtained  earlier in  the  year  to  finance  the
acquisition of the Tonex portfolio  and  refinance  certain  other debt)  into
a commercial  paper programme  administered by WestLB, at  an  interest   rate
saving of 0.15% per annum.

There was a net cash inflow of £0.09 million during  the quarter (1998 outflow
of £0.07 million).  For the year to date there was an outflow of £1.72 million
(1998:  £1.79 million  inflow).  Capital  expenditure for  the  year  to  date
was  £83.30 million (1998 £3.16 million).  At the quarter  end  gearing  stood
at  122% (1998  77.7%)  and interest cover for the year to date was 2.03 times
(1998 2.2).


Occupancy and Trading Statistics

The  Group's key statistics relating to  its  trading operations  are given in
the table below:-


                                          31         30         30         31
                                    December  September       June      March
                                        1999       1999       1999       1999
------------------------------------------------------------------------------
Number of Estates                         95         96         73         73
------------------------------------------------------------------------------
Total Floorspace at end of 
 period                            5,720,600  5,733,122  3,851,622  3,824,913
------------------------------------------------------------------------------
of which:                                                       
Available for letting              4,726,204  4,743,613  2,862,312
Undergoing development
 /refurbishment                      994,396    989,512    989,512
------------------------------------------------------------------------------
Lettable Floorspace of core 
 portfolio (sq ft)                 2,819,913  2,817,766  2,817,400  2,818,312
------------------------------------------------------------------------------
Lettable Units (number)                3,492      3,514      2,717      2,682
------------------------------------------------------------------------------
Annual Rent Roll of Occupied 
 Units (£)                        25,014,216 24,788,742 17,777,821 17,361,828
------------------------------------------------------------------------------
Average Rent (£/sq. ft)                 4.99       4.88       5.34       5.20
------------------------------------------------------------------------------
Average  Rent of Core 
 Portfolio (£/Sq. ft)                   6.37       6.24       6.20       6.00
------------------------------------------------------------------------------
Occupancy: overall                     87.62%     88.55%     86.45%     87.31%
------------------------------------------------------------------------------
Occupancy of Core Portfolio            91.15%     91.83%     91.12%     92.33%
------------------------------------------------------------------------------

Comparisons of overall occupancy and rent  roll are distorted by acquisitions,
disposals and transfers.  The 'core portfolio' is defined as those  properties
that  have been  held  throughout the  year  and  which  are  not  subject  to
major refurbishment/development programmes  (the  properties  subject to  such
programmes  in  the  year  were  Three  Mills,  Kingsland Viaduct, 1-10  Union
Street  and Wilton Road Camberley).

Contracted  future  rentals  not  included  in  the  current annual rent  roll
include  £2  million  commencing  on  31.3.2001 for 1-10 Union Street.

Current Trading

There continues to be a good flow of new enquiries for space, and improvements
in   headline  rents.  This   continues  the  good  underlying  progress  seen
throughout 1999. With   its  strong  London  and   South   East representation
and  the benefit of income reversions from the Tonex portfolio, the underlying
prospects  for the Group in the year ahead remain strong.

New Non-Executive Director

On 17 January  2000, Dr Christopher Pieroni  was appointed  as a non-executive
director  of  the  Company  and  a  member  of  the  Audit,  Remuneration  and
Nominations Committees.  Aged  41 he  is  currently  Chief  Operating  Officer
of  Colliers,  Erdman  Lewis,  the   property surveying  firm.  Following this
appointment the  Board considers  that the constitution of the Board  complies
fully  with  the 'Combined Code' on the  Principles  of Governance and Code of
Best Practice.

Unaudited Consolidated Profit and Loss Account for the 3 and 9 months ended 31
December 1999
                                                      9 months
                                             ended 31 December
                           3 months ended     Trading    Other 
                              31 December  Operations    Items  Total
                           1999      1998        1999     1998   1999    1998
                           £000      £000        £000     £000   £000    £000
------------------------------------------------------------------------------
Turnover - continuing 
 operations               8,627     5,897      21,394        - 21,394  16,824
Rent payable and direct
 costs                   (2,263)   (1,505)     (5,593)         (5,593) (4,338)
------------------------------------------------------------------------------
Gross profit              6,364     4,392      15,801          15,801  12,486
Administrative expenses  (1,004)     (873)     (3,133)         (3,133) (2,488)
------------------------------------------------------------------------------
Operating profit - 
 continuing operations    5,360     3,519      12,668          12,668   9,998
Profit on Disposal
 of Investment
 Property                   356       919                  351    351   1,122
Interest receivable          62        12         122             122     116
Interest payable and 
 similar charges         (2,731)   (1,606)     (6,533)    (937)(7,470) (5,090)
------------------------------------------------------------------------------
Profit on ordinary 
 activities before 
 taxation                 3,047     2,844       6,257     (586) 5,671   6,146
Taxation on profit on 
 ordinary activities       (853)     (768)     (1,752)     164 (1,588) (1,659)
------------------------------------------------------------------------------
Profit attributable to
 shareholders             2,194     2,076       4,505     (422) 4,083   4,487
Dividends                     -         -        (941)       -   (941)   (873)
------------------------------------------------------------------------------
Retained for the 
 period                   2,194     2,076       3,564     (422) 3,142   3,614
==============================================================================
Earnings per share 
 (basic)                   14.0p     13.1p       28.7p    (2.7)p 26.0p   28.3p
Diluted earnings 
 per share                 13.9p     13.0p                       25.8p   28.2p


Statement of Total Recognised Gains and Losses


                                                 9  months ended  31 December
                                                          1999           1998
                                                         £000s          £000s
------------------------------------------------------------------------------
Profit for the financial period                          4,083          4,487
Unrealised surplus on revaluation 
 of investment properties                               10,371          4,365
==============================================================================
Total gains relating to the financial period            14,454          8,852


Consolidated Balance Sheet

                                                     Unaudited        Audited
                                              31 December 1999  31 March 1999
                                                          £000           £000
------------------------------------------------------------------------------
Fixed assets
Tangible assets
Investment properties                                  279,889        185,978
Other fixed assets                                       1,089          1,179
Investment in own shares                                   999          1,024
------------------------------------------------------------------------------
                                                       281,977        188,181
------------------------------------------------------------------------------
Current assets
Debtors                                                  7,547          2,514
Investments                                              6,802          2,332
Cash at bank and in hand                                    74           2
------------------------------------------------------------------------------
Creditors: amounts falling due within one year
 loans and overdrafts                                   (2,517)        (4,726)
 others                                                (20,277)       (13,983)
------------------------------------------------------------------------------
Net current liabilities                                 (8,371)       (13,861)
------------------------------------------------------------------------------
Total assets less current liabilities                  273,606        174,320
Creditors:  amounts  falling 
 due after more  than  one  year                      (151,614)       (65,866)
------------------------------------------------------------------------------
                                                       121,992        108,454
==============================================================================
Capital and reserves
Called up share capital                                  1,588          1,588
Share premium account                                   39,693         39,668
Revaluation reserve                                     66,414         56,043
Profit and loss account                                 14,297         11,155
------------------------------------------------------------------------------
Shareholders' funds - equity interests                 121,992        108,454
==============================================================================
Net asset value per share                                £7.68          £6.83
==============================================================================
Movement in shareholders' funds
Profit for the financial period                          4,083          6,536
Dividends                                                 (941)        (2,989)
------------------------------------------------------------------------------
                                                         3,142          3,547
Issue of Shares                                              -              2
Share premium account                                       25             17
Revaluation reserve - increase                          10,371         21,843
------------------------------------------------------------------------------
Net movement in shareholders' funds for the
 financial period                                       13,538         25,409
Shareholders' funds as at 1 April 1999/1998            108,454         83,045
------------------------------------------------------------------------------
Shareholders' funds  as  at 31 December  
 1999/31  March  1999                                  121,992        108,454
==============================================================================


Unaudited Cash Flow Statement
for the nine months ended 31 December 1999


                                                   9 months ended 31 December
                                                          1999           1998
                                                          £000           £000
------------------------------------------------------------------------------
Net cash inflow from operating activities               12,821         11,006 
Return on investment and servicing of 
 finance                                                (6,600)        (4,986)
Taxation                                                (2,372)        (1,257)
Capital expenditure (net)                              (83,304)        (3,155)
Equity dividends paid                                   (2,116)        (1,904)
------------------------------------------------------------------------------
Net cash outflow before use of 
 liquid resources  and financing                       (81,571)          (296)
Management of liquid resources                          (4,471)         2,640
Financing                                               84,323           (558)
------------------------------------------------------------------------------
Net cash outflow/inflow                                 (1,719)         1,786
------------------------------------------------------------------------------
Reconciliation of net cash flow to movement 
 in net debt (Decrease)/Increase in cash                (1,719)         1,786
Increase/(decrease) in liquid resources                  4,471         (2,640)
Cash inflow from (increase)/decrease in debt           (84,297)           557
------------------------------------------------------------------------------
Changes in net debt resulting from cash flows          (81,545)          (297)
------------------------------------------------------------------------------
Net debt at 1 April                                    (68,457)       (70,436)
Net debt at 31 December                               (150,002)       (70,733)
==============================================================================


Notes to the Quarterly Results


1. Basis of Preparation

   The  unaudited financial information contained in  this 
   quarterly  report does not comprise statutory  accounts
   within the meaning of Section 240 of the Companies  Act
   1985.   The  statutory accounts for the year  ended  31
   March  1999  included  an  unqualified  report  of  the
   auditors.   The  Group's  unaudited  accounts  for  the
   period  to 31 December 1999 have been prepared  on  the
   basis  of the accounting policies set out in the Annual
   Report and Accounts for the year ended 31 March 1999.

2. Segmental Analysis
                                         3 months ended        9 months ended
                                            31 December           31 December
                                        1999       1998       1999       1998
                                       £000s      £000s      £000s      £000s
------------------------------------------------------------------------------
Rental income                          6,563      4,790     16,938     13,543
Service  charge  and other 
 recoveries                            1,628        906      3,499      2,729
Fees, commissions, and sundry 
 income                                  436        201        957        552
------------------------------------------------------------------------------
                                       8,627      5,897     21,394     16,824
==============================================================================


3. Interest Payable
                                         3 months ended        9 months ended
                                            31 December           31 December
                                        1999       1998       1999       1998
                                       £000s      £000s      £000s      £000s
------------------------------------------------------------------------------
Convertible loan stock and 
 debenture stock interest                663        663      1,987      1,987
Mortgage interest                      2,132      1,067      4,794      3,432
Bank and other interest                  108         25        242        131
Net  development  interest 
 capitalised                            (172)      (149)      (490)      (460)
Loan Breakage Costs                        -          -        937          -
------------------------------------------------------------------------------
Charged  to  profit  and loss 
 account                               2,731      1,606      7,470      5,090
==============================================================================


4. Taxation

   The  taxation  charge  for the nine  months  ended  31
   December 1999 is based on the estimated effective  tax
   rate  for  the  year  ending  31  March  2000  of  28%
   (1998:27%).   The  charge  has  increased   from   the
   effective  tax  rate  of  23.8%,  excluding   property
   disposals,  for the year ended 31 March  1999  because
   the   benefits  of  the  recovery  of  ACT  previously
   written off have come to an end.




5. Earnings Per Share and Net Assets Per Share

   Earnings  per  share have been calculated  by  dividing
   the  profit  after tax for each period attributable  to
   shareholders   by  the  weighted  average   number   of
   ordinary   shares  in  issue  during  the  period   (of
   15,679,800  shares on an undiluted basis and 15,808,175
   on  a  diluted basis).  Net assets per shares have been
   calculated  by dividing net assets at the end  of  each
   period  by  the number of ordinary shares in  issue  at
   that time (of 15,883,815 shares).

6. Valuation

   The  valuation of investment properties at 31  December
   1999  is  based on the independent valuation by Richard
   Ellis   St  Quintin  at  30  September  1999   net   of
   subsequent additions and disposals.

7. Creditors

   Creditors falling due within one year include  tenants'
   deposits  of £2.21million (31 March 1999:£1.66 million)
   and  deferred  rental  and  service  charges  of  £4.23
   million (31 March 1999: £2.34 million).


8. Financial Instruments
                                  Book Value        Fair Value     Difference
                                   £ Million         £ Million      £ Million
------------------------------------------------------------------------------
Short term borrowings and 
 current part of long term 
 borrowings                             (2.5)             (2.5)             -
Long term borrowings                  (151.6)           (161.8)         (10.2)
------------------------------------------------------------------------------
                                      (154.1)           (164.3)         (10.2)
==============================================================================

This represents 64 pence per issued ordinary share and if
applied to net asset value per share at 31 December  1999
would reduce the latter to £7.04.  However, the Group has
no obligation or present intention to repay its Debenture
and  Convertible borrowings other than at maturity,  when
they  will be repaid at par.  Cash outflows arising  from
these  borrowings  will be limited to  the  future  fixed
interest  payments and redemption at par.  These outflows
are  unaffected  by the notional market  or  fair  values
referred to above.

9. Interim Statement

   Copies   of  this  statement  will  be  dispatched   to
   shareholders  on Monday 14 February 2000  and  will  be
   available   from  the  Group's  registered  office   at
   Magenta House, 85 Whitechapel Road, London E1 1DU  from
   9.00am on that day.