Rosebank Workspace Business Plan — Business Model

How centre contribution builds from desk revenue against lease and running cost, and why occupancy drives everything.

Section 11 of 29

Business Model

Jump to section

Lease long, sell short, and earn the spread, with a structurally negative working-capital cycle that funds part of the growth.

10.1 Business model canvas

Table 29 Business model canvas

Building block	Content
Customer segments	Professional services firms; mining, energy and resources advisory; technology and fintech; multinational country offices; corporate satellite and project teams; independent professionals
Value proposition	Premium Johannesburg addresses, fully fitted and serviced, on twelve-month contracts with no capital outlay and occupancy within fifteen business days
Channels	Direct enterprise sales; commercial property brokers on introduction commission; digital enquiry and self-service for flexible products; member referral; landlord and professional-network referral
Customer relationships	Named account management for suite members; community and events programme; structured renewal process beginning ninety days before expiry; quarterly service review for accounts above fifteen desks
Revenue streams	Private suites (60% of FY2031 revenue); dedicated desks (12%); flexible memberships (9%); virtual office (8%); parking (4%); meeting rooms and events (4%); ancillary and commissions (2%)
Key resources	Three long leases in premium nodes; fitted centres carrying R44.6m of capital expenditure, R35.6m net of landlord allowances; the member contract book; the operating team; the licensed technology stack
Key activities	Site acquisition and lease negotiation; design and fit-out delivery; enterprise sales; centre operations; member retention; capital management
Key partners	Institutional landlords; commercial property brokers; the fit-out contractor and quantity surveyor; connectivity and power infrastructure providers; the food and beverage concessionaire; asset finance providers
Cost structure	Property rental (36% of FY2031 revenue); centre staff (11%); utilities, cleaning and security (13%); connectivity and IT (4%); central overhead and marketing (15%); depreciation (5%)

10.2 How capital converts into return

The chain runs as follows. R56.8 million of committed funding converts 6,800 m² of shell space into three fitted centres providing 755 desks. Desks are sold at an average of R9,622 per occupied desk per month by FY2031 across all products and ancillary lines, at 84% blended occupancy, producing R73.4 million of revenue. Direct centre costs of R48.5 million leave R24.9 million of centre contribution; central overhead of R10.7 million leaves R14.2 million of EBITDA. Depreciation of R4.0 million and finance costs of R0.9 million leave R9.3 million of pre-tax profit and R8.8 million after tax, sheltered by an assessed loss carried forward from the ramp years.

Table 30 Conversion metrics at build-out (FY2031)

Metric	Value	Comment
Revenue per square metre per month	R900	Against a blended rental of R327 per m²
Revenue per occupied desk per month	R9,622	All products and ancillary lines
Rent cover	2.75×	Group level; 2.59× at the Rosebank flagship
Centre contribution margin	33.9%	After all directly attributable centre costs
EBITDA margin	19.3%	After central overhead
Capital employed per desk	R47,122	R35.6m of net capitalised cost across 755 desks
Revenue per rand of capital employed	R2.06	FY2031 revenue over net capitalised cost
Return on invested capital	48.4%	NOPAT over net PPE plus net trade working capital
Return on equity	38.0%	On a depleted equity base following the ramp-year losses

Return on invested capital and return on equity are flattered in FY2031 by an asset base that has been depreciated for five years and an equity base reduced by cumulative ramp losses. They should be read alongside the money multiple and IRR in Section 21, which are computed on actual cash flows.

10.3 Working capital as a source of funds

Members pay monthly in advance and lodge a deposit of one month for suite and dedicated products. The result is a structurally negative working-capital position: at FY2031 the balance sheet carries R3.4 million of deferred revenue and R4.4 million of member deposits against R1.0 million of receivables and R0.3 million of prepayments. Working-capital movements contribute R11.7 million of cash inflow cumulatively across the five years, funding approximately 21% of the capital programme without recourse to external capital.

This is a genuine structural advantage of the model and it is worth naming the corresponding risk. Deferred revenue and deposits are a liability that unwinds if occupancy falls. In the stress case, where occupancy runs 16% below plan, the working-capital inflow reverses and accelerates the cash decline: the model shows R9.6 million less cumulative working-capital benefit in the stress case than in the base case, which is roughly a third of the total stress-case funding gap.

10.4 Scalability and its limits

Centre-level scalability is limited by the floorplate. A centre cannot sell more desks than it has, and additional revenue at a stabilised centre comes only from rate escalation and ancillary consumption. Growth therefore requires new sites.
Group-level scalability is real but bounded. Central overhead falls from 65% of revenue in FY2027 to 14.6% in FY2031, but the marginal head-office cost of a fourth or fifth centre is not zero: the plan assumes one additional central hire per additional centre beyond the third.
The binding constraint on growth is the availability of the right building at the right terms, not capital or capability. The Company expects to be able to fund a fourth centre from operating cash flow by FY2032; whether it can find the site is a separate question.
A management-agreement route, operating a landlord’s space for a fee and profit share, becomes available once the Company has a trading record, and would allow growth without additional lease liability at a materially lower margin. This is explicitly outside the projection period but is the most probable shape of growth beyond FY2031.