Rosebank Workspace Business Plan — Financial Model and Assumptions

How the model is built, which assumptions drive which outputs, and where the sensitivities concentrate.

Section 20 of 29

Financial Model and Assumptions

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A sixty-month integrated model driven by desks, occupancy and rate — not by growth percentages. Every line in the statements that follow derives from the assumptions in this section.

19.1 Model architecture

The model is built monthly for sixty months from January 2027 to December 2031 and aggregated to five financial years. Revenue is constructed from operational drivers at the level of each individual centre: desk capacity by product, occupancy, price, and separately modelled ancillary lines. Costs are built the same way, with rent derived from contracted square metres and escalation, staff from the establishment in Section 13, and variable costs from occupied desks. The three statements are fully integrated: the income statement drives retained earnings, the cash flow statement drives the cash balance, working-capital movements derive from the operating assumptions, and the balance sheet reconciles to nil in all sixty periods and in every scenario tested.

Finance costs are solved iteratively. Interest in each month depends on the closing debt balance, which depends on the revolving facility drawdown, which depends on the cash position, which depends on interest. The model runs this loop to convergence within one rand in each period rather than applying interest to opening balances, which would understate the cost of facility usage in the ramp years.

19.2 Revenue drivers

Table 50 Revenue build — capacity, mix and pricing

Driver	Basis	Rosebank	Sandton	Waterfall
Net lettable area	Contracted	2,600 m²	2,200 m²	2,000 m²
Desk capacity	At 9.0 m² per desk inclusive of common areas	289	244	222
Opening month	From financial close	Month 4	Month 16	Month 37
Product mix — private suite	Share of desk capacity	62%	62%	62%
Product mix — dedicated desk		20%	20%	20%
Product mix — flexible membership	Sold at 1.6× capacity (oversell)	18%	18%	18%
Stabilised occupancy — private	Blended stabilised occupancy 87% / 83% / 76% by product	87%	87%	87%
Rate index versus Rosebank	Node premium or discount	1.00	1.06	0.88
FY2027 price — private suite	Per desk per month, escalating 6.5% p.a.	R7,100	R7,526	R6,248
FY2027 price — dedicated desk		R4,750	R5,035	R4,180
FY2027 price — flexible membership		R2,650	R2,809	R2,332
Ramp from opening	20% at opening, 5.5 percentage points per month	13 months	13 months	13 months

Table 51 Ancillary revenue assumptions

Line	Driver	Rate	FY2031 revenue
Meeting rooms and events	Per occupied desk per month	R300	R2.9m
Parking	0.35 bays per occupied desk	R1,050 per bay per month	R3.0m
Virtual office	Members per centre: 170 / 130 / 110 at maturity	R990 per member per month	R6.2m
Other ancillary and commissions	Per occupied desk per month; includes food and beverage concession	R175	R1.7m
Total ancillary			R13.8m

19.3 Occupancy and capacity

Figure 1. Desk capacity and blended occupancy, FY2027 to FY2031

Blended occupancy dips in FY2030 to 74.2% from 83.1% in FY2029. This is not a deterioration in trading: it is the arithmetic effect of adding 222 empty desks at Waterfall City to a portfolio of 533 stabilised ones. The same effect appears in the EBITDA margin, which falls from 14.7% to 10.3% in the same year. Both recover in FY2031 once the third centre stabilises. An investment committee should read FY2030 as the cost of the third centre rather than as a warning about the first two.

19.4 Cost drivers

Figure 2. Cost structure as a percentage of revenue, FY2027 to FY2031

Table 52 Cost assumptions

Cost line	Driver	Assumption	FY2031 (R m)	% of revenue
Property rental	Contracted m² × rate, escalating 7.5% p.a.	R250 / R278 / R212 per m² per month at commencement	26.7	36.3%
Centre staff	Establishment per Section 12.1	7 / 6 / 5 per centre, escalating 6.0% p.a.	7.9	10.8%
Utilities	Per m² with a variable element per occupied desk	R62 per m² per month, escalating 6.0%	6.4	8.7%
Cleaning and security	Outsourced, per m²	R34 per m² per month, escalating 6.0%	3.5	4.8%
Connectivity and IT	Fixed per centre plus variable per occupied desk	R22,000 per centre per month plus R165 per desk	2.6	3.5%
Community and member services	Per occupied desk	R120 per occupied desk per month	0.9	1.2%
Maintenance	Per m²	R7.50 per m² per month	0.5	0.7%
Head office payroll	Establishment per Section 13.1	Cost-weighted 4 to 7 roles, escalating 6.0%	5.1	6.9%
Marketing	Percentage of revenue, higher during ramp	3.5% of revenue, minimum R1.4m per annum	2.6	3.5%
Corporate overhead	Audit, legal, insurance, systems, professional fees	R2.2m in FY2027, escalating 6.0% plus a step per centre	3.0	4.1%
Brokerage	7.5% of first-year contract value on introduced suite deals	Expensed as incurred	0.1	0.1%

19.5 Capital expenditure and depreciation

Table 53 Capital expenditure by centre and category (R m)

Category	Rosebank	Sandton	Waterfall	Total	Useful life
Fit-out and leasehold improvements	14.56	11.66	9.80	36.02	10 years
Furniture, fittings and equipment	2.14	1.73	1.53	5.40	6 years
Technology and connectivity	0.98	0.81	0.71	2.50	3 years
Initial capital expenditure	17.68	14.20	12.04	43.92
Technology refresh, FY2030–FY2031	–	–	–	0.63	3 years
Total capital expenditure	17.68	14.20	12.04	44.55
Landlord installation allowance	(3.38)	(3.19)	(2.40)	(8.97)
Net capitalised cost	14.30	11.01	9.64	35.58
Net capital per desk	R49,485	R45,113	R43,433	R47,122

Source: Company financial model. Landlord allowances are received as a contribution against fit-out cost and are capitalised against the related asset, so depreciation is computed on the net capitalised amount. Fit-out is depreciated over the shorter of ten years and the lease term. Column totals include FY2030 and FY2031 technology refresh capital that is not attributable to a single centre at commissioning.

19.6 Financing and tax assumptions

Table 54 Financing, macroeconomic and tax assumptions

Assumption	Value	Basis
Prime lending rate	10.5%	Held flat across the projection period; sensitivity tested in Section 22
Senior term debt rate	12.8%	Prime plus 225 basis points
Asset finance rate	13.5%	Prime plus 300 basis points, fixed at drawdown
Revolving credit facility rate	14.5%	Prime plus 400 basis points on drawn amounts
Senior debt structure	18-month moratorium, 54-month amortisation	Capital moratorium through the Rosebank ramp
Cost inflation	6.0%	Applied to staff, utilities, cleaning, IT and corporate overhead
Price escalation	6.5%	Applied to all revenue lines; deliberately below lease escalation
Lease escalation	7.5%	Contracted, fixed
Corporate tax rate	27.0%	South African corporate rate
Assessed loss utilisation	80% of taxable income	Section 20 of the Income Tax Act, as amended
Debtor days	5 days	Monthly billing in advance by debit order
Creditor days	32 days	Standard supplier terms
Deferred revenue	55% of one month’s revenue	Advance billing cycle
Member deposits	One month for suite and dedicated members	Held as a liability, not recognised as revenue
Minimum cash balance	R3.0m	Operating floor; revolving facility drawn below this level

19.7 Break-even

Figure 3. Break-even analysis at the FY2031 cost structure

Table 55 Break-even analysis

Measure	Value	Comment
Fixed cost base at FY2031	R35.6m	Rent, staff, corporate overhead and the fixed element of utilities and IT
Variable cost ratio	9.9%	Costs that move directly with occupied desks
Contribution margin	90.1%
Break-even revenue	R39.5m	Against FY2031 revenue of R73.4m
Break-even occupancy	69.5%	Against a planned blended occupancy of 84.2%
Margin of safety	16.3%	Revenue may fall by this proportion before EBITDA turns negative
First EBITDA-positive month	Month 22	October 2028
First profitable month	Month 26	February 2029

The margin of safety of 16.3% is the single most useful number in the financial section. It states plainly how much can go wrong at build-out before the business stops covering its costs, and it is thinner than a five-year EBITDA margin of 19.3% might suggest. The reason is the fixed cost base: R35.6m of annual cost, of which R26.7m is contracted rent that continues whether desks are occupied or not.