Workspace reports lettings boost and rent growth but occupancy slips
Workspace Group PLC on Thursday reported a ‘strong’ lettings performance in the final quarter of its financial year, though occupancy levels slipped and the company warned of continued pressure from macroeconomic conditions.
The London-based provider of flexible workspace said it completed 390 new lettings in the three months that ended March 31, with a total rental value of £10.1 million. That marked a 15% increase year-on-year and a significant improvement on the previous quarter.
Like-for-like rent per square foot rose 0.9% to £48.08, while like-for-like rent roll increased 1.4% to £107.9 million.
However, like-for-like occupancy fell by 1.0 percentage point to 85%, impacted by recent completions of large-unit refurbishments and ongoing customer move-outs, particularly among larger tenants.
Chief Executive Officer Lawrence Hutchings said Workspace had taken ‘strategic actions’ to support retention and conversion amid a challenging backdrop, and would detail its plans in a strategy update alongside full-year results in June 5.
‘The recent macroeconomic events combined with slower economic growth will continue to affect sentiment among some of our customers,’ Hutchings warned, but added: ‘Confidence in the long-term outlook for this market underpins my excitement in the structural growth opportunity that lies ahead.’
Workspace said it sold six non-core properties during the quarter for £52.5 million, with a further disposal completed in April for £10.3 million. Disposals included sites in Reading, Soho, Raynes Park, and Brentford.
Total rent roll increased 0.8% over the quarter to £139.4 million, while net debt fell to £820 million from £847 million at the end of December. Cash and undrawn facilities stood at £260 million, and the loan-to-value ratio was 34% based on September 2024 valuations.
Shares in Workspace were down 0.8% at 423.00 pence in London on Thursday morning.
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