Customer demand drives post-lockdown rebound for office giant Workspace
Workspace Group (Workspace) has revealed customer demand for its services has returned to pre-Covid levels, with its flexible office space becoming increasingly attractive in an era of hybrid working.
The company completed 1,520 lettings in the twelve months up to the end of March 2022, for a total rental value of £30m.
Like-for-like occupancy is now up 7.8 percentage points to 89.6 per cent, while like-for-like rent roll up has risen 8.7 percentage points to £92.9m.
The boost in demand has helped the company rebound from a year of deep losses.
Workspace has now recovered from being £235.9m in the red last year, to making a profit before tax of £124m this year.
Alongside customer demand, the turnaround also reflects rising interest rates and property valuations.
For the full-year, Workspace’s trading profits after interest were up 21 per cent to £46.9m, driven by a 6.4 per cent increase in net rental income to £86.7m.
Its total dividend was up 21 per cent to 21.5p per share, an increase from 17.75p last year.
·Meanwhile, the company’s overall portfolio valuation has risen to £2.4bn, an underlying uplift of three per cent (£69m) from last year.
The company has engaged in a flurry of acquisitions and sales for its portfolio to expand its footprint.
Workspace acquired The Old Dairy in Shoreditch for £43m last September, the Busworks in Islington for £45m in November, and post year-end it completed the acquisition of McKay Securities PLC for £258m last month.
Over the full-year period, it has also sold 13-17 Fitzroy Street in Fitzrovia for £92m, and Highway Business Park in Limehouse for £24m.
As for refurbishments, it completed the refurbishment of Pall Mall Deposit in Ladbroke Grove last September, and opened Mirror Works, a new business centre in Stratford, one month later.
The company has a healthy pipeline of redevelopment activity projected to deliver 1.2m square feet of new and upgraded space over the next five years.
Chief executive Graham Clemett said: “Our focus over the past year has been to support our customers’ return to the office, rebuild like-for-like occupancy back to 90 per cent and drive trading profit growth. I am delighted that we have been able to deliver on these targets, reflecting the fantastic efforts of the Workspace team, the quality of space and facilities we provide and the attractions of our distinctive flexible offer.”