Wework collapse hits Helical as vacancy rate set to reach 25 per cent
London property and investment firm Helical announced a £93.1m loss in the half year to September this morning, driven primarily by the revaluation of its property portfolio.
The company also warned it will take a hit from the collapse of Wework, with vacancy rates rising as much as 25 per cent when leasing agreements with the flexible office space provider and law firm Baker McKenzie come to an end.
Earlier this month, Helical kicked Wework out of its Bower building in London due to non payment of rent for September.
However, Helical subsequently allowed Wework to re-enter the building, because they entered into a short-term lease agreement with Wework and received a fee equivalent to the whole of the September quarter’s rent and service charge due “under the terms of the previous contractual arrangements.”
When the short-term agreement ends, Helical expects to re-let the building.
Despite the loss, Helical said it is in a good position for next year, as it steams ahead with new developments, including plans to open a new eight storey office development in Bank.
The company completed five new lettings in the period, comprising 10,381 square feet of space. Net asset value fell 17.5 per cent to £502m and EPRA net tangible asset value per share slumped 17 per cent to 409p as the company struggled to fill its buildings.
Despite these headwinds, Helical plans to capitalise on the shortage of “best in class” office space in central London.
Gerald Kaye, chief executive, said: “There remains a shortage of “best-in-class” newly refurbished or redeveloped office space in central London.
“With an experienced management team, a substantial development pipeline with optionality over timing and funding, and no legacy assets requiring investment to meet minimum sustainability standards, Helical is well positioned to capitalise on current cyclical opportunities.”
Shares in Helical traded down three per cent in London this morning.