Workspace: Lettings activity surges but CEO warns on economic uncertainty
Workspace said lettings activity in the fourth quarter was up around 15 per cent on the previous year, as the office business competed for over £10m worth of new rentals.
CEO Lawrence Hutchings said the group had “strong lettings performance in Q4, resulting in like-for-like rent roll growth”.
In an announcement to its shareholders, Workspace said it completed 390 new lettings in the fourth quarter ending 31 March, with like-for-like rent roll-up up 1.4 per cent to £107.9m.
While its like-for-like rent per sq. ft. was up less than one per cent to £48.08, its like-for-like occupancy was down one per cent over Q4 to 85.1 per cent.
Hutchings said the group’s performance was “partly driven by strategic actions we’ve taken to counter current macroeconomic and competitive pressures, support retention and improve conversion.”
However, he warned that “recent macroeconomic events combined with slower economic growth will continue to affect sentiment among some of our customers.”
“Whilst it will take some time for us to work through the impact of the larger unit vacations we have seen and expect to see in the first half of this year, we remain laser-focused on what we can control, including costs, as we continue to prioritise a recovery in occupancy and rent roll,” he added.
The group said it will “maintain a disciplined approach to gearing” as long-term interest rates are expected to remain high and some debt maturing this year.
Following the disposals made during the quarter, net debt decreased by £27m to £820m (31 December 2024: £847m). Cash and undrawn facilities were £260m as of 31 March 2025, with the proforma loan to value at 34 per cent based on the 30 September 2024 valuation.
Workspace had continued to dispose of non-core assets and completed or exchanged on the sale of six properties for a total of £52.5m in the last quarter.
This included a Rainbow Industrial Estate in Raynes Park for £20.3m, Archer Street Studios in Soho for £13.9m and the former Mecca Bingo site on Garratt Lane, Wandsworth, for £5m.
The company’s major refurbishment projects include the Chocolate Factory in Wood Green, where it is delivering 40,000 sq. ft. of new and upgraded space and expects practical completion in the second quarter, and The Biscuit Factory in Bermondsey, where it is set to deliver 30,000 sq. ft. of additional space towards the end of 2025.
“Confidence in the long-term outlook for this market underpins my excitement in the structural growth opportunity that lies ahead of us, which I believe Workspace is uniquely positioned to capture,” Hutchings added.