Workspace swings to £178m first-half loss as valuations sink

London-focused office, industrial and workshop space provider Workspace swung to a big loss in the first half of the year as a result of a £178m reduction in valuations.

The company reported a loss before tax of £147.9m for the six months to 30 September, compared with a profit of £35.8m profit the year before.

By the end of the period, Workspace's properties were valued at £2.51bn, down 6.6% on an underlying basis compared with the end of the previous fiscal year. EPRA net tangible assets per share declined by 10.2% over the six months to £8.32.

Nevertheless, net rental income was up 9% at £61.0m as a result of "good customer demand" with 583 lettings completed in the half year with a total rental value of £15m.

Like-for-like rent roll was up 6.3% in the half year to £108.6m, while improved pricing led to a 6.6% increase like-for-like rent per square foot to £42.98.

Workspace raised its interim dividend by 7% to 9.0p per share.

"As expected, valuations are down as a result of movement in market yields. However, we have maintained a conservative level of gearing, with the continuing disposal of non-core properties further strengthening our balance sheet and we expect more over the next six months," said chief executive Graham Clemett.

"We go into the second half of the year with good momentum. Our scalable operating platform gives us a competitive advantage and we have a clear pathway to unlock near and long-term income growth, both through capturing reversion on our like-for-like properties and active asset management opportunities."