Workspace confident amid positive underlying demand

Flexible office provider Workspace Group reported “good” underlying levels of customer enquiries, viewings and lettings in its first quarter on Thursday, as like-for-like rent per square foot rose 2.6% in the quarter to £38.07.

The FTSE 250 company said its like-for-like occupancy was “stable” at 89.6%, while its like-for-like rent roll was 2.9% firmer in the quarter at £93.8m.

Workspace reported “strong demand” at its recently-completed projects, with overall occupancy on the schemes increasing by five percentage points to 74% in the quarter.

The integration of the McKay assets, meanwhile, was progressing to plan, with “good traction” reported on leasing activity.

During the period, the company exchanged contracts for the disposal of its residential scheme at Riverside, Wandsworth, for £55m, in line with the March valuation.

Completion there was expected in December.

The board said it was progressing with the disposal of the non-core McKay assets, and was still targeting completion by December as well.

Workspace reported a loan-to-value ratio of 32% on a proforma basis, before the proceeds from its planned disposal programme.

“We have had a good start to the year, with customer demand for our distinctive flexible offering driving further like-for-like pricing growth and high occupancy levels,” said chief executive officer Graham Clemett.

“We are also delivering additional rent roll growth from the strong progress we are making letting up recently completed schemes and the successful integration of recent acquisitions.”

Clemett said the firm was continuing to “closely monitor” the wider economic situation, but was not currently seeing “any meaningful impact” on customer demand.

“As we have consistently demonstrated in the past, in these more challenging business environments our active operational capabilities combined with the attractions of our flexible offer and broad range of properties resonate strongly with our diverse customer base of agile, innovative small to medium enterprises.”

At 1141 BST, shares in Workspace Group were up 0.27% at 566p.

Reporting by Josh White at Sharecast.com.