Workspace converts strong demand in solid fourth quarter

Office space specialist Workspace Group said in a quarterly update on Thursday that customer demand remained strong in the three months through March, with an average of 932 enquiries per month.

The FTSE 250 firm said it was successful in converting that demand into new lettings in its fourth quarter, with 341 new lettings completed during the period, bringing in a total rental value of £8.3m per annum.

It also reported positive pricing momentum, with a like-for-like rent per square foot up 2.7% during the quarter and 9.4% since March last year, reaching £40.61.

The like-for-like occupancy rate remained stable at 89.1%, with a slight decrease from 89.2% in December.

Workspace said its like-for-like rent roll increased 1.2%, or £1.2m, in the quarter, and was ahead by 7.2% since March last year, to £97.7m.

Additionally, the firm’s total rent roll increased by £2.2m, or 1.6%, in the quarter to £140.1m.

Furthermore, the sale of the residential component of the Riverside mixed-use redevelopment in Wandsworth was completed in March, fetching £54m, which was in line with the September valuation.

Workspace described its balance sheet as “robust”, with a proforma loan-to-value ratio of 32% based on the 30 September valuation, and an average maturity of drawn debt of 4.1 years.

“We saw a strong fourth quarter of trading activity with customer demand enabling us to continue moving our pricing forward,” said chief executive officer Graham Clemett.

“This performance reflects the continuing attractions of our offer to the changing needs of businesses looking for space.

“We provide flexibility in terms of both lease length and size of space at affordable prices within high-quality sustainable buildings, in well-connected locations across London.”

Clemett explained that, in the current, “challenging” economic times, Workspace had a “robust” balance sheet, with the majority of its debt on long maturities.

“This will be further enhanced as we progress with the disposal of non-core assets.

“Our distinctive offer, proven operating track record and ownership of an extensive property footprint across London sets us apart from others in the growing flexible space market.

“This all provides us with an exciting opportunity to deliver sustainable long-term growth.”

At 0936 BST, shares in Workspace Group were down 0.96% at 455p.

Reporting by Josh White for Sharecast.com.