Workspace grows Q1 rental income as pricing improves

Office owner and operator Workspace Group said an improvement in pricing helped lift rental income in its first quarter as occupancy held stable, while new lettings were bolstered by "resilient" customer demand.

Rent roll for the three months to 30 June was up 1.2% on a like-for-like basis at £111.8m, helped by a 1.2% LFL increase in rent per square foot to £46.28.

On a total basis, rent roll was slightly lower (-£0.1m) at £143.3m due to the negative impact of disposed properties no longer in the portfolio as the company continues to sell non-core assets, with £8.1m exchanged for sale during the quarter.

Occupancy was flat at 88.2% on a LFL basis, unchanged from the third and fourth quarters of last financial year.

"It has been a good start to the year with occupancy stable and continued pricing improvements in the first quarter, reflecting the resilience of our diverse SME customer base and the appeal of our distinctive, flexible offer," said chief executive Graham Clemett.

Workspace said it saw "resilient customer demand in what is typically a quieter quarter". Enquiry levels are lower, but that was mitigated by an improved conversion to viewings and lettings, with an average of 102 new lettings completed each month in the first quarter, up from the 87 monthly average a year earlier.

"We are progressing with the disposal of non-core assets, recycling capital to invest in accretive refurbishment projects across the portfolio," Clemett said.

The stock was up 0.5% at 621p b 0902 BST.