Workspace swings to full-year loss

Office space provider Workspace said on Thursday that it swung to a full-year loss due to a drop in its property valuation.

In the year to the end of March, the company swung to a pre-tax loss of £37.5m from a profit of £124m a year earlier as its property valuation declined 3.2% to £2.7bn.

Net rental income was 34% higher on the year at £116.6m, or 17% higher on an underlying basis. EPRA net tangible assets per share were down 6.2% from the end of March to £9.27.

Workspace said it continues to see "good" demand and expects to see further price growth. In addition, rental income growth will be supported by the letting of recently-completed projects and the letting of refurbished and vacant space in the McKay portfolio.

However, it also cautioned that the current high levels of inflation will impact on both its service charge and administrative costs.

"In relation to service charge costs, where the majority of the cost is passed on to our customers, we have been able to limit the impact on customers by the hedging of our energy costs in October 2021," it said.

"Staff costs are the most significant driver of our administrative expenses and, whilst we have limited inflationary salary increases to 6% for staff earning more than £50,000, we have given higher increases for those on lower salary levels."