Workspace losses widen as property valuation declines

Workspace Group has posted widening losses on the back of a property valuation decline, despite growing its rental income. The flexible offices provider made a loss before tax of £192.8m during the year to 31 March, compared with a £37.5m loss last year. Its property valuation fell by 9.5% to £2.4bn, largely underpinned by a 6.6% decline in the first half. There was a 3.1% underlying decline in the second half. Portfolio value fell by 8.1% on a like-for-like basis. EPRA net tangible assets per share fell by 13.7% to £8. However, net rental income jumped by 8.2% to £126.2m, while occupancy was largely static at 88.1% at the end of March. Some £143m of disposals either exchanged or completed during the year, with a further £4.6m exchanged after year-end. The sales generated £118m of proceeds. Outgoing chief executive Graham Clemett said Workspace’s trading performance was “underpinned by rental growth with stable occupancy”. He also predicted valuations will improve in the coming months. He said: “Our valuation was down in the year by 9.5%, although the reduction was significantly lower in the second half. I would expect this valuation to be the low point of the current cycle given the forecast of interest rate reductions combined with our ability to continue to deliver pricing growth and value-add asset management activity. “Looking ahead, the future is bright for Workspace as London’s leading provider of flexible, sustainable workspace to SMEs. Our scalable operating platform, combined with more than three decades of experience in the flex space, puts us in a strong position to maintain our leadership position in this growing market and continue delivering long-term income and dividend growth for our shareholders.”