Flexible serviced office provider Workspace received around 70% of rent payments due in the first quarter.
Taking into account agreed rent deferrals and discounts, including the 50% rent reduction offered to circa 75% of its customers by rent roll the for three months until the end of June, rent collection rates have been “robust”, said Graham Clemett, chief executive of Workspace.
However, he also warned in the company’s latest full-year results that the current year would “undoubtedly see a subdued operational performance and a reduction in rental income”.
“For many of our existing customers there is a difficult period ahead as they look to rebuild their businesses. Some businesses will want to downsize, some will decide to continue working remotely, some may fail, while others will recover quickly.”
The rent reductions given in the first quarter amounted to circa £15m and around 15% of the discounted rent amounts due from its customers have been deferred.
The business also reported in its results that there had been a significant lowdown in enquiries from the end of March.
Workspace added that its measures to aid customers’ return to the office included signage to promote social distancing, screens, hand sanitiser dispensers, one-way systems, restrictions on use of communal areas and increased daily cleaning of the common areas in our business centres.
Clemett added: “We are fortunate that our buildings are low-rise, so the severe lift restrictions that need to be put in place have limited impact.”
For the year ended 31 March 2020, Workspace posted a 47% drop in its pretax profit to £72.5m, which the business attributed to “an adverse movement year-on-year in the property revaluation from a surplus of £60.8m in the prior year to a deficit of £7.5m in the current year”.
Workspace’s property valuation stood at £2.57bn, down by 0.3% from £2.6bn last year.
Revenue was up 8% to £161.4m for the year as net rental income rose by 10% to £122m and trading profit increased by 11% to £104m.
The business decreased its net debt over the year by 6.7% to £541m, including an undrawn facility of £96m at the end of March. In addition, it had £70.3m of cash available.
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