Workspace: Flexible office provider calls market bottom as workers return to the City

Flexible office provider Workspace said its “future is bright” after it revealed a 8.7 per cent increase in profit for the year to March. 

The FTSE 250 company said demand across its 78 hybrid working buildings also remained strong.

Throughout the year, the business completed 1,238 lettings and 705 lease renewals, worth £53.3m in terms of rent roll. On a like-for-like basis, the company’s rent roll jumped 9.6 per cent.

It reported like-for-like rent per square foot of £44.27, up 10.4 per cent compared to the prior year.

Overall occupancy of its buildings was 88.1 per cent at the end of the fiscal period.

Off the back of the strong results the company announced a 28p per share dividend for the year, up 8.5 per cent. It ended the year with a EPRA net tangible asset value per share of 800p, down 13.7 per cent.

Outgoing boss Graham Clemett, chief executive officer said: “It has been a year of continued progress at Workspace, driven by the resilience and dynamism of our 4,000 SME customers. 

“The strong trading performance has once again been underpinned by rental growth with stable occupancy, delivering an 8.5 per cent growth in the total dividend to shareholders of 28p per share.

He added: “Our valuation was down in the year by 9.5 per cent, 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.”

Clemett, who has served nearly 16 years at the firm, is set to retire as chief executive. 

Last month, the firm revealed former Capital & Regional chief Lawrence Hutchings would be next to take the throne. 

Clemett said: “I am immensely proud of the distinctive culture we’ve cultivated at Workspace; it has made my time in the business hugely enjoyable, despite the challenges we have had to deal with over the last two decades. I have no doubt that Lawrence Hutchings, who succeeds me as chief executive officer, will be a great fit for the business and that Workspace will continue to thrive under his leadership.

“I wish everyone at Workspace and all our stakeholders all the best for the future. I will of course remain an invested shareholder and I look forward to watching from the sidelines as Workspace goes from strength to strength.”