Workspace Group suffers as 2020 remains out of office

Shares in FTSE 250 office rental business Workspace Group (LON:WKP) tumbled 3.77% to 727.50p (as of 14:45 GMT) after it booked a loss before tax for the half year ended 30th September. The loss was largely due to adjustments in property valuations but trading profits were also down due to large rent discounts offered to clients.

CEO Graham Clemett commented: “Like so many businesses, we have had a challenging first half as a result of the Covid-19 pandemic. Despite the difficult environment, we have delivered a resilient performance which has highlighted the strength of our offering and business model. We have sought to support our customers as much as possible during this time, offering the majority a 50% rent discount in the first quarter. We believe our freehold ownership model, our financial strength and our long-established flexible offer will be an attractive option for an increasing number of London businesses as the economy recovers. In this regard, it was encouraging to see the increase in enquiries and lettings from new customers to near pre-Covid levels in the second quarter, confirming the appeal of our offer.

“There is no doubt that people’s expectations of the office are changing. Although this trend has been apparent to us for several years, the pandemic has accelerated fundamental changes to the role and requirements of the office for an increasing number of businesses and their employees. As the economy recovers from Covid-19, businesses will need to be more agile and will expect the same from office space providers. By owning our properties outright, we can quickly adapt to customers’ changing needs – from ensuring they are Covid-safe to making our offices ever more sustainable. This is distinct to Workspace and ideally positions us in the flight to flexibility.

“Our immediate priority is to manage our way through the challenges of the second half of the year. With Government Covid-19 restrictions in place we expect to see further pressure on occupancy and pricing in the near-term, which will impact on our full year performance. However, our strong balance sheet, compelling customer offer and experienced team mean that Workspace is well positioned to navigate the challenges ahead and benefit as the economy recovers.”