Workspace Group swings to loss as customers downsize due to virus crisis – ET RealEstate

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BENGALURU: Workspace Group on Wednesday swung to a first-half loss and pushed back a decision on full-year dividend as the office space provider struggled with a rise in customers vacating and downsizing due to the coronavirus crisis.

Work-from-home policies and the economic fallout from the pandemic have hurt margins for office space providers such as WeWork, IWG and Workspace as costs surge and customers default on rent payments.

“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,” the company said in a statement.

Chief Executive Graham Clemett said the company would see further pressure from virus-related curbs on occupancy and pricing in the near term, impacting its full-year performance.

Workspace had offered most of its customers a 50% rent discount in the first quarter.

The company, which owns and manages 4 million square feet of business space in London, posted a pretax loss of 110.4 million pounds ($146.58 million) for the six months ended Sept. 30, compared with a profit of 99.1 million pounds a year earlier.

Still, it said customer enquiries for work spaces were at 935 in September, an improvement from the 272 seen in April, as restrictions eased. Rent collections also picked up, with 95% of rents due for the first half received as at Nov. 2.



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Unite Group sees more student housing cancellations as UK coronavirus cases rise – ET RealEstate

BENGALURU: Student housing provider Unite Group said on Thursday there were more than usual cancellations in recent weeks following a rise in coronavirus cases in Britain, leading to occupancy falling short of its 90% target.

The company, which provides homes to 74,000 students across 177 properties in 27 university towns and cities, however, held out hope for increased sales from January from students opting to move into properties with short-hold tenancy agreements.

Schools and universities in Britain started reopening last month after the COVID-19 pandemic had forced their closure since March, resulting in students giving up their campus stay to move back home during the health crisis.

“While recognising that this is an evolving situation, all of our buildings remain open with a range of independently assessed COVID-19-secure measures in place,” Unite Students CEO Richard Smith said.

The company said it still expected rental income, comprising of direct lets to students and leases to universities and commercial tenants, to fall between 10% and 20% for the 2020/21 academic year as it had to forgo rents for those students who returned to their homes for the summer semester.



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UK’s PM promises lower deposits to boost home ownership – ET RealEstate

LONDON: British Prime Minister Boris Johnson pledged on Tuesday to make it easier for first-time homebuyers to take out a mortgage, in an effort to overturn “disgraceful” low rates of home ownership among young people.

“We need now to take forward one of the key proposals of our manifesto of 2019: giving young first-time buyers the chance to take out a long-term fixed-rate mortgage of up to 95% of the value of the home,” Johnson said in his keynote speech to the Conservative Party Conference.

Johnson said it was a “disgraceful truth” that millions of people were forced to pay rent on homes they could not truly make their own.

The rate of home ownership among people aged 25 to 34 has fallen sharply over the last few decades, from 67% in 1991 to around 40% today, according to government data.

“We will help turn generation rent into generation buy,” Johnson said, adding that his policies could create up to 2 million new owner-occupiers.

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