UK’s Workspace posts 235.7 million pounds loss in FY21 – ET RealEstate

BENGALURU: Workspace Group on Thursday slipped to its first annual loss in 12 years as COVID-19 battered occupancies and rents, with the office-space provider saying it would take a couple of years to recover to pre-pandemic levels.

Shares of the FTSE 250 firm fell as much as 3.6% after it said it lost around a tenth of its customers, comprising mostly small and medium-sized enterprises and entrepreneur businesses, in the wake of the coronavirus pandemic.

Employees and consumers were marooned at homes by lockdowns, while companies were forced to cut costs with few investing.

Workspace Chief Financial Officer David Benson told Reuters the company expects to see “significant” recovery this year after reporting a pre-tax loss of 235.7 million pounds for the 12 months ended March 31.

“Certainly over the next couple of years, we will be recovering back to where we were pre-COVID,” said Benson.

The London-focused company, which serves a varied client base from architects to florists and craft beer brewers to app developers, said a survey on future space requirements over the year showed that only 12% of its clients thought they would reduce space.

“Over 60% of them (clients) said they thought they would be taking about the same amount of space. 25% thought it would be taking more space,” said Chief Executive Officer Graham Clemett on an earnings call.

Annual net rental income plunged 33% to 81.5 million pounds, while the underlying value of its properties slipped 10%.



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Office space provider Workspace sees occupancy level returning this fiscal year – ET RealEstate

BENGALURU: Office space provider Workspace Group said on Thursday it expects a recovery in occupancy levels in the current financial year as coronavirus-related restrictions ease in the UK and financial capital London opens up for business.

Office space providers are gradually recovering after work-from-home policies and the economic fallout from the pandemic hurt their margins as costs surge and customers default on rent payments.

Workspace, which owns and manages 4 million square feet of business space in London, said occupancy at its centres was at 20% of pre-pandemic levels by end-March and 30% by end-April.

“Despite the government lockdown, new customer demand picked up strongly through the fourth quarter, with average monthly enquiries of 910 and average monthly lettings of 111,” the company said in a business update.

Workspace said cash collection has continued to be robust, with the company receiving 92% of rent due for the fourth quarter of fiscal 2021 and 84% for the first quarter of the current financial year.

Shares of the FTSE Midcap component rose more than 2% in early trade.



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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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