Workspace faces occupancy slump as major clients prepare to vacate
The business told investors on Wednesday it saw more 'larger customers vacating' in the three months to 30 June, with further larger-scale clients expected to vacate in the second quarter.
'Our immediate focus remains on stabilising and, over time, rebuilding occupancy', Lawrence Hutchings, chief executive of Workspace, said.
Like-for-like occupancy slipped 0.3 per cent in the quarter to 82.2 per cent.
The London-focused group said its like-for-like rent per sq. ft. was 'stable' in the first quarter, at £47.42.
The group saw 278 new lettings completed in the quarter, with a total rental value of £7.1million per year.
It leased a monthly average of 93 new office spaces in the period, compared to 102 spaces in the previous year.
Workspace has seen property valuations fall since the pandemic, as businesses ditched larger office spaces and opted for hybrid work models.
The company has been disposing underperforming assets and investing in refurbishing other units to retain occupants.
Hutchings said: 'As expected, occupancy declined slightly in the quarter and we have more large vacations to come in Q2.
'We have made good progress implementing the pilot projects at two of our high conviction sites, Vox Studios and The Leather Market, to test capital-light, high impact upgrades to our product.
'We have also seen success in leasing up some of the larger spaces thanks to more targeted marketing initiatives.
'We are confident that these strategic actions, once rolled out more widely across the portfolio, will help us retain and attract more customers.'
The group said it had a 'robust' balance sheet with £267million of cash.
The company leases space to small businesses ranging from fintech firms to podcasters and people using AI to write music.
It owns a portfolio of about 70 properties across London and the south-east of England, providing office space to more than 4,000 businesses.
In May, Workspace cut its profit expectations for the next year, citing increased churn of large occupiers and higher costs.
Workspace shares fell 1.01 per cent or 4.00p to 393.00p on Wednesday, having fallen over 37 per cent in the last year.
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