Commercial Property

UK’s Workspace posts first annual loss in 12 years on pandemic hit

Slump in rental prices, loss of customers hits office space provider

Photograph: iStock

Thu Jun 3 2021 - 08:23

Office-space provider Workspace Group slipped to its first annual loss in 12 years on Thursday as it suffered from a slump in rental prices and lost around 10 per cent of customers struggling with the fallout of the coronavirus pandemic.

Company insolvencies in England and Wales fell to their lowest in more than 30 years in early 2021 as the government's support helped businesses to ward off bankruptcy.

With employees and consumers marooned at home by lockdowns, however, companies have been striving to cut costs and few are investing. Workspace said rents had been driven down by weak demand.

"The past year has been one of the most challenging in Workspace's history; with London effectively closed for much of it," chief executive Graham Clemett said.

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Net rental income at the company fell 33 per cent to £81.5 million, with £20 million of rent discounts and deferrals given to customers.

The 10 per cent decrease in the underlying value of its property was more than six times its trading profit of £38.7 million.

Workspace and larger peer IWG, however, have both pointed to the positive impact that a shift to more flexible working arrangements is likely to have on their businesses in future.

“The role of the office in our working lives is being re-examined and all the signs highlight flexibility, quality and wellbeing becoming more important for businesses and their people,” Mr Clemett said, adding the company will complete two more projects in the second half of the year.

The London-based company reported a pre-tax loss of £235.7 million for the full year ended March 31st, compared to a profit of £72.5 million a year earlier. – Reuters

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