Workspace Group (WKP) reinstates dividend as workers return
09:42, 17 November 2021
Flexible space player Workspace Group confirmed £3.4m ($4.6m) in pre-tax half-year profits earlier on Tuesday as more workers dribbled their way back to the office environment, indicating an improvement in sector sentiment.
The FTSE 250 real estate investment trust (REIT) saw a loss of more than £110m a year ago. Workspace has now reinstated a 7p per share interim dividend. It claimed “strong customer demand with enquiries, viewings and lettings now at pre-Covid levels”.
Like-for-like occupancy improves
The REIT also claimed strong growth in like-for-like occupancy, up 3.7% to 85.6%, “with rent per sq foot stabilising in the second quarter, up 0.3% to £35.50 after a 2.3% decline in the first quarter”.
“All the signs,” said CEO Graham Clemett, “point to strong underlying momentum in our business. Demand metrics continued to improve in the first half across London, utilisation of our centres is increasing, prices have stabilised and rent collection is strong.”
Sector under pressure but sentiment better
Workspace Group shares have climbed more than 17% in the last 12 months. This morning its stock was 0.35% up to 865p. Like so many real estate players, the sector has been pummelled by Covid-19. Despite substantial 2020 losses, recent increased demand has spurred investor sentiment but the risk of pullbacks remain.
In October property agents Colliers said occupation level optimism was up, though warned that the market was skewed “towards better quality space”. More recently, Land Securities has predicted an uptick in London office space demand.
Data from property agents Cushman & Wakefield (C&W) has also supported better office space sentiment – companies leased 2.77m square feet of office space, C&W claims, between July and September – a jump of 54% compared to the previous April-June quarter.