REG - Workspace Grp PLC - WORKSPACE GROUP PLC SECOND QUARTER BUSINESS UPDATE

WorkspaceAnnouncement

Thu 07:00

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RNS Number : 5589D  Workspace Group PLC  16 October 2025

16 October 2025

 

 

 

Workspace GROUP PLC

 

SECOND Quarter business update FOR THE

PERIOD ENDING 30 SEPTEMBER 2025

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space, provides a business update for the second
quarter ending 30 September 2025.

 

Lawrence Hutchings, Chief Executive Officer, Workspace Group PLC, commented:

 

"This has been a busy quarter of solid progress in our strategy to Fix,
Accelerate and Scale our business and embed operational excellence. Our
efforts to stabilise and rebuild occupancy by improving customer retention and
conversion to lettings are starting to bear fruit, with 326 lettings completed
in the quarter. As expected, the overall impact of these actions on occupancy
was outweighed in the quarter by the vacation of large spaces at The Centro
Buildings in Camden. To support the move towards operational excellence, we
have streamlined our support functions, creating a leaner, faster organisation
and delivering £2m in annualised efficiencies.

 

Our pilot capital-light upgrade projects at high-conviction sites, The Leather
Market and Vox Studios, are complete and the early responses we've had from
existing and new customers have been extremely positive. We are now
selectively expanding this programme to other high-conviction buildings. We've
also made progress on our plan to accelerate asset disposals in line with our
new conviction approach to portfolio management. We have exchanged or
completed on the disposal of £52.4m of low-conviction assets and have good
momentum on other assets identified for disposal following our thorough
portfolio review.

 

In parallel with our laser focus on increasing occupancy, we are also
advancing our plans to provide a more specialised offer to certain
fast-growing industries in high-conviction locations, which we believe will
provide opportunities to scale our business and drive accretive growth for
Workspace in the future. In an uncertain environment, we don't underestimate
the work we have to do to deliver on our strategy and it will take time, but
we are executing at pace and are confident we have the foundations in place to
deliver shareholder value."

 

Progress against strategy

 

·    Fix - stabilise and rebuild occupancy

o  Actions implemented to stabilise and rebuild occupancy, including
improvements to product and empowering frontline teams, gaining early traction
and driving customer retention, as well as better conversion of enquiries to
lettings

o  Delivered £2m in annualised efficiencies by streamlining our central cost
base

o  As expected, like-for-like(1) occupancy down 2.3% in the quarter to 80.0%,
largely driven by large customers vacating The Centro Buildings in Camden.
Excluding those vacations, like-for-like occupancy would have been 81.7%

·    Accelerate - optimise our portfolio and platform

o  Further progress on disposal of non-core assets, in line with conviction
approach to portfolio management. £52.4m exchanged or completed against our
£200m target, 1.6% below March 2025 book value and at a combined net initial
yield of 3.5%. Momentum building on other low conviction assets in the
disposal pipeline

·    Scale - innovate to deliver accretive scale in the future

o  Advancing plans to provide a more specialised offer to certain
fast-growing industries in high-conviction locations, expanding our
addressable market

Additional operational & financial highlights

·    326 new lettings completed in the quarter, with a total rental value
of £7.3m per annum

·    Like-for-like(1) rent per sq. ft. up 0.1% in the quarter to £47.55

·    Like-for-like(1) rent roll down 3.2% in the quarter to £107.1m

·    Robust balance sheet with £167m of cash and undrawn facilities and
proforma LTV at 35% (based on 31 March 2025 valuation)

(1) Restated for the transfer in of Barley Mow, Chiswick; Pall Mall Deposit,
Ladbroke Grove and the development part of The Light Bulb, Wandsworth, where
occupancy is now stabilised post-refurbishment and the transfer out of Morie
Street, Wimbledon (sold) and Castle Lane, Victoria (exchanged).

 

Customer activity

 

We have seen robust demand with 326 new lettings completed in the second
quarter (Q2 2024/25: 296) with a total rental value of £7.3m (Q2 2024/25:
£7.4m). While demand was impacted by summer holidays and Tube strikes, we
have driven improved conversion of enquiries to lettings through more targeted
marketing in line with our strategy. The table below shows a 2% uplift in
conversion of enquiries to lettings to 16%, from 14% in Q2 2024/25.

 

            Monthly Average               Monthly Activity
            Q2        Q1        Q2        30 Sep  31 Aug  31 Jul

            2025/26   2025/26   2024/25   2025    2025    2025

 Enquiries  666       634       700       699     565     733
 Viewings   519       495       486       504     458     596
 Lettings   109       93        99        127     109     90

 

As stated previously, we expected to see a decline in like-for-like occupancy
in the second quarter, mainly due to the impact of two large customers
vacating their units at The Centro Buildings in Camden, in particular Win
Technologies who vacated 43,000 sq. ft. These two vacations represent 1.7% of
occupancy, with like-for-like occupancy now at 80.0%.

 

We have continued to prioritise retention through empowering our centre teams
and delivering fast improvements to our product and experience, in line with
feedback from customers. Our recent marketing campaign helped to support new
customer acquisition, driving a 22% uplift in viewers booked via our website
during the campaign period compared to the prior three-year average for the
same period. In addition, we are taking a pragmatic approach to pricing, with
like-for-like rent per sq. ft. stable in the quarter at £47.55.

 

                                        Quarter Ended
                                        30 Sep 25  30 Jun 25(1)  31 Mar 25(1)
 Like-for-like occupancy                80.0%      82.3%         82.5%
 Like-for-like occupancy change(2)      (2.3%)     (0.2%)        0.2%

 Like-for-like rent per sq. ft.         £47.55     £47.50        £47.52
 Like-for-like rent per sq. ft. change  0.1%       0.0%          0.9%

 Like-for-like rent roll                £107.1m    £110.6m       £110.7m
 Like-for-like rent roll change         (3.2%)     (0.1%)        1.7%

 

(1) Restated for the transfer in of Barley Mow, Chiswick; Pall Mall Deposit,
Ladbroke Grove and the development part of The Light Bulb, Wandsworth, where
occupancy is now stabilised post-refurbishment and the transfer out of Morie
Street, Wimbledon (sold) and Castle Lane, Victoria (exchanged).

(2) Absolute change

 

 

In line with our stated methodology for calculating like-for-like occupancy,
28,000 sq. ft. has been adjusted out at 30 September 2025 due to refurbishment
projects. Like-for-like rent roll and like-for-like rent per sq. ft. are
unaffected.

 

We have made good progress with our ongoing programme of refurbishment and
subdivision of larger units, with c.9,000 sq. ft. completed in the quarter and
marketing commencing shortly on a further c.7,000 sq. ft. largely completed in
the quarter. In tandem, we have continued to let some of our larger spaces in
their current form, with six units totalling 24,000 sq. ft. let in the
quarter.

 

Total rent roll decreased by 3.9% (£5.4m) in the first half to £134.0m, as
detailed below:

 

 Total Rent Roll                     £m
 At 31 March 2025                    139.4
 Like-for-like portfolio             (3.6)
 Completed projects                  0.3
 Projects underway and design stage  (0.4)
 South East offices                  (0.2)
 Disposals                           (1.4)
 Other                               (0.1)
 At 30 September 2025                134.0

 

Portfolio activity

 

In July, we completed on the sale of The Shaftesbury Centre, Ladbroke Grove
for £4.7m, 3.3% above the March 2025 valuation with a net initial yield of
6.2%.

 

In August, we exchanged and completed on the sale of Morie Street Studios,
Wandsworth for £8.1m and completed the sale of Chocolate Factory (Part) -
Block E1, Wood Green for £2.2m with a combined net initial yield of 3.8% and
3.5% below the March 2025 valuations.

 

In September, we exchanged on the sale of Castle Lane, Victoria for £14.3m,
4.3% below the March 2025 valuation with a net initial yield of 4.0%.

 

There is a further £13.0m of exchanged disposals which are expected to
complete within the next 12 months, and we will continue to dispose of low
conviction assets throughout the year.

 

Activity is ongoing at our major refurbishment projects. The Biscuit Factory
in Bermondsey will deliver 31,000 sq. ft. of additional space towards the end
of 2025 and we are nearing completion of Atelier House at The Centro Buildings
in Camden, where we have transformed a traditional office building into a
Workspace business centre with 41 units, a café and meeting rooms. Marketing
has now started for the units at Atelier House.

 

Financing

 

Net debt increased by £20m in the quarter to £833m (30 June 2025: £813m),
following payment of the full year dividend, partly offset by disposal
proceeds received in excess of capital expenditure. Cash and undrawn
facilities were £167m as at 30 September 2025, with LTV at 35% on a proforma
basis, based on the 31 March 2025 valuation.

 

Half year results

 

Workspace will publish its half year results for the six months to 30
September 2025 on 19 November 2025. A presentation to analysts and investors
will be held at 10:30am at our

Eventspace, Salisbury House, 114 London Wall, EC2M 5QA.

 

- ENDS -

 

For further information, please contact:

 

 Workspace Group PLC                                             020 7138 3300
 Paul Hewlett, Director of Strategy & Corporate Development
 Clare Marland, Head of Corporate Communications

 FGS Global                                                      020 7251 3801
 Chris Ryall
 Guy Lamming
 Emma Black

 

 

Notes to Editors

 

About Workspace Group PLC:

 

Workspace is London's leading owner and operator of flexible workspace,
currently managing 4.2 million sq. ft. of sustainable space at 64 locations in
London and the South East.

 

We are home to some 4,000 of London's fastest growing and established brands
from a diverse range of sectors. Our purpose, to give businesses the freedom
to grow, is based on the belief that in the right space, teams can achieve
more. That in environments they tailor themselves, free from constraint and
compromise, teams are best able to collaborate, build their culture and
realise their potential.

 

We have a unique combination of a highly effective and scalable operating
platform, a portfolio of distinctive properties, and an ownership model that
allows us to offer true flexibility. We provide customers with blank canvas
space to create a home for their business, alongside leases that give them the
freedom to easily scale up and down within our well-connected, extensive
portfolio.

 

We are inherently sustainable - we invest across the capital, breathing new
life into old buildings and creating hubs of economic activity that help
flatten London's working map. We work closely with our local communities to
ensure we make a positive and lasting environmental and social impact,
creating value over the long term.

 

Workspace was established in 1987, has been listed on the London Stock
Exchange since 1993, is a FTSE 250 listed Real Estate Investment Trust (REIT)
and a member of the European Public Real Estate Association (EPRA).

 

Workspace® is a registered trademark of Workspace Group PLC, London, UK.

LEI: 2138003GUZRFIN3UT430

For more information on Workspace, visit www.workspace.co.uk
(http://www.workspace.co.uk)

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