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RNS Number : 8382A  Workspace Group PLC  17 April 2026

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

FOR IMMEDIATE RELEASE.

 

17 April 2026

 

 

Workspace GROUP PLC

 

FOURTH Quarter business & FINANCIAL update

 

Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, flexible work space, provides a business update for the fourth
quarter ending 31 March 2026 and an update on financial outlook for the year
ending 31 March 2027.

 

Charlie Green, Chief Executive Officer, Workspace Group PLC, commented:

 

"I have known Workspace and its assets for many years, giving me a significant
head start in assessing the business since I joined in early February.

 

We have an extraordinary portfolio of quality buildings in good locations and
we're operating in markets with continued long-term structural demand. We're
seeing this demonstrated through resilient levels of enquiries and improved
conversion rates, particularly in this last quarter amidst a challenging macro
environment.

 

The opportunity moving forward is to reposition and elevate our offering so
that we fully address the changing needs of our customers. In doing so, we
will own the value category and be the first-choice provider of space for the
start-up, SME and scale-up market. This will require investment in our
portfolio and our scale will then give us the platform to create a significant
market advantage in how we provide for our customers.

 

Moving forward, it will take time to deliver on our ambitions and, as we
deliberately reposition the business, there will be a step down in
profitability. To reflect this, and a disciplined approach to capital
allocation, the Board has also reviewed our dividend policy and intends to
return to cover of 1.2x earnings for FY 2025/26 onwards. There is considerable
work to be done and we can see a clear path to accelerating our strategy and,
in time, delivering sustainable earnings growth. We look forward to providing
more detail at our full year results in June."

 

Highlights

·    Enquiries resilient in Q4, with enquiry to letting conversion broadly
stable at 18% in the fourth quarter (Q4 24/25: 16%)

·    384 lettings completed with a total rental value of £8.2m (Q4 24/25:
390, with a total rental value of £10.1m)

·    Stabilised portfolio(1) occupancy increased 0.3pp to 81.6% and
stabilised portfolio rent per sq. ft. was down 0.9% to £46.31, driving a 0.6%
reduction in the stabilised portfolio rent roll in the quarter to £108.3m

·    Exchanged or completed on £38.1m of low-conviction asset disposals
in the quarter, taking the total to £125.7m now exchanged or completed
against our £200m two-year target. In active discussions on a further eight
assets for approximately £58m

·    Robust balance sheet with £241m of cash and undrawn facilities (Dec
2025: £221m) and proforma LTV at 35% based on the September 2025 valuation
(Dec 2025: 35%)

(1) Stabilised portfolio (previously like-for-like) is where the site is 24
months post-refurbishment or acquisition, or has 12 months of stable occupancy
- whichever is earlier.

 

Customer activity

Trading has been steady in the fourth quarter, with 384 new lettings
completed; we saw a reduction in the total rental value of these lettings to
£8.2m (Q4 2024/25: £10.1m). Enquiries and viewings were down year-on-year
though we have continued to deliver a good conversion of enquiries to
lettings, at 18% (Q4 2024/25: 16%).

 

             Quarterly Average                                 Monthly Activity
             Q4        Q3        Q2        Q1        Q4        31 Mar  28 Feb  31 Jan

             2025/26   2025/26   2025/26   2025/26   2024/25   2026    2026    2026
 Enquiries   710       568       666       634       796       636     739     755
 Viewings    503       444       519       495       585       463     427     618
 Conversion  71%       78%       78%       78%       73%       73%     58%     82%
 Lettings    128       107       109       93        130       179     113     92
 Conversion  18%       19%       16%       15%       16%       28%     15%     12%

 

Rent Roll

 

Total rent roll decreased by 1.4% (£1.8m) in the fourth quarter to £127.3m,
as detailed below:

 

 Total Rent Roll         £m
 At 31 December 2025(1)  129.1
 Stabilised portfolio    (0.6)
 Completed projects      0.4
 Disposals               (1.6)
 Other                   -
 At 31 March 2026        127.3

(1) Restated for Workspace and third-party cafés being removed from floor
area and rent roll to standardise reporting.

 

Total occupancy increased by 0.6pp to 79.4% in the quarter. We have seen a
reduction in pricing, and as a result overall rent per sq. ft. is down 1.3% to
£41.96. Excluding disposals made in the quarter, the rent roll was down 0.2%
to £127.3m.

 

                             Quarter Ended
 Total portfolio             31 Mar 26  31 Dec 25(2)  30 Sep 25(2)  30 Jun 25(2)
 Floor space sq. ft.         3.8m       3.8m          3.8m          3.8m
 Floor space sq. ft. change  0.4%       (0.9%)        (0.1%)        1.3%

 Occupancy                   79.4%      78.8%         77.8%         80.0%
 Occupancy change            0.6pp      1.0pp         (2.2pp)       (0.7pp)

 Rent per sq. ft.            £41.96     £42.51        £42.84        £42.90
 Rent per sq. ft. change     (1.3%)     (0.8%)        (0.1%)        (0.2%)

 Rent roll                   £127.3m    £127.5m       £128.1m       £132.0m
 Rent roll change            (0.2%)     (0.5%)        (3.0%)        0.2%

( )

(2) Restated for disposals of Chocolate Factory (part); The Planets, Woking;
Shaftesbury Centre, Ladbroke Grove; Q West, Brentford; The Mille, Brentford;
Morie Street, Wandsworth; Castle Lane, Victoria; Cannon Wharf, Surrey Quays;
338 Goswell Road, Angel; Peer House, Holborn and Havelock Terrace, Battersea.
Also, restated for Workspace and third-party cafés being removed from floor
area and rent roll to standardise reporting and the removal of floor space at
Kennington Park, Oval which is being converted to self-storage space.

 

Stabilised portfolio occupancy grew marginally in the quarter, by 0.3pp to
81.6%, while stabilised portfolio rent per sq. ft. is down 0.9% to £46.31.
Encouragingly, occupancy for our core product, units under 3,000 sq. ft.
within the stabilised portfolio, grew by 1.1pp in the quarter.

 

                             Quarter Ended
 Stabilised portfolio        31 Mar 26  31 Dec 25(3)  30 Sep 25(3)  30 Jun 25(3)
 Floor space sq. ft.         2.9m       2.9m          2.9m          2.9m
 Floor space sq. ft. change  (0.1%)     (0.6%)        (0.3%)        -

 Occupancy                   81.6%      81.3%         80.5%         83.0%
 Occupancy change            0.3pp      0.8pp         (2.5pp)       -

 Rent per sq. ft.            £46.31     £46.71        £47.37        £47.35
 Rent per sq. ft. change     (0.9%)     (1.4%)        -             0.1%

 Rent roll                   £108.3m    £108.9m       £109.9m       £113.6m
 Rent roll change            (0.6%)     (0.9%)        (3.3%)        0.1%

( )

(3) Restated for the transfer in of Barley Mow, Chiswick; Pall Mall Deposit,
Ladbroke Grove; Portsoken House, Aldgate; Swan Court, Wimbledon; Omnibus
House, Camden; United House, Camden and the development part of The Light
Bulb, Wandsworth, where occupancy is now stabilised post-refurbishment and the
transfer out of Morie Street, Wandsworth; Castle Lane, Victoria; Cannon Wharf,
Surrey Quays; 338 Goswell Road, Angel; Peer House, Holborn (sold) and 66
Wilson Street, Moorgate (exchanged). Also, restated for Workspace and
third-party cafés being removed from floor area and rent roll to standardise
reporting and the removal of floor space at Kennington Park, Oval which is
being converted to self-storage space.

 

Portfolio activity

 

In February, we completed the sale of Peer House in Holborn for £4.8m, in
line with the September 2025 valuation. In March, we completed on the sale of
Havelock Terrace in Battersea for £20.0m, a 16% discount to the September
2025 valuation, and The Planets, Woking for £7.3m at a combined net initial
yield of 5.0%. The Planets is a vacant leisure centre with an approved
residential planning consent and was sold at a 44% discount to the September
2025 valuation.  In March, we also exchanged on the sale of 66 Wilson Street
in Moorgate for £6.0m, a 6% discount to the September 2025 valuation;
completion is expected to take place in September.

 

This takes the total assets now exchanged or completed to £125.7m against our
£200m two-year target. We are currently involved in active discussions on the
sales of a further eight low-conviction assets for approximately £58m in
value.

 

Financing

 

Net debt decreased by £20m in the quarter to £759m (31 December 2025:
£779m). Cash and undrawn facilities were £241m as at 31 March 2026, with LTV
at 35% on a proforma basis, based on the 30 September 2025 valuation.

 

Outlook

 

Workspace expects Trading Profit after interest for the financial year ended
31 March 2026 to be in line with market expectations. We expect the decrease
in rent roll and reduction in pricing over the second half of the financial
year to have a negative impact on the valuation of our property portfolio.

 

Looking forward to the financial year ending 31 March 2027, there are a number
of factors that should be taken into account:

 

1.   Lower opening stabilised portfolio rent roll compared to the average
over the year to 31 March 2026, driven by lower occupancy and pricing, in part
impacted by the challenging macroeconomic environment.

 

2.   Many of the £75 million of disposals expected to be completed in FY
2026/27 as part of the £200m disposal programme are higher yielding.

 

3.   Higher average interest costs, following repayment of £80m of private
placement notes in August 2025, which could be further impacted by increases
in SONIA and any refinancing of shorter-term debt during the year.

 

4.   Following completion of major development projects, there will be a
material decrease in capitalised interest compared to prior years, and we
expect a reduced contribution from other non-recurring items such as cash
settlements from customer vacations, thanks to our focus on customer
retention.

 

5.   An expected increase in operating expenses driven by inflation,
including energy costs, as well as investment in the organisation to
accelerate delivery of the strategy.

 

Workspace expects the combined impact of these factors to result in a
substantial step down in FY 2026/27 Trading Profit compared to FY 2025/26.

 

Looking to the medium term, we are confident in the structural demand for our
space and our strategy to deliver sustainable earnings growth. We have an
opportunity to bring about a step change in pricing as we elevate our product
by investing in our high-quality portfolio. We are considering additional
disposals, beyond the previously identified £200 million disposal programme,
to accelerate this accretive investment and further increase balance sheet
capacity.

 

Dividend policy

 

The Board has reviewed the dividend policy with a view to balancing the
opportunities to invest in our portfolio to reposition the business with the
importance of cash dividends to our shareholders. As a result, the Board
intends to return the dividend cover to 1.2x for FY2025/26 onwards. This
reflects a disciplined approach to capital allocation while aligning dividends
with sustainable long-term profitability.

 

Full year results

 

Workspace will publish its full year results for the year ended 31 March 2026
on 10 June 2026. A presentation to analysts and investors will be held at
9:30am 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

 
 

The person responsible for arranging release of this announcement is Carmelina
Carfora, Company Secretary.

 

Notes to Editors

 

About Workspace Group PLC:

 

Workspace is London's leading owner and operator of flexible workspace,
currently managing 3.8 million sq. ft. of sustainable space at 57 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 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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