REG - Workspace Grp PLC - TRANSFORMING TO AN EARNINGS-FOCUSED BUSINESS
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RNS Number : 6623H Workspace Group PLC 10 June 2026
10 June 2026
WORKSPACE GROUP PLC
FULL YEAR RESULTS & STRATEGY UPDATE
TRANSFORMING TO AN EARNINGS-FOCUSED BUSINESS
Workspace Group PLC ("Workspace"), London's leading owner and operator of
sustainable, high quality flexible work space today announces its results for
the year to 31 March 2026. The comments in this announcement refer to the
period from 1 April 2025 to 31 March 2026 unless otherwise stated.
Commenting on the results, Charlie Green, Chief Executive Officer said:
"The past year has been one of transition, both operationally and in our
leadership, and that process continues as we reshape the business. We have an
extraordinary portfolio of buildings in strong London locations, operating in
markets with continued long-term structural demand. This is reflected in the
resilience of enquiry levels and lettings, despite a muted economic backdrop.
"We have an exciting opportunity ahead to reposition our business and elevate
our offer, work that has already started, so that we fully address the
changing needs of occupiers today. Owning the best value category in the
market and being the first-choice provider for start-ups, SMEs and scale-ups
requires investment in our buildings, our people and our systems, and it will
take time. We will recycle proceeds into low-risk, high-return portfolio
improvements including a new Managed offer, alongside a Space only offer,
generating returns substantially in excess of our cost of capital.
"Our focus is on earnings through disciplined execution, driving higher
occupancy with pricing growth while controlling costs. We believe this is the
best strategy to maximise income and capital returns for shareholders and our
ambition is to deliver, organically, trading profit before interest of over
£125m per annum in the medium term. We will also explore further
opportunities to better leverage our platform for growth and generate
accretive value for shareholders. We have a focused plan, a scalable platform
and a clear strategic direction. I am confident in our strategy and excited
for the future of Workspace."
Executing our Fix, Accelerate, Scale strategy at pace
● Medium-term ambition to deliver over £125m trading profit before
interest(†)
● Active capital recycling with £125.7m of disposals exchanged or completed in
the year
● In June 26, we exchanged on the sale of two further properties for £6.0m with
a further £60.4m in active discussions towards existing target of £200m
● £100m+ of additional disposals under consideration to accelerate our
accretive investment in the portfolio and further increase balance sheet
capacity
● Commencing major improvements at Salisbury House, Cargo Works, Edinburgh House
and Centro Buildings as case studies, to enhance amenities and unit standards
to improve operational earnings
Resilient customer demand; some recovery in occupancy in the second half of
the year
● 1,310 lettings and 558 renewals completed with a total rental value of £50.4m
(FY25: 1,266 lettings and 500 renewals completed with a total rental value of
£46.4m)
● 77% of enquiries converted to viewings (FY25: 72%) and 17% of enquiries
converted to lettings (FY25: 15%)
● Stabilised Portfolio occupancy at 81.6% at 31 March 26 (Sep 25: 80.5%(3), Mar
25: 83.0%(3))
● Stabilised Portfolio rent per sq. ft. down 2.1% to £46.31 at 31 March 26 (Sep
25: £47.37(3), Mar 25: £47.30(3))
● Stabilised Portfolio rent roll down 4.6% to £108.3m at 31 March 26 (Sep 25:
£109.9m(3), Mar 25: £113.5m(3))
Reduction in income, reflecting disposals and lower occupancy and pricing
● Net rental income down 7.1% (£8.7m) to £113.4m (Mar 25: £122.1m) following
disposals, with underlying net rental income(†1) down 2.4%(1) to £109.9m
(Mar 25: £112.6m)
● Trading profit after interest(†) down 9.4% (£6.3m) to £60.5m (Mar 25:
£66.8m)
● Final dividend of 16.7p per share declared, giving total dividend of 26.1p per
share in respect of FY26 (Mar 25: 28.4p), consistent with our revised dividend
policy
● Loss before tax of £120.5m (Mar 25: £5.4m profit) primarily reflecting the
reduction in the property valuation
Modest leverage and significant undrawn facilities
● Stabilised Portfolio valuation down 5.6%, on an underlying(2) basis, over the
financial year (an underlying(2) reduction of 2.9% from Sep 25) with ERV per
sq. ft. down 3.8% to £48.94 and equivalent yield coming in 18bps to 6.7%
● EPRA net tangible assets per share(†) down 11.2% from March 25 to £6.87
(HY26: £7.21; FY25: £7.74)
● LTV of 35% (Mar 25: 34%) and £242m of undrawn facilities and cash
● In June 26, the £200m RCF maturity date was extended by one year to June
2030, taking the average debt facility maturity to 2.8 years on a proforma
basis.
● Fitch has commenced coverage of Workspace with a credit rating of BBB-, stable
outlook; notice given to S&P to terminate coverage
Summary Results
31 March 31 March Change
2026 2025
Financial performance
Net rental income(†) £113.4m £122.1m -7.1%
Underlying net rental income(†1) £109.9m £112.6m -2.4%(1)
Trading profit after interest(†) £60.5m £66.8m -9.4%
(Loss)/Profit before tax (£120.5m) £5.4m
Final dividend per share 16.7p 19.0p -12.1%
Full year dividend per share 26.1p 28.4p -8.1%
Valuation
Property valuation(†) £2,133m £2,368m -7.0%(2)
EPRA net tangible assets per share(†) £6.87 £7.74 -11.2%
Financing
Loan to value(†) 35% 34% +1pp
Drawn debt £761m £845m -9.9%
Undrawn bank facilities and cash £242m £260m -6.9%
† Alternative performance measure (APM). The Group uses a number of
financial measures to assess and explain its performance. Some of these which
are not defined within IFRS are considered APMs.
(1) Underlying change adjusted for disposals.
(2) Underlying change excluding capital expenditure and disposals.
(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.
For media and investor enquiries, please contact:
Workspace Group 020 7138 3300
PLC
Charlie Green, Chief Executive Officer
Tom Edwards-Moss, Chief Financial Officer
Paul Hewlett, Director of Strategy & Corporate Development
FGS Global 020 7251 3801
Chris Ryall
Guy Lamming
Details of results presentation
Workspace will host a strategy update alongside the FY results presentation
and Q&A for analysts and investors on Wednesday, 10 June 2026 at 9:30am.
The venue for the presentation is Eventspace, at Salisbury House, 114 London
Wall, EC2M 5QD.
The presentation and Q&A can also be accessed live via webcast, available
at the following link:
https://secure.emincote.com/client/workspace/workspace029
(https://url.uk.m.mimecastprotect.com/s/bnDKCVOWyixW5mvtzhBUEH0xy?domain=secure.emincote.com)
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 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)
CHAIR'S STATEMENT
It has been another year marked by macroeconomic uncertainty and a challenging
operating backdrop. Inflationary pressures, higher interest rates and subdued
levels of business confidence have continued to weigh on decision‑making
across our customer base. Against this backdrop, the Board has been clear that
this was a year for focus and discipline, with FY26 centred on streamlining
the business, managing operating costs, sharpening priorities and beginning to
deliver on our strategy to Fix the portfolio positioning, Accelerate and
rebuild lettings, thereby positioning the business to Scale in the future.
I would like to thank shareholders for their continued support during what
has been a demanding period of change. I would also like to thank colleagues
across the Group: their professionalism and focus have been instrumental in
the progress we have made to date.
The year also marked an important transition in the leadership of the
business. Following rigorous processes, with assistance from independent
external search agency Heidrick & Struggles, we welcomed Charlie Green as
Chief Executive Officer and Tom Edwards‑Moss as Chief Financial Officer.
The Board has been delighted with how quickly and effectively they have
formed a strong working partnership and established momentum across the
organisation. While we knew that Charlie brought valuable prior knowledge of
Workspace and the wider sector, we have been struck by the speed with which he
has been able to build a deep understanding of the business, its complex
operating platform and the financials underlying the business model, enabling
him to take important early action to accelerate the execution of the
strategy. His experience and profound understanding of the sector have allowed
us to achieve this quickly.
I would also like to place on record the Board's thanks to Lawrence Hutchings
for his contribution to the development of the Group's strategy, and to Dave
Benson, whose tireless efforts as CFO have ensured a smooth and orderly
transition. Dave's knowledge of the business and his commitment to supporting
the new leadership team have been invaluable and exemplify the strength of
Workspace's culture and his integrity.
As the Company turns its focus to the next phase of execution, Workspace's
portfolio remains one of our greatest strengths. We own a unique collection of
historic and characterful buildings across London, the majority of which we
have identified as high‑conviction assets which will continue to benefit
from our operating model. These properties sit in locations with enduring
demand from our SME customers and many offer significant ongoing potential to
be upgraded as part of proactive portfolio management, reflecting the
evolution of what our customers value today.
Alongside this, we remain committed to a disciplined programme of disposals
of lower‑conviction assets. As always, the Board carefully assesses the use
of proceeds from these sales with a clear focus on maximising long‑term
shareholder returns. At this point in the cycle, we see a clear benefit in
prioritising balance sheet strength ahead of the Group's refinancing events,
while also continuing to invest selectively in the existing portfolio where
returns are most compelling.
In this context, our approach to the dividend is disciplined. The Board has
reviewed the dividend policy and intends to return to earnings cover of 1.2x
for FY26 onwards, reflecting a balanced approach between reinvesting in the
portfolio and maintaining an appropriate level of return to shareholders.
Looking ahead, the external environment remains uncertain and the operating
conditions in our market are likely to remain tough for some time. No one
underestimates the challenge ahead. However, we are confident that Workspace
has the right Board, Executive, wider team and portfolio to navigate this
period and to create shareholder value over the long term. We have a
high‑quality London‑focused portfolio, a differentiated operating platform
and a leadership team with a clear plan and a common sense of purpose. Our
priority is delivering sustainable shareholder returns and rebuilding
long‑term value. While the path will not be straightforward, we believe the
actions now underway position Workspace to re‑establish its market
leadership.
I would especially like to thank my fellow Board members for their continued
commitment and constructive approach throughout the year, and all our
colleagues for their hard work and dedication. With the right focus and
discipline, Workspace will emerge from this period stronger and even better
placed for the future.
CHIEF EXECUTIVE's STATEMENT
The year ended 31 March 2026 has been one of transition for Workspace, both
operationally and in leadership, and that process continues as we reposition
the business. The business has strong underlying fundamentals with an
exceptional portfolio and by driving the Fix, Accelerate, Scale strategy, we
can deliver significant value creation over time.
Both Tom Edwards-Moss, our CFO, and I joined Workspace in February 2026. In
the weeks and months since, our priority has been to understand every aspect
of the business, from the portfolio, people and operating model to the
financial performance and, importantly, the significant potential of
Workspace.
The macroeconomic backdrop has undoubtedly created a challenging trading
environment. Notwithstanding this, enquiry levels have remained resilient and
improved conversion to lettings is an encouraging indicator of the strength
and relevance of the business. Occupancy improved modestly towards the year
end, driven in part by actions taken on pricing and asset management. As
previously stated, alongside the impact of ongoing disposals, this reduced
rent roll over the period. Net rental income was £113.4m, resulting in
Trading Profit after interest of £60.5m for the year.
This reduction in trading profit clearly highlights the need to reposition the
business. We must strengthen and modernise our offer to take full advantage of
our exceptional portfolio of buildings. That requires elevating our offer to
meet the evolving demands of occupiers today. We need to invest in our
buildings and invest in the product. As we progress this strategy, alongside
the impact of disposing of higher-yielding assets and increased interest
costs, there will be a near-term impact on profitability, as stated in our Q4
Trading Update.
We have a significant opportunity to reposition the business in line with our
strategy. We will recycle proceeds into low-risk, high-return refurbishments
and deliver a new Managed offer, alongside a Space only offer, generating
returns substantially in excess of our cost of capital. We have set a
medium-term ambition to deliver, organically, annual trading profit before
interest of over £125m. The emphasis now is on disciplined execution of that
strategy. We will also assess opportunities to grow the portfolio in due
course, where it is accretive to returns.
We have a focused plan to transform the business, with a clear emphasis on
shareholder returns through sustainable earnings growth. We continue to make
progress recycling capital through the disposal of non-core assets, with
£125.7m exchanged or completed prior to year-end and £6.0m exchanged
since, with a further £60.4m in active discussions against our two-year
£200m target. £100m+ of further disposals are under consideration to
accelerate our accretive investment in the portfolio and further increase
balance sheet capacity.
Our investment will create an offer and brand that positions Workspace as the
market leader in our sub-sector of the flex market, delivering an elevated
offer that is better suited to today's demand. Achieving this requires
investment not only in our buildings, but also in our people and systems. Over
time, our operating platform will allow us to benefit from additional revenue
streams and better leverage our ability to grow.
We are starting major improvements across four key buildings (Salisbury House,
EC2, Cargo Works, SE1, Edinburgh House, SE11 and Centro Buildings, NW1), as
case studies, to enhance customer areas, amenities and deliver the Managed
offer to improve operational earnings for each of the properties, establishing
proof of concept. In the meantime, we will be reviewing and investing to
improve other assets and offices across the portfolio.
Workspace has an outstanding portfolio of buildings and operates in markets
supported by continued long-term structural demand. Our opportunity is to
reposition and elevate our product and offer so that we better address the
changing needs of our customers and, in doing so, leverage our scale
advantage.
By improving the customer proposition in a disciplined and targeted way, we
will drive higher occupancy and support pricing growth, delivering sustainable
earnings growth and, ultimately, better returns for shareholders over the
medium term.
Workspace has strong foundations: a characterful London-focused portfolio, a
scalable operating platform and a clear strategic direction. The task now is
to execute against that strategy, creating a new product and brand proposition
that better reflects the changing working patterns and customer expectations
evident across the market today.
I could not be more excited about the opportunity ahead and look forward to
sharing our progress as we deliver on our medium-term ambition to generate,
organically, over £125m of trading profit before interest.
Finally, I would like to thank the Workspace team for their hard work and
continued commitment through this period of change, as well as our customers
and shareholders for their ongoing support.
BUSINESS REVIEW
CUSTOMER ACTIVITY
We have seen resilient customer demand with 1,310 lettings and 558 renewals
completed in the year with a total rental value of £50.4m (FY25: 1,266
lettings and 500 renewals completed with a total rental value of £46.4m).
Average Monthly
FY FY Q4 Q3 Q2 Q1
2025/26 2024/25 2025/26 2025/26 2025/26 2025/26
Enquiries 649 703 727 568 666 634
Viewings 497 507 528 444 519 495
Conversion 77% 72% 73% 78% 78% 78%
Lettings 109 106 128 107 109 93
Conversion 17% 15% 18% 19% 16% 15%
Trading has been steady, with overall lettings for FY26 similar to prior year
despite a modest decrease in enquiries due to increased conversion rates.
Monthly
May 2026 April 2026 May 2025 April 2025
Enquiries 541 654 644 631
Viewings 457 456 547 465
Conversion 84% 70% 85% 74%
Lettings 91 73 92 65
Conversion 17% 11% 14% 10%
With Easter, the May bank holidays and half term usually falling within the
first two months of the financial year, this period is traditionally quieter:
lettings activity has been similar to the same period in the prior year.
RENT ROLL
Total rent roll, representing the total annualised net rental income at a
given date, was down 8.6% (£12.0m) in the year to £127.3m at 31 March 26, as
set out in the table below.
Total Rent Roll £m
At 31 March 25(1) 139.3
Stabilised Portfolio (5.3)
Completed projects 1.2
Projects underway and design stage (0.1)
South East Office (0.1)
Non-core (0.2)
Disposals (7.5)
At 31 March 26 127.3
(1) Restated for Workspace and third-party cafés being removed from floor
area and rent roll to standardise reporting.
Six Months Ended
Total Portfolio 31 March 26 30 September 25(1) 31 March 25(1)
Floor space sq. ft. 3.8m 3.8m 3.8m
Floor space sq. ft. change (0.5%) 1.2% 0.9%
Occupancy 79.4% 77.8% 80.7%
Occupancy change 1.6pp (2.9pp) (1.8pp)
Rent per sq. ft. £41.96 £42.84 £42.99
Rent per sq. ft. change (2.1%) (0.3%) 3.2%
Rent roll £127.3m £128.1m £131.8m
Rent roll change (0.6%) (2.8%) 2.0%
(1) 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.
The total Estimated Rental Value (ERV) of the portfolio, comprising the ERV of
the Stabilised Portfolio and those properties currently undergoing
refurbishment or redevelopment (but only including properties at the design
stage and non-core properties at their current rent roll and occupancy), was
£175.7m at 31 March 26.
If all properties were at 90% occupancy (or current occupancy if higher in the
South East Offices) at the CBRE and Knight Frank estimated rental values at 31
March 26, the rent roll would be £158.5m, £31.2m higher than the actual rent
roll at 31 March 26.
Stabilised Portfolio
Stabilised Portfolio is defined as properties within London which have been
owned and consistently in operation and not affected by development or
refurbishment activity during the current and prior reporting years or which
have twelve months of stable occupancy - whichever is earlier.
The Stabilised Portfolio represents 85% of the total rent roll as at 31 March
26. It comprises 38 properties all within London, with stabilised occupancy,
and excludes recent acquisitions and disposals, buildings impacted by
significant refurbishment or redevelopment activity, or contracted for sale.
Six Months Ended
Stabilised Portfolio 31 March 26 30 September 25(1) 31 March 25(1)
Floor space sq. ft. 2.9m 2.9m 2.9m
Floor space sq. ft. change (0.6%) (0.3%) 0.2%
Occupancy 81.6% 80.5% 83.0%
Occupancy change 1.1pp (2.5pp) (1.1pp)
Rent per sq. ft. £46.31 £47.37 £47.30
Rent per sq. ft. change (2.2%) 0.1% 2.7%
Rent roll £108.3m £109.9m £113.5m
Rent roll change (1.5%) (3.2%) 1.5%
(1) 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.
The Stabilised Portfolio occupancy was down by 1.4pp to 81.6% in the financial
year, with an overall decrease in the Stabilised Portfolio rent roll of 4.6%
(£5.2m) to £108.3m. We saw some recovery in occupancy in H2 at the expense
of some reduction in pricing.
We have seen ERV per sq. ft. decrease by 3.8% in the year. If all the
properties in the Stabilised Portfolio were at 90% occupancy at the CBRE and
Knight Frank estimated rental values at 31 March 26, the rent roll would be
£128.1m, £19.8m higher than the actual rent roll at 31 March 26.
Completed Projects
There are six projects in the completed projects category, comprising
Evergreen Studios, Centro Workshops, Leroy House, Parkhall (excluding Blocks
A&B), Chocolate Factory and Wenlock Studios. The combined rent roll
increased overall by £1.2m in the year to £5.1m, with occupancy at 63.5%
(Mar 25: 61.7%). The combined net lettable area increased by 58,000 sq. ft. to
277,000 sq. ft. with the main movements being new space at Chocolate Factory
accounting for 40,000 sq. ft. and the completed Centro Workshops adding 21,000
sq. ft., offset by 3,000 sq. ft. being converted to communal space at Parkhall
(excluding Blocks A&B) and 500 sq. ft. at Evergreen Studios.
If the buildings in this category were all at 90% occupancy at the ERVs at 31
March 26, the rent roll would be £9.2m, an uplift of £4.1m.
Refurbishments
Our major refurbishment at The Biscuit Factory (J Block) with The Biscuit
Factory (part and Cocoa Studios), is due to complete soon and will add 38,500
sq. ft. of new space and 231,000 sq. ft. of upgraded space (83,000 sq. ft at J
Block plus the entire Biscuit Factory site will benefit from the upgraded
amenities).
The rolling refurbishments at Fleet Street and Corinthian House have been
paused pending review.
As at 31 March 26, rent roll was £6.3m, down £0.1m in the year, with
occupancy at 68.3% (Mar 25: 66.7%).
Assuming 90% occupancy at the ERVs at 31 March 26, the rent roll at these
three buildings once they are completed would be £12.0m, an uplift of £5.7m.
South East Office
As at 31 March 26, the rent roll of the South East office portfolio,
comprising eight buildings, was £6.9m, down £0.1m in the year, with
occupancy at 86.1% (Mar 25: 87.3%) and net lettable area steady at 333,000 sq.
ft..
Assuming 90% occupancy (or current occupancy if higher) at the ERVs at 31
March 26, the rent roll would be £8.6m, an uplift of £1.7m.
Non-core
As at 31 March 26, the rent roll of the non-core portfolio was £0.7m, down
£0.2m from 31 March 2025, with occupancy down 18.7pp to 54.2% (March 25:
72.9%) as vacant possession is being obtained at Parkhall (Blocks A & B)
prior to completion and net lettable area was steady at 35,000 sq. ft..
Disposals
During the year, £125.7m of properties exchanged or completed as sales, a
7.2% discount to the most recent book value prior to sale. In aggregate,
disposals have delivered £111m of proceeds (net of sales costs) in the year,
at a combined net initial yield of 5.9%.
In June, we exchanged on the sale of Chiswick Studios, Chiswick for £3.0m and
One Crown Square, Woking for £3.0m, for a combined yield of 11.5% and a 15.5%
discount to the March 26 net book value. There are active discussions on a
further eight assets for approximately £60.4m in value and are also a further
£100m+ of disposals beyond the previously guided £200m disposal target.
PROFIT PERFORMANCE
Trading profit after interest for the year was down 9.4% (£6.3m) on the prior
year at £60.5m.
£m 2026 2025 YoY Movement
Rental income 134.3 138.2 (3.9) (2.8%)
Unrecovered service charge costs (4.8) (4.2) (0.6) 13.5%
Empty rates and other non-recoverable costs (13.4) (11.5) (1.9) 16.5%
Services, fees, commissions and sundry income (2.7) (0.4) (2.3) 575%
Net rental income(1) 113.4 122.1 (8.7) (7.1%)
Less net rental income from assets sold 3.5 9.5 6.0 63.2%
Underlying net rental income 109.9 112.6 (2.7) (2.4%)
Administrative expenses - underlying (20.0) (20.7) 0.7 3.4%
Administrative expenses - share based payment costs(2) (1.7) (2.6) 0.9 34.6%
Net finance costs (31.2) (32.0) 0.8 2.5%
Trading profit after interest 60.5 66.8 (6.3) (9.4%)
(1) There is an analysis of net rental income and segmental breakdown of net
rental income in note 1 in the financial statements.
(2) These relate to both cash and equity settled costs
Net rental income decreased by £8.7m (7.1%), of which £6.0m related to
disposals. On an underlying basis, net rental income, excluding the impact of
disposals, has decreased by £2.7m.
The underlying decrease in net rental income of £2.7m reflects:
- £2.1m increase in vacancy related costs comprising
£0.9m higher unrecovered direct costs, reflecting lower occupancy and
increased cleaning, security and maintenance costs; and £1.2m higher empty
rates, driven by increased vacant space, particularly at Leroy House and The
Chocolate Factory which are letting up
- £0.7m increase in marketing costs, reflecting higher
promotional spend
- £1.9m increase in services costs, driven by enhanced
amenity provision, including additional cafés and Wi-Fi upgrades, across 20
properties, and increased utilities costs
- Partially offset by £2.0m of one-off income, comprising
£1.0m of higher cash settlements received in the year; and £1.0m of bad debt
releases.
Underlying administrative expenses (excluding share based payment costs)
decreased by £0.7m to £20.0m, with lower staff costs reflecting performance
in the year and tight control of other costs offsetting inflation. Share-based
costs decreased by £0.9m to £1.7m driven by lower vesting levels.
Net finance costs decreased by £0.8m to £31.2m in the year reflecting the
reduction in average net debt following asset disposals. The average debt
balance over the year was £31.8m lower than in the prior year.
Loss before tax was £120.5m compared to a profit of £5.4m in the prior year.
£m 31 March 31 March
2026 2025
Trading profit after interest 60.5 66.8
Change in fair value of investment properties (159.5) (56.3)
Loss on sale of investment properties (13.8) (1.5)
Loss on disposal of fixed assets (0.4) -
Other costs (7.3) (3.6)
Profit/(loss) before tax (120.5) 5.4
Adjusted underlying earnings per share 31.3p 34.5p
The change in fair value of investment properties, including assets held for
sale, was a decrease of £159.5m compared to a decrease of £56.3m in the
prior year.
The loss on sale of investment properties of £13.8m was driven by disposals
below book value and costs associated with disposals in the year.
Other costs are made up of exceptional costs and include one-off items
relating to the replacement of the finance and property management system and
CRM system at £3.1m in the year and organisational restructure costs of
£4.2m. Full details can be found in Note 3(b) in the financial statements.
Adjusted underlying earnings per share, based on trading profit after interest
and calculated on a diluted share basis, was down 9.3% to 31.3p. The
calculation of adjusted, basic, diluted and EPRA earnings per share is shown
in note 8 to the financial statements.
DIVIDEND
The Board recently reviewed the dividend policy and decided to return to
ensuring the total dividend per share in each financial year is covered at
least 1.2 times by adjusted underlying earnings per share.
Consequently, the Board is recommending a final dividend of 16.7p per share,
taking the full year dividend to 26.1p (2025: 28.4p), to be paid on 3 August
2026 to shareholders on the register at 3 July 2026. The dividend will be paid
as a REIT Property Income Distribution (PID) net of withholding tax where
appropriate.
PROPERTY VALUATION
At 31 March 26, our property portfolio was independently valued by CBRE and
Knight Frank at £2,133m, an underlying decrease of 7.0% (£160m) in the year.
The main movements in the valuation are set out below:
£m
Valuation at 31 March 25 2,368
Capital expenditure 48
Disposals (123)
Underlying revaluation movement (160)
Valuation at 31 March 26 2,133
A summary of the full year valuation and revaluation movement by property type
is set out below:
Valuation 31 March Underlying revaluation decrease
£m 2026 Full Year H2 H1
Stabilised Portfolio 1,780 (105) (6%) (53) (3%) (52) (3%)
Completed projects 133 (20) (13%) (7) (5%) (13) (9%)
Refurbishments 148 - - 5 3% (5) (4%)
South East office 58 (19) (25%) (9) (13%) (10) (13%)
Non-core 14 - - - - - -
Disposals - (16) - - - (16) (14%)
Total 2,133 (160) (7%) (64) (3%) (96) (4%)
Stabilised Portfolio
There was a 5.6% (£105m) underlying decrease in the valuation of the
Stabilised Portfolio to £1,780m. This was driven by lower occupancy with a
3.8% decrease in the ERV per sq. ft. offset by a 18bps inward shift in
equivalent yield.
We saw a stronger performance in ERV for smaller space, which represents the
majority of our lettings activity, with a decrease of 2.8% in the year for
units under 1,000 sq. ft., compared to larger spaces, where ERVs decreased by
4.7%. Larger units will continue to be divided into smaller units where we
believe this will enhance returns. With the elevated product strategy we
intend to drive increases in ERVs across all unit sizes.
31 March 31 March
2026 2025(1) Change
ERV per sq. ft. £48.94 £50.87 (3.8%)
Rent per sq. ft. £46.31 £47.30 (2.1%)
Equivalent yield 6.7% 6.8% 18bps
Net initial yield 5.5% 5.6% 5bps
Capital value per sq. ft. £612 £640 (4.3%)
(1) 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.
A 2.5% increase in ERV per sq. ft. would increase the valuation of the
Stabilised Portfolio by approximately £46m while a 25bps increase in
equivalent yield would reduce the valuation by approximately £62m.
Completed Projects
There was an underlying decrease of 13.1% (£20m) in the value of the six
completed projects to £133m. This was driven by a 8.1% decrease in the ERV
per sq. ft. The overall valuation metrics for completed projects are set out
below:
31 March 31 March
2026 2025 Change
ERV per sq. ft. £36.36 £39.57 (8.1%)
Rent per sq. ft. £28.86 £29.00 (0.5%)
Equivalent yield 6.6% 6.4% 19bps
Net initial yield 3.7% 2.5% 122bps
Capital value per sq. ft. £473 £490 (3.4%)
Current Refurbishments
The value of our current refurbishments was held steady at £148m, with the
capital value per sq. ft. at £419 (including new space at Biscuit Factory not
currently lettable) and capital expenditure of £16.4m during the year.
The decrease in like-for-like value of our refurbishments reflected the
combination of an outward movement in yields, increase in build costs and
offset by an increase in ERVs.
South East Office
There was a 24.7% (£19m) underlying decrease in the valuation of the South
East office portfolio to £58m with 24bps outward shift in equivalent yield,
and a 4.1% decrease in ERV per sq. ft., the overall valuation metrics are set
out below:
31 March 31 March
2026 2025 Change
ERV per sq. ft. £27.40 £28.58 (4.1%)
Rent per sq. ft. £24.13 £24.13 -
Equivalent Yield 10.5% 10.2% 24bps
Net Initial Yield 9.5% 8.9% 57bps
Capital Value per sq. ft. £177 £227 (22.3%)
REFURBISHMENT ACTIVITY
A summary of the status of the refurbishment pipeline at March 26 is set out
below:
Projects Number Capex spent Capex to spend Upgraded and new space (sq. ft.)
Underway 3 £39m £4m 334,500
Activity is nearing completion at our major refurbishment project with £32m
of capital expenditure spent to date and an estimated £1m outstanding; The
Biscuit Factory in Bermondsey, which will deliver 38,500 sq. ft. of new space
and 231,000 sq. ft. of upgraded space within the first half of 2026/27 (83,000
sq. ft at J Block plus the entire Biscuit Factory site will benefit from the
upgraded amenities).
Further rolling refurbishments at Fleet Street and Corinthian House have been
paused pending review.
CASE STUDIES
We are starting refurbishments across four key buildings to improve customer
areas, amenities and unit standards to improve the rental return on these
spaces.
Works will begin shortly at Salisbury House, Cargo Works, Edinburgh House and
Centro Buildings. The current performance indicators are detailed below with
the expected capital expenditure and target metrics.
31 March 26 Salisbury House Cargo Works Edinburgh House Centro Buildings(1)
Current floor size 220,000 sq. ft. 71,000 sq. ft. 65,000 sq. ft. 205,000 sq. ft.
Occupancy 87.4% 74.6% 83.0% 65.2%
Average rent £psf £68.15 £67.69 £48.15 £35.60
Case Study
Case study floor size 27,000 sq. ft. 12,000 sq. ft. 15,000 sq. ft. 48,500 sq. ft.
Planned capex £5m-£6m £1.5m-£2m £1.5m-£2m £8m-£10m
Incremental yield on cost 25-30% 15-20% 15-20% 12.5-17.5%
Target unlevered IRR 15-20% 10-15% 10-15% 10-15%
(1) Includes Centro Workshops and floor area in Centro 1,3 & 4 currently
not available to let
CASH FLOW
A summary of cash flows is set out below:
£m 31 March 31 March
2026 2025
Net cash from operations after interest 63 77
Dividends paid (55) (56)
Capital expenditure (52) (60)
Property disposals and cash receipts 111 77
Other(1) (5)(2) (3)
Net movement 62 35
Opening debt (net of cash) (820) (855)
Closing debt (net of cash) (758) (820)
(1) Comprises exceptional costs, finance costs, share scheme settlements,
proceeds and interest from other investments
(2) 2026 includes £3.2m investment in Qube (2025: £nil)
There is a reconciliation of net debt in note 16(b) in the financial
statements.
The overall decrease of £62m in net debt largely reflects the disposals made
in the period net of capital expenditure.
NET ASSETS
Net assets decreased in the year by £174.0m to £1,328m. EPRA net tangible
assets (NTA) per share at 31 March 26 was down 11.2% (£0.87) to £6.87.
EPRA NTA per share £
At 31 March 25 7.74
Adjusted trading profit after interest 0.31
Property valuation deficit (0.82)
Dividends paid (0.28)
Other (0.08)
At 31 March 26 6.87
The calculation of EPRA NTA per share is set out in note 9 of the financial
statements.
TOTAL ACCOUNTING RETURN
The total accounting return for the year was (7.6%) compared to 0.3% in the
prior year ended 31 March 2025. The total accounting return comprises the
change in absolute EPRA net tangible assets per share plus dividends paid in
the year as a percentage of the opening EPRA net tangible assets per share.
The calculation of total accounting return is set out in note 9 of the
financial statements.
FINANCING
As at 31 March 26, the Group had £3m of available cash and £239m of undrawn
facilities:
31 March 2026 Drawn Facility Interest Rate Facility Maturity
Unsecured Debt
Term Loan Facility £80.0m £80m SONIA+1.77% November 2027+
Revolver Loan £51.8m £200m* SONIA+1.77% June 2029++
Revolver Loan £44.2m £135m* SONIA+1.82% November 2029+
Private Placement Notes
(i) 10-year notes (2017) £120.0m £120m 3.19% August 2027
(ii) 10- year notes (2019) £100.0m £100m 3.60% January 2029
Green Bond £300.0m £300m 2.25% March 2028
Unsecured Debt Total £696.0m £935m
Secured Debt
Aviva(1) £65.0m £65m 4.02% May 2030
Secured Debt Total £65.0m £65m
Total Debt £761.0m £1,000m 3.60%(2) 2.6 years
(1) Aviva loan is secured on Kennington Park asset
(2) Based on SONIA at 3.73% (March 26)
* Includes accordion option, subject to bank consent
+ Includes option to extend to by one year, subject to bank consent
++ Includes option to extend twice by one year each, subject to bank consent
The majority of the Group's debt comprises fixed-rate committed facilities
including a £300m green bond, £220m of private placement notes, and a £65m
secured loan facility.
Liquidity and flexibility is provided by floating-rate sustainability-linked
Revolving Credit Facilities (RCFs) totalling £335m which were £96m drawn as
at March 26. In May 2025 the terms of the £200m RCF were amended to extend
the maturity to 30 June 2029, with options to extend by up to a further two
years and an option to increase the facility amount to £300m, subject to
lender consent. In November 2025, the maturity of the £135m RCF (including an
option to increase the facility amount to £255m, subject to lender consent)
and £80m term loan were extended by one year to 30 November 2029 and 30
November 2027 respectively. Both facilities have options to extend by a
further year, subject to lender consent. The average debt facility maturity is
2.6 years (Mar 25: 3.1 years). In June 26, the lenders approved the one year
extension of the maturity of the £200m RCF to 30 June 2030, which takes the
average debt facility maturity to 2.8 years on a proforma basis.
At 31 March 26, the Group's effective interest rate on drawn debt was 3.6%
(average cost of debt over the year was 3.8%), based on SONIA at 3.73%, with
77% (£585m) of drawn debt at fixed rates. The average interest cost of our
fixed-rate borrowings was 2.9% and our floating-rate bank borrowings had an
average margin of 1.8% over SONIA. A 1% change in SONIA would change the
effective interest rate by 0.3pp (at current debt levels).
At 31 March 26, loan to value (LTV) was 35% (Mar 25: 34%) and interest cover,
based on net rental income and interest paid over the last 12-month period,
was 3.6 times (Mar 25: 3.8 times), providing good headroom on all facility
covenants.
CREDIT RATING
We have decided to transition our credit rating to Fitch. Fitch provides
credit ratings to more of the UK real estate sector and we believe its
methodology is more appropriate for a company of Workspace's scale. Fitch has
commenced coverage of Workspace today with a credit rating of BBB- and stable
outlook. We have given notice to S&P to terminate its coverage.
SUSTAINABILITY
We believe our portfolio is inherently sustainable, underpinned by our
refurbishment-led ethos resulting in 40-70% lower embodied emissions, compared
to industry best practice, from our development and refurbishment activities
and our energy efficient operations. The average energy intensity of our
portfolio is 17% lower than industry best practice for net zero carbon
offices, set at 90kWhe/m(21). Further improving the energy efficiency of our
buildings is key in helping us to achieve our target of being a net zero
carbon business.
The Workspace portfolio is currently 64.4% EPC A and B rated, an increase of
4.4pp (in year target: 6%) in the year, ensuring our portfolio is
future-proofed against the proposed regulated trajectory for all commercial
buildings to be EPC A/B rated by 2030. We also continue to procure 100%
renewable electricity, with two-thirds of this demand being met via our power
purchase agreement with a solar plant in Devon. In the year we achieved a 2.5%
(in year target: 5%) reduction in operational energy intensity across all
properties owned for the last 24 months (excluding disposals). To ensure we
build long-term climate resilience, we have updated our net zero carbon
commitment - being the first UK REIT to adopt the latest building sector
guidance from The Science Based Targets Initiative - committing us to a target
of 90% emissions reduction by 2040 against our 2020 baseline. We are pleased
to report that we have already reduced our emissions by 36% and have strong
foundations in place to continue to drive climate action at pace.
(1)
https://ukgbc.org/wp-content/uploads/2020/01/UKGBC-Net-Zero-Carbon-Energy-Performance-Targets-for-Offices.pdf
(https://ukgbc.org/wp-content/uploads/2020/01/UKGBC-Net-Zero-Carbon-Energy-Performance-Targets-for-Offices.pdf)
OUTLOOK STATEMENT
Enquiries and lettings remain resilient, despite the noted economic backdrop.
As outlined in the Q4 Trading Update released in April 2026, we expect a
substantial step down in trading profit after interest for the financial year
ending 31 March 2027 on account of a number of factors, including lower
opening rent roll versus FY26, disposals, higher borrowing costs, less
capitalised interest, higher expenses and a reduced contribution from other
non-recurring items.
Along with disposing of the remaining £75m properties identified to reach the
£200m target, we are considering a further £100m+ of property disposals by
the end of FY27. This will increase our capacity for accretive investment
within the portfolio.
While we can cover all of our debt maturities until March 2028 using existing
undrawn facilities, we are actively reviewing our refinancing options.
We are confident in the structural demand for our space and excited by the
opportunity to deliver sustainable earnings growth by elevating our product
through investment in our portfolio. We have set ourselves a medium-term
ambition to generate, organically, over £125m of annual trading profit before
interest.
property statistics Half Year ended
31 Mar 30 Sep 31 Mar 30 Sep
2026 2025 2025 2024
Workspace Portfolio
Property valuation £2,133m £2,276m £2,368m £2,423m
Number of locations 57 64 67 73
Lettable floorspace (million sq. ft.) 3.8 4.2 4.3 4.3
Number of lettable units 4,503 4,707 4,744 4,650
Rent roll of occupied units £127.3m £134.0m £139.4m £140.1m
Average rent per sq. ft. £41.96 £41.91 £41.50 £40.27
Overall occupancy 79.4% 75.4% 78.5% 81.5%
Stabilised Portfolio number of properties 38 38 39 39
Stabilised Portfolio lettable floor space (million sq. ft.) 2.9 2.9 2.7 2.7
Stabilised Portfolio rent roll growth (1.5%) (3.2%) 0.7% (1.6%)
Stabilised Portfolio rent per sq. ft. growth (2.2%) 0.1% 2.0% 2.7%
Stabilised Portfolio occupancy movement 1.1pp (2.5pp) (1.2pp) (3.8pp)
1) The overall portfolio has been restated in the current financial year
for the 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.
2) The Stabilised Portfolio category has been restated in the current
financial year 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.
3) Stabilised Portfolio statistics for prior years are not restated for
the changes made to the Stabilised property portfolio in the current financial
year.
4) Occupancy is the area of space let divided by the total net lettable
area (excluding land used for open storage) expressed as a percentage. Net
lettable area is the internal area of a building that is available to let.
5) Overall rent per sq. ft. and occupancy statistics includes the
lettable area at the properties in the Stabilised Portfolio and all
refurbishment and redevelopment projects, including those projects recently
completed and also properties where we are in the process of obtaining vacant
possession.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board assesses and monitors the principal risks of the business and
considers how these risks could best be mitigated, where possible, through a
combination of internal controls and risk management.
The financial year has seen a fragile UK economic backdrop, with inflation
persistently above the Bank of England's 2% target, weak consumer and business
confidence, and heightened uncertainty driven by global geopolitical tensions,
including the recent escalation of conflict in the Middle East. This conflict
has also intensified pressure on global supply chains, contributing to rising
construction costs and longer lead times for materials, which affects
Workspace's refurbishment activity. These conditions have contributed to
softer demand across the economy as business sentiment continues to weaken. At
the same time, London's flex office market remains competitive, with ongoing
recalibration of occupier requirements placing further pressures on occupancy
and pricing for Workspace's portfolio.
Overall, key risks that could affect the Group's medium-term performance and
the factors that mitigate these risks have not materially changed from those
set out in the Group's Annual Report and Accounts 2025. However, Workspace has
undertaken a detailed review of its principal risks to ensure they remain
appropriately aligned to the environment in which we operate. As part of this,
several risks have been refined and updated, including expanding Customer
Demand to incorporate retention, broadening Technology and Systems to reflect
AI‑related risks, adding a new Operational Delivery risk, and introducing
Capital Allocation as a standalone risk. These amendments ensure the risk
register better reflects current market conditions and the operational and
financial pressures the business faces today.
These risks have been assessed in line with the 2024 UK Corporate Governance
Code requirements and are shown below. The Board is satisfied that we continue
to operate within our risk profile.
Risk Area Mitigating Activities
Customer Demand and Retention · Broad mix of buildings across London with different space
offerings, at various price points to match customer requirements.
Workspace's ability to attract and retain customers depends on delivering a
relevant and competitive product offering, including the quality and location · Enhance market insight, segmentation, data and reporting to track
of our buildings, the flexibility of our leasing model, and the amenities and customer trends, optimise sales performance and develop new propositions.
services we provide. Failure to adapt and invest in our product to meet or
exceed evolving customer expectations, combined with wider economic pressures · Improvements to product offer, including building design, more
affecting demand, could lead to reduced occupancy, lower pricing power and flexible terms and additional services and benefits to enhance the proposition
weaker income performance. for both new and existing customers.
RISK IMPACT · A Case Study programme has been created as an enhanced approach
to the pilot programme, to test our managed offer proposition and communal
· Fall in occupancy and/or rental levels at our properties space enhancements in a live environment, based on customer feedback and
market demand.
· Reduction in rent roll
· Increased accountability for centre staff to maintain ongoing
· Reduction in property valuation relationships with our customers, understand their requirements and implement
change to meet their needs.
· Business plans are stress tested to assess the sensitivity of
forecasts to reduced levels of demand and implement contingency measures.
· Targeted marketing creates demand for Workspace and drives
conversion to viewings, with advertising content and messaging regularly
reviewed and updated.
Financing · We regularly review funding requirements for business plans, and
we have a wide range of options to fund our forthcoming plans. We prepare a
Macroeconomic uncertainty, a reduction in the availability of long-term five-year business plan which is reviewed and updated annually.
financing and an increase in bond yields could impact asset valuations, credit
rating and our ability to fund the business. As existing low-cost debt · We have a broad range of funding relationships in place and
matures, funding costs are likely to rise, reducing returns and having a regularly review our refinancing strategy.
negative impact on covenant headroom.
· Market-related valuation risk is largely dependent on
RISK IMPACT independent, external factors.
· Inability to fund business plans and invest in new opportunities · We maintain a conservative LTV ratio which can withstand a severe
decline in property values without covenant breaches.
· Cost of refinancing increases, reducing trading profits more than
expected. · We maintain a specific interest rate profile via the use of fixed
rates on the majority of our debt facilities so that our interest payment
· Impact on share price and credit rating profile is broadly stable. Where appropriate, we may also use interest rate
hedges to further fix our interest costs.
· Financing covenants linked to loan to value ('LTV') ratio and or
interest cover · Loan covenants are monitored and reported to the Board on a
monthly basis, and we undertake detailed cash flow monitoring and forecasting.
· In May 2025 the £200m Revolving Credit Facility ('RCF') was
refinanced with an extended maturity to June 2029, and in June 2026, was
extended by a further year.
· In November 2025, we extended the maturity of the £135m RCF to
November 2029 and extended the maturity of the £80m term loan by a further 12
months to November 2027, providing further certainty over our funding position
going forwards.
Risk Area Mitigating Activities
Capital Allocation · We maintain a disciplined and forward-looking capital plan,
supported by detailed business planning and a five-year portfolio strategy to
Workspace's ability to execute its strategy depends on achieving appropriate identify priorities, reinvestment needs and long-term value drivers.
pricing on asset disposals and redeploying the proceeds effectively. Market
volatility, reduced buyer demand, or misaligned pricing expectations may · We apply a disciplined investment process, using established
result in sales below valuation or delay transactions, limiting capital criteria, reinforced by detailed financial appraisals reviewed by the
available for reinvestment and reducing financial flexibility. In turn, Executive Committee and approved by the Board for both disposals and
allocating funds to projects that fail to deliver anticipated returns or acquisitions.
operational benefits may hinder income growth and slow portfolio progress.
Together, these factors increase the risk of constrained reinvestment · Invest in the ongoing optimisation of our portfolio, including
capacity, weaker financial performance, and reduced shareholder value. regulatory compliance upgrades (such as MEES) and targeted refurbishment,
while exploring alternative use and mixed use opportunities to preserve and
RISK IMPACT enhance long-term value.
· Inability to fund business plans and invest in existing portfolio · Optimise portfolio investment, ensuring capital is directed
or new opportunities towards income and value accretive assets or initiatives and/or lower
long-term operating cost exposure.
· Impact on share price and earnings
· Impact on overall shareholder returns
Customer Payment Default · Rent collection and customer payment levels have remained strong
throughout the year, however the economic environment remains challenging.
Uncertainty remains around the macroeconomic environment. Although inflation
and interest rates have reduced during the period, given the broader · The risk continues to be mitigated by strong credit control
geopolitical climate and recent increases to living wage and national processes and an experienced team of credit controllers, able to make quick
insurance costs, there remains a risk of an economic downturn, which could put decisions and negotiate with customers for payment. In addition, we hold a
pressure on rent collection figures. three-month deposit for the majority of customers.
RISK IMPACT · Centre staff maintain relationships with customers and can
identify early signs of potential issues whilst receiving early sign of
· Negative cash flow and increasing interest costs default from credit control team.
· Breach of financial covenants · As a consequence, a near 40% reduction in trade receivables has
been achieved.
Technology, Cyber and Systems · Technology risk is managed using a mitigation framework
comprising network security, IT security policies and third-party risk
Workspace depends on reliable technology platforms, integrated data systems, assessments. Controls are regularly reviewed and updated and include
Artificial Intelligence ('AI') and strong cyber-security to operate technology such as next generation firewalls, multi layered access control
effectively and support customers. As these technologies evolve, risks arising through to people solutions such as user awareness training, mock-phishing
from the accuracy and reliability of AI generated outputs, failures in system emails and cyber-attack simulations.
performance, data quality, platform integration or cyber-security could
disrupt operations, impact business continuity, impair customer service and · Assurance over the framework's performance is gained through an
reduce the quality of financial and strategic decision-making. As technology independent maturity assessment, penetration testing and network vulnerability
remains central to how the business runs and how decisions are made, any testing, all performed annually.
weaknesses in our systems or data pose a material operational and reputational
risk. · We are committed to continue the adoption of the NIST
Cybersecurity Framework to enhance our cyber security maturity. This adoption
RISK IMPACT will strengthen risk management, improve controls, fortify incident response,
and ensure consistent protection and recovery, validated through external
· Inability to process new leases and invoice customers independent assessments.
· Reputational damage · Tested business continuity and disaster recovery processes,
ensuring critical systems and data can be restored rapidly following outages
· Increased operational costs or cyber incidents.
Risk Area Mitigating Activities
Culture · We are establishing a more empowered culture, with greater
accountability across the business, in particular for our customer-facing
Organisational culture and behaviours, and policies that fail to reflect core teams, enabling them to act more quickly and drive performance. This means new
values, motivate teams or support strategic goals, could lead to lower ways of working across the business and greater inter-departmental
employee engagement and a risk to execution of strategy. collaboration.
RISK IMPACT · Incentive schemes align employee objectives with the strategic
objectives of the Group to motivate employees to work in the best interests of
· Increased costs from high staff turnover the Group and its stakeholders. This is supported by a formal appraisal and
review process for all employees.
· Delay in growth plans
· Our HR and People teams run a broad training and development
· Reputational damage programme designed to ensure employees are supported and encouraged to
progress with learning and study opportunities.
· We have revised our internal application process for existing
employees with 37 individuals being internally promoted and nine employees
acting up in role during this period.
· We continue to enhance internal communications and engagement
with employees through CEO updates and regular 'town hall' meetings including
open Q&A.
Supply Chain and Third-Party Relationships · Maintain a robust tendering and supplier selection process,
including the onboarding of suppliers onto the supplier portal to ensure
Workspace relies on a wide network of suppliers, contractors and service suppliers and service partners meet required standards on financial stability,
partners to operate buildings, deliver refurbishment and redevelopment compliance and performance.
projects, and support day-to-day services to customers. Disruptions within the
supply chain, including rising energy and construction costs, materials · Monitor supplier performance through service level agreements,
shortages, changes in supplier capability, or contractor insolvencies may with clear escalation processes and corrective actions where underperformance
impact project delivery, operational performance and cost efficiency. Failure is identified.
by key suppliers or partners to meet required standards could impact
customer experience, delay developments, and limit effective portfolio · Manage exposure to refurbishment, construction and materials cost
management. volatility through active project oversight, competitive procurement and
strong contractor relationships.
RISK IMPACT
· Request compliance with London Living Wage commitments through
· Decline in customer confidence the onboarding process, supporting consistency and stability across core
service providers.
· Increased project or operational costs
· Maintain strong oversight of development and refurbishment
· Fall in customer demand partners, enabling early identification of risks that could impact project
timelines or service delivery.
· Weaker cash flow
· Request new and existing suppliers are operating in line with our
· Reputational damage sustainability strategy.
Risk Area Mitigating Activities
Regulatory · Health and safety is one of our primary concerns, and strong
leadership promotes a culture of awareness throughout the business. We have
A failure to keep up to date and plan for changing regulations in key areas well-developed policies and procedures in place to help ensure that any
such as health and safety, the employment landscape and sustainability, could workers, employees, or visitors on site comply with strict safety guidelines,
lead to fines or reputational damage. and we work with well-respected suppliers who share our high-quality standards
in health and safety.
RISK IMPACT
· We have a Health and Safety Consultant to support our commitment
· Increased costs to Health and safety throughout the business. Health and safety management
systems are updated in line with changing regulations and regular audits are
· Reputational damage undertaken to identify any potential improvements.
· We closely monitor developments in the employment landscape,
including changes in employment law, workplace expectations and regulatory
requirements. Our dedicated HR team maintains robust policies and procedures
to support compliance and best practice, which are regularly reviewed and
updated to reflect legislative changes and emerging risks.
· Sustainability requirements remain a key focus for the Group, and
are taken seriously across the business. We have committed to becoming a net
zero carbon business and being climate resilient. We undertake an annual
review of all ESG regulations and our policies and procedures to ensure
compliance. We also closely monitor and manage physical risk arising from
climate change along with a mitigation strategy.
· Workspace has a robust legal framework in place, managed by the
Company Secretary and external legal advisers, to ensure full compliance with
applicable laws, regulations, and corporate governance.
Climate Change · The inherent risk from climate change is universal, with a high
likelihood of risk materialising in the near future resulting in a potentially
Failure to recognise that climate change presents a financial risk to our material impact on businesses in general. For Workspace, our risk is lower
business, alongside our customers' increasing expectations for the sustainable when compared to many other real estate businesses, in particular our exposure
operation of our properties, could have a significant impact on the business. to physical risk. However, transition risk is an industry-wide risk and is
impacting all real estate businesses due to the environmental impact
RISK IMPACT associated with the sector. As a result, the regulatory requirements continue
to address the high impact associated construction and operations of
· Loss of rent roll buildings. In response to this, Workspace has been proactively managing its
risk exposure. Our mitigation strategy includes:
· Negative impact on value
· Periodic assessment of our climate risk exposure, using climate
· Reduced occupancy levels modelling every time the portfolio changes.
· Reputational damage · Active management of acute physical risks such as floods and
storms across the portfolio through emergency preparedness, site maintenance
surveys and business continuity planning.
· Delivery of net zero carbon and EPC upgrades across the portfolio
to manage transition risk.
· Embedding of climate-related objectives linked with remuneration,
to incentivise focused action.
· Active management of our energy and raw materials costs via
efficiency measures and design optimisation.
Risk Area Mitigating Activities
Operational Delivery · Maintain disciplined cost control, with regular review of
operating expenditure, supplier arrangements and service delivery models to
Workspace's ability to maintain an efficient cost base and protect income is ensure value for money.
critical to shareholder returns. Rising operating costs, inflationary pressure
on energy, utilities and services, and higher construction and refurbishment · Strengthen procurement processes, leveraging competitive
costs can all reduce operating margins. Inefficiencies in processes, systems tendering and long-term supplier relationships to manage cost inflation across
or supplier arrangements may also impact financial performance, particularly energy, services and construction activities.
in a competitive market with softer customer demand. Any sustained imbalance
between income and costs could affect profitability, dividend capacity and the · Enhance operational systems and processes, improving efficiency,
ability to reinvest in the portfolio. reducing manual work and helping maintain accurate, timely reporting on income
and cost performance.
RISK IMPACT
· Monitor income and margin performance regularly, with Board
· Increased operational costs oversight of operating ratios, cost trends and efficiency initiatives.
· Weaker cash flow
· Negative impact on overall shareholder return
· Delay in growth plans
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2026
Notes 2026 2025
£m £m
Revenue 1 181.4 185.2
Direct costs(1) 1 (68.0) (63.1)
Net rental income 1 113.4 122.1
Administrative expenses 2 (21.7) (23.3)
Trading profit 91.7 98.8
Loss on disposal of investment properties and assets held for sale 3(a) (13.8) (1.5)
Loss on disposal of fixed assets 11 (0.4) -
Other expenses 3(b) (7.3) (3.6)
Change in fair value of investment properties 10 (159.2) (55.9)
Impairment of assets held for sale 10 (0.3) (0.4)
Operating (loss)/profit (89.3) 37.4
Finance costs 4 (33.4) (32.6)
Finance income 2.2 0.6
(Loss)/profit before tax (120.5) 5.4
Taxation 6 0.2 -
(Loss)/profit for the financial year after tax (120.3) 5.4
Basic (loss)/earnings per share 8 (62.6)p 2.8p
Diluted (loss)/earnings per share 8 (62.6)p 2.8p
1. Direct costs in 2026 includes impairment of receivables of £0.3m
(2025: £1.0m). See note 1 for additional information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2026
Notes 2026 2025
£m £m
(Loss)/profit for the financial year (120.3) 5.4
Other comprehensive (loss)/income:
Items that will not be reclassified to profit or loss:
Change in fair value of other investments 12 (0.8) 0.1
Items that may be reclassified subsequently
to profit or loss:
Change in fair value of derivatives 16(e) 0.1 (0.3)
Other comprehensive loss in the year (0.7) (0.2)
Total comprehensive (loss)/income for the year (121.0) 5.2
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2026
Notes 2026 2025
£m £m
Non-current assets
Investment properties 10 2,107.6 2,351.7
Intangible assets - 1.1
Property, plant and equipment 11 2.2 3.4
Other investments 12 6.2 3.3
Deferred tax 0.5 0.3
2,116.5 2,359.8
Current assets
Trade and other receivables 13 26.8 32.8
Assets held for sale 10 56.3 45.2
Cash and cash equivalents 14 10.5 32.7
93.6 110.7
Total assets 2,210.1 2,470.5
Current liabilities
Trade and other payables 15 (88.8) (92.2)
Borrowings 16(a) - (79.9)
Derivative financial instruments 16(e) - (0.1)
(88.8) (172.2)
Non-current liabilities
Borrowings 16(a) (757.0) (761.4)
Lease obligations 17 (36.1) (34.7)
(793.1) (796.1)
Total liabilities (881.9) (968.3)
Net assets 1,328.2 1,502.2
Shareholders' equity
Share capital 19 192.3 192.1
Share premium 19 295.6 295.6
Investment in own shares (0.2) (0.3)
Other reserves 20 69.9 71.2
Retained earnings 770.6 943.6
Total shareholders' equity 1,328.2 1,502.2
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2026
Attributable to owners of the Parent
Notes Share capital Share premium Investment in own shares Other reserves Retained earnings Total shareholders' equity
£m £m £m £m £m £m
Balance at 31 March 2024 191.9 296.6 (9.9) 93.0 977.3 1,548.9
Profit for the financial year - - - - 5.4 5.4
Other comprehensive loss for the year - - - (0.2) - (0.2)
Total comprehensive (loss)/income - - - (0.2) 5.4 5.2
Transactions with owners:
Dividends paid 7 - - - - (54.5) (54.5)
Own shares transferred in prior years(2) - - 9.3 - (9.3) -
Cost of shares awarded to employees - - 0.3 - - 0.3
Share-based payments 0.2 (1.0)(1) - (0.4) 3.5 2.3
Share options lapsed in prior years(3) - - - (21.2) 21.2 -
Balance at 31 March 2025 192.1 295.6 (0.3) 71.2 943.6 1,502.2
Loss for the financial year - - - - (120.3) (120.3)
Other comprehensive loss for the year - - - (0.7) - (0.7)
Total comprehensive loss - - - (0.7) (120.3) (121.0)
Transactions with owners:
Dividends paid 7 - - - - (54.6) (54.6)
Share-based payments 0.2 - 0.1 (0.6) 1.9 1.6
Balance at 31 March 2026 192.3 295.6 (0.2) 69.9 770.6 1,328.2
1. The movement in the year ended 31 March 2025 on share premium relates
to the excess between the nominal value and the vested share price on awarded
shares to employees in the previous year, which was reclassified to retained
earnings.
2. In the year ended 31 March 2025, the Group transferred the excess
amounts held in the investment in own shares reserve to retained earnings in
accordance with the carrying value of the remaining shares held. The transfer
should have been made prior to the date of the opening comparative period, but
was omitted. The error is not considered material and hence it was corrected
in the prior year.
3. In the year ended 31 March 2025, the Group transferred amounts held in
the share-based payment reserve to retained earnings In relation to share
options that had lapsed in prior years. The transfer should have been made
prior to the date of the opening comparative period, but was omitted. The
error is not considered material and hence it was corrected in the prior year.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2026
Notes 2026 2025
£m £m
Cash flows from operating activities
Cash generated from operations 18 92.0 105.1
Interest paid (30.3) (29.1)
Interest received 0.9 0.6
Net cash inflow from operating activities 62.6 76.6
Cash flows from investing activities
Capital expenditure on investment properties (51.5) (58.9)
Proceeds from government grant 1.3 0.7
Proceeds from disposal of investment properties (net of sale costs) 80.2 36.5
Proceeds from disposal of assets held for sale 31.0 40.4
(net of sale costs)
Purchase of intangible assets - (0.4)
Purchase of property, plant and equipment (0.6) (1.8)
Proceeds from other investments 0.6 -
Interest from other investments 0.3 -
Purchase of other investments (3.2) -
Net cash inflow from investing activities 58.1 16.5
Cash flows from financing activities
Finance costs for new/amended borrowing facilities 16(h) (1.8) (1.3)
Repayment of Private Placement Notes 16(h) (80.0) -
Repayment of bank borrowings 16(h) (168.8) (355.5)
Draw down of bank borrowings 16(h) 164.8 341.5
Payment of lease obligations (2.2) -
Settlement of share schemes (0.3) (0.4)
Dividends paid 7 (54.6) (56.3)
Net cash outflow from financing activities (142.9) (72.0)
Net (decrease)/increase in cash and cash equivalents (22.2) 21.1
Cash and cash equivalents at start of year 14 32.7 11.6
Cash and cash equivalents at end of year 14 10.5 32.7
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 2026 or 2025 but is derived
from those accounts. Statutory accounts for 2025 have been delivered to the
Registrar of Companies, and those for 2026 will be delivered in due course.
The auditor has reported on those accounts; their reports were i) unqualified
and i i) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006. The accounting policies are consistent with those
contained in the Group's last annual report and accounts for the year ended 31
March 2025, with exception of the following:
Basis of preparation
These consolidated financial statements have been prepared and approved by the
Directors on a going concern basis, in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those standards.
The Group's consolidated financial statements have been prepared on a
historical cost basis, other than as explained in the accounting policies
below. The consolidated financial statements are presented in Sterling, the
Group's presentation currency which is also the Company's functional currency,
to the nearest million. The comparative information disclosed relates to the
year ended 31 March 2025.
The Board is required to assess the appropriateness of applying the going
concern basis in the preparation of the financial statements. Macroeconomic
and geopolitical issues, including the impact of instability in the Middle
East on UK businesses and their supply chains, have heightened wider concerns
around the UK economy and mean there is a continuing risk of an economic
downturn. In this context, the Directors have fully considered the business
activities and principal risks of the Company.
In preparing the assessment of going concern, the Board has reviewed a number
of different scenarios over the 12-month period from the date of signing of
these financial statements. These scenarios include a severe, but
realistically possible, scenario which includes the following key assumptions:
A reduction in occupancy, reflecting weaker customer demand for office space.
A reduction in the pricing of new lettings, resulting in a reduction in
average rent per sq. ft.
Continued elevated levels of cost inflation.
Refinancing of fixed-rate debt at UK five-year gilt plus margin of 2.75%.
Increased outward movement in investment yields resulting in a lower property
valuation.
The appropriateness of the going concern basis is reliant on the continued
availability of borrowings, sufficient liquidity and compliance with loan
covenants. All borrowings require compliance with Loan to Value ("LTV") and
Interest Cover covenants. As at the tightest test date in the going concern
period, the Group could withstand a reduction in Net Rental Income of 48%
compared to the March 2026 Net Rental Income and a fall in the property
portfolio valuation of 43% compared to 31 March 2026 before these covenants
are breached, assuming no mitigating actions are taken.
As at 31 March 2026, the Group had significant headroom with £242m of cash
and undrawn facilities. The Group's fixed debt comprises of a £300m green
bond, £220m of private placement notes, and a £65m secured loan facility.
Shorter-term liquidity and flexibility is provided by floating-rate bank
facilities which comprise £335m of sustainability-linked revolving credit
facilities ("RCFs") made up of £200m maturing in June 2030 (following the
exercise of an extension option in June 2026 as detailed in Note 22) and
£135m maturing in November 2029. Both facilities include the potential to be
extended by a further one year subject to lender consent. The £200m RCF has
the option to increase the facility amount by up to £100m and the £135m RCF
has the option to increase the facility amount by up to £120m, both subject
to lender consent.
For the full period of the going concern assessment, the Group maintains
sufficient headroom in its cash and loan facilities. The Group also has
sufficient liquidity to cover all maturities falling due for the remainder of
2027.
Consequently, the Directors have a reasonable expectation that the Group and
Company will have sufficient funds to continue to meet its liabilities as they
fall due for the period to 30 June 2027 and therefore the financial statements
have been prepared on a going concern basis.
CONSIDERATION OF CLIMATE CHANGE
In preparing the financial statements, the Directors have considered the
impact of climate change, particularly in the context of the risks identified
in the TCFD disclosures. There has been no material impact identified on the
financial reporting judgements and estimates. In particular, the Directors
considered the impact of climate change in respect of the following areas:
the potential impact on the valuation of our investment properties due to
transition risks;
going concern and viability of the Group over the next three years; and
the capital expenditure required to upgrade our assets' EPC ratings and
deliver our net zero targets.
Whilst there is currently minimal medium-term impact expected from climate
change, the Directors are aware of the ever-changing risks attached to climate
change and will regularly assess these risks against judgements and estimates
made in the preparation of the Group's financial statements.
New accounting standards, amendments and guidance
a) During the year to 31 March 2026 the Group adopted the following
accounting standard and guidance:
IAS 21 (amended) Lack of Exchangeability
There was no material impact from the adoption of this accounting standard and
amendment on the financial statements.
b) The following accounting standards and guidance are not yet effective but
are not expected to have a significant impact on the Group's financial
statements or result in changes to presentation and disclosure only. They have
not been adopted early by the Group:
IFRS 9 and IFRS 7 (amended) Amendments to the Classification and Measurement of Financial Instruments
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 19 Subsidiaries without Public Accountability: Disclosures
IFRS 18 will replace IAS 1 Presentation of financial statements and is
effective for annual periods beginning on or after 1 January 2027. IFRS 18
will not impact the recognition or measurement of items in the financial
statements, but its impacts on presentation and disclosure is expected to be
material. Management is currently assessing the detailed implications of
applying the new standard on the Group's consolidated financial statements.
The other standards and amendments that are not yet effective are not expected
to have a material impact on the Group in the current or future reporting
periods and on the foreseeable future transactions.
1. Analysis of net rental income and segmental information
2026 2025
Revenue Direct Net rental income Revenue Direct Net rental income
£m costs(1) £m £m costs(1) £m
£m £m
Rental income 142.7 (8.4) 134.3 144.9 (6.7) 138.2
Service charges 32.8 (37.6) (4.8) 33.2 (37.4) (4.2)
Empty rates and other non-recoverable costs - (13.4) (13.4) - (11.5) (11.5)
Services, fees, commissions and sundry income 5.9 (8.6) (2.7) 7.1 (7.5) (0.4)
181.4 (68.0) 113.4 185.2 (63.1) 122.1
1. There was one property within the current period (2025: one) that was
non-rent producing. Direct costs relating to investment properties that did
not generate any rental income were £nil (2025: £nil).
Included within direct costs for rental income is a charge of £0.3m (2025:
£1.0m) for expected credit losses in respect of receivables from customers in
the period.
All of the properties within the portfolio are geographically close to each
other and have similar economic features and risks. Management information
utilised by the Executive Committee to monitor and review performance is
presented as one portfolio. As a result, for the year ended 31 March 2026,
management has determined that the Group operates a single operating segment
providing business accommodation for rent in and around London.
2. Operating (loss)/profit
The following items have been charged in arriving at operating (loss)/profit:
2026 2025
£m £m
Depreciation(1) (note 11) 1.4 1.4
Staff costs (including share-based payment costs)(1) (note 5) 30.2 31.9
Repairs and maintenance expenditure on investment properties 4.9 5.3
Trade receivables impairment (note 13) 0.3 1.0
Amortisation of intangibles(2) 1.1 1.5
Audit fees payable to the Company's Auditor 0.6 0.6
1. Charged to direct costs and administrative expenses based on the
underlying nature of the expenses.
2. The amortisation charge was expensed to administrative costs and other
expenses following a change in the expected useful life of the assets.
Auditor's remuneration: services provided by the Company's Auditor and its 2026 2025
associates
£000 £000
Audit fees:
Audit of Parent Company and consolidated financial statements 454 457
Audit of subsidiary financial statements 50 46
504 503
Fees for other services:
Audit-related assurance services(1) 75 67
Total fees payable to Auditor 579 570
1. Audit-related assurance services consist of £75k for half-year review
(2025: £67k).
2026 2025
£m £m
Total administrative expenses are analysed below:
Staff costs 12.2 13.8
Equity-settled share-based payments 1.6 2.4
Cash-settled share-based payments 0.1 0.2
Other 7.8 6.9
Total administrative expenses 21.7 23.3
3(a). Loss on disposal of investment properties and assets held for sale
2026 2025
£m £m
Proceeds from sale of investment properties (net of sale costs) 79.4 38.4
Proceeds from sale of assets held for sale (net of sale costs) 30.7 40.4
Book value at time of sale (123.9) (80.3)
Loss on disposal (13.8) (1.5)
3(b). Other expenses
2026 2025
£m £m
Other expenses (7.3) (3.6)
(7.3) (3.6)
Other expenses include exceptional costs relating to the replacement of our
finance and property management system and CRM system of £3.1m (2025:
£2.7m), which brings the cumulative spend to date to £8.8m with a forecast
spend in the next financial year of £1.8m in relation to the CRM system.
Phase 1 went live during FY26 and Phases 2 and 3 are expected to go live
during FY27. There were also other expenses in the year relating to
organisation restructuring totalling £4.2m (2025: £nil), and one-off costs
relating to the CEO appointed in the prior year of £0.9m. These costs are
outside the Group's normal trading activities.
4. Finance costs
2026 2025
£m £m
Interest payable on bank loans and overdrafts (13.8) (12.8)
Interest payable on other borrowings (17.7) (19.3)
Amortisation of issue costs of borrowings (1.5) (1.8)
Interest payable on leases (2.2) (2.1)
Interest capitalised on property refurbishments (note 10) 1.8 3.4
Total finance costs (33.4) (32.6)
All finance costs have been calculated in accordance with IFRS 9,
re-estimating the cash flows based on the original effective interest rate
with any adjustment being taken through the consolidated income statement,
with the exception of interest payable on leases which is calculated in
accordance with IFRS 16.
5. Employees and Directors
Staff costs for the Group during the year were: 2026 2025
£m £m
Wages and salaries 22.9 27.5
Social security costs 3.3 3.2
Other pension costs 1.2 1.4
Redundancy costs 2.6 -
Share-based costs 1.7 2.6
31.7 34.7
Less costs capitalised to investment property (1.5) (2.8)
30.2 31.9
The monthly average number of people employed during the year was: 2026 2025
Number Number
Head office staff (including Directors) 142 173
Estates and property management staff 159 162
301 335
The emoluments and pension benefits of the Directors are determined by the
Remuneration Committee of the Board and are set out in detail in the
Directors' Remuneration Report.
Total Directors' emoluments for the financial year were £2.1m (2025: £2.4m),
comprising of £1.9m (2025: £2.1m) of Directors' remuneration, £0.1m (2025:
£0.3m) gain on exercise of share options and £0.1m (2025: £0.1m) of cash
contributions in lieu of pension in respect of four Directors (2025: three).
6. Taxation
2026 2025
£m £m
Current tax:
UK corporation tax - -
Adjustments to tax in respect of previous periods - -
- -
Deferred tax:
On origination and reversal of temporary differences (0.2) -
-
Total taxation credit (0.2) -
The tax on the Group's (loss)/profit for the year differs from the standard
applicable corporation tax rate in the UK of 25% (2025: 25%). The differences
are explained below:
2026 2025
£m £m
(Loss)/profit before taxation (120.5) 5.4
Tax at standard rate of corporation tax in the UK of 25% (30.1) 1.4
(2025: 25%)
Effects of:
REIT exempt income (12.1) (17.2)
Changes in fair value not subject to tax as a REIT 39.9 14.3
Share-based payment adjustments - 0.2
Unrecognised losses carried forward 1.7 1.0
Other non-taxable expenses 0.4 0.3
Total taxation credit (0.2) -
The Group is a Real Estate Investment Trust ('REIT'). The Group's UK property
rental business (both income and capital gains) is exempt from UK corporation
tax. The Group estimates that as the majority of its future profits will be
exempt from tax, future tax charges are likely to be low.
Profits arising from any residual business activities (e.g. trading activities
and interest income), after the utilisation of tax losses, are subject to
corporation tax at the main rate of 25% for the period.
The Group currently has an unrecognised asset in relation to tax losses from
the non-REIT business carried forward of £9.3m (2025: £8.6m) calculated at a
corporation tax rate of 25% (2025: 25%).
7. Dividends
Payment date Per share 2026 2025
£m £m
For the year ended 31 March 2024:
Final dividend August 2024 19.0p - 36.5
For the year ended 31 March 2025:
Interim dividend February 2025 9.4p - 18.0
Final dividend August 2025 19.0p 36.5 -
For the year ended 31 March 2026:
Interim dividend February 2026 9.4p 18.1 -
Dividends for the year 54.6 54.5
Timing difference on payment of withholding tax - 1.8
Dividends cash paid 54.6 56.3
The Directors are proposing a final dividend in respect of the financial year
ended 31 March 2026 of 16.7 pence per ordinary share, which will absorb an
estimated £32.1m of retained earnings and cash. If approved by the
shareholders at the AGM, it will be paid on 3 August 2026 to shareholders who
are on the register of members on 3 July 2026. The dividend will be paid as a
REIT Property Income Distribution ('PID') net of withholding tax where
appropriate.
8. Earnings per share
Earnings used for calculating earnings per share: 2026 2025
£m £m
Basic and diluted earnings (120.3) 5.4
Decrease in fair value of investment properties 159.2 55.9
Impairment of assets held for sale 0.3 0.4
Loss on disposal of investment properties and assets held for sale 13.8 1.5
Loss on disposal of fixed assets 0.4 -
Tax credit (0.2) -
Other expenses (note 3(b)) 7.3 3.6
EPRA earnings 60.5 66.8
Earnings have been adjusted to derive an earnings per share measure as defined
by the European Public Real Estate Association ('EPRA') and an adjusted
underlying earnings per share measure.
Number of shares used for calculating earnings per share: 2026 2025
Number Number
Weighted average number of shares 192,223,942 191,997,294
(excluding own shares held in trust)
Dilution due to share option schemes 966,472 1,770,841
Weighted average number of shares 193,190,414 193,768,135
for diluted earnings per share
2026 2025
In pence:
Basic (loss)/earnings per share (62.6)p 2.8p
Diluted (loss)/earnings per share (62.6)p 2.8p
EPRA earnings per share 31.5p 34.8p
Diluted EPRA earnings per share 31.3p 34.5p
Adjusted underlying earnings per share(1) 31.3p 34.5p
Adjusted underlying earnings per share (basic) 31.5p 34.8p
1. Adjusted underlying earnings per share is calculated by dividing
trading profit after interest by the diluted weighted average number of shares
of 193,190,414 (2025: 193,768.135).
The diluted loss per share for the period to 31 March 2026 has been restricted
to a loss of 62.6p per share, as the loss per share cannot be reduced by
dilution in accordance with IAS 33 Earnings per Share.
9. Net assets per share and total accounting return
Number of shares used for calculating net assets per share: 2026 2025
Number Number
Shares in issue at year end 192,313,264 192,143,004
Less own shares held in trust at year end (24,612) (57,524)
Dilution due to share option schemes 1,014,372 1,871,843
Number of shares for calculating diluted 193,303,024 193,957,323
adjusted net assets per share
EPRA Net Asset Value Metrics
The Group measures financial position with reference to EPRA Net Tangible
Assets ('NTA'), Net Reinvestment Value ('NRV') and Net Disposal Value ('NDV').
March 2026 March 2025
EPRA EPRA EPRA EPRA EPRA EPRA
NRV
NTA
NDV
NRV
NTA
NDV
£m £m £m £m £m £m
IFRS Equity attributable to shareholders 1,328.2 1,328.2 1,328.2 1,502.2 1,502.2 1,502.2
Fair value of derivative financial instruments - - - 0.1 0.1 -
Intangibles per IFRS balance sheet - - - - (1.1) -
Excess of book value of debt over fair value - - 28.3 - - 39.9
Purchasers' costs 145.0 - - 161.0 - -
EPRA measure 1,473.2 1,328.2 1,356.5 1,663.3 1,501.2 1,542.1
EPRA measure per share £7.62 £6.87 £7.02 £8.58 £7.74 £7.95
Total accounting return
Total Accounting Return 2026 2025
£ £
Opening EPRA net tangible assets per share (A) 7.74 8.00
Closing EPRA net tangible assets per share 6.87 7.74
Decrease in EPRA net tangible assets per share (0.87) (0.26)
Ordinary dividends paid in the year 0.28 0.28
Total return (B) (0.59) 0.02
Total accounting return (B/A) (7.6%) 0.3%
The total accounting return for the year comprises the movement in absolute
EPRA net tangible assets per share plus dividends paid in the year as a
percentage of the opening EPRA net tangible assets per share. The total return
for the year ended 31 March 2026 was -7.6% (31 March 2025: 0.3%).
10. Investment properties
2026 2025
£m £m
Balance at 1 April 2,351.7 2,408.5
Capital expenditure 46.4 54.3
Movement in head lease 1.4 -
Capitalised interest on refurbishments (note 4) 1.8 3.4
Disposals during the year (85.3) (38.5)
Change in fair value of investment properties (159.2) (55.9)
Disposed properties tenant incentives recognised 0.1 0.2
in advance under IFRS 16
Less: Classified as assets held for sale (49.3) (20.3)
Balance at 31 March 2,107.6 2,351.7
Investment properties represent a single class of property, being business
accommodation for rent in and around London.
Investment properties include buildings with a carrying amount of £297.7m
(2025: £291.9m) for which there are lease obligations of £36.1m (2025:
£34.7m). Investment property lease commitment details are shown in note 17.
Disposed properties tenant incentives relate to disposed properties during the
year, where there were tenant lease incentives accounted for under IFRS 16.
Capitalised interest is included at a rate of capitalisation of 5.8% (2025:
6.7%). The total amount of capitalised interest included in investment
properties is £23.1m (2025: £21.5m).
The change in fair value of investment properties is recognised in the
consolidated income statement.
Investment property held for sale
2026 2025
£m £m
Balance at 1 April 45.2 65.7
Capital expenditure 0.7 1.4
Reclassified from investment properties in the period 49.3 20.3
Disposals during the year (38.6) (41.8)
Impairment of assets held for sale (0.3) (0.4)
Balance at 31 March 56.3 45.2
One of the properties classified as held for sale at the end of the prior year
was not sold during the year. This property is retained within current assets
as it is still expected to sell within the next 12 months to 31 March 2027.
This property exchanged during the year.
Eight (2025: four) additional properties were reclassified as held for sale at
year end. One of these properties exchanged for sale prior to year end and one
post year end . All eight assets are highly probable to complete within the
next 12 months. The transfer value is their year end valuation per CBRE and
Knight Frank.
Valuation
The Group's investment properties are held at fair value and were valued at 31
March 2026 by the external valuers, CBRE Limited and Knight Frank Limited,
firms of independent qualified valuers, in accordance with the Royal
Institution of Chartered Surveyors Valuation - Global Standards. All the
properties are revalued at period end regardless of the date of acquisition.
In line with IFRS 13, all investment properties are valued on the basis of
their highest and best use. For stabilised portfolio properties, their current
use equates to the highest and best use. For properties undergoing
refurbishment or redevelopment, most of these are still being used for
business accommodation in their current state. However, the valuation at the
balance sheet date includes the impact of the potential refurbishment and
redevelopment as this represents the highest and best use.
The Executive Committee and the Board both conduct a detailed review of the
property valuation to assess whether appropriate assumptions have been applied
and that valuations are appropriate. Meetings are held with the valuers to
discuss and challenge the valuations, to confirm that they have considered all
relevant information.
The valuation of stabilised portfolio properties (which are not undergoing
significant refurbishment or redevelopment) is based on the income
capitalisation method which applies market-based yields to the Estimated
Rental Values ('ERVs') of each of the properties. Yields are based on current
market expectations depending on the location and use of the property. ERVs
are based on estimated rental potential considering current rental streams and
market comparatives whilst also considering the occupancy and timing of rent
reviews at each property. Although occupancy and rent review timings are
known, and there is market evidence for transaction prices for similar
properties, there is still a significant element of estimation and judgement
in ERVs. The ERVs include assumptions about future occupancy levels, these are
primarily derived from current occupancy levels adjusted as considered
necessary by the valuer. As a result of adjustments made to market observable
data, the significant inputs are deemed unobservable under IFRS 13.
When valuing properties where Workspace is carrying out a major refurbishment,
the residual value method is used. The completed value of the refurbishment is
determined as for stabilised portfolio properties above. This is then adjusted
for costs to complete and developers' profit margin. A discount factor is
applied to reflect the time period to complete construction and make allowance
for construction and market risk to arrive at the residual value of the
property.
The discount factor used is the property yield that is also applied to the
estimated rental value to determine the value of the completed building. Other
risks such as unexpected time delays relating to planned capital expenditure
are assessed on a project-by-project basis, looking at market comparable data
where possible and the complexity of the proposed scheme.
Redevelopment properties are also valued using the residual value method. The
proposed redevelopment which would be undertaken by a residential developer is
valued based on the market value for similar sites and then adjusted for costs
to complete, developers' profit margin and a time discount factor. Allowance
is also made for planning and construction risk depending on the stage of the
redevelopment. If a contract is agreed for the sale/redevelopment of the site,
the property is valued based on agreed consideration.
For all methods, the valuer is provided with information on tenure, letting,
town planning and the repair of the buildings and sites.
The reconciliation of the valuation report total to the amount shown in the
consolidated balance sheet as non-current assets, investment properties, is as
follows:
2026 2025
£m £m
Total per CBRE and Knight Frank valuation reports 2,132.8 2,367.8
Deferred consideration on sale of property (0.6) (0.6)
Head leases treated as leases under IFRS 16 36.1 34.7
Tenant incentives recognised under IFRS 16 (4.4) (5.0)
Less: Reclassified as assets held for sale (56.3) (45.2)
Total investment properties per balance sheet 2,107.6 2,351.7
The Group's investment properties are carried at fair value and under IFRS 13
are required to be analysed by level depending on the valuation method
adopted. The different valuation methods are as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2 - Use of a model with inputs (other than quoted prices included in
Level 1) that are directly or indirectly observable market data.
Level 3 - Use of a model with inputs that are not based on observable market
data.
As noted in the significant judgements and critical estimates section,
property valuations are complex and involve data which is not publicly
available and involve a degree of judgement. All the investment properties are
classified as Level 3, due to the fact that one or more significant inputs to
the valuation are not based on observable market data.
CBRE and Knight Frank have made enquiries to ascertain any sustainability
factors which are likely to impact on value, consistent with the scope of
their terms of engagement. Sustainability encompasses a wide range of
physical, social, environmental, and economic factors that can affect the
value of an asset, even if not explicitly recognised. This includes key
environmental risks; such as flooding, energy efficiency, climate, design,
legislation and management considerations - as well as current and historic
land use. Where CBRE and Knight Frank recognise the value impacts of
sustainability, they reflect their understanding of how market participants
include sustainability factors in their decisions and the consequential impact
on market valuations.
The following table summarises the valuation techniques and inputs used in the
determination of the property valuation at 31 March 2026.
Key unobservable inputs:
ERVs - per sq. ft. Equivalent yields
Property category Valuation Valuation technique Range Weighted average Range Weighted average
£m
Stabilised portfolio 1,780.5 A £22-£83 £49 6.0%-8.5% 6.7%
Completed projects 132.3 A £25-£55 £36 6.2%-7.8% 6.7%
Refurbishments 147.5 A £28-£60 £35 6.3%-10.6% 6.8%
South East Office 15.6 A £31-£31 £31 8.9%-8.9% 8.9%
Tenant incentives (4.4) n/a - - - -
Head leases 36.1 n/a - - - -
Total 2,107.6
A = Income capitalisation method.
All investment properties have been valued using the income capitalisation
method at the reporting date. Property categories are used for internal
reporting purposes and may reflect the nature of ongoing asset management
activity; the external valuer has nevertheless applied an income approach
where appropriate.
Costs to complete are not considered to be a significant unobservable input
for refurbishments due to the high percentage of costs that are fixed.
Sensitivity analysis:
A +/- 10% movement in ERVs or a +/- 25 basis points movement in yields would
result in the following increase/decrease in the valuation.
£m +/- 10% in ERVs +/- 25 bps in yields
Stabilised portfolio +178/-178 -64/+69
Completed projects +13/-13 -5/+5
Refurbishments +15/-15 -5/+6
South East Office +2/-2 -0/+0
The following table summarises the valuation techniques and inputs used in the
determination of the property valuation at 31 March 2025.
Key unobservable inputs:
ERVs - per sq. ft. Equivalent yields
Property category Valuation Valuation technique Range Weighted average Range Weighted average
£m
Like-for-like 1,755.8 A £24-£84 £51 5.9%-8.6% 6.8%
Completed projects 167.8 A £25-£55 £37 4.9%-7.6% 6.9%
Refurbishments 322.6 A/B £23-£75 £36 5.3%-10.2% 7.2%
South East Office 75.8 A £25-£35 £29 8.4%-12.5% 10.3%
Tenant incentives (5.0) n/a - - - -
Head leases 34.7 n/a - - - -
Total 2,351.7
A = Income capitalisation method.
B = Residual value method.
A key unobservable input for redevelopments at planning stage and
refurbishments is developer's profit. The range is 10%-19% with a weighted
average of 15%.
Costs to complete is a key unobservable input for redevelopments at planning
stage with a range of £273-£416 per sq. ft. and a weighted average of £325
per sq. ft.
Costs to complete are not considered to be a significant unobservable input
for refurbishments due to the high percentage of costs that are fixed.
Sensitivity analysis:
A +/- 10% movement in ERVs or a +/- 25 basis points movement in yields would
result in the following increase/decrease in the valuation.
£m +/- 10% in ERVs +/- 25 bps in yields
Like-for-like +176/-176 -62/+67
Completed projects +17/-17 -6/+6
Refurbishments +37/-37 -13/+14
South East Office +8/-8 -2/+2
11. Property, plant and equipment
Cost or valuation Equipment
and fixtures
£m
1 April 2024 8.2
Additions during the year 1.9
Disposals during the year (0.2)
Balance at 31 March 2025 9.9
Additions during the year 0.6
Disposals during the year (0.6)
Balance at 31 March 2026 9.9
Accumulated depreciation
1 April 2024 5.2
Charge for the year 1.4
Disposals during the year (0.1)
Balance at 31 March 2025 6.5
Charge for the year 1.4
Disposals during the year (0.2)
Balance at 31 March 2026 7.7
Net book amount at 31 March 2026 2.2
Net book amount at 31 March 2025 3.4
12. Other investments
The Group holds the following investments:
2026 2025
£m £m
Balance at 1 April 3.3 3.2
Additions 4.3 -
Disposals (0.6) -
Fair value movement in other comprehensive income (0.8) 0.1
Balance at 31 March 6.2 3.3
At the year end, the Group held 1.9% (2025: 2.0%) of the issued ordinary share
capital and £1.9m of preference shares (2025: £2.5m) in Wavenet Limited. In
accordance with IFRS 9, the share capital has been valued at fair value,
recognised in the consolidated statement of comprehensive income, resulting
in £0.8m movement in the financial year (2025: £0.1m). The preference shares
are measured at amortised cost, with the 10% coupon rate recognised in the
statement of profit and loss. £1.1m of additions in the year relates to
accrued interest on Wavenet preference shares.
During the year, the Group invested £3.2m to acquire 12% of liquidity
preference shares in Qube. In accordance with IFRS 9, the preference shares
have been measured at fair value through profit and loss.
13. Trade and other receivables
Current trade and other receivables 2026 2025
£m £m
Trade receivables 11.6 19.2
Less provision for impairment of receivables (1.3) (3.5)
Trade receivables - net 10.3 15.7
Prepayments, other receivables and accrued income 13.9 14.0
Deferred consideration on sale of investment properties 2.6 3.1
26.8 32.8
Receivables at fair value
Included within deferred consideration on sale of investment properties is
£0.6m (2025: £0.6m) of overage which is held at fair value through profit
and loss.
The deferred consideration arising on the sale of investment properties
relates to cash and overage. The overage has been fair valued by Knight Frank
Limited using appropriate discount rates, and will be revalued on a regular
basis. This is a Level 3 valuation of a financial asset, as defined by IFRS
13. The change in fair value recorded in the consolidated income statement was
£nil (31 March 2025: £nil).
Deferred consideration on sale of investment properties 2026 2025
£m £m
Balance at 1 April 3.1 1.1
Cash received (2.0) -
Additions 1.5 2.0
Balance at 31 March 2.6 3.1
Receivables at amortised cost
The remaining receivables are held at amortised cost. There is no material
difference between the above amounts and their fair values due to the
short-term nature of the receivables. Trade receivables are impaired when
there is evidence that the amounts may not be collectable under the original
terms of the receivable. All the Group's trade and other receivables are
denominated in Sterling.
Movements on the provision for impairment of trade receivables are shown
below:
2026 2025
£m £m
Balance at 1 April 3.5 3.9
Increase in provision for impairment of trade receivables 0.3 1.0
Receivables written off during the year (2.5) (1.4)
Balance at 31 March 1.3 3.5
14. Cash and cash equivalents
2026 2025
£m £m
Cash at bank and in hand 2.7 25.3
Restricted cash 7.8 7.4
10.5 32.7
£6.3m (2025: £7.2m) of the restricted cash relates to tenants' deposit deeds
which represent returnable cash security deposits received from tenants which
are held in ring-fenced bank accounts in accordance with the terms of the
individual lease contracts. The remaining balance relates to restricted cash
under terms of development projects' funding.
15. Trade and other payables
2026 2025
£m £m
Trade payables 4.2 6.8
Other tax and social security payable 5.0 3.2
Tenants' deposit deeds 6.4 7.3
Tenants' deposits 31.3 32.1
Accrued expenses 32.7 31.7
Deferred income - rent and service charges 9.2 11.1
88.8 92.2
There is no material difference between the above amounts and their fair
values due to the short-term nature of the payables.
16. Borrowings
(a) Balances
2026 2025
£m £m
Current
3.07% Senior Notes (unsecured) - 79.9
Non-current
Bank loans (unsecured) 173.4 178.2
Other loans (secured) 64.4 64.3
3.19% Senior Notes (unsecured) 119.9 119.9
3.6% Senior Notes (unsecured) 99.9 99.9
2.25% Green Bond (unsecured) 299.4 299.1
757.0 761.4
Total borrowings 757.0 841.3
(b) Net debt
2026 2025
£m £m
Borrowings per (a) above 757.0 841.3
Adjust for:
Cost of raising finance unamortised 4.0 3.7
761.0 845.0
Cash at bank and in hand (note 14) (2.7) (25.3)
Net debt 758.3 819.7
At 31 March 2026, the Group had £239.0m (2025: £235.0m) of undrawn bank
facilities, a £2.0m overdraft facility (2025: £2.0m) and £2.7m of
unrestricted cash (2025: £25.3m).
The Group has a loan to value covenant applicable to the Bank Loans and Senior
Debt Borrowings of 60%, Green Bond of 65% and Other Loan (Secured) of 55%.
Loan to value at 31 March 2026 was 35% (31 March 2025: 34%).
The Group also has an interest cover covenant of 2.0x applicable to the Bank
Loan and Senior Debt Borrowings, 1.75x applicable for the Green Bond and 2.25x
applicable for the Other Loan (secured). This is calculated as net rental
income divided by interest payable on loans and other borrowings. At 31 March
2026 interest cover was 3.6x (31 March 2025: 3.8x).
(c) Maturity
2026 2025
£m £m
Repayable within one year - 80.0
Repayable between one and two years 500.0 80.0
Repayable between two and three years 100.0 420.0
Repayable between three years and four years 96.0 200.0
Repayable between four years and five years 65.0 -
Repayable in five years or more - 65.0
761.0 845.0
Cost of raising finance (4.0) (3.7)
Total 757.0 841.3
(d) Interest rate and repayment profile
Principal at Interest rate Interest payable Repayable
period end
£m
Current
Bank overdraft due within one year or on demand - Base + 2.25% Variable On demand
Non-current
Private Placement Notes:
3.19% Senior Notes 120.0 3.19% Half yearly August 2027
3.6% Senior Notes 100.0 3.60% Half yearly January 2029
Bank Loan 51.8 SONIA + 1.77%(1) Variable June 2029
Bank Loan 44.2 SONIA + 1.82%(1) Variable November 2029
Bank Loan 80.0 SONIA + 1.77%(1) Half yearly November 2027
Other Loan (Secured) 65.0 4.02% Quarterly May 2030
Green Bond 300.0 2.25% Yearly March 2028
761.0
1. The base margin is dependent upon the LTV as reported in the client
certificate, which is submitted twice a year. The base margin can be adjusted
further by up to 4.5bps dependent upon achievement of three ESG-linked
metrics.
(e) Derivative financial instruments
The Group uses a mixture of fixed rate and variable rate facilities to manage
its interest rate exposure appropriately to provide operational and budget
certainty. At 31 March 2026, the Group had no interest rate hedging in place
on its variable rate debt.
Hedge effectiveness is assessed on critical terms (amount, interest rate,
interest settlement dates, currency and maturity date). The critical terms of
this hedging relationship perfectly matched at origination, so for the
prospective assessment of effectiveness a qualitative assessment was
performed. The interest rate swap creates an equal and opposite interest
receipt and a fixed interest payment, therefore creating an exact offset for
this transaction resulting in a net fixed interest payable. Potential sources
of hedge ineffectiveness include significant change in the credit risk of
either party or a reduction in the hedged item as such will impact the
economic relationship between the fair value changes of the hedged item and
the swap.
The effects of the interest rate swap hedging relationship is as follows:
2026 2025
Carrying amount of derivative - (0.1)
Change in fair value of designated hedging instrument 0.1 (0.3)
Notional amount £m - 100
Rate payable (%) - 4.285
Maturity - 31 January 2026
Hedge ratio - 1:1
(f) Financial instruments and fair values
2026 2026 2025 2025
Book value Fair value Book value Fair value
£m £m £m £m
Financial liabilities held at amortised cost
Bank loans 173.4 173.4 178.2 178.2
Other loans 64.4 61.9 64.3 61.5
Private Placement Notes 219.8 212.6 299.7 290.5
Lease obligations 36.1 36.1 34.7 34.7
Green Bond 299.4 280.8 299.1 271.2
793.1 764.8 876.0 836.1
Financial assets/(liabilities) at fair value through other comprehensive
income
Financial derivative - - (0.1) (0.1)
Other investments 3.0 3.0 3.3 3.3
3.0 3.0 3.2 3.2
Financial assets at fair value through profit or loss
Deferred consideration (including overage) 2.6 2.6 3.1 3.1
Other investments 3.2 3.2 - -
5.8 5.8 3.1 3.1
In accordance with IFRS 13, disclosure is required for financial instruments
that are carried or disclosed in the financial statements at fair value. The
fair values of all the Group's bank loans and Private Placement Notes have
been determined by reference to market prices and discounted expected cash
flows at prevailing interest rates and are Level 2 valuations. The Green bond
is listed on the Irish stock exchange and is measured at the quoted price
using Level 1 valuations. There have been no transfers between levels in the
year.
The different levels of valuation hierarchy as defined by IFRS 13 are set out
in note 10.
(g) Financial instruments by category
Assets 2026 2025
£m £m
a) Assets at fair value through profit or loss
Deferred consideration (overage) 0.6 0.6
Other investments 3.2 -
3.8 0.6
b) Loans and receivables
Cash and cash equivalents 10.5 32.7
Trade and other receivables excluding prepayments(1) 16.9 23.5
27.4 56.2
c) Assets/(liabilities) at fair value through other comprehensive income
Financial derivative - (0.1)
Other investments 3.0 3.3
3.0 3.2
Total 34.2 60.0
Liabilities 2026 2025
£m £m
Other financial liabilities at amortised cost
Borrowings 757.0 841.3
Lease liabilities 36.1 34.7
Trade and other payables excluding non-financial liabilities(2) 74.6 77.9
867.7 953.9
1. Trade and other receivables exclude prepayments of £7.0m (2025:
£5.9m), accrued income of £2.3m (2025: £2.8m) and non-cash deferred
consideration of £0.6m (2025: £0.6m).
2. Trade and other payables exclude other tax and social security of
£5.0m (2025: £3.2m) and deferred income of £9.2m (2025: £11.1m).
(h) Changes in liabilities from financing activities
Bank loans and borrowings Lease liabilities
£m £m
Balance at 1 April 2025 841.3 34.7
Changes from financing cash flows:
Proceeds from bank borrowings 164.8 -
Repayment of bank borrowings (168.8) -
Finance costs for new/amended borrowing facilities (1.8) -
Repayment of Private Placement Notes (80.0) -
Payment of lease obligations - (2.2)
Total changes from cash flows (85.8) (2.2)
Amortisation of issue costs of borrowing 1.5 -
Changes in finance leases - 1.4
Interest on finance leases - 2.2
Total other changes 1.5 3.6
Balance at 31 March 2026 757.0 36.1
Bank loans and borrowings Lease liabilities
£m £m
Balance at 1 April 2024 854.8 34.7
Changes from financing cash flows:
Proceeds from bank borrowings 341.5 -
Repayment of bank borrowings (355.5) -
Finance costs for new/amended borrowing facilities (1.3) -
Total changes from cash flows (15.3) -
Amortisation of issue costs of borrowing 1.8 -
Total other changes 1.8 -
Balance at 31 March 2025 841.3 34.7
17. Lease Obligations
Lease liabilities are in respect of leased investment property.
Minimum lease payments under leases fall due as follows:
2026 2025
£m £m
Within one year 2.2 2.1
Between one and five years 8.7 8.4
Between five and fifteen years 21.8 20.9
Beyond fifteen years 179.2 174.8
211.9 206.2
Future finance charges on leases (175.8) (171.5)
Present value of lease liabilities 36.1 34.7
Following the adoption of IFRS 16, lease obligations are shown separately on
the face of the balance sheet. The balance represents a non-current liability
as the payment shown within one year of £2.2m (2025: £2.1m) is offset by
future finance charges on leases of £2.2m (2025: £2.1m). All lease
obligations are long leaseholds, therefore, the majority of the obligations
fall beyond fifteen years.
18. Notes to cash flow statement
Reconciliation of (loss)/profit for the year to cash generated from
operations:
2026 2025
£m £m
(Loss)/profit before tax (120.5) 5.4
Depreciation 1.4 1.4
Amortisation of intangibles 0.4 0.9
Letting fees amortisation 0.1 0.6
Loss on disposal of investment properties and assets held for sale 13.8 1.5
Loss on disposal of fixed assets 0.4 -
Other expenses 0.7 0.7
Net loss from change in fair value of investment property 159.2 55.9
Impairment of assets held for sale 0.3 0.4
Equity-settled share-based payments 1.7 2.7
Finance costs 33.4 32.6
Finance income (2.2) (0.6)
Changes in working capital:
Decrease in trade and other receivables 5.6 5.7
Decrease in trade and other payables (2.2) (2.1)
Cash generated from operations 92.0 105.1
For the purposes of the cash flow statement, cash and cash equivalents include
restricted cash - tenants' deposit deeds (note 14).
19. Share capital and share premium
2026 2025
£m £m
Issued: Fully paid ordinary shares of £1 each 192.3 192.1
Movements in share capital were as follows: 2026 2025
Number Number
Number of shares at 1 April 192,143,004 191,910,392
Issue of shares 170,260 232,612
Number of shares at 31 March 192,313,264 192,143,004
In the year, the Group issued and authorised 170,260 shares in relation to
share schemes with net proceeds totalling £2,498 (31 March 2025: 232,612
share scheme options issued with £nil net proceeds).
Share capital Share premium
2026 2025 2026 2025
£m £m £m £m
Balance at 1 April 192.1 191.9 295.6 296.6
Issue of shares 0.2 0.2 - -
Reduction of shares - - - (1.0)
Balance at 31 March 192.3 192.1 295.6 295.6
The movement in the prior year on share premium relates to the excess between
the nominal value and the vested share price on awarded shares to to
employees in the previous year. This was recycled to retained earnings in the
prior year.
20. Other reserves
Other investment reserve Hedging Reserve Equity-settled share-based payments Merger reserve Total
£m
£m £m £m £m
Balance at 1 April 2024 1.5 0.2 26.0 65.3 93.0
Share-based payments - - (0.4) - (0.4)
Share options lapsed in prior years(1) - - (21.2) - (21.2)
Change in fair value of other investment (note 12) 0.1 - - - 0.1
Change in fair value of derivative financial instruments (cash flow hedge) - (0.3) - - (0.3)
Balance at 31 March 2025 1.6 (0.1) 4.4 65.3 71.2
Share-based payments - - (0.6) - (0.6)
Change in fair value of other investment (note 12) (0.8) - - - (0.8)
Change in fair value of derivative financial instruments (cash flow hedge) - 0.1 - - 0.1
Balance at 31 March 2026 0.8 - 3.8 65.3 69.9
1. In the year ended 31 March 2025, the Group transferred amounts held in
the share-based payment reserve to retained earnings In relation to share
options that had lapsed in prior years. The transfer should have been made
prior to 1 April 2024, but was omitted. The error is not considered material
and hence it was corrected in the prior year.
21. Capital commitments
At the year end the estimated amounts of contractual commitments for future
capital expenditure not provided for were:
2026 2025
£m £m
Investment property construction 6.2 24.1
For both current and prior periods, there were no material obligations for the
repair or maintenance of investment properties. All material contracts for
enhancement are included in the capital commitments.
22. Post-balance sheet events
One Crown Square and Chiswick Studios have exchanged for sale in June 2026,
with completion set for June and July 2026 respectively. In June 2026, the
Group's £200m RCF bank facility was extended with maturity now June 2030.
23. RESPONSIBILITY STATEMENT
The 2026 Annual Report, which will be issued on 19 June 2026, contains a
responsibility statement which states that on 9 June 2026, the date of
approval of the Annual Report, the Directors confirm that, to the best of
their knowledge:
● The Group financial statements, which have been prepared in accordance with UK
adopted international accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the Group.
● The Business Review contained within the Annual Report, includes as fair
review of the developments and performance of the business, and the position
of the Group, with a description of the principle risks and uncertainties that
the Group faces included in a separate section.
● The Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company's performance, business model and strategy
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