Workspace unlocks rental revenue

Headline profits were lower, but only because of a slightly smaller valuation uplift of £138m, coupled with a one-off deferred consideration boost in the comparable period. More importantly, like-for-like rents were up by 11 per cent to £20.68 per sq ft. Four properties were acquired during the period at a cost of £91m, with contracts exchanged costing another £10m. Planning consent was also secured on two mixed-use developments for 320 flats and two major refurbishments in Shoreditch and Hoxton. Workspace continues to use a virtually risk-free development model, whereby a site with planning consent is sold to a housebuilder which finances construction. In return, part of the development is passed back to Workspace as modern small office accommodation.

Rental income is expected to grow further with the opening later this year of the newly built Grand Union Studios and new space at Vox Studios. Like-for-like occupancy remained steady at 90.9 per cent, a level that chief financial officer Graham Clemett feels comfortable with, given the ongoing process of refurbishment and reallocation as some tenants move into larger spaces.

Analysts at Investec are forecasting net asset value (NAV) at the March 2016 year-end of 891p a share, from 703p at the end of March 2015.