The recovery doesn't seem to have stalled at Workspace, which lets cheap office and small-scale industrial space to London entrepreneurs. The key occupancy figure increased from 83.6 per cent in March to 85.2 per cent in September, pushing the rent roll up 2.2 per cent to £50m. Chief executive Harry Platt says Workspace's exposure to London and the dynamic small business sector puts it "in the right place" even as the wider UK economy remains stagnant.
Workspace's portfolio rose 2.2 per cent in value, on a like-for-like basis, thanks to an increase in the estate's rental value. And, as vacancies are gradually filled, the balance of negotiating power is swinging back to the landlord, driving market rents higher. Moreover, Workspace has a significant refurbishment and development pipeline, progress on which also boosted property values. For example, in July it finished the £4m refurbishment of Chester House in its period office complex in Kennington, South London, creating a 36,000 square foot business centre.
Reported profits were down due to adjustments for the changing value of interest rate swaps. Stripping out these and portfolio revaluations, underlying profits were also down marginally because of property disposals - Workspace sold eight assets to its joint venture with BlackRock in February.
Brokerage Jefferies expects full-year adjusted net asset value of 296p (290p in the half year).
WORKSPACE (WKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 243p | MARKET VALUE: | £350m | |
| TOUCH: | 242.75-243.25p | 12-MONTH HIGH / LOW | 295p | 210p |
| DIVIDEND YIELD: | 3.4% | DEV PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 15% | |||
| INVEST PROPERTIES: | £732m | NET DEBT: | 76% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 255 | 18.0 | 15.3 | 2.66 |
| 2011 | 285 | 16.9 | 13.2 | 2.93 |
| % change | +12 | - | - | +10 |
Ex-div: 11 Jan Payment: 7 Feb | ||||
