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Workspace's rerating potential underappreciated

Shares in the flexible office provider could benefit from the gradual reopening of the economy and return to offices
Workspace's rerating potential underappreciated
  • Occupancy rates and average rents have declined during lockdown
  • The group has the financial strength to withstand substantial declines in income and asset valuations
  • More widespread adoption of hybrid working could provide a post-pandemic opportunity
Tip style
Value
Risk rating
High
Timescale
Long Term
Bull points

Shares at discount to forecast NAV

Robust balance sheet

Potential growth in flexible working

Modern, well located portfolio

Bear points

Occupancy rate decline

Rent pricing weakens

Office landlords are arguably facing more uncertainty than those in any other corner of the real estate market. While the government’s roadmap set firm dates for the potential reopening of shops and hospitality venues, no firm guidance has been given for employees to come back to offices in great numbers. More unclear is just how many employers will even require their staff to make the return, and how many will embrace home or hybrid working.

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