Workspace (WKP) increased occupancy during the first half of its financial year, but heightened competition within the flexible office space market meant that pulling in more business came at the expense of pricing. Although occupancy rose and like-for-like rental income rose 1 per cent, this was weighed down by a 0.2 per cent decline in rent per square foot, to £41.10.
In the face of a more crowded marketplace, the group has adjusted its pricing “slightly”, said chief executive Graham Clemett. “Some of the penthouse pricing we have achieved on the top of out-buildings has [also] come off to some extent,” he added. The rent roll was boosted by last year’s acquisitions of The Shepherd's Building in Hammersmith and the Centro Buildings in Camden, which collectively added £8m in rental income.
Another three properties were exchanged for £49.5m at a 27 per cent premium to their March valuation. The sale of residential schemes at four redevelopment projects is expected to contribute a further £8m in cash, in addition to the £41m already received.
House broker Panmure Gordon expects adjusted net asset value of 1,109p at the March 2020 year-end, rising to 1,174p in 2021.
| WORKSPACE (WKP) | ||||
| ORD PRICE: | 1,108p | MARKET VALUE: | £2.0bn | |
| TOUCH: | 1,104-1,108p | 12-MONTH HIGH: | 1,120p | LOW: 778p |
| DIVIDEND YIELD: | 3.1% | TRADING PROP: | £60.5m | |
| DISCOUNT TO NAV: | 0.6% | |||
| INVESTMENT PROP: | £2.6bn | NET DEBT: | 29%^ | |
| Half-year to 30 Sep | Net asset value (p)* | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 1,086 | 102 | 58.4 | 10.61 |
| 2019 | 1,115 | 99.1 | 54.9 | 11.67 |
| % change | +3 | -2 | -6 | +10 |
| Ex-div: | 9 Jan | |||
| Payment: | 5 Feb | |||
| ^Excluding lease liabilities. *EPRA adjusted | ||||
