BENGALURU: London-focused flexible office-space provider Workspace is subdividing its properties with larger floor areas to compact units, as its clientele of small businesses downsize to position for post-pandemic work trends.
Unlike larger office landlords in the UK, Workspace offers unfurnished spaces on relatively short-term leases to mostly small- and medium-sized enterprises and entrepreneurs – from architects and florists to podcasters and app developers.
British property firms are recovering after a post-pandemic freeze, with property values stabilising and expectations of more interest rate cuts in the near term fuelling optimism.
The COVID pandemic battered global commercial property markets, driving up inflation and financing costs, and the ensuing shift to hybrid and remote work hit demand for office space. Many tenants now seek smaller but higher-quality spaces.
Workspace is seeing the best rental growth in its sub-1,000 square feet spaces, while the vacancy is highest and rental growth is going backwards in some units above 3,000 square feet, Paul Hewlett, the group’s director of strategy and corporate development, told Reuters.
About one-third of the London-listed company’s portfolio comprises spaces below 1,000 square feet, where prices grew around 3% during the six-month period to Sept. 30, said Hewlett.
Workspace, which manages 4.3 million square feet of office space at 73 locations in London and South East England, has a different business model to its popular peer WeWork; the British company owns its buildings unlike the U.S. firm.
On Friday, Workspace reported a pre-tax profit of 10.2 million pounds ($12.75 million) for the half-year period, compared with a loss of 147.9 million pounds a year earlier.
EPRA net tangible assets per share – a key industry metric for the value of buildings – was down 1.9% to 7.85 pounds by Sept. 30, compared with the March-end valuation.
Source Homevior.in
