Workspace has reported a 2.9% decline in its quarterly rent roll to £48m despite an overall marginal increase in occupancy.
In an interim management statement released ahead of an AGM today, the flexible business space provider said: “Business conditions are challenging but customer demand is good, albeit with flexibility demanded on pricing, which has impacted the company’s cash rent roll”.
Overall occupancy was up 0.7% in the quarter to 81%.
Including disposals, the company posted an overall decline in rent per square foot of 4% to £12.17 per sq. ft.
It said the value of its property portfolio was £619m, down 4.6% in the quarter excluding disposals.
It added that this is a significant slowing in the pace of decline, which in the previous two quarters was 10% and 15% respectively.
Excluding the impact of acquisitions, disposals and capital expenditure the fall in the value of the portfolio from its peak at June 2007 is now around 42%.
Workspace, which was the first property company to make a cash call of around £87m in January in response to the rapid fall in property values, said it was soundly financed with good headroom on its covenants.
Workspace said that negotiations with lenders – led by Bank of Scotland – to its £85m joint venture with Glebe to regenerate the existing Wandsworth Business Village are continuing but are proving difficult.
It said its investment in the venture is fully written down and it will only increase its “limited outstanding commitments” if the benefits to the group are “sufficiently attractive”.
The company completed the sale of six properties during the quarter at values in line with the March 2009 valuation.
Disposal proceeds of £14.2m have been received in the quarter with a further £1.5m due from disposals in August 2009, and the company will continue with further “selective disposals where value can be created”.
Total disposal proceeds since November 2008 are now £28.4m, and the company said it is on track to take £40m from disposals by December 2009.
