Flexible office operator Workspace Group says macroeconomic issues are denting customer demand.
In a stock market update for the final three months of 2024, the company said it sealed 273 new lettings with a combined rental value of £6m, down “slightly” year-on-year. Like-for-like rent per sq ft nudged up by 1.1% to £47.54, while occupancy was down by 1.3% at 86.1%.
Chief executive Lawrence Hutchings said the “macroeconomic environment continued to weigh on customer activity” during the quarter.
“Within that environment, we are laser focused on optimising what we can control,” he said. “We are making good progress with the refurbishment and subdivision of larger spaces which have become available this year, building on the work already underway across the portfolio to meet the demand from our customers. Recycling larger spaces back into smaller units, which are our core product and achieve higher pricing growth, is an integral part of our business model.”
Hutchings said he has spent his first months in the role “looking under the bonnet of the business”, adding: “Despite the current market uncertainty, I remain confident about our potential to capture the structural growth opportunity that lies ahead.”
The company has been turning space vacated by larger tenants into smaller units. It said: “We have continued to see higher levels of customer churn, including customers vacating larger spaces.”
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