UK’s Workspace says demand running at pre-pandemic levels as offices reopen

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Office-space provider Workspace Group Plc (WKP.L) said on Thursday it was witnessing demand at pre-pandemic levels, with strong signs of London businesses returning to offices as restrictions ease, although some near-term uncertainties remained.

Office space operators such as Workspace are firefighting rent deferral and declines amid an extended moratorium on payments, while its clients are forced to cut costs and investments due to the coronavirus crisis.

Also, the recent surge in cases in different parts of the world has brought back lockdowns and other restrictions in some regions, that raised fears of denting the pace of economic recovery and rattled stock markets earlier this week.

“With occupancy increasing and pricing beginning to stabilise, this is a solid start to what we expect to be a positive year for Workspace,” said Chief Executive Officer Graham Clemett.

The company, which reported its first annual loss in 12 years last month, said the occupancy at its centres improved to 35% of pre-pandemic levels by the end of June.

The FTSE 250 firm, which provides unfurnished spaces to a varied client base including architects, florists, craft beer brewers and app developers, said enquiries rose to 947 a month during the quarter ended June 30 from 506 a year ago.

Although office portfolio has fared better than the retail property segment during the pandemic with relatively healthy levels of rent collection, short-term flexible leases and its heavy exposure to small companies have battered Workspace’s prospects.

The London-focused firm that counts small-medium enterprises and entrepreneurs as its predominant clients said it collected 95% rent due for the quarter.

Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich