LONDON: British flexible office provider Workspace Group PLC (WKP.L) share declined over 3.0% as the company reported a dip in occupancy for its second quarter, as it grapples with a strategic shift to streamline its portfolio and operations in a challenging commercial property market.
The London-focused firm said on Thursday that like-for-like occupancy fell to 80.0% for the quarter ending Sept. 30, down 2.3 percentage points from the previous quarter. It attributed the decline primarily to two large customers, including Win Technologies, vacating a combined 43,000 square feet at its The Centro Buildings in Camden.
Despite the drop, Chief Executive Lawrence Hutchings said the company was making “solid progress” on its strategy to “Fix, Accelerate and Scale” the business.
“Our efforts to stabilise and rebuild occupancy by improving customer retention and conversion to lettings are starting to bear fruit,” Hutchings said in a statement.
The company completed 326 new lettings in the quarter, with an annual rental value of 7.3 million pounds, indicating what it called “robust demand” despite headwinds from summer holidays and London Tube strikes.
To bolster its financial position, Workspace is accelerating the disposal of assets it deems “low-conviction.” It has exchanged or completed on 52.4 million pounds worth of sales, progressing towards a 200 million pound target. The sales were completed at a combined 1.6% below their March 2025 book value.
As part of a cost-cutting drive, the company also said it had streamlined its support functions, delivering 2 million pounds in annualised efficiencies.
The company’s like-for-like rent per square foot remained nearly flat, inching up 0.1% to 47.55 pounds, as the company takes a “pragmatic approach to pricing.”
Workspace ended the quarter with 167 million pounds in cash and undrawn facilities. Net debt stood at 833 million pounds, with a proforma loan-to-value ratio of 35%, based on its March 2025 portfolio valuation.
The group, which will publish its full half-year results on Nov. 19, is also advancing plans to provide more specialised workspace offers to fast-growing industries in its key locations to drive future growth.