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UK's Workspace posts loss, sees 2-year recovery from pandemic

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Bicycles are seen parked in front of an office building owned by Workspace in London
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By Aby Jose Koilparambil

(Reuters) - Workspace Group on Thursday slipped to its first annual loss in 12 years as COVID-19 battered occupancies and rents, with the office-space provider saying it would take a couple of years to recover to pre-pandemic levels. Shares of the FTSE 250 firm fell as much as 3.6% after it said it lost around a tenth of its customers, comprising mostly small and medium-sized enterprises and entrepreneur businesses, in the wake of the coronavirus pandemic.

Employees and consumers were marooned at homes by lockdowns, while companies were forced to cut costs with few investing.

Workspace Chief Financial Officer David Benson told Reuters the company expects to see "significant" recovery this year after reporting a pre-tax loss of 235.7 million pounds for the 12 months ended March 31.

"Certainly over the next couple of years, we will be recovering back to where we were pre-COVID," said Benson.

The London-focused company, which serves a varied client base from architects to florists and craft beer brewers to app developers, said a survey on future space requirements over the year showed that only 12% of its clients thought they would reduce space.

"Over 60% of them (clients) said they thought they would be taking about the same amount of space. 25% thought it would be taking more space," said Chief Executive Officer Graham Clemett on an earnings call.

Annual net rental income plunged 33% to 81.5 million pounds, while the underlying value of its properties slipped 10%.

($1 = 0.7067 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi, Patrick Graham, Kirsten Donovan)

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