Workspace warns office market to remain subdued as workers stay at home

Office-space business Workspace has said it expects the market to remain subdued after workers were told to stay at home in the face of coronavirus.

The company said the virus has had a “dramatic impact” but predicted that it will help to catalyse a structural shift in the market towards “flexible” offices.

It came as the London-listed firm reported a 47% slump in profit to £72.5 million for the year to March 31.

Meanwhile, revenue for the period increased by 8% to £151.4 million, while net incomes moved 10% higher.

Workspace said it supported customers with a 50% rent reduction and offered deferral agreements to a majority of its customers.

It said it is readying its business centres for the increased return of customers and has put in place extensive measures to enable social distancing and promote good hygiene.

Graham Clemett, chief executive of the group, said: “Looking forward, we will undoubtedly see subdued levels of operational performance in the short term with a reduction in rental income.

“However, we expect that the structural shift in the office market towards flexibility will now accelerate more broadly.

“We believe that, with our well-established flexible offer and the quality of our space and services, Workspace is ideally positioned to benefit as London recovers from the impact of the Covid-19 pandemic.”

Mr Clemett also highlighted the company’s robust balance sheet and “prudent funding liquidity”, as well as its “substantial headroom” on its covenants.

Shares in the company moved 3.2% higher to 815p in early trading on Friday.