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Workspace collects 65% of rents

Workspace collects 50% of rents and puts dividend under review

Workspace Group has collected 65% of rent due this quarter, it has revealed in a trading update.

The London flexible office provider said this compared to 80% at the equivalent time last year. Cash collection for the April to June quarter was now at 75%.

Encouragingly, customer enquiries steadily improved during the quarter with 765 in June, up from 272 in April and 480 in May. This compares to a monthly average of 1,060 enquiries in the same period last year.

It completed 91 new lettings in June, again massively up on April’s 20 and May’s 17, but down on the monthly average for the quarter of 121.

The group added activity levels at its business centres were now at around 15% of usual levels.

Rent collection

The company offered rent reductions of 50% to customers from the start of the lockdown period in late March to the end of June 2020. It also offered customers the opportunity to defer a proportion of their rental payments. 

Overall, it gave rent reductions to around 80% of customers by rent in the quarter, which represents a reduction in rent of around £16m. It also agreed to defer around 15% of the discounted rent amounts due from these customers.

The rent collection figure of 75% for the April to June quarter represents around 41% of gross rents before rent reductions and deferrals. 

The 65% cash collection in the current quarter, comprising quarterly rents and monthly rents due for July, is equivalent to 60% of gross rents before rent reductions and deferrals. 

Portfolio Activity

In June 2020, Workspace opened two new business centres: Mare Street Studios in Hackney, which provides 55,000 sq ft of new business space; and Lock Studios in Bow, a new 39,000 sq ft business centre.

It said it expects to complete another three projects during the remainder of the current financial year, providing a further 91,000 sq ft of new and upgraded space.

In June 2020, it was granted planning consent for a mixed-use redevelopment project in Wandsworth comprising a new 106,000 sq ft business centre and 65,000 sq ft of new light industrial space, as well as 402 residential apartments.

Financing

The group’s pro forma loan to value ratio at 30 June 2020, based on the 31 March 2020 property valuation, is 21%.

Net debt increased by £5m in the quarter to £546m, with cash balances and undrawn facilities of £161m as at 30 June 2020.

Chairman Succession

Daniel Kitchen steps down as chairman today and is replaced by Stephen Hubbard.

WKP : Workspace collects 65% of rents

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