Workspace Group (LSE:WKP), the U.K. real estate investment trust, reported underlying net rental income of £58.6 million for the first half — unchanged from a year earlier — while trading profit after interest slipped 6.4% to £30.6 million.
EPRA NTA declined 6.8% to £7.21, reflecting a 3% like-for-like valuation drop, and the interim dividend was maintained at 9.4 pence.
Occupancy remained the key area of weakness. Like-for-like occupancy fell 2.5 percentage points to 80%, in line with guidance, following two large customer exits earlier in the year. The rent roll was down 3.3%.
However, rent per square foot held firm at £47.55, and the company pointed to improving operational momentum into autumn, with October conversion rates rising to 17%. CEO Lawrence Hutchings said the team is “seeing encouraging signs that the actions we are taking are positively impacting customer retention and conversion.”
He added that “Following the launch of our Fix, Accelerate and Scale strategy in June, we have made steady operational progress through the first half of the year in what remains a challenging market,” reiterating that “As expected, occupancy was lower in the first half, but we are seeing encouraging signs that the actions we are taking are positively impacting customer retention and conversion.”
Workspace continued to recycle capital, completing or exchanging £52.4 million in disposals toward its £200 million two-year goal. Its refurbishment programme is advancing, with pilot projects at The Leather Market and Busworks delivering higher customer satisfaction and early signs of occupancy improvement.
The group also expanded its collaboration with Qube, securing a 20-year lease for 32,000 square feet at The Old Dairy and taking a £3 million minority stake.
Jefferies analyst Mike Prew described the update as “softer but as expected,” saying the Fix, Accelerate and Scale strategy is beginning to “take shape.”
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