Workspace had a strong start to the year as first-half adjusted trading profit jumped by 20%, and the 17% increase in rental income was the driving force behind the strong earnings. Profit before tax fell by 17.8%, but that was because of lower profit on disposals, and smaller increases in property valuations. The interim dividend was hiked by 20%, which is a clear sign the company is confident in its ability to perform.
Overall, it was a respectable set of numbers from Workspace, and healthy rental income is the most important indicator as it shows that clients are still keen to expand despite the uncertainty regarding Brexit.
Workspace (LON:WKP) had an impressive year last year as pre-tax profits jumped by 92%. Rental income was up 21% and like-for-like occupancy ticked up by 0.8%, and rent per square foot rose by 8%. The company finds that its well-located offices are in demand, and this separates it from other real estate investment trusts (REITs) – which are typically retail focused.
Many REIT’s blame uncertainty surrounding Brexit for their poor share price performance, when in fact it is the changes in consumer habits that are hurting their businesses. The rise of online shopping has led to a decline in footfall at retail parks, but some firms like to cite Brexit for their declining share prices.
The political uncertainty surrounding Brexit is actually helping Workspace in a roundabout way. Some companies don’t want to commit to long-term leases, so the short-term more flexible leases offered by Workspace are becoming more popular.
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