Key facts
- Workspace Group reported a £120.5 million pre-tax loss for the last financial year, compared to a £5.4 million profit the previous year.
- The company incurred nearly £160 million in write-downs of property valuations.
- New CEO Charlie Green is implementing a strategy to sell under-performing assets and invest in modernizing workspaces.
- Workspace has reduced its full-year dividend by 8.1% to 26.1p per share.
- Rental income fell by 7.1% to £113.4 million, partly due to £125.7 million in property sales.
Workspace Group has reported a substantial pre-tax loss of £120.5 million for the last financial year, a stark contrast to the £5.4 million profit recorded in the prior year. This downturn was significantly influenced by property valuation write-downs totaling nearly £160 million, a move associated with a strategic overhaul initiated by the new chief executive, Charlie Green, who joined in February 2026.
Green's strategy involves divesting under-performing properties and investing in the modernization of workspaces to align with evolving tenant demands post-pandemic. The company observed that smaller office spaces, under 1,000 square feet, demonstrated stronger performance compared to larger units, whose estimated rental value declined by 4.7%. Workspace has also absorbed costs related to dividing larger units into smaller ones to meet market needs.
Inflationary pressures exacerbated the company's financial challenges, leading to increased operational expenses. Higher utility costs, including electricity and heating, amounted to nearly £2 million, while empty property taxes added an additional £1.2 million. Rental income saw a 7.1% decrease, falling to £113.4 million, partly attributed to the sale of £125.7 million worth of properties during the year.
In response to these financial results and strategic adjustments, Workspace has tightened its dividend policy, slashing the full-year handout by 8.1% to 26.1p per share from 28.4p. The company anticipates further pressure on its bottom line in the upcoming year, projecting a "substantial step-down" in profit for 2027 due to a reduced property portfolio, increased borrowing costs, higher expenses, and a lag in realizing the full benefits from asset sales.