Flexible office provider Workspace (WKP) rises 0.3% to 569p as its pricing increases and the lettings on its new refurbishments beat expectations in the third quarter.

A 1.8% rise in rental income and a £2 million income boost from its completed refurbishments has led Liberum Capital to upgrade its net asset value (NAV) in each of the next three years to 1.9%, 5.1% and 5.5%, respectively.

The investment bank forecasts a 21% total return from NAV and dividends in the next year but has not upgraded Workspace’s pre-tax profits over the next three years.

London-focused Workspace said demand for tailored space in the capital is strong and is pushing to make further benefits from improving its estate.

Six more refurbishment will start this year and it has two development sites under offer two months after it paid £18.1 million for Verulam House in London to meet rising demand for flexible space in the area.

There is potential for further growth as some 10% of its space was empty at the end of December.

The property market is recovering and values are hardening with Workspace having sold three properties during the quarter for £11 million at an average 18% premium to book.

Web - Workspace - 24 Jan


Issue Date: 24 Jan 2014