Workspace occupancy, enquiries decline in Q3

Office space provider Workspace said on Thursday that occupancy and enquiries fell in the third quarter, although there were signs that things are beginning to improve.

In the three months to the end of December 2020, there was an average of 672 enquiries per month, down from 1,001 in the same period a year ago, and 109 lettings per month, versus 113 previously. Workspace said it had seen "resilient" customer demand despite Covid-19 restrictions.

Like-for-like occupancy was down 3.4% in the quarter to 82.1%, as customers that had given notice to leave earlier in the year did so.

Workspace said cash collection remains "robust", with 91% of rent due for the third quarter and 82% of rent due for the fourth quarter collected to date. Rent per square foot fell 5.3% to £38.46, with around half the decline driven by short-term lease incentives that will unwind over the next six months.

Workspace said that having seen an increase in enquiries and lettings to near pre-Covid levels in the second quarter, tighter restrictions and the usual quieter Christmas period meant there was a drop in new customer activity in the third quarter.

Chief executive officer Graham Clemett said: "Despite near-term uncertainty, we are seeing signs that customers are starting to look through the pandemic and we believe that our strategy, business model and differentiated customer offer position us to outperform over the medium and longer term.

"In terms of trading performance in the quarter, customer activity was impacted by government restrictions, but we were encouraged by the resilient demand for our space, which has continued into the fourth quarter. It appears that we are now coming towards the end of the significant occupancy declines we have seen over the last three quarters."

Clemett said the timing and pace of Workspace’s recovery will depend on the rollout of Covid-19 vaccines and the lifting of government restrictions.