Workspace Group focused on improving occupancy after Q1 decline

(Sharecast News) - Office operator Workspace Group has reported falling occupancy levels at the start of the year and pointed to further large vacations to come in the second quarter. Like-for-like rent per square foot was £47.42 over the first quarter to 30 June, unchanged from three months before, while LFL occupancy fell 0.3% to 82.2%. As a result, LFL rent roll was also 0.3% lower at £111.6m.

The company blamed the timing of Easter - which fell into Q1 this year - on lower enquiry levels, though more targeted marketing efforts have improved the conversion rate to viewings.

Monthly enquiries averaged 634 in the quarter, down from 688 in the corresponding period last year, while viewings were more or less unchanged at 495, down from 499. Lettings, however, averaged just 93, down from 102 previously.

"As expected, occupancy declined slightly in the quarter and we have more large vacations to come in Q2. Our immediate focus remains on stabilising and, over time, rebuilding occupancy," said chief executive Lawrence Hutchings.

Pilot projects at two of the company's so-called high conviction sites to test "capital-light, high impact upgrades" have received good feedback, while targeted marketing initiatives have helped lease out some larger spaces.

"We are confident that these strategic actions, once rolled out more widely across the portfolio, will help us retain and attract more customers," Hutchings said.

"We know that our assets with the best strategic fit outperform on occupancy and income growth measures, so we are also pushing ahead with our new, more clinical conviction approach to portfolio management."