Workspace Group reported a pre-tax loss of £120.5 million for the year ended March 31, 2026, after declining property values weighed heavily on results and offset earnings from its flexible workspace operations.
The London-focused workspace provider recorded a £159.2 million reduction in the value of its property portfolio, which fell 7% on an underlying basis to £2.13 billion. Net tangible assets per share also declined more than 11% during the year, according to Yahoo Finance.
Occupancy and Rental Income Under Pressure
Trading conditions remained challenging across the portfolio. Trading profit after interest fell 9.4% to £60.5 million, while net rental income dropped 7.1% to £113.4 million.
Occupancy across Workspace’s stabilized portfolio stood at 81.6% at year-end, down from the previous year, while average rent per square foot declined 2.1%.
The company said vacancy costs, higher marketing spending, and increased service-related expenses contributed to weaker performance, though leasing activity improved during the second half of the year.
New Leadership Launches Recovery Strategy
New chief executive Charlie Green and chief financial officer Tom Edwards-Moss have introduced a strategy focused on improving profitability, increasing occupancy, and streamlining the portfolio.
The plan centers on refurbishing existing assets, expanding managed workspace offerings, and continuing a program of property disposals and reinvestment.
Workspace has already completed £125.7 million in asset sales as part of a broader £200 million capital recycling initiative and is considering selling an additional £100 million or more of properties by the end of fiscal 2027.
Profit Recovery Target Set
Management has set a medium-term goal of generating more than £125 million in annual trading profit before interest, compared with an estimated underlying level of roughly £80 million today after planned disposals.
However, the company warned that trading profit is expected to decline further in the current financial year due to lower rental income, ongoing asset sales, higher financing costs, and reduced one-off income streams.
Despite the near-term pressures, Workspace said it has sufficient financing in place to cover debt maturities through March 2028 as it pursues its turnaround strategy.
