|Delayed - 01/25 11:35:04 am|
Workspace : swings to loss as customers downsize due to virus crisis
|11/11/2020 | 02:57am|
(Reuters) - Workspace Group on Wednesday swung to a first-half loss and pushed back a decision on full-year dividend as the office space provider struggled with a rise in customers vacating and downsizing due to the coronavirus crisis.
Work-from-home policies and the economic fallout from the pandemic have hurt margins for office space providers such as WeWork, IWG and Workspace as costs surge and customers default on rent payments.
"There is no doubt that people's expectations of the office are changing. Although this trend has been apparent to us for several years, the pandemic has accelerated fundamental changes to the role and requirements of the office for an increasing number of businesses and their employees," the company said in a statement.
Chief Executive Graham Clemett said the company would see further pressure from virus-related curbs on occupancy and pricing in the near term, impacting its full-year performance.
Workspace had offered most of its customers a 50% rent discount in the first quarter.
The company, which owns and manages 4 million square feet of business space in London, posted a pretax loss of 110.4 million pounds for the six months ended Sept. 30, compared with a profit of 99.1 million pounds a year earlier.
Still, it said customer enquiries for work spaces were at 935 in September, an improvement from the 272 seen in April, as restrictions eased. Rent collections also picked up, with 95% of rents due for the first half received as at Nov. 2.
(Reporting by Jasmine I S in Bengaluru; Editing by Devika Syamnath)