Workspace Group (WKP) H2 2025 earnings summary

Executive summary

• Delivered a solid full-year performance for 2024-2025 amid macroeconomic challenges and increased competition, with adjusted profit of GBP 66.8 million, up 1.2% year-over-year, and a fully covered dividend of GBP 0.284, up 1.4%.

• Occupancy declined to 83% and is expected to fall further before stabilizing, but strategic actions are underway to rebuild occupancy and income.

• Strategy focuses on operational excellence, portfolio management, and capital recycling to drive income-led growth and scale, with an emphasis on long-term shareholder value.

• Extensive market research underpins confidence in London SME market opportunities and Workspace's positioning.

Financial highlights

• Underlying rental income increased by GBP 2.3 million to GBP 135.5 million, driven by a near 5% rise in average rent per sq ft.

• Net rental income fell 3.2% to GBP 122.1 million due to property disposals, offset by lower interest and admin costs.

• Adjusted underlying EPS rose 1.2% to GBP 34.50.

• Property valuation decreased 2.4% year-over-year, mainly due to lower occupancy.

• EPRA NTA per share at GBP 7.74, down 3.3% year-over-year.

Outlook and guidance

• Earnings for the coming year will be impacted by lower opening rent roll, continued occupancy pressure, higher costs (living wage, NI), and increased debt costs.

• Planned CapEx of GBP 50-60 million, focused on high-return asset management, to be offset by further property disposals.

• Occupancy expected to decline further before stabilizing and recovering toward the long-run average of 90%.

• Macroeconomic uncertainty and competitive pressures in the London SME office market expected to persist.