Workspace Group Wants To Raise £190M From Its Investors Due To Rise In Demand For Flexible Office Spaces
The demand for flexible office spaces is increasing and Workspace Group has now revealed its plans to ask investors to invest £190m, to manage the rising demand for these office spaces. Businesses are demanding flexible office spaces by in large today and Workspace Group is a company that has tapped into its own investors to raise money for these spaces.
Workspace Group, which is a London based real estate firm, provides office spaces on flexible leases. It is not just the smaller companies that demand these spaces from Workspace Group but larger firms are also renting them now.
With the help of the raised money, Workspace Group will be able to finance up to 7 recent buildings in Camden and will be able to buy office buildings in the future as well. It will also help the company to exercise capital spending. The company currently owns 66 properties, all in London, but now, it wants to buy more of these to fulfill the growing demand of its client base.
Reports reveal that placing 16,320,062 new ordinary shares during the later days of the week will raise this money for Workspace Group. This is an amount equal to about 10% of the company’s currently issued share capital.
The demand for flexible office spaces grows, as the working terms become more flexible and there is a willingness from companies to start working in different locations that are outside the office core of London. These buildings are not in central London but they are still being preferred by people as their primary working hubs because they are more accessible. Flexible office spaces always are.
On average, the lease length for these office spaces is 24 months, which is quite lower than the orthodox office landlords, which offer contracts for 10-25 years. According to Jamie Hopkins, the Chief Executive of the company, “As far as the demand is concerned, we can see it coming from across the board and there have been no changes due to Brexit in the domain”. Adding further, he said, “The major difference that we are seeing here is that now larger companies are coming to us with their demands, this didn’t happen before”. As of now, according to Hopkins, the real estate industry itself is a little behind in offering flexible spaces to businesses.
While revealing some figures, Workspace revealed that an increase in its trading profit and the property values helped in contributing 92% to the growth in the pre-tax profits (£170m) in this year to March. The like for like occupancy rates increased by 0.8%, settling at 91.6% and the rent per square foot rose by 7.6%, settling at £35.50. This pushed the net rental income by 21% to £95.6m.
The company’s shareholders, it is being revealed, will also receive a full year dividend of 18.55% per every share, which is a 30% rise from last year. However, during early hours of trading, the company’s stock dropped by 6.5% at £10.90 per share.