(Reuters) -Workspace, a London-focused flexible office-space provider, said on Thursday its customers are vacating larger spaces and reported lower third-quarter occupancy at its buildings amid challenging macroeconomic conditions.
Although British commercial property firms are recovering after a post-pandemic freeze, with property values stabilising in the second half of 2024, recent concerns around the decreased pace of interest rate cuts have cast a shadow over the broader economic outlook.
Unlike larger office landlords in the UK, Workspace offers unfurnished spaces on relatively short-term leases to mostly small- and medium-sized enterprises and entrepreneurs – from architects and florists to podcasters and app developers.
The company, which has shifted its focus on subdividing its properties with bigger floor areas to compact units, said like-for-like occupancy at its buildings dropped 1.3 percentage points in the three months ended Dec. 31 to 86.1%, compared with the September quarter.
Workspace, however, said it had a good start to the New Year with 531 enquires and 337 viewings completed by Jan. 17, including the firm’s strongest week for viewings since the pre-pandemic period.
The FTSE 250 firm, which manages 4.3 million square feet of office space at more than 70 locations in London and South East England, said it was selectively reviewing unit pricing, but customer demand for its core product has driven overall improvement in average pricing in the third quarter.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Janane Venkatraman and Rashmi Aich)
