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Workspace Group to tap market to fund growth

The London-focused office space provider said like-for-like occupancy in the fiscal year just ended rose to 91.6%, up 0.8% in the year, and rent per square foot was up 7.6% to £35.50.
Office space
The company said enquiries are averaging 1,016 per month

Workspace Group plc (LON:WKP), the office space specialist, is proposing to raise funds through a placing of 16.32mln shares.

The newly issued shares will represent around 10% of the current issued share capital of the company. Workspace's shares fell 17p to 1,148p following the news.

READ: Workspace Group to raise £200mln to fund expansion

Proceeds from the placing will be used to finance capital expenditure on the project pipeline and acquire new properties in London.

The fund-raising comes after the company five of the Centro Buildings in Camden for £109mln in February and increased its footprint in Camden in April with the acquisition of various properties for £76.5mln.

“We have an exciting pipeline of ongoing projects and acquisition opportunities and this fund-raise will enable us to continue to invest in assets that we believe will drive rental income growth and capital value uplift, as well as finance the recent acquisitions of the Centro Buildings in Camden,” said Jamie Hopkins, the chief executive officer of Workspace.

“With continued strong demand for our product, London remains the ideal market for Workspace and we believe we are well positioned to continue to take advantage of opportunities to meet that demand and generate superior value for shareholders," he added.

The announcement was made alongside the release of the group's full-year results for the year to the end of March that showed a near doubling of profit before tax to £170.4mln from £88.8mln the year before.

Net rental income rose 21% to £95.6mln while the EPRA (European Public Real Estate) net asset value at the end of March had risen 8.8% from a year earlier to £10.37.

"These strong results are further evidence of management successfully executing the right strategy. Flexible working continues to gain significant attention and our well-connected, inspiring spaces are driving strong customer demand. Our continued rental growth over the year reflects the resilient demand for the right type of space in London,” Hopkins said.

“This very positive trading performance and confident outlook underpins the board's decision to increase the total dividend by 30%,” he added.

The board has recommended a final dividend of 18.55p, up from 14.27p the year before, raising the full-year pay-out to 27.39p from 21.07p the previous year.  

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