Published by Global Banking & Finance Review®
Posted on June 5, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleWorkspace Group faces challenges in renting larger offices due to hybrid work trends and high costs, focusing on smaller units to boost yields.
By Ankita Bora
(Reuters) -Workspace Group expects challenges with renting out its bigger office spaces to persist in the current fiscal year, the UK-focussed company said on Thursday, after it reported a drop in occupancy due to vacancies at larger units.
The company, which leases out space to small businesses ranging from fintech firms to podcasters and people using AI to write music, said like-for-like occupancy was at 83% in the fiscal year ended March 31, compared with 88% a year earlier.
WHY IT'S IMPORTANT
Workspace, like other commercial properly landlords, has seen property valuations decline since the pandemic, as businesses ditched larger office spaces and opted for hybrid work models.
High borrowing costs have also hurt landlords and small businesses.
CONTEXT
Under new CEO Lawrence Hutchings, the London-listed firm is focusing on boosting rental yields by converting larger spaces into smaller units, lowering debt through asset sales and cutting costs.
KEY QUOTES
"Our number one priority in the near-term is to recover the occupancy we have lost," Hutchings said in a statement on Thursday.
"Last year we saw quite a significant reduction in the property valuation … largely driven by the fact that interest rates went up very significantly," finance chief Dave Benson told Reuters.
BY THE NUMBERS
Workspace said its estimated rental value (ERV) for rental spaces under 1,000 square feet rose 3.4% in the fiscal year, while that of larger units fell 0.8%.
The company reported a pretax profit of 5.4 million pounds ($7.33 million) in the fiscal year, compared with a loss of 192 million pounds a year earlier, thanks to tighter cost control.
EPRA net tangible assets — an industry measure that represents the value of its buildings — fell 3.3% to 7.74 pounds per share in the period.
($1 = 0.7371 pounds)
(Reporting by Ankita Bora and Yadarisa Shabong in Bengaluru; Editing by Sahal Muhammed)
Workspace Group reported a like-for-like occupancy rate of 83% for the fiscal year ended March.
The pandemic has led to a decline in property valuations as businesses moved away from larger office spaces in favor of hybrid work models.
Under new CEO Lawrence Hutchings, Workspace Group is focusing on boosting rental yields by converting larger spaces into smaller units and cutting costs.
Workspace Group reported a pretax profit of 5.4 million pounds, a significant recovery from a loss of 192 million pounds the previous year.
The estimated rental value for spaces under 1,000 square feet rose by 3.4% in the fiscal year, contrasting with a 0.8% decline for larger units.
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