Shares in commercial property company Workspace Group (LSE: WKP) fell 2.5% on Tuesday amid a broader decline in real estate investment demand caused by rising interest rates.
The drop in share price comes as Workspace reported a £178 million decline in the value of its property portfolio to £2.5 billion for the first half of its financial year. This valuation decline pushed the FTSE 250 firm into a half-year loss of £148 million.
However, despite the loss, Workspace remains confident looking ahead. Occupancy rates remain steady at around 89% and interest rates are potentially nearing their peak.
Workspace’s focus on providing flexible office space to small and medium enterprises (SMEs) also leaves it well-positioned for when the economy eventually rebounds.
Read More News
AO World shares up as online retailer swings to profit
Graham Clemett, CEO of Workspace, praised the vibrant London SME scene which comprises many of the firm’s tenants. He cited fast-growing Workspace tenant Muddy Machines, which develops farming robots, as an example of the “unsung heroes” driving growth in the UK economy.
“These SMEs are the unsung heroes of the London and the UK economy,” said Clemett. “We are back to where we were pre-Covid in terms of vibrancy, you’ll continue to see our customers growing with us.”
Despite today’s share price decline, Workspace stock is still up 24% year-to-date and 25% versus last year.