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1. Company Snapshot

1.a. Company Description

Established in 1987, and listed on the London Stock Exchange since 1993, Workspace owns and manages some 4 million sq.ft.of business space in London.


We are home to London's brightest businesses, including fast growing and established brands across a wide range of sectors.Workspace is geared towards helping businesses perform at their very best.We provide inspiring, flexible work spaces in dynamic London locations.


Workspace (WKP) is a FTSE 250 listed Real Estate Investment Trust (REIT) and a member of the European Public Real Estate Association.

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1.b. Last Insights on WKP

Workspace Group plc faced challenges in the recent 3 months, with the company navigating a difficult economic environment. The half-year 2026 earnings call highlighted the need for cost efficiency and customer engagement to drive future growth. A challenging economic backdrop and rising costs likely pressured the company's operations. With a focus on cost management, Workspace aims to overcome current headwinds. No recent share buyback or new product announcements were reported. (Source: Workspace Group PLC (LSE:WKP) Half Year 2026 Earnings Call Highlights)

1.c. Company Highlights

2. Workspace's H1 Performance: Navigating a Challenging Market

Workspace's financial performance in the first half of the year was marked by a decline in like-for-like occupancy of 2.5% and a fall in rental income. However, the company has taken steps to control costs, with admin expenses down 5.6% or GBP 2 million annualized. The company's EPS came in at 0.158, in line with analyst estimates. Revenue growth is expected to be -1.1% next year, according to analyst estimates.

Publication Date: Nov -24

📋 Highlights
  • Cost Reduction: GBP 2 million annualized savings from 5.6% admin expense cut.
  • Portfolio Optimization: GBP 152 million in asset sales (GBP 52M 2023 + GBP 100M 2022) toward GBP 200M 2-year target.
  • Occupancy & Retention: Like-for-like occupancy down 2.5%, but retention improved to 85% (up 2% year-on-year).
  • Debt Management: Net debt increased to GBP 833 million, with focus on reducing leverage and interest drag.
  • Conversion Strategy: 18% conversion rate, aiming to reach 20-22% via AI tools (e.g., Elodie) and market targeting.

Operational Highlights

The company's strategy, Fix, Accelerate, and Scale, is aimed at achieving operational excellence and delivering sustainable growth in underlying recurring income. The Fix element is focused on stabilizing and rebuilding occupancy, with a focus on retaining existing customers and improving the service experience. Like-for-like retention has improved by 2% to 85%, and the company is investing in its buildings to create better environments.

Valuation and Pricing Strategy

The company's valuation assumes a structural occupancy assumption of 90%, which hasn't changed in the last 2 years. Workspace is being pragmatic on pricing, focusing on driving occupancy and letting rate off. Lawrence Hutchings noted that existing customers typically get a renewal spread of 5% kickers in the first anniversary, and then the rent is set at market value. With a P/E Ratio of 130.55 and a P/B Ratio of 0.47, the market is pricing in a challenging recovery phase for the company.

Portfolio Review and Capital Discipline

The company is on track to meet its 2-year target of GBP 200 million, equivalent to circa 20 assets, following an extensive portfolio review. Workspace has sold GBP 52 million so far this year, broadly in line with book value. The company is constantly reviewing its portfolio with a critical eye, recycling more assets, and exploring change of use opportunities where the SME market has shifted.

Growth Initiatives and AI Trials

Workspace is exploring ways to capitalize on its unique real estate customer base, adding complementary formats to its larger campuses that create new sources of demand. The company is also trialing AI in various areas, including automating campaign creation and image creation, with the potential to improve efficiency and speed. Qube is an example of this strategy, unlocking an exciting new source of demand for London's growing content creators.

3. NewsRoom

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Workspace Group PLC (LSE:WKP) (Half Year 2026) Earnings Call Highlights: Navigating Challenges ...

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Workspace Group PLC (LSE:WKP) Full Year 2025 Earnings Call Highlights: Navigating Growth Amidst ...

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.31%)

6. Segments

Rental

Expected Growth: 8%

Workspace Group plc's 8% rental growth is driven by increasing demand for flexible workspaces, particularly among SMEs and entrepreneurs. London's thriving startup ecosystem, coupled with the company's strategic acquisitions and refurbishments, have expanded its portfolio of high-quality, amenity-rich workspaces. Additionally, the shift towards hybrid working models and the need for businesses to adapt to changing workforce requirements have fueled growth in the flexible office space market.

Service Charges

Expected Growth: 9%

Workspace Group plc's 9% growth in Service Charges is driven by increasing demand for flexible workspace, rising occupancy rates, and growing average rent per square foot. Additionally, the company's strategic acquisitions and expansion into new locations have contributed to the growth. Furthermore, the shift towards hybrid working models and the need for businesses to adapt to changing workforce requirements have also fueled the demand for Workspace Group's services.

Services, Fees, Commissions and Sundry

Expected Growth: 11%

Workspace Group plc's 11% growth in Services, Fees, Commissions and Sundry is driven by increasing demand for flexible workspace, expansion of business centers, and growth in commission-based services. Additionally, the company's focus on providing value-added services, such as business support and networking opportunities, has contributed to the growth.

7. Detailed Products

Flexible Offices

Workspace Group plc offers flexible offices that provide businesses with the flexibility to upsize or downsize as needed, with options for short-term leases and bespoke office spaces.

Managed Offices

Workspace Group plc provides managed offices that offer a bespoke and tailored office solution, including fit-out, furniture, and IT infrastructure.

Co-Working Spaces

Workspace Group plc offers co-working spaces that provide a collaborative and dynamic environment for entrepreneurs, freelancers, and small businesses.

Meeting and Event Spaces

Workspace Group plc provides meeting and event spaces that offer a range of facilities and services for businesses to host meetings, conferences, and events.

Virtual Offices

Workspace Group plc offers virtual offices that provide businesses with a professional business address, mail handling, and telephone answering services.

8. Workspace Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Workspace Group plc operates in a niche market, providing flexible workspace solutions. While there are substitutes available, such as traditional office spaces, the company's unique offerings and strong brand reputation mitigate the threat of substitutes.

Bargaining Power Of Customers

Workspace Group plc's customers are largely small to medium-sized businesses and entrepreneurs, who have limited bargaining power. The company's flexible lease terms and high-quality services also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Workspace Group plc has a diversified supplier base, and its suppliers are largely fragmented. The company's scale and negotiating power reduce the bargaining power of suppliers.

Threat Of New Entrants

While there are barriers to entry in the flexible workspace market, such as high capital expenditures and regulatory hurdles, new entrants can still disrupt the market. However, Workspace Group plc's strong brand reputation and established network of locations mitigate this threat.

Intensity Of Rivalry

The flexible workspace market is highly competitive, with several established players and new entrants vying for market share. Workspace Group plc faces intense competition from companies like WeWork, Regus, and others, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.71%
Debt Cost 3.95%
Equity Weight 66.29%
Equity Cost 9.18%
WACC 7.42%
Leverage 50.84%

11. Quality Control: Workspace Group plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Fonciere Inea

A-Score: 6.2/10

Value: 3.2

Growth: 4.2

Quality: 4.7

Yield: 10.0

Momentum: 5.5

Volatility: 9.3

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NSI

A-Score: 5.9/10

Value: 3.5

Growth: 2.2

Quality: 5.8

Yield: 10.0

Momentum: 5.0

Volatility: 9.0

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FastPartner

A-Score: 5.6/10

Value: 4.2

Growth: 3.4

Quality: 5.2

Yield: 6.9

Momentum: 5.0

Volatility: 9.0

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Entra

A-Score: 5.1/10

Value: 3.8

Growth: 7.0

Quality: 5.7

Yield: 3.1

Momentum: 3.0

Volatility: 8.3

1-Year Total Return ->

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CLS Holdings

A-Score: 4.7/10

Value: 6.7

Growth: 2.0

Quality: 3.7

Yield: 8.8

Momentum: 0.5

Volatility: 6.3

1-Year Total Return ->

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Workspace

A-Score: 4.6/10

Value: 4.1

Growth: 2.9

Quality: 4.2

Yield: 9.4

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.81$

Current Price

3.81$

Potential

-0.00%

Expected Cash-Flows