Workspace slashes dividend as profit plummets amid new boss’ shake-up
Real estate group Workspace slashed its dividend in the latest financial year as the firm plunged to a hefty loss.
The FTSE 250 company posted a £120.5m loss before tax, from £5.4m last year, which was driven by nearly £160m in write-downs of property valuations amidst a changing strategy.
New boss Charlie Green – who joined in February 2026 – has sought to sell-off under-performing properties and pump cash into upgrading modern workspaces.
Green also said the firm was looking to take on the evolution of what tenants want post-pandemic, which has changed the office culture.
“The task now is to execute against that strategy, creating a new product and brand proposition that better reflects the changing working patterns and customer expectations evident across the market today,” he said.
Workspace said that smaller spaces – those under 1,000 square feet – had performed significantly better than that of larger spaces in the last year. The estimated rental value of bigger units decreased by 4.7 per cent in the period.
Earlier this year, the chief executive of British Land told CityAM the returning to office debate was “over” as it looked to capitalise on constrained supply for commercial property AI firms.
Workspace feels inflation pinch
The changing office environment has led to many firms adopting smaller corporate footprints to suit hybrid workers. In response, Workspace has sought to absorb the cost of dividing larger units into smaller ones to match demands.
But its losses were also worsened by inflationary pressures that made operating the firm’s portfolio of major office buildings more expensive. Just shy of £2m was spent on “increased utility costs” as electricity and heating bills surged.
Empty property taxes also racked up an extra £1.2m in costs for the firm.
This also came alongside falling rental income, which was down 7.1 per cent to £113.4m. The firm pointed to the £125.7m worth of properties it has sold off in the year for driving this slump.
As a result, it has tightened its dividend policy slashing its full-year handout by 8.1 per cent to 26.1p per share, down from 28.4p.
The firm also pointed to further drag on its bottom line over the next year with a “substantial step-down” pencilled in for 2027 profit.
This was on the account of the company’s reduced portfolio, higher borrowing costs and higher expenses, as well as a lag time in clocking the full benefits of its sale of assets.
Real estate trust in Saba’s clutches
Workspace has found itself in the sight of US hedge fund Saba in the last 12 months.
The investment giant increased in the real estatate trust to 18.2 per cent from 13.5 per cent in January and called for a managed wind-down of the company over 12 months, as it pointed to the “persistent discount” and structural impediments to managed creation.
Saba has used its stronghold to force specific votes on the agenda at Workspace’s annual general meeting next month. The hedge fund is looking to give the chop to six of Workspace’s current non-executive directors and replace them with their own chosen candidates. Should it succeed, its new directors will effectively control or heavily influence the company’s future strategy.
Oli Creasey, head of property research at Quilter Cheviot, said: “Saba’s impact on the business goes completely unremarked in today’s results, with management focused on creating long-term shareholder value and never referencing the hedge fund by name.
“However, management do acknowledge that the path to doing so “will not be straightforward” but believe they are on the right track.”