Numis Securities sees no impact on Workspace from WeWork expansion

Iain Gilbert WebFG News | 10 Nov, 2017 16:01 - Updated: 16:01 | | |

Office, offices
  • 947.50
  • -0.63%-6.00
  • Max: 963.50
  • Min: 947.00
  • Volume: 51,114
  • MM 200 : n/a
17:18 22/11/17
  • 20,013.86
  • 0.35%69.88
  • Max: 20,059.37
  • Min: 19,943.89
  • Volume: 0
  • MM 200 : n/a
17:20 22/11/17
  • 4,127.98
  • 0.15%6.01
  • Max: 4,147.16
  • Min: 4,121.95
  • Volume: 0
  • MM 200 : n/a
17:20 22/11/17
  • 4,076.76
  • 0.16%6.31
  • Max: 4,094.81
  • Min: 4,070.45
  • Volume: 0
  • MM 200 : n/a
17:30 22/11/17
  • 2,922.55
  • 0.23%6.82
  • Max: 2,929.41
  • Min: 2,911.21
  • Volume: 0
  • MM 200 : n/a
17:20 22/11/17

Numis Securities said on Friday that after the release of real estate investment trust Workspace's first-half results its future seemed to be far from "plain-sailing" despite the group having been "seemingly unphased" by the activity of competitor WeWork.

Workspace's first half saw the London based firm bring in 21% more in rent revenues at £46.1m than it had over the same period a year earlier, helping it record a massive jump in pre-tax profit from £7.1m to £123.7m.

An underlying increase of 3.5% also helped boost its total property valuation to £2.1bn.

Numis analysts noted that while a strong showing from market leader WeWork, which effectively priced International Workplace Group (IWG) out of the market and brought about its poor London performance and resulting profit warning, hadn't particular hindered Workspace in its last half, overall market demand was likely to slow until such a time as it reached an equilibrium with supply, meaning pricing could eventually come under pressure.

However, Paul Gorrie and Robert Duncan of Numis said that this did not appear to be "just around the corner", and that "as long as Workspace continues driving like-for-like rental growth" as well as adding value to its refurbishment and redevelopment projects it would see its earnings and net asset value continue to improve.

This led the analysts to leave their target price of 1,012p and 'add' recommendation unchanged.

As of 1415 GMT, shares had dropped just 0.16% to 931.00p.

More news

00:20 US close: Wall Street mixed ahead of Thanksgiving holiday

Wall Street finished mixed on Wednesday, following the record highs set the day before and amid lighter-than-usual trading volumes ahead of the Thanksgiving holiday on Thursday.

22 Nov Jefferies upgrades Kingfisher to 'buy', raises target price

Analysts at Jefferies upgraded home improvement products retailer Kingfisher (KGF) to 'buy' from its previous 'hold' rating on Wednesday, raising its target price from 310p to 400p along the way.

22 Nov Europe close: German stocks give back gains amid political impasse

Stocks ended the session modestly lower as traders waited for the release of the minutes of the US Federal Reserve's last rate-setting meeting in the evening and monitored the news-flow out of Germany, amid speculation that a 'grand coalition' between Germany's two main political parties, the centre-right CDU/CSU and the Socialist SPD, may yet be possible.

22 Nov Lebanon prime minister Hariri retracts resignation

Saad al-Hariri has revoked his resignation as Lebanon's prime minister, according to a local news report on Wednesday.

22 Nov Budget: Planning probe spooks builders, mixed reaction for stamp duty cut

A range of new housing policies were proposed by Chancellor Philip Hammond in his Budget statement, including more funds for smaller housebuilder, a probe into potential holding of land by major housebuilders and a stamp duty cut for first-time buyers.

22 Nov US open: Shares hold ground ahead of FOMC minutes

Wall Street is holding its ground following the record highs set the day before, albeit amid lighter than usual trading volumes ahead of the Thanksgiving Holiday on Thursday, with investors looking to the release of the minutes of the most recent meeting of the Federal Open Market Committee.

22 Nov London close: Stocks higher on UK budget

Shares closed higher on Wednesday as investors sifted through corporate releases as well as the Autumn Budget.

22 Nov FTSE 250 movers: Qinetiq boosted by Berenberg note as Thomas Cook tanks

The FTSE 250 index was up around 0.50% on the day in which Chancellor Philip Hammond revealed his budget for the upcoming year.

22 Nov Higher margins offset declining sales volumes at Cambria

Motor dealer Cambria Automobiles managed to successfully grow profit and revenue throughout the financial year, as per-unit profits counteracted a slide in sales volumes.

22 Nov First production at Texas asset transforms Pantheon Resources into full-cycle energy and power business

Oil and gas exploration firm Pantheon Resources announced "another year of progress" in its full-year results on Wednesday, as it completed the transition from a pure-play exploration company to a full-cycle energy and power business.