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Prices & Quotes - UK Markets - Workspace Group (WKP)

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Share Price:
Up 870.00p
Change Today:
10.50p
Market Cap:
1,575.70m
Sector:
Real Estate Investment Trusts

Workspace suits 'hub and spoke' office future, JP Morgan says

By Sean Farrell

Date: Friday 28 Aug 2020

LONDON (ShareCast) - (Sharecast News) - Workspace is best placed to benefit from a shift towards a "hub and spoke" model for corporate real estate, JP Morgan said as it cut its target price on the company's shares.
JP Morgan analysts reduced their price target on Workspace shares to 700p a share from 930p and said they still saw 23% upside potential to support their 'overweight' rating. Adopting an "extremely cautious" view they priced in a 30% fall in property values over two years and a 40% drop in earnings per share this year.

Companies are rethinking their office requirements after employees spent months working from home successfully during the Covid-19 shutdown. Many are considering cutting their office capacity in central London and having outposts in the suburbs for workers to use nearer their homes.

A hub and spoke model for Workspace would feature its Metal Box Factory near London Bridge at the centre with spokes at the Chocolate Factory in North London, Pall Mall Deposit in the west of the city, The Fuel Tank in the east and Riverside Studios in the South, JP Morgan said.

Workspace's properties are well connected by tube, rail and underground transport with existing space at either point of the compass in suburban London, JP Morgan said. The company owns its property and digital infrastructure, allowing it to tailor arrangements for customers, they added.

The analysts said Workspace also has about 1m sq ft of projects in the pipeline outside central London, allowing time to capture the trend away from the centre.

"We see multiple benefits to this approach relating to employee satisfaction, corporate real estate costs and pressure on transport networks," JP Morgan analyst Neil Green and his colleagues wrote in a note to clients. "We imagine a hub and spoke office portfolio using Workspace assets, and consider it to be best placed for this potential shift."

"We are overweight Workspace as we believe the shares are too deeply discounted considering company positioning and potential 'hub and spoke' tailwind," Green said. He said JP Morgan was 'underweight' Derwent London "as we believe the recession isn't priced in despite it being a great company".

This story has been corrected to take out a reference to Regus.

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Workspace Group Market Data

Currency UK Pounds
Price 870.00p
Change Today 10.50p
52 Week High 920.50p
52 Week Low 482.40p
Volume 53,303
Shares Issued 181.12m
Market Cap 1,575.70m

Performance Indicators

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Operating Margin
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What The Brokers Say

Strong Buy 3
Buy 0
Neutral 5
Sell 1
Strong Sell 2
Total 11
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Workspace Group Dividends

  Latest Previous
  Final Final
Ex-Div 01-Jul-21 02-Jul-20
Paid 06-Aug-21 07-Aug-20
Amount 17.75p 24.49p

Trades for 22-Jun-2021

Time Volume / Share Price
14:46 169 @ 870.00p
14:45 32 @ 870.00p
14:45 300 @ 870.00p
14:45 67 @ 870.00p
14:45 67 @ 870.00p

Workspace Group Key Personnel

CEO Graham Clemett
CFO David Benson