Workspace rents rise

LONDON (Reuters) - Flexible business space provider Workspace Group (WKP.L) shrugged off concerns surrounding Britain's limp labour market on Monday after posting a 13 percent rise in net rental income in the year to March 31.

The company, which lets space on flexible lease terms to around 4,500 small and medium-sized enterprises in London, reported net rental income of 47.1 million pounds and a 12.2 percent surge in like-for-like rental values as demand for units in its 6.3 million square-foot portfolio continued to grow.

Chief Executive Harry Platt said the firm's robust rental performance largely offset a softening in property investment yields during the period, which knocked the value of Workspace's portfolio by 8 million pounds to 993 million pounds.

The group's diluted net asset value per share fell 7.4 percent to 311 pence.

"This is a strong set of trading results for the final quarter and full year with double-digit growth in both income and rent roll," Platt said.

"The challenge for the group, as always, is to balance generating strong trading profits and cashflows in the short-term whilst investing for longer-term capital growth," he said.

Despite continued liquidity pressures on small British businesses and the rising threat of recession, Workspace reported a 1 percent rise in overall occupancy to 85.8 percent in the year to end March.

Trading profits rose 8.8 percent to 11.1 million pounds and net cash from operations grew 12 percent to 41.6 million pounds.

(Reporting by Sinead Cruise; Editing by Quentin Bryar)

(See www.reutersrealestate.com for the global service for real estate professionals from Reuters)