Regus shares fall amidst concerns over demand for Office Space
August 9th, 2008 | by Simon Rattray
Shares in Regus fell 2p this week to 71p amidst warnings from UBS that the shares could fall much more in the next year as the economic downturn worsens.
They have recommended that shareholders should now sell, citing that off-balance-sheet liabilities made the shares look expensive.
Analyst, Stephen Swanton, said that despite industry conditions being “robust” he thought that the impact of the credit crunch would eventually feed into Regus’ share price and the wider serviced office industry. However he added that although the next 12 months may not be fruitful for the group, longer term, Regus would offer “value to investors”.
Regus’ share price has fallen sharply since last year, with fears that demand for office space is likely to decrease in 2009. The company is due to announce their interim results in September which should show a solid performance. However Swanton noted that investors will be more interested in the outlook for the immediate future.
What does Choregus think?
Clearly the serviced office industry and Regus are not immune from the effects of the economic downturn. We have argued here that the credit crunch may even benefit the industry as companies need flexible workspace while they downsize or try to avoid committing to a long term lease.
Hopefully, Regus and the industry can weather the current storm and make significant progress into 2010.
This industry is still in it’s infancy!
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