Victory Offices disputes lock-out from landlord AMP Capital

Flexible workplace provider Victory Offices (ASX: VOL) has been locked out of three offices in Melbourne and Sydney since 2 July over allegations of unpaid rent as well as outgoings and cleaning contributions.

The news comes as the Melbourne-headquartered group, whose share price has fallen off a cliff since the pandemic from $1.43 to $0.17 per share, is in the midst of divesting half its unprofitable sites with three leases surrendered recently with paperwork still to be finalised and negotiations currently in place to opt out of another two.

The lock-out relates to Collins Place and Bourke Place in the Melbourne CBD, and the EY Centre in the Sydney CBD.

Victory has appointed Robert Grays Lawyers to deal with matters related to the rental dispute with AMP Capital concerning COVID relief across the three locations.

"The lock outs have had a significant impact on tenants who utilise the workspaces. However, action is being taken to ensure all tenants are supported," Victory Offices said in an update today.

"Alternate office spaces are being sourced for existing tenants to minimise work disruption.

"The Company has acted in good faith in discussions and negotiations with the landlord."

In its latest quarterly report for the three months to 31 March, Victory Offices received net cash from operating activities of $156,000, although it recorded much higher net cash outflows from investing and financing activities.

This brought net cash down from $4.4 million at the start of 2021 to $1.2 million by the end of March.

To keep Victory afloat, its co-founders Manisha Angirish and Dan Baxter provided their own $15 million lending facility for the company, although in April the board announced Baxter had agreed to subscribe to $15 million in cash for new ordinary shares.

In April the company's occupancy rates had recovered to more than 50 per cent across all sites.