Victory Offices confirms closures of another three workspaces

Victory Offices confirms closures of another three workspaces

Victory Offices has closed its space at 727 Collins Street, Melbourne (Image via Development Victoria). 

Two days after announcing it had completely exited from the Sydney CBD co-working and serviced offices market, Victory Offices (ASX: VOL) has confirmed the closures of three more office locations, this time in Melbourne.

The three spaces, all confirmed by the company to be loss-making, add to four offices in Sydney that closed in April and May of this year, bringing the total number of exits to seven in 2022.

The Melbourne CBD spaces all closed on 1 June 2022 and include:

  • Whitehorse Road, Box Hill, Melbourne
  • 180 St Kilda Road, St Kilda, Melbourne
  • 727 Collins Street, Melbourne CBD

“The closed locations were likely to continue to operate at a loss for some time into the future and the decision to exit is expected to have a positive impact on the company’s remaining portfolio of office locations,” said VOL, which saw its CFO resign earlier this week.

“The company expects these locations will have a negative impact on revenue for the financial year ending 30 June 2022 but is not expected to have a significant impact on profitability.

“The company closed the abovementioned locations by way of lease terminations, having not fulfilled all respective lease obligations. The location closures above are expected to improve the company’s financial position over the long term.”

VOL added that its board is confident that it will “return to profitability sooner than anticipated”, and confirmed that the company is in compliance with continuous disclosure obligations.

The announcement comes just a year after VOL announced it had been locked out from three offices in Melbourne and Sydney over allegations of unpaid rent as well as outgoings and cleaning contributions.

Victory appointed Robert Grays Lawyers to deal with the matters across the three locations which were Collins Place and Bourke Place in the Melbourne CBD, and the EY Centre in the Sydney CBD.

It also follows the release of VOL’s 1H22 results in February, when the company blamed its “difficult period” on COVID-19 driving a trend toward people choosing to work from home instead of in its serviced offices and co-working spaces.

At the time, the company reported revenue from flexible workspaces was $7 million, compared to $6.6 million in 1H21.

The company delivered a net loss after tax in the period of $25.9 million, including an impairment on assets of $2.4 million. By comparison, the company’s loss for 1H21 was $17.7 million.

Shares in VOL are up 2.78 per cent to $0.04 per share at 10.53am AEST.

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