WOTSO Group reports robust expansion with 31 flexible workspace locations and a $299 million property portfolio, trading at a notable discount to net asset value. The company’s suburban focus and operational discipline underpin sustained revenue and occupancy gains.
- 31 flexible workspace sites across Australia and New Zealand
- Annual revenue surpasses $32 million, growing 19% yearly since FY21
- Property portfolio valued at $299 million with 97% occupancy
- Contribution margin up 50% since 2021, underlying EPS between 2.2 and 3.3 cents
- Shares trade significantly below adjusted NAV, highlighting value opportunity
WOTSO’s Unique Position in Flexible Workspace
WOTSO Group (ASX: WOT) is carving out a distinctive niche in the flexible workspace sector by combining operational expertise with strategic property ownership. Unlike many peers focused on CBD locations, WOTSO targets suburban and regional markets, a segment growing rapidly as remote and hybrid work models become entrenched.
With origins tracing back to pioneers like Servcorp and Regus, and later disrupted by WeWork’s mainstream push, the flexible workspace industry has matured into a permanent commercial real estate fixture. WOTSO represents the next evolution, blending flexible workspace solutions with a substantial real estate foundation valued at $299 million.
Strong Growth Backed by Real Estate Assets
The group operates 31 sites across Australia and New Zealand, with 14 fully owned properties and 2 partly owned, while the remainder are leased. This portfolio supports over 7,200 desks with occupancy consistently above 80%, a testament to WOTSO’s operational discipline and site selection strategy. The property portfolio itself boasts a 97% occupancy rate, generating $15 million in annual revenue through traditional leasing.
Revenue from flexible workspace solutions has nearly doubled from $16.8 million in FY21 to over $32 million annually, reflecting a compound growth rate of 19%. This growth is underpinned by a 50% increase in contribution margin since 2021, reaching $9.1 million in the first half of 2025, alongside steady underlying earnings per security between 2.2 and 3.3 cents.
Financial Discipline and Market Valuation
WOTSO’s management emphasizes financial discipline, achieving revenue per available desk of $363 per month and maintaining a desk efficiency of 6.85 square meters. Despite these strong operational metrics and a robust property portfolio, the company’s securities trade at a significant discount to both net tangible assets and adjusted net asset value, presenting a compelling entry point for value-oriented investors.
The discount suggests the market may be underappreciating the synergy between WOTSO’s flexible workspace operations and its real estate holdings, or cautious about sector risks. However, the company’s focus on suburban locations, where demand is growing fastest, and its active acquisition pipeline could drive further value creation.
Looking Ahead
WOTSO’s integrated model positions it well to capitalize on evolving work trends and real estate dynamics. The management team’s extensive property experience enhances its ability to optimize both tenant and operational outcomes. Investors will be watching closely for updates on acquisition activity and occupancy trends as the group continues to scale.
Bottom Line?
WOTSO’s blend of suburban workspace growth and real estate ownership offers a value proposition that could reshape investor perceptions in the flexible workspace sector.
Questions in the middle?
- How will WOTSO’s acquisition pipeline impact future revenue and NAV?
- Can the company sustain high occupancy rates amid increasing market competition?
- What risks might arise from the suburban and regional focus compared to CBD-centric peers?