This article is from the Australian Property Journal archive
ASX-listed co-working space operator has gone into voluntary administration Victory Offices after battling the fall out of the pandemic on the office market, despite some of its competitors finding clearer skies.
The company, which listed in 2019 and until May was chaired by former Victorian premier Steve Bracks, said in a statement it entered into voluntary administration “as it seeks to recover from the effects of the COVID-19 pandemic by recapitalising the business and help ensure it can emerge in a stronger financial position”.
“The decision comes as the company navigates through a challenging period where occupancy levels are increasing however higher overhead costs such as rental costs, competition and managing ongoing legal disputes with landlords has necessitated the board to make this decision.
“The board resolved that, while it is of the view that the company is currently solvent, the company is likely to become insolvent at some future point in time and, hence, that administrators should be appointed to the company.”
Danny Vrkic and Daniel O’Brien of DV Recovery Management have been appointed as administrators.
At the time of listing, Victory had 21 co-working venues and a market capitalisation of more than $80 million after an initial public offering at $2 share, but its share price has plummeted to site at just 4.2c before the company went into a trading halt this week. That puts its value at $6.6 million.
Victory’s problems have been brewing since the beginning of the pandemic, which upturned the globe’s office market and concept of the workplace. Victory found itself locked out of offices last year in Sydney’s EY Centre at 200 George Street and at Collins Place and Bourke Place in Melbourne amid disputes over unpaid rent. Each of the towers were owned by AMP Capital, with the EY Centre owned jointly with Mirvac.
Eviction at Investa’s 420 George Street and then termination of its sublease at 300 Barangaroo Avenue followed this year, before Bracks stepped down followed by non-executive director Kelly Humphreys and chief financial officer Keith Pollocks leaving their posts.
It posted a $50.1 million loss in September.
Victory is now run by Dan Baxter and his wife Manisha.
Meanwhile, demand for flexible spaces has rebounded as companies continue to work through their office real estate requirements. WeWork and Wotso Property have both reported increases in revenue and rental income respectively.
