About the Primary Tenant
Our primary tenant is the Department for Work & Pensions (DWP). Over 99% of gross rental income is derived from our full repairing and insuring (triple net) leases signed with the AA-rated UK Government.
The DWP is a British government department responsible for welfare, pensions and child maintenance policy. It is the largest public service department, administering UK’s State Pension and a range of working age, disability and ill health benefits. For the 12 months ended 31 March 2020, the DWP served over 20 million claimants and customers with a budget of £191 billion in benefits.1
At the end of March 2020, the DWP employed more than 72,186 full-time employees, ensuring that the department was able to effectively engage its customers at every touch point and deliver the right outcomes for the people it serves.
DWP’s services are available to four user groups:
- DWP Annual Report 2019-2020
Service User Group
People seeking employment
People with a disability or health condition
People planning for or in retirement
Children and families
Jobcentre Plus provides personal tailored employment advice combined with detailed knowledge of local labour markets to match people to suitable job vacancies
Disability and Carers Service provides financial support to disabled people and their carers
Pension Service pays the Basic State Pension and Pension Credit and provides information on related issues
Child Maintenance Group provides the statutory Child Support Schemes, operating as the Child Support Agency and the Child Maintenance Service
With the onset of COVID-19 and the weakening of the UK economy, the DWP continued to play a vital role alongside frontline healthcare workers, supporting millions of citizens who depend on government financial support measures during this difficult period. This demonstrates DWP’s uniquely counter-cyclical business which ensures that our properties remain a crucial public infrastructure for the provision of DWP services through economic cycles.
More than 82% of our properties are designated Jobcentre Plus offices which provide front-of-house services to people who are unemployed or unable to work as a result of health issues or disability. DWP’s Jobcentre Plus centres match people with employers and jobs, allowing customers to transit from taking benefits to finding work and sustained independence.
Importance of DWP Infrastructure
UK’s unemployment rate increased to 5% in the three months ended November 2020, and is projected to hit 7.5% in mid-20212. In the light of a significant increase in unemployment rate, the function of DWP and its 637 Jobcentre Plus offices have become more crucial to UK’s social fabric.
In anticipation of growing demand for its services, the DWP continues to enlarge its pool of work coaches. This is expected to increase DWP’s need for additional office space as front-line work coaches engage customers in a face-to-face setting. Early signs of higher utilisation of office space have been demonstrated through waivers and extension of options for two properties within our portfolio: Lodge House, Bristol and John Street, Sunderland.
With the DWP as our primary tenant, our properties are a crucial asset in the delivery of an important public service to more than 66 million UK citizens.
- Office for Budget Responsibility, Economic and Fiscal outlook scenarios, 25 November 2020.