Compaq coup perks up Regus

SERVICED offices provider Regus has provided some rare good news for its troubled investors by signing a £23.9m contract to house 450 of Compaq's UK staff.

Regus has suffered from the economic decline in the past year, especially in the technology sector, and the announcement of its biggest outsourcing deal to date bolstered hopes that its fortunes may be recovering. The shares jumped 3 1/4p, or 10%, to 34p although they had started last year above 350p.

The firm will provide long-term serviced offices for staff in London's Victoria, Birmingham and Leatherhead. Regus already has Compaq staff at its offices in the North of England.

In the face of growing vacancies at its offices around the world, Regus has cut £60m in costs and axed almost a quarter of its staff. It took an £87m one-off charge charge in the third quarter of last year.

Longer-lease clients are the mainstay of Regus' strategy. The Compaq deal follows £26m of similar deals signed in recent weeks. The company recently said the average lease length had roughly doubled in the past 18 months although it put that down partly to the improved terms it offered.