WeWork’s growing domination of the London market has taken a further step forward with the serviced office operator set to make its second direct real estate purchase and having undertaken one of the largest leasing deals in the capital this year.
It is close to completing a deal to buy 51 Eastcheap, EC3, a 74,000 sq ft City office block (pictured), for around £48m.
The building has had a chequered recent past. Administrators at PwC are selling the asset on behalf of Cerberus, which bought the defaulted loan securing the building as part of a £1bn non-performing loan portfolio from Nationwide in 2014.
BNP Paribas Real Estate was instructed to sell the building in September 2015. LS Estates was close to buying the block in November 2015 but the deal did not progress. Union Investments also neared a deal at the site last summer but failed to complete.
It is understood WeWork will refurbish the building, which has consent to expand to 90,000 sq ft.
Last week WeWork also agreed terms to buy the 82,000 sq ft 120 Moorgate, EC2, from Redevco for around £40m. The site has consent for a 200,000 sq ft redevelopment but it is expected that it is more likely to undertake a refurbishment.
The company is moving into direct real estate to take more control over the assets it operates in terms of both rents and the maintenance of buildings.
It is also still highly active in leasing properties. This week it announced a 140,000 sq ft deal to occupy Almacantar’s 125 Shaftesbury Avenue, WC2.
According to Cushman & Wakefield, alongside WeWork’s recent 280,000 sq ft deal at Almacantar’s Two Southbank Place, SE1, the Shaftesbury Avenue letting means it has undertaken the largest two leasing deals of the year thus far in central London (see p27).
WeWork now occupies almost 2m sq ft in central London, although Regus remains the largest operator, with around 2.1 m sq ft of occupancy according to research from Knight Frank.
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