Ellis Short’s Kildare Partners is lining up what will be the first significant sale of a London building let mainly to WeWork.
The Sunderland AFC owner’s private equity real estate firm has appointed BNP Paribas Real Estate to market Fox Court, WC1, less than three months after acquiring the building from Karlin Real Estate, which itself acquired the asset in February.
The sale of the 100,000 sq ft office will prove a test of investor appetite for the covenant of WeWork, the $10bn (£6.5bn) co-working space start-up that has achieved explosive growth since its launch five years ago.
The company has attracted investment from US real estate grandees including billionaire Mort Zuckerman, but its rapid growth has been criticised by landlords, including Empire State Building owner Anthony Malkin, who questions its sustainability.
No London building in which WeWork is a major tenant has yet changed hands. However, a trio of US deals involving the company as occupier have completed since August 2014 and there is no clear evidence the covenant impacted pricing.
Fox Court, which was sold for £70m in February, and then as part of a £260m portfolio in May, is now expected to attract bids of around £115m – a 4.5% yield.
