WeWork joins forces on £580m Devonshire Square deal
WeWork has teamed up with Denmark’s biggest pension fund, PFA Ejendomme, and TH Real Estate to buy the Devonshire Square estate, EC2, from Blackstone for around £580m.
WeWork has taken a 10% stake and TH Real Estate’s European Cities Fund and PFA have each taken a 45% interest in the 620,000 sq ft estate. WeWork already occupies 20,000 sq ft at the 12-building campus.
Bank of America Merril Lynch has financed the acquisition with a five-year senior loan at a 40% LTV, indicating an overall loan size of around £232m.
WeWork has teamed up with Denmark’s biggest pension fund, PFA Ejendomme, and TH Real Estate to buy the Devonshire Square estate, EC2, from Blackstone for around £580m.
WeWork has taken a 10% stake and TH Real Estate’s European Cities Fund and PFA have each taken a 45% interest in the 620,000 sq ft estate. WeWork already occupies 20,000 sq ft at the 12-building campus.
Bank of America Merril Lynch has financed the acquisition with a five-year senior loan at a 40% LTV, indicating an overall loan size of around £232m.
Rich Gomel, senior executive, WeWork said: “The opportunity we have in Devonshire Square underlines the WeWork effect. By fully activating the estate we will unlock tremendous potential and maximise value.”
The deal represents the $20bn serviced office company’s third acquisition in the UK. Last year it agreed deals to buy 51 Eastcheap, EC3, for around £48m and 120 Moorgate, EC2, for around £40m.
Blackstone acquired the campus from the Abu Dhabi Investment Authority and Rockpoint in 2012 for £330m and has since carried out an asset management programme including the transformation of the square into a piazza-style courtyard framed by warehouse buildings, bars, restaurants and shops.
Nick Deacon, head of European offices, TH Real Estate, said: “The acquisition of Devonshire Square represents a unique opportunity to acquire a high-quality, multi-let asset, which is well suited to shared office concepts and offers sound rental reversion potential.”
Michael Bruhn, executive director of PFA Ejendomme, said: “The investment forms part of our international strategy which focuses on megatrends such as the sharing economy and flexible solutions. We have experience in the London property market, and despite Brexit, there is substantial growth in new shared office concepts, of which this will be the first of its kind in our portfolio.”
Eastdil Secured advised the consortium on the acquisition financing.
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