For the second time this year, WeWork’s leasing covenant in London will be tested after Brookfield Property Partners sold a building that houses the startup’s European HQ to Hong Kong-based Kingboard Chemical Holdings for £271 million ($331 million). The co-working player currently occupies 167,000 square feet (15,514 square metres), or roughly 75 percent, of the complex.
Situated in the heart of the City of London, Moor Place is a ten-minute walk away from the Museum of London, the Bank of England and the Royal Exchange. In 2015, WeWork agreed on a 20-year lease last year that saw them move into the ground level and first seven floors of the building.
Brookfield put the 11-storey building up for sale in June with an asking price of £290 million ($354.5 million). The Canadian firm acquired the property from Blackrock and CarVal Investors in partnership with Quadrant Estates in December of 2014 for £211 million ($258 million).
This is the second time a lease in London connected to the co-working company has been sold this year. In May, German asset and investment management company Corpus Sireo acquired an office block let to WeWork at its 33 Queen Street branch for £40 million ($48 million).
Hong Kong’s KCH Migrates From Laminates to London
The new owner of Moor Place made a name for itself manufacturing laminates in Hong Kong. And while KCH may be best known for producing finishes for everything from kitchens to circuit boards, the Hong Kong firm also has a taste for real assets.
Owned by Paul Cheung Kwok Wing, the Hong Kong-listed firm had focused its efforts exclusively in China before becoming WeWork’s newest landlord in London.
KCH owns three commercial properties in Guangzhou along with the Kingboard Modern Plaza in Shanghai. It also has residential projects in Huaqiao, Zhangpu and the Kunshan development zone. According to the company’s website, KCH claims to have a 3 million square metre land bank in China with sites in Kunshan, Jiangsu province, Shanghai and Guangzhou.
Using Proceeds From Evergrande Deal To Buy Abroad
Earlier this year, KCH sold a Shenzhen land parcel to debt-ridden mainland developer Evergrande Real Estate Group in an all-cash deal valued at over RMB 2 billion ($306 million). The deal was one of 12 mainland projects picked up by the Guangzhou-based developer from Hong Kong firms during a six-month stretch between December 2015 and May 2016.
The 85,748 square meter plot in Shenzhen’s Longhua New District has land use rights of 50 years commencing from January 2016. This leasing period length typically indicates use for a commercial development.