Singapore’s Sun Venture Closes on $201M Buy of WeWork London Asset

Singapore’s Sun Venture has completed its acquisition of a freehold office building in central London from WeWork Capital Advisors for £148 million ($201 million), keeping up a string of acquisitions by Asian investors that helped drive a record 15 trades of London buildings in December.

Sun Venture bought 120 Moorgate building in the northern part of the City of London from the property investment arm of shared working space provider WeWork, adding 112,875 square feet (10,486 square metres) of grade A office area, retail and leisure space to its London portfolio now valued at £900 million, according to a report from Savills which advised the Singapore firm on the acquisition.

“We are pleased with our latest acquisition. 120 Moorgate is a striking, best-in-class asset strategically positioned to benefit from the opening of the Elizabeth Line,” Ong Jeun Jye, real estate head for Sun Venture said. “It also reaffirms our strategy as a firm to expand our presence overseas.”

The completed sale, which was first reported in December, joins the string of deals bagged by Asian investors in the UK including Hong Kong builder K&K Property Holdings’ £66.1 million  purchase of 15 Adam Street as announced last week and the 906-room Holiday Inn London Kensington Forum hotel that Singapore’s Fragrance Group bought in December for an undisclosed sum.

Overseas Venture

Since making its first UK investment a year and a half ago, this latest acquisition marks the third London buy for Sun Venture following its £552 million acquisition of 1&2 New Ludgate office building in December 2020 and the £174 million it paid for to buy the One New Oxford Street office and retail development in the midtown area in July of that same year.

The refurbished freehold office and retail block was sold for £1,311 ($1,773) per square foot to book a net initial yield of 4.5 percent, with the selling price a tad higher than WeWork’s guidance price of £147 million when it put the asset up for sale in the third quarter.

120 Moorgate’s office area is currently leased to WeWork, while British bank Barclays occupies a retail space and the leisure unit houses gym operator Third Space.

Its latest London prize sits at the corner of Moorgate and South Place in the Finsbury area, one mile (1.6 kilometres) northeast of its existing office buildings at 1&2 New Ludgate. The asset is within a 10-minute walk from three railway networks via the Moorgate, London Liverpool Street and Bank subway stations.

For the seller WeWork Capital Advisors, the deal marked the first WeWork office disposal since the pandemic according to Knight Frank who acted as its advisor for the transaction. The co-working space provider teamed up with private equity firm Rhone Group in May 2017 and paid £43 million to buy the asset which was then refurbished in 2019 to fit the requirements of the shared office startup.

“We are delighted to have acted for WeWork Capital Advisors on this disposal. 120 Moorgate is a fantastic, freehold, trophy office building,” said Edward Fairweather, partner for London capital markets at Knight Frank. “The marketing process demonstrated depth of demand for WeWork-let assets, and confidence in the flexible office model.”

UK On Track For Q1 Record Deals

In a Linkedin post, Sun Venture said the latest acquisition reaffirms their commitment to widening its overseas footprint and expand a portfolio that currently spans more than 800,000 square feet of office assets in Singapore, including 71 Robinsons Road in the central business district and Westgate Tower in Jurong East, and three mixed-use office towers in the UK.

The deal also “highlights the compelling aspects of London real estate to global investors according to Felix Rabeneck, director of central London investment at Savills.

Among the Asian investors active in the UK capital is Hong Kong’s K&K Property, which this month was revealed as having made its fourth acquisition in the West End within a two year period, to bring its portfolio of posh London property to £380 million.

Singapore’s Koh Wee Meng has also been growing his UK holdings, with the tycoon’s Fragrance Group having closed last month on its purchase of the Holiday Inn Kensington Forum, to bring its portfolio of UK hospitality assets to five operational hotels and six development projects, according to the company’s website.

In December, SGX-listed ARA Asset Management – which is now part of ESR Group – and its Korean partner NH Investment & Securities also bought the Marble Arch Place commercial project in London’s West End for £280 million booking an investment yield of over 4 percent.

According to the latest investment report by Savills Research, 15 percent of UK properties sold last year were picked up by Asian investors, while the majority of buyers came from North America (35 percent), the UK (24 percent) and the rest of Europe (22 percent).

Savills said last year’s busiest month was December with 15 buildings that changed hands, boosting the full-year transaction volume to £7.72 billion for all 91 closed deals, which is 68 percent bigger than the £4.6 billion recorded in 2020.

“As such Savills stand by its prediction that Q1 2022 has the potential to be the largest Q1 ever recorded within the city market,” it said, citing the £3.2 billion worth of properties that are still under offer.