Singaporean investment firm Sun Venture is reportedly offering to pick up a freehold office building in central London for around £150 million ($199.4 million) to mark its third UK deal since making its debut in the country last year.
Sun Venture is under offer to buy 120 Moorgate, an office building in Finsbury Square, City of London, from WeWork-affiliated investment firm Ark, which currently leases the 156,000 square feet (14,493 square metres) space to the co-working provider, UK real estate news publication Estates Gazette (EG) reported on Tuesday.
Ark had put the asset on the market through Knight Frank during the third quarter with a guide price of £147 million, according to the report.
The Singaporean asset manager’s offer for the recently remodeled property comes after Sun Venture notched the biggest property acquisition of last year when it bought the 1&2 New Ludgate office building in the City of London from local developer and investor Land Securities Group for £552 million (then $742 million) in December 2020.
WeWork in London
WeWork, together with private equity firm Rhone Group, had purchased 120 Moorgate in May 2017 for £43 million (now $57.14 million) and then refurbished the structure in 2019 to fit the requirements of the shared office startup.
Located around one mile (1.6 kilometres) northeast of Sun Venture’s 1&2 New Ludgate, the Singapore firm’s latest target sits at the corner of Moorgate and South Place in the Finsbury area. Located in the northern part of the City of London financial district, the asset is within a less than 10-minute walk from three railway networks via the Moorgate Station, London Liverpool Street and Bank Stations.
The news of the sale by the WeWork affiliate comes soon after the shared office firm’s debut on the New York stock exchange in October through a SPAC merger some two years after its famous IPO flop in September 2019.
At the time of publication, neither WeWork nor Sun Venture had responded to requests for comment by Mingtiandi on the reported transaction.
Big in the UK
Should Sun Venture follow through on this latest office deal, 120 Moorgate will boost the Singapore firm’s current 500,000 square feet of central London property by more than 31 percent. In it home market Sun Venture manages some 800,000 square feet of office assets, including 71 Robinson Road, which is purchased from Germany’s Commerzbank in 2019 for S$655 million (now $479 million).
The Singaporean investor made its first UK property investment in July last year when it picked up the 110,000 square foot One New Oxford Street in London’s Midtown area for £174 million from a Nuveen fund backed by the Central London Office Fund and British Airways Pension Trustees.
Sun Venture is expanding in London at a time when take-up in the office market has picked up amid a recovering economy, with vacancy rates falling and rents returning to pre-crisis levels.
According to a market report by Knight Frank, take-up of office space during the third quarter reached to reach 2.63 million square feet, which was a jump of 54.9 percent over the amount leased during the preceding three months, while vacancy fell to 7.7 percent. The agency also demand from investors on the upswing as improved leasing restored market confidence.
“Investor appetite for prime London offices continues to be strong as the easing of restrictions and greater levels of international travel drove £3.85 billion of transactions across London,” the report read. “Rising levels of sentiment and low levels of availability for best-in-class space has led to a rise in prime rents in core submarkets where agreed rents are above the market average.”