WeWork's investment arm is relaunching to market 99 Queen Victoria Street in the City as the coworking group continues to raise funds by selling London offices it bought during its rapid expansion in the 2010s.
The US company is seeking around £68 million, the same price as it paid for the building in 2019.
WeWork's Ark business began exiting much of its London office portfolio more than a year ago.
Ark, a multibillion-dollar real estate investment business affiliated to the global coworking group, was a highly active player in UK and European markets at the end of the last decade. It had the ability to de-risk the occupational side of an investment opportunity by bringing in a WeWork flexible office or WeLive coliving scheme as its tenant.
The business bought a number of buildings, principally in London, from 2017 to 2019 in the lead-up to WeWork's high-profile failed first attempt to become a publicly listed company.
At the end of 2021 CoStar News revealed that Ark was in the process of agreeing a sale of 99 Queen Victoria Street with Cushman and Wakefield thought to be advising.
The then-WeWork Property Investors bought the building the State General Reserve Fund, an Omani sovereign wealth fund, for about £65 million, in 2019.
After a pause in the process last year, WeWork via Cushman and Wakefield is approaching select parties again. The agent is targeting discretionary equity and therefore ruling out development managers who do not have 100% liquidity, according to a market source.
The building was single-let to Sumitomo Mitsui Banking Corporation, which had a lease break in 2021 to line up with its move to 100 Liverpool Street. WeWork committed to taking the space on SMBC’s departure but the building is thought to be being sold as a vacant possession opportunity.
In January last year Ark sold 120 Moorgate to Singapore investor Sun Venture £148 million from Ark.
CoStar News revealed the building had come to market in September 2021 for £147 million, in a significant test of investor appetite for WeWork-anchored product as it pursued a second attempt at a public listing. Knight Frank had been mandated to seek a buyer for the 105,000-square-foot building at a 4.55% yield. WeWork eventually went public via a special-purpose acquisition company.
Ark has also been pursing a sale of 140 Wardour Street, part of its Film House development in Soho, via Savills, and seeking more than £12 million.
The property comprises 8,495 square foot of offices across lower ground, ground and six upper floors that are connected via a six-person passenger lift and central staircase. It is let to Finish TV, trading as Freefolk, until September 2022.
The sales, if successful, would mean Ark would retain sole ownership of two London properties, the rest of Film House and 51 Eastcheap, both of which it occupies. WPI bought 51 Eastcheap for £47 million via receivers on behalf of City Site Estates in 2017 with vacant possession.
WeWork sold its 10% ownership stake in Devonshire Square last year. It owned the stake alongside a consortium of TIAA and Danish pension fund PFA Global Real Estate. The trio paid Blackstone £580 million for the complex in 2018, putting up £345 million of equity and taking £275 million of debt.
WeWork launched Ark with an initial $2.9 billion (£2.26 billion) to spend in May 2019.
It used WeWork’s previous move into real estate acquisition and management, WeWork Property Advisors, as its platform. WPA was an investment adviser affiliated with the coliving provider's parent company and Rhône Group that had been investing under the joint venture co-mingled fund WeWork Property Investors.
At the beginning of 2023, WeWork said in a statement ahead of its earnings call that it plans to axe about 300 roles around the world to cut costs as high inflation weighs on company spending on offices.
In connection with its "portfolio optimisation" and in continuing to streamline operations, it is pursuing "headcount reductions," expected to affect about 10% of its United Kingdom workforce. It employs 500 staff in the United Kingdom and operates 50 locations in London, four in Manchester and one in Cambridge and Birmingham.
The move comes after Fitch Ratings downgraded the group in December on concerns over the effect of the global economic slowdown on demand for offices.
Last month, the company signed to increase the space it occupies at 123 Buckingham Palace Road next to London Victoria station. The company will occupy the building’s fifth floor, comprising 30,000 square feet, in addition to its existing space on the second and fourth floor, which WeWork has operated since 2018.
The group said the expansion, due to open later this year, will meet the "unwavering demand from companies, particularly enterprises with large workforces, who continue to seek class-A, flexible workplace solutions in well-connected locations across the capital".