WeWork-let Fox Court comes to market

By James Buckley - Thursday, October 27, 2016 15:35

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Within a week of a sale being agreed of WeWork’s City headquarters, the US co-working group’s Midtown base Fox Court has been put up for sale, CoStar News can reveal.

Ellis Short’s property fund Kildare Partners has instructed Cushman & Wakefield to sell Fox Court at 14-22 Gray’s Inn Road, WC1 with market sources suggesting it would fetch in excess of £100m or around a 5% net initial yield.

Fox Court comprises a freehold, 103,555 sq ft office building which has recently undergone a substantial refurbishment and is in close proximity to Farringdon station in the heart of London’s Midtown. It is let to three occupational tenants, WeWork, Telereal Trillium and Map of Medicine, offering an average unexpired lease term of approximately 15 years.

The current rent passing reflects £51 per sq ft overall and 70% of the income for the building is subject to five yearly minimum increases of 2.5% per annum compounded, providing an attractive reversionary yield profile.

New York-based WeWork signed to take 70,000 sq ft of offices at Fox Court in July last year as the $10bn office group for the creative sectors embarked on a search for a further 1.1m sq ft in the capital. WeWork agreed a term of 20 years at a rent in the late £50s per sq ft.

The building could be the third WeWork-let London office to trade this year. In addition to Moor Place - WeWork’s London HQ which Hong Kong investor Kingboard agreed terms to buy on Saturday for £271m -  German investor Corpus Sireo bought Angelo Gordon’s 150-year long leasehold interest in 33 Queen Street, EC4, for £40m in May in what was the first test case of the strength of the co-working group’s covenant.

Fox Court was substantially refurbished in 1996 with additional works in 2007 and 2011. 

Karlin Real Estate sold its near 30-strong Project Carolus granular UK secondary portfolio and Fox Court to Kildare Partners in May last year for around £260m.

jbuckley@costar.co.uk

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