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Deals for WeWork-leased assets stall; Blackstone to invest €500M in Greek assets

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Deals for WeWork-leased assets stall; Blackstone to invest €500M in Greek assets

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* Deals for two buildings mostly leased to WeWork Cos. Inc. are on the ropes amid the company's decision to push back its IPO to overcome concerns about its slashed valuation among other things, Bloomberg News reported, citing people familiar with the matter. Saudi Arabia-based Sidra Capital pulled out of a £90 million deal to acquire 70 Wilson St. near London's financial district from a venture led by Columbia Threadneedle Investments, while talks stalled for the sale of London-based coworking facility WeWork Waterloo, sources added.

Singapore-based Bright Ruby Resources Pte. Ltd. had agreed in August to acquire the WeWork Waterloo, originally known as Two Southbank Place, and an adjoining property leased to Royal Dutch Shell PLC, for roughly £850 million, but negotiations have now stalled, with no certainty about their outcome, sources added. It is unclear what impact WeWork's IPO market fallout has had on the deal, the people said.

* U.S.-based Blackstone Group Inc. is set to invest €500 million in Greek hotel properties, starting with the acquisition of hotel chain units in the Ionian and Aegean islands in a transaction amounting to roughly €200 million, Ekathimerini reported. Blackstone will use a Luxembourg-based holdings company for its first purchase of the hotel units, which will continue to be managed by their current owners in cooperation with their new stakeholders.

* Intu Properties PLC said it obtained approval for its 2.5 million-square-foot, €800 million retail and leisure intu Costa del Sol development to the north of Torremolinos in Spain. Preparatory work is due to start in 2020, with the opening set for 2023.

UK and Ireland

* Warehouse REIT PLC acquired a portfolio of eight fully occupied reversionary warehouse and distribution assets from Aviva Investors for £70 million, with an additional deferred payment of up to £5 million due around September 2023. The purchase price reflects a net initial yield of just over 7%.

The portfolio provides a total floor area of 995,106 square feet and produces an annual rent of £5.38 million. Tenants include Iron Mountain, Direct Wines, the Sytner Group and Amazon. The assets are around major U.K. urban areas, including Reading and Gloucester in the South; Coventry, Leicester and Nottingham in the Midlands; Grimsby and the Humber Docks in the North East; and Warrington in the North West.

Separately, Aviva Investors sold the freehold interest in the Forum St Paul's grade A office building in London to Goldstone Commercial for roughly £80.8 million, Property Week reported. The deal reflects a net initial yield of 4.46%. The 64,680-square-foot property was redeveloped by Aviva in 2017. The building is entirely let or under offer, the report noted.

* The U.K.'s purpose-built student accommodation sector is set to receive £3.2 billion in investments in 2019, compared with £3.1 billion in 2018, PW reported, citing research by Knight Frank.

* Coworking brand Spaces has pre-leased 30,000 square feet at the €160 million Horgan's Quay project in Cork City, Ireland, the Irish Independent reported. The project will also deliver 325 apartments, a 120-room boutique hotel and retail and restaurant space. The first block with the Spaces letting is expected to be complete in summer 2020.

* Brexit-related uncertainty is hampering consumer demand, with British house prices growing at their slowest annual rate for seven years, The Guardian reported. National house price growth faltered 0.7% in July from 1.4% in June due to steep declines in prices in London and the south, the publication said, citing the Office for National Statistics.

Germany, Greece and Spain

* Union Investment acquired a €120 million logistics property portfolio from Trans Service Team, IPE Real Assets reported. The portfolio, which spans 120,000 square meters, comprises one existing asset and three development projects in the German regions of Ruhr and Rheinhessen.

* Lamda Developers said it planned to call an extraordinary shareholders meeting for a share capital increase of up to €650 million, Reuters reported. The news came after investors withdrew interest in a development project at the abandoned Hellenikon airport in Athens.

Lamda plans to convert the disused facility into a complex of luxury residences, hotels, a yachting marina and casino at a total cost of about €8 billion.

* According to JLL, student housing developers are targeting Spain to take advantage of growing demand for such developments in southern Europe. Purpose-built student accommodation is being developed rapidly in Spain, with record 18 transactions of greenfield and brownfield developments in 2018, reflecting a volume of €141 million, JLL data showed.

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