Joint venture will target commercial offices in central London
Office Space in Town, one of the UK’s leading serviced office providers, is pleased to announce the launch of its second joint venture with Forum Partners, a global real estate investment and asset management firm. The joint venture will acquire commercial office buildings to be converted into serviced offices in key central London locations.
Forum Partners and Office Space in Town have committed in excess of £30 million in the first round of equity and are in advanced negotiations with blue-chip property and financial investors for further funding commitments, which could raise the platform’s equity capacity to £100 million.
The joint venture’s focus is primarily in London’s zone one, with a particular emphasis on the West End, Midtown and City fringes. The strategy targets commercial properties in excess of 25,000 square feet and within a four minute walk of a tube station or rail links. The joint venture can acquire vacant or soon-to-be vacant offices, and offices in need of refurbishment. The partners are in discussions regarding two City office buildings, which are likely to be the venture’s first acquisitions.
The properties in the first joint venture, launched in 2012, consist of three London serviced offices in Liverpool Street, St Pauls and Waterloo, the latter of which was opened earlier this year. Andrew Close of Masons Property Advisors City, a serviced office specialist, acted as property advisor on all previous purchases and will continue to advise the partnership.
Giles Fuchs, Co-founder and CEO of Office Space in Town, commented:
“We are actively looking to buy office buildings; we have the funding in place to quickly build a strong portfolio as well as a strong track record as both operators and investors in the serviced office sector. Our heritage of providing exceptional quality serviced offices for over 30 years, combined with the success and outperformance of our first joint venture with Forum Partners, suggests we should continue to deliver exceptional growth.”
Andrew Walker, Managing Partner and co-founder of Forum Partners, commented:
“We had a fantastic experience working with Office Space in Town on our first joint venture and we are very pleased to back this second initiative. The serviced office market has been performing well and provides excellent investment opportunities. Office Space in Town, with its long experience in the sector and proven record as investors, are the perfect partners.”
In recent years, the UK’s serviced office market has enjoyed robust growth, with London the clear leader, recording near 20% growth rates and outperforming the country’s other office markets. London now accounts for over 25% of the entire UK serviced office sector.
The increase in overall supply has not kept pace with demand and average serviced office rates in the Capital have recently risen to levels not seen since the height of the market in 2008. As London is one of the most expensive office markets in the world, businesses, especially SMEs, are keen to find more flexible solutions, with the serviced office model particularly attractive.
Recent reports cite London as having, by far, the largest number of serviced offices in the world at over 400, close to 10% of the total, and is equivalent to the combined size of the markets in Paris, New York, Tokyo, Hong Kong and Sydney. The next largest market is New York.