US shared office space business WeWork has bought a 13-asset estate in the City of London from private equity giant Blackstone alongside TH Real Estate and Danish pension fund PFA Ejendomme for a reported £580 mln (€670 mln).
According to Bloomberg, WeWork will hold 10% of the Devonshire Square Estate, while TH Real Estate and PFA will own 45% each. The deal was slated in October 2017.
The $20 bn-valued New York start-up will add the 620,000 ft2 (57,600 m2) complex to its growing portfolio of owned assets.
'The opportunity we have in Devonshire Square underlines the WeWork effect,' said the firm's senior executive Rich Gomel in a statement. 'By fully activating the estate, we will unlock tremendous potential and maximise value.'
The historic warehouse site, which belonged to the East India Company, is currently home to offices, restaurants and private members society the Devonshire Club.
It was purchased by Blackstone in May 2012 from rival Rockpoint and the Abu Dhabi Investment Authority (ADIA) for just under £340 mln, about 17% below the £410 mln paid by Rockpoint and ADIA for the site in late 2006.
WeWork appointed Eastdil Secured to source credit to finance the deal. The transaction follows other high-profile purchases by WeWork including the acquisition of the flagship Lord & Taylor building in Manhattan for $850 mln (645 mln) last autumn.
Blackstone has also developed an interest in the co-working business in recent years.
In 2017, the private equity player swooped on a majority stake in The Office Group (TOG), a UK pioneer in flexible office space.
The US buyout group, which has about $100 bn (€81 bn) in assets under management, said the transaction valued TOG at £500 mln.