Two leading UK office owners are set to merge into a £ 1.5 billion deal that will make the combined group one of the most significant players in the fast-growing flexible office sector.
Office Group, owned mostly by the American private equity group Blackstone, and Fora supported by Brookton Capital, have agreed to merge and form a company with more than 3 million square meters of office space across the UK and Germany. The merger will be approved.
The financial terms of the merger have not been revealed, but according to people familiar with the two companies, the combined entity will be valued at around £ 1.5 billion.
The merger, which is subject to regulatory approval, is the latest sign of crystallization in the field of flexible offices.
This month, Workspace, which trades on FTSE 250, has agreed a deal to buy McKay Securities for £ 272m, strengthening its London and South East office portfolio.
IWG, one of the largest operators of flexible offices and services in the world, announced last week a £ 270 million investment in London-based Flexible Workspaces, The Instant Group.
The deals come with the removal of the corona restrictions and the workers are starting to drift back to the offices.
But average Office occupancy Rates remain well below pre-plague levels. In the week ending March 4, average UK occupancy was just 21% – although it was most likely affected by London Underground strikes – according to Remit Consulting.
Investors in flexible workspaces are betting that offices that provide a high level of services and flexible leasing conditions will grow in attractiveness, even if hybrid work patterns mean lower occupancy rates are lower than before the epidemic.
“Businesses are increasingly recognizing that the workplace is no longer a commodity, but a place that can be used to actively drive improvement in the productivity, collaboration and well-being of their teams,” said Enrico Sana, prolific CEO.
Sana will be the CEO of the merged group. Katrina Larkin, co-founder of Fora, will be the environment, company and administration officer. Perhaps Olsen and Charlie Green, the founders of The Office Group, will be the chairman and president, respectively.
“To some extent and with a variety of options [flexible working] Can work well. If you have a broad portfolio and you can offer tenants a variety of spaces to grow into, then it works, ”said Colm Lauder, an analyst at Goodbody.
Tenants at The Office Group and Fora offices include BP Oil, GlaxoSmithKline and Ocado.
But the flood of mergers and acquisitions stemmed no less from the discounts available to investors in registered real estate companies because of the epidemic as from the specific references of flexible work, Lauder said.
According to Goodbody, 19 listed real estate companies have been taken into privacy or merged with others in the past three years as the corona plague has pushed valuations down sharply.
The Office Group agrees £1.5bn merger Source link The Office Group agrees £1.5bn merger