WeWork, ASOS Sign Full-Building Leases in London Submarkets

Kennedy Wilson secured long-term agreements with the coworking giant and the leading online retail group, marking two of the largest European deals in the company’s history.
Friars Bridge Court

A year after completing a merger between Kennedy Wilson Holdings Inc. and Kennedy Wilson Europe, creating an $8 billion global real estate investment and asset management platform, Kennedy Wilson has signed two of the largest European deals in the company’s history with two major tenants—WeWork and ASOS—in London.

“The long-term commitments we are generating from world-class companies like WeWork and ASOS are a testament to the quality of our European office assets, as well as strong tenant demand in our U.K. portfolio,” Mike Pegler, head of asset management of Kennedy Wilson Europe, said in a prepared statement.

William McMorrow, chairman & CEO of Kennedy Wilson, recently told Commercial Property Executive that the company liked the office business in Europe because the leases are generally longer—10 to 25 years—compared to the United States, where leases can average five to 10 years.

WeWork, the coworking and technology giant that is growing quickly around the world and is already the largest corporate office occupier in Central London, has leased the eight-story building at Friars Bridge Court in the city’s Southbank market. Following a comprehensive refurbishment, WeWork will take occupancy of the building in 2021. Kennedy Wilson executives said it was one of the largest leases in the core Southbank market for 2018.

Located at 41-45 Blackfriars Road, it is in close proximity to the Blackfriars and Southwark underground stations and the Waterloo mainline station. Southbank, which has seen significant high-rise office, residential and hotel developments, has been attracting a lot of technology and media companies.

“London’s Southbank is an important location for us in terms of community; adding Friars Bridge Court to our portfolio proves our commitment and dedication to this area and this city as a whole,” Patrick Nelson, head of WeWork EMEA + Australia, Real Estate, said in a prepared statement.

Friars Bridge Court will be WeWork’s 41st location in London. The company’s largest European building, WeWork Waterloo, is set to open next year with more than 6,000 members, Nelson added.

ASOS expands in Watford

ASOS office in Leavesden Park

While the length of the WeWork lease was only described by Kennedy Wilson as “long-term,” the company did state ASOS, a leading online fashion retailer, took a 15-year lease for 125,000 square feet at Leavesden Park in the Watford submarket, representing the largest leasing deal in the U.K’s South East office market since 2016. ASOS already occupies 75,000 square feet of newly refurbished space at6 Hercules Way but will move into the rest of the building in mid-2019. The company plans to use the Leavesden Park building as its global customer care center.

“After a successful transaction to bring ASOS to Watford in 2017, we are delighted to have been able to secure its long-term commitment to expand at Leavesden Park. This is a landmark deal for the South East office market and a powerful commitment from a fast-growing business to create additional jobs in the U.K.,” Pegler explained. The two leases “represent our largest lettings in Europe and bring strong momentum to our leasing program year-to-date with 2.5 million square feet of transactions.”

Kennedy Wilson, which owns, operates and invests in real estate in the Western U.S., the U.K. and Ireland, also signed WeWork to a full-building lease in San Francisco this year. The company agreed in April to lease the entire 252,000-square-foot office tower at 430 California St. co-owned by Kennedy Wilson and Takenaka Corp.

Images courtesy of Kennedy Wilson