Almacantar Repays £100M Of Debt On Waterloo WeWork Office At Centre Of Legal Case
The London real estate developer that counts some of Europe’s wealthiest families among its backers has repaid £100M of debt secured against an office building that houses one of the world’s biggest WeWork locations.
Almacantar, run by CEO Mike Hussey, repaid £100M of a £200M loan secured against Two Southbank Place in Waterloo in 2023, according to the most recent accounts for the company.
The repayment came as part of an extension to the loan on the building, which was scheduled to mature in April 2024. It now matures in April 2026, at the same time as a £200M loan secured against One Southbank Place. The loans against the two buildings were provided by Legal & General Investment Management in 2019.
The interest rate on the extended loan is 7.1% and 2.4% on the other loan. Almacantar redrew £115M of a debt facility secured against another of its assets, a residential scheme at Marble Arch in the West End, and used the money to pay down part of the loan on Two Southbank Place, according to the accounts.
Almacantar developed the 570K SF One and Two Southbank Place after buying the site in a forward-purchase deal for £550M. The two buildings were completed in 2018, with Shell preleasing 270K SF at One Southbank Place and WeWork preleasing 300K SF at Two Southbank Place, one of the coworking giant's largest global locations.
The company has tried to sell the buildings on two occasions, for £875M in 2019 and for £1B in 2022, but a sale was not achieved.
In December 2023, Almacantar launched legal proceedings against a special-purpose vehicle controlled by WeWork, saying it should forfeit its lease at Southbank Place.
It argued that it had the right to demand WeWork give up the lease and leave the building because the lessee's guarantor, a U.S. special-purchase vehicle, went into bankruptcy when WeWork filed for Chapter 11 bankruptcy last year. WeWork has argued against the claim, saying in a defence that the lease guarantor was not part of the bankruptcy.
WeWork pays £20M a year in rent on the building and has not missed any rental payments. The case is ongoing.
In its results, Almacantar said one of its assets had been valued on the basis that the primary tenant would forfeit its lease, but it did not say which one.
Almacantar owns three assets: Southbank Place, Marble Arch Place, which comprises 54 apartments built for sale, and Centre Point, the famous residential tower in the West End. It bought Centre Point in the wake of the Lehman Brothers collapse, converted it from offices to luxury apartments, and it has been selling off units ever since.
The company said the value of its portfolio was £1.36B at the end of 2023, down from £1.49B at the end of 2022. Part of that drop resulted from selling £69M of apartments.
Almacantar was set up in 2009, and one of its original backers was Exor, the investment vehicle of the Agnelli family, which also controls Fiat and Italian football club Juventus. Exor in 2016 sold its stake in the company to Partner Reinsurance, an insurance company it controls.
Other reported backers of Almacantar are vehicles controlled by the Hans Wilsdorf Foundation, the charitable trust that owns Rolex, and the Wertheimer family, which owns fashion brand Chanel. The company paid its owners a £70M dividend in 2023, the accounts show.
