Queensgate Investments LLP (“Queensgate Investments” or “Queensgate”), has engaged Lazard to explore strategic options for London Executive Offices (“LEO”).
London Executive Offices is the premier serviced office business in London, controlling 33 serviced offices totalling circa 745,000 sqft in Belgravia, Mayfair, Midtown and the City.
Iconic owned assets include 33 St James’s Square, Central Court, 1 Cornhill, 78-79 Pall Mall, 53 Davies Street, 2 Eaton Gate, 84 Brook Street, Hudson House, 288 Bishopsgate, 16 Old Queen Street and 17 Cavendish Square.
London Executive Offices differentiates itself with heritage stand-alone buildings, best in class fixtures, fittings and IT and exemplary customer service demonstrated by an average 38 month stay for clients.
LEO has over 2,200 customers ranging from blue chip to start ups, including a large proportion of virtual office clients generating high-margin income.
Queensgate has worked with the management of LEO to transform the business. Since acquisition. Queensgate has added twelve assets, implemented a significant capital expenditure upgrade program, overseen a re-brand to London Executive Offices and managed an operational turnaround.
LEO revenues are north of GBP 80M, occupancy is approaching 90% and EBITDA under Queensgate has increased 210%.
Queensgate Investments is a joint venture between the Kow Family, the LJ Partnership and the Peterson Group, and advises and manages around GBP 1.6B worth of real estate through the suite of Queensgate Investments Funds. Queensgate has an additional GBP 1.5B of additional purchasing power. The company has quickly established a track record in the sector through its asset management and development capabilities, supported by its ability to execute unique transactions.
Jason Kow, Chief Executive Officer of Queensgate, said:
“Queensgate is proud to have successfully implemented a turnaround of LEO into a market leader in the UK serviced office market. Queensgate has invested significant monies to upgrade and to build the estate into a formidable 33 asset strong portfolio with over GBP 80M in passing revenues.
Going forward LEO has significant further growth opportunities from horizontal expansion into identified owned and leased properties. LEO post turnaround also has an attractive running yield which is particularly important in today’s low yield environment.
LEO sales enquiries post Brexit have peaked given the unprecedented demand from dynamic businesses seeking flexibility and shorter lease terms. The UK serviced office market is expected to increase in value eight time to GBP 126B by 2025.
Queensgate’s ownership of LEO has been hugely successful for all parties, and we look forward to continuing our strategy of identifying similarly attractive opportunities for our investors.”
About London Executive Offices
- London Executive Offices is the largest 5-star serviced office company of scale in the UK, providing flexible office rental of iconic buildings re-fitted to exceptional standards, and best-in-class service provision with a range of add-on services.
- The business has 33 unbranded assets in Mayfair, the City and Belgravia assembled over 20 years, including 11 owned, 19 leased and 3 managed assets, all with state-of-the-art office infrastructure with best-in-class fixtures and fittings.
About Queensgate Investments LLP
- Queensgate Investments is a joint venture between the Kow Family, the LJ Partnership and the Peterson Group. Queensgate Investments advises and manages around GBP 1.6B worth of real estate through the suite of Queensgate Investments Funds. Queensgate has an additional GBP 1.5B of purchasing power.
- Key investments include:
- In August 2016, Queensgate sold its interest in the 5-star InterContinental Hotel, Conference Centre and Residences at the O2 Arena. The mixed use development comprises a 488 room hotel, Europe’s largest hotel connected conference centre, 100 private residences and 40 serviced apartments.
- In September 2013, Queensgate acquired London Executive Offices, a 5* service office business, with over 33 assets and over 700,000 sqft in Belgravia, Mayfair, Midtown and the City. Key assets include 33 St James Square, 1 Cornhill, 53 Davies Street, 78-79 Pall Mall and 2 Eaton Gate.
- In December 2015, Queensgate acquired the 906 room Kensington Forum Hotel, the fifth largest hotel in the UK.
- Queensgate differences itself by its flexible, nimble and non-institutional capital with a focus on asset rich operational companies and long income real estate assets.
