Yahoo Finance Blackstone plots sale of £1.5bn WeWork rival The Office Group
Blackstone is exploring a £1.5bn sale of The Office Group as it looks to capitalise on the collapse of rival WeWork.
The private equity giant has held informal talks with advisers to explore a possible exit from the company amid renewed interest in flexible office space.
City sources said the company was targeting a deal in the first quarter of 2025, with a sale or stock market listing among potential options. They cautioned that discussions were at an early stage.
Blackstone acquired a majority stake in The Office Group in 2017 in a bet on growing demand for flexible working space.
The pandemic dealt a hammer blow to the sector as repeated lockdowns sparked the beginning of the work from home era. But demand has since picked up as a growing number of companies adopt a hybrid approach to working.
In 2022, The Office Group struck a deal to merge with Fora, a rival flexible office space provider with locations across London and in Germany. Fora is backed by Brockton Capital, a London-based property investment firm.
The tie-up created one of the largest players in the market, with more than 3 million square feet of office space and a reported valuation of £1.5bn.
The company’s offices serve around 29,000 employers, including pharmaceutical giant GSK and online grocery firm Ocado.
The Office Group, which has now rebranded as Fora, has also benefited from the collapse of WeWork, the controversial office company founded by Adam Neumann that declared bankruptcy late last year.
WeWork has begun slimming down its portfolio in London, shutting down sites in Finsbury Square, Bishopsgate and Clerkenwell.
The company said the closures formed part of efforts to achieve a “sustainable capital structure and profitable business”.
Sources said WeWork’s retreat had created a new opening for The Office Group and boosted its market share. Unlike WeWork, which predominantly holds long leases, The Office Group owns the freehold on most of its buildings.
The Office Group is now one of the largest operators in central London with more than 60 locations, while WeWork’s footprint has more than halved from a peak of 65 to just 30.
IWG, one of the world’s largest operators of flexible working space, has around 65 London sites, though these are split across different brands.
A Blackstone spokesman said: “We have no plans to exit the business in the foreseeable future and we have not appointed any advisers.”
