Barnett House tenants exit as IWG subsidiary collapses
Serviced office provider Regus gave occupiers at its 30,000 sq ft Fountain Street site in Manchester a week’s notice to vacate, after the special purpose vehicle that operated the site appointed administrators.
A company called Fountain Street Manchester Centre, the leaseholder and a subsidiary of Regus parent IWG, appointed Quantuma as administrator last week.
The SPV operated the eight-storey Barnett House serviced office space under the Regus brand but was unable to meet the costs required to fix two passenger lifts. IWG subsequently decided to wind the company up, according to pension fund Canada Life, which owns the building.
Canada Life told Place North West that Fountain Street Manchester Centre had reported that the lifts had failed but it “couldn’t afford to replace them without further financial support from the landlord”.
“Despite a number of meetings, both parties were unable to reach a commercially acceptable solution,” and tenants vacated last Tuesday, Canada Life said.
At the height of the pandemic last year, Canada Life “provided a comprehensive package of support to Regus that included a rent payment deferral and rent concession”, the landlord added.
Quantuma has been instructed to lead the administration proceedings of Fountain Street Manchester Centre and has recently been appointed to several other Regus offices across the UK – in Birmingham, London and Glasgow.
IWG declined to comment when contacted by Place North West.
According to Canada Life, Barnett House tenants have been relocated to other serviced offices in Manchester city centre operated by Regus or other IWG brands, such as at 3 Hardman Street in Spinningfields and St James’s Tower on Charlotte Street. Regus operates 10 sites across Manchester.
Firms affected include Ashcott Solicitors, social media company Lipstick Group and project management consultancy Future Projects.
One occupier that did not wish to be named said Regus had made the relocation process “very easy”, despite the short notice. Regus has not increased rents despite the move to more modern office space, and has also offered to pay for any redecorating required at the new locations, the occupier added.
Canada Life bought Barnett House from Eric Wright Group for £8m in 2018. Regus’ 10-year lease on the building was not due to expire until this October.