Co-working operator pulls out of Windmill Green deal
Our Space has dropped plans to open its first site in Manchester at Windmill Green, with a 13,600 sq ft deal agreed in January last year no longer going ahead.
Fore Properties is developing the office, which is a part-extension and a part-refurbishment of the former London Scottish House on Mount Street opposite The Midland Hotel.
Our Space agreed a deal around 12 months ago to take half of the ground floor and the entire first floor in a letting totalling 13,600 sq ft, in what would have been its debut site in Manchester.
However, Place understands the operator has now pulled out, leaving the building without a confirmed tenant. Another co-working operator, as yet unnamed, is understood to be under offer on two floors with more details expected in the coming months.
The building has floorplates of 12,750 sq ft from the second to fifth floors, along with 9,750 sq ft on the sixth floor, and roof terraces and a bar space on the seventh.
Knight Frank and Lambert Smith Hampton are the joint agents for Windmill Green, while Colliers International acted for Our Space on its deal last year.
Our Space’s decision to back out of its deal follows a similar situation at 125 Deansgate. Co-working operator WeWork, which had been under offer for four floors at the 116,000 sq ft building, will now not be taking the space after negotiations with landlord Worthington Group stalled late last year.
Place understands the developer was concerned that a letting to WeWork would not increase the office’s value enough to a future purchaser, particularly compared to a blue-chip occupier. The developer is thought to be looking to achieve an ambitious yield when it sells the completed building.
When WeWork leases space it creates a special purpose vehicle for each location, to reduce the risk to the parent company. However, this means that as a tenant, WeWork is not seen to have the covenant strength of a well-established law firm.
There has also been rising scepticism in the property market as to whether appetite for co-working space will continue to match WeWork’s rapid expansion.
