Workspace agrees to buy McKay Securities for £272 million

Workspace’s Lock Studios in Bow, London

Reading-based commercial property investment company McKay Securities is set to be acquired by London-based real estate investment trust Workspace for £272 million.

Workspace, which was founded in 1987 by the privatisation of property assets of the former Greater London Council and lets office, industrial and workshop space to small and medium-sized enterprises, said on Wednesday it had agreed to buy McKay Securities PLC – the only UK REIT specialising entirely in the South East and London office, industrial and logistics markets – in a cash and shares deal.

It owns and manages approximately four million sq ft of business space across 59 properties in London locations.
Mckay chairman Richard Grainger said: “The McKay Board’s recommendation of the acquisition follows a detailed and rigorous review during which we considered a broad range of options to unlock value for McKay shareholders and which determined Workspace’s proposal to be the most attractive.

“The offer from Workspace provides McKay Shareholders with an opportunity to receive a return which values the business substantially above where it has been trading historically with a substantial proportion of this return payable in cash.

“It also provides McKay shareholders with the opportunity to participate in the future success of the enlarged and well capitalised Workspace Group, whose business model is well placed to meet post-Covid-19 demand for high quality, flexible business space.”

Workspace chief executive Graham Clemett said: “The market for office space is shifting, with businesses prioritising greater flexibility and the right location for their teams. This acquisition is a fantastic opportunity to accelerate our growth plans by capturing more of the strong demand we are seeing for our flexible offer in London, whilst selectively extending our reach into attractive commercial locations in the South-East.

“We will be a larger, more resilient company with an enhanced financial profile, and by applying our proven operational model and expertise, we expect to generate strong returns from McKay’s portfolio of high-quality assets over the medium term.”

Pictured: Workspace’s Lock Studios in Bow, London