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Reading's McKay Securities to be acquired by Workspace in £277m deal

By Stephen Emerson
2 March 2022

Flexible office space provider Workspace Group is to acquire commercial property investment firm McKay Securities.

The Reading-based firm's shares, under the deal, are valued at 303p per share giving the company a total value of £277m with the deal expected to be completed in May once ratified by shareholders.

Following the acquisition, existing Workspace Shareholders will hold approximately 95 per cent. of the enlarged group and McKay Shareholders will hold approximately 5 per cent.

The deal will take the new entity's loan to value ratio to 32 per cent which Workspace say it will reduce below 30 per cent in the medium term.

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Graham Clemett, Chief Executive Officer of Workspace 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."

Workspace is a FTSE 250 REIT manages approximately four million sq. ft. of business space across 59 properties in locations across London.

McKay is a commercial property investment company with REIT status specialising in the development, refurbishment and management of office, industrial and logistics property in the South East and London.

Workspace say the acquisition will ensure the group becomes more resilient with enhanced income and capital growth prospects and gross property assets of £2.9 billion.

The deal, Workspace say, will contribute to the group's bottom line from year two before going on to enhance earnings grow dividends over the medium term.

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