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A flexible office business with multiple sites in London and Leeds has been sold, with a deal coming after the company fell into administration, Bisnow can reveal.
Prospect Business Centres has been bought by Inc & Co Property Group, the property arm of Manchester-based digital marketing company Inc & Co.
Partners from FRP were appointed as administrators to Prospect Business Centres and several of its subsidiaries on 19 March, and sold the business to Inc on 26 March, FRP confirmed to Bisnow. As a result of the sale, 35 jobs have been saved and transferred with the business.
“While the serviced office market has grown quickly in recent years, it isn’t immune to challenges facing many businesses to sustain cashflow and perform in a competitive sector,” FRP Joint Administrator Simon Carvill-Biggs said. “Unfortunately the business was unable to meet its liabilities as they fell due, which led to the administration.”
The company and subsidiaries put into administration, and the properties they occupy, are:
• Prospect Business Centres — Holding company.
• Prospect House Leeds Limited — Prospect House, 32 Sovereign Street, Leeds.
• Prospect Business Centres (Furnival Street) — 40 Furnival Street, London.
• Prospect Business Centres (Leadenhall) — 107 Leadenhall Street, London.
• Prospect Business Centres (Mandeville Place) — 5-7 Mandeville Place, London.
• Prospect Business Centres (Midtown) — 20 Procter Street, London.
• Prospect Business Centres (Monument) — 16-18 Monument Street, London.
• Prospect Business Centres (Old Jewry) — Becket House, 36 Old Jewry, London.
Prospect Business Centres (Fountain) Limited, the special purpose vehicle for its site at 4 South Parade, Leeds, remains in administration and the joint administrators are engaging with the landlord of the site.
Prospect Business Centres was previously part of Prospect Property Group, which bought the company in 2006 when it had a single site in Leeds. By 2019, it had expanded to eight sites with more than 1,500 desks.
But it began to experience difficulties in 2019. It was unable to pay the rent on one building in Victoria and so handed back the keys to the landlord, according to Property Week.
The company used debt to partly fund its expansion, securing a £3M credit facility with peer-to-peer lender Archover in 2017. According to accounts for the holding company, £2.2M was owed to Archover.
“We're planning on investing in modernising all the interiors to offer new, innovative contemporary working spaces that meet the growing needs of our customers,” Inc and Co Chief Executive Jack Mason said in a statement. “We'll also be rebranding the centres in order to bring them under the Inc & Co umbrella.”
While Prospect’s troubles predate the outbreak of the coronavirus, the pandemic has hit flexible office companies hard, because tenants can easily cancel leases at short notice.
IWG has reached out to UK landlords asking to defer rent, and WeWork has approached some of its larger landlords seeking similar deferrals. Workspace said in a trading update that it had only received 50% of the rent it was due from tenants in March.
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