Workspace paying £30m to end JV share agreement

23rd Dec 2014 07:59

Serviced office provider Workspace said it will pay £30m in cash to terminate a share agreement relating to its Glebe joint venture.The Glebe portfolio comprised 11 commercial properties, some with mixed-use redevelopment potential, valued at £267m.Workspace has now agreed terms with the former lenders of the joint venture for the termination of the Glebe Proceeds Share Agreement (GPSA)."The payment reflects a successful conclusion for both parties to the acquisition by Workspace of full control of the former Glebe joint venture in 2009 for an initial consideration of £83m," the company said.The maximum that could have been payable under the GPSA was £48m, with £20m already recognised at 30 September.As such, the termination payment will result in a £10m or 6p-per-share reduction in Workspace's net asset value at 30 September (101p per share).The joint venture with Glebe was formed in 2006 to "promote the intensification and change of use opportunities" for 11 estates owned by Workspace and three owned by Glebe. The joint venture was formed by a merger of the partners' respective holdings, supported by Bank of Scotland who have provided a £126m loan facility.The balance of financial resources required to complete the transaction was provided in equal proportions by Workspace and Glebe, with Workspace providing the day-to-day management of the properties, whilst Glebe was responsible for the promotion of the regeneration opportunities at the properties.