How will sale of LEO affect serviced office valuations?

Cornhill

Sale price of £475m is well below £700m sought two years ago, raising questions about values in the sector.

Queensgate Investments’ sale of the 38-property portfolio comes amid a co-working boom in London; serviced offices are poised to account for 30% to 35% of offices in the capital by 2030, according to flexible workspace adviser The Instant Group, and Japanese tech giant SoftBank is reportedly in talks to plough another $10bn (£7.7bn) into WeWork.

This flurry of activity raises the questions: why did LEO take so long to sell and what does the sale price mean for the valuation of the wider serviced office sector?

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