Bank of Ireland in talks on sale of loan on London building leased to WeWork – report

Bank of Ireland is reportedly selling a £104 million (€120.9m) loan granted to a Korean financial house six years ago to buy a landmark City of London building, after the investor struggled to refinance the facility amid a drop in the building’s value and concerns about the outlook for its main tenant WeWork.

Seoul-based Hanna Financial Group acquired the building, No 1 Poultry, which is opposite the Bank of England in the heart of the London financial district, in 2018 for £182 million (€211.6m). Fellow Korean financial firm Daishin Securities provided a junior loan against the property in 2021.

Bloomberg reported on Wednesday that Daishin is in talks to buy the senior Bank of Ireland facility in a defensive move designed to protect its own investment in the junior facility. This would buy Hanna time to find a solution for the property and prevent Daishin’s junior loan from potentially being wiped out by a distressed sale triggered by Bank of Ireland.

A Daishin spokesman confirmed the negotiations but declined to comment on the price. A spokesman for Bank of Ireland declined to comment on the report.

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WeWork, the US-based office-sharing company that is the main tenant in the building, filed for Chapter 11 bankruptcy protection in November to restructure debt and abandon leases in certain locations in its home market and Canada. However, the move has also raised concerns about its future in other locations.

The sale of the UK loan comes as Bank of Ireland has taken a more cautious approach to the commercial property market in recent times amid a downturn in prices internationally recently following a slew of central bank rate hikes and a shift in work patterns following the pandemic.

Bank of Ireland, led by chief executive Myles O’Grady, has also been reducing its lending exposure to the UK in recent years, driven by a decision to retreat from the mass mortgage market to more bespoke and higher-yielding home loans. Last month Bank of Ireland said it was dropping its offer of mortgages and personal loans through the UK Post Office, and ended its financial services joint venture with the AA in the UK as the group continues to restructure its offering in that market.

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