WeWork posts net loss of $888.85 million in Q2 2021 – ET RealEstate

BENGALURU: Office-sharing startup WeWork reported on Friday a dip in its second-quarter revenue from the prior quarter, as the emergence of the Delta coronavirus variant stoked a slower-than-expected recovery for the first half of the year.

The company, which is backed by Japanese conglomerate SoftBank Group Corp, said the health crisis dampened its expectations for a rebound in average revenue per member, particularly in the United States and Canada, for 2021 and 2022.

The fast-spreading variant and the subsequent tightening of curbs in some places have compounded worries for office space providers, as businesses opt for shorter leases and many employees continue to work remotely.

WeWork said it had 517,000 members in the second quarter ended June 30, a drop from 612,000 in the year-ago period.

The hybrid-work strategy will help improve sales, the company said, adding that it still expects preliminary July revenue to come in at about $215 million, with $650 million to $700 million sales for the third quarter.

In a hybrid workplace model, employees have the ability to work in different spaces, including corporate offices, coworking spaces, public areas and from home.

WeWork in March agreed to go public through a merger with BowX Acquisition Corp, a special purpose acquisition company, in a deal that valued it at $9 billion. SoftBank said it would retain a majority stake in the company after the merger.

Net loss attributable to WeWork was $888.85 million in the second quarter, compared with $863.83 million a year earlier.

Quarterly revenue dipped nearly 1% to $593.48 million from the first quarter.



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UK’s Workspace sees some signs of recovery in demand in London – ET RealEstate

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BENGALURU: UK office space provider Workspace said on Thursday its occupancy in London had started to pick up from pandemic lows, although rents were still under pressure as businesses were in no rush bring all their employees back.

The company, which caters mostly to small and medium-sized enterprises and entrepreneurs and last month reported its first annual loss in 12 years, said that two-thirds of the space it has rented out was not being used.

The average rent per square foot in the April-June quarter declined 2.4% from the January-March quarter, but occupancy inched up 1.1 percentage points to 82.7% on a like-for-like basis, it said.

In a further sign of improving demand, Workspace, whose 58 properties in London are modelled as flexible office spaces, said average monthly enquiries from potential customers had almost doubled to 947 in the April-June quarter compared to a year earlier.

Shares in the mid-cap company, which provides unfurnished spaces to a varied client base from architects to florists and craft beer brewers to app developers, were up 3% by 1100 GMT after losing more than a third of their value since the pandemic took hold.

The wider industry has been struggling as repeated lockdowns forced people to work from their homes, a shift that major companies including Amazon and Standard Chartered are adopting for the long term.

Workspace boss Graham Clemett acknowledged that some level of uncertainty will continue in the near term, but said there were strong signs that London’s businesses were returning to work. England lifted all its pandemic restrictions earlier this week.

London opening up

Jefferies analysts said while disruption could continue from the fast-spreading Delta variant of the coronavirus, Workspace’s occupational signs looked encouraging.

“The prospect of more passing trade and higher overall footfall is clearly giving small businesses the confidence to dip their toe into trading once more,” Hargreaves’ Susannah Streeter said.

While short-term flexible leases and a heavy exposure to small companies battered Workspace’s performance last year, the company could benefit from businesses seeking out flexible spaces as they are hesitant to commit to long-term leases.

“Younger employees with little prospect of a regular desk in the office, may opt for a seat in one of Workspace’s shared offices, instead of working from the kitchen table for the foreseeable future,” Streeter said.



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IWG snaps up WeWork office spaces in London and New York – ET RealEstate

BENGALURU: Office space provider IWG is set to open eight new shared-office centres in locations including London and New York, five of which were previously operated by its U.S.-based rival WeWork, as it seeks to meet the growing need for flexible work spaces.

Two of the former WeWork properties are located in Kensington, London, and Park Avenue South, New York, with three more in the Indonesian capital, Jakarta.

The other sites are in Chicago, Philadelphia, and opposite Penn Station in New York, according to a statement exclusively seen by Reuters.

IWC, owner of the Spaces and Regus brands, has said demand for such sites was up 14% in June from pre-pandemic levels. It will invest in refurbishing the properties.

IWG, which has its head office in Switzerland and more than 3,300 locations across 110 countries, added over 100 centres in the first half of 2021 through its franchise partners, three times as many as in the first half of 2020.

After a year in which the coronavirus pandemic shut office buildings and forced people to work from home, companies around the world are reducing their office space with an eye on trimming costs.

“The pandemic has accelerated the shift to the hybrid model by 10 years … There has been a rapid change,” said Mark Dixon, the boss of IWG.

“Office spaces in cities like New York and London are going to shrink in a post-pandemic world as some people move back to towns and countryside. It is hard to quantify by how much.”

From U.S. tech giants Amazon and Microsoft to banks such as Standard Chartered, firms have announced plans to adopt some form of flexible working model, typically having staff work from home for part of the week.

Dixon said there would be more change over the next three years as companies’ leases end.

“We are seeing a continuous interest in suburban and countryside locations as people avoid the commute and other hassles of a city life.”



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IWG triples number of new shared-office spaces in H1 2021 – ET RealEstate

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BENGALURU: Britain’s IWG has added more than 100 shared-office spaces to its global network this year, three times as many as in the first half of 2020, as it anticipates a lasting shift from working in large offices.

The company has struggled with plummeting occupancy levels in office buildings and last month said this year’s earnings would be well below 2020 levels.

But the company, known for its Regus and Spaces workspaces that compete with WeWork, is banking on a long-term shift to smaller, more local workplaces.

It said it signed 20 new franchise partners in the first half of 2021 that will add more than 110 shared-office locations to its network, compared with 30 last year.

The deals are in countries including India, Malaysia and the United States, with many workspaces being planned in small towns.

“Companies are indicating that hybrid work is here for the long term. This demand has been driven by a desire from employees to live and work locally,” IWG said in a statement.

The ramp-up includes four new centres to the North Indian town of Zirakpur, and three new flexible workspaces in the coastal city of Melaka in Malaysia, as employees explore the mix of working at home or nearby and commuting.

The expansion comes at no cost to IWG, whose franchise partners will invest in the centres.

The pandemic-led shift in working habits saw IWG sign its biggest-ever deal earlier this year, providing Japanese telecoms group NTT’s 300,000 staff global access to its offices.

The number of publicly listed UK-based companies considering hybrid workspaces – a combination of work from home, the traditional office or company-designated shared office spaces – has tripled this year, IWG said, citing internal research.

Last month, demand in the United Kingdom for hybrid spaces was up 15% compared to pre-pandemic, while the United States saw a 43% surge, IWG said in an email.



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