WeWork India raises Rs 200 crore – ET RealEstate

NEW DELHI: WeWork India has raised Rs 200 crore from investors, through a mix of debt and equity, the company said in a media release.

Karan Virwani, CEO, WeWork India, said, “The new capital we have raised will help us in continuing our upwards momentum and truly explore the potential of flexible workspaces in the Indian market.”

The company claims to have leased 10,000 desks i.e. more than 7 lakh sq ft of area in Q1 2021. It’s enterprise portfolio has seen a 10% jump to now constitute 60% enterprise members. “Over the last year, WeWork has also seen a strong demand from enterprises, who are now looking at flexible workspaces as a viable long-term real estate option,” the company said in a media release.

In December, it had launched about 1.65 lakh sq ft flexible workspace in Embassy Manyata NXT building in Bengaluru. The location had capacity of over 3,500 desks.

It also leased out 1.5 lakh sq ft space to Microsoft in Noida and 15,700 sq ft of office space in Bengaluru to Khaitan & Co last year.



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WeWork’s plan to go public unlikely to hit India operations – ET RealEstate

BENGALURU: WeWork’s plan to go public by merging with BowX, a special purpose acquisition company (SPAC), is unlikely to impact its operations in India, the company said.

Just like in China and Japan, the office space company’s operations in India are franchised to third parties, in this case, property developer Embassy Group. WeWork has a management agreement with Embassy as part of which the New York company gets an agreed-upon management fee.

Karan Virwani, CEO of WeWork India, declined to comment on whether the agreement structure between the two entities will change or fee would remain the same post the merger.

India is a major market for WeWork and is expected to turn profitable this year. It is also putting a greater focus on enterprise clients, many of whom are vacating traditional office spaces as a large chunk of its employees continue to work from home.

The merger with BowX values WeWork at $9 billion, a steep drop from the $47 billion it was valued for a listing in 2019. That IPO never happened following investor concerns over its business model.



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WeWork India opens 1.65 lakh sq ft space in Embassy Manyata NXT in Bengaluru – ET RealEstate

NEW DELHI: WeWork India has launched about 1.65 lakh sq ft flexible workspace in Embassy Manyata NXT building in Bengaluru. The location has capacity of over 3,500 desks.

Karan Virwani, CEO of WeWork India, said, “The new location is customised to fit the needs of all enterprises, SMEs, startups and entrepreneurs.”

It will be the first building for Commonwealth Bank of Australia, the company said in a media release.

The company recently leased out 1.5 lakh sq ft space to Microsoft in Noida and 15,700 sq ft of office space in Bengaluru to Khaitan & Co.

WeWork India currently has 34 centres comprising 60,000 desks across six major cities.

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WeWork aims to become profitable in 2021 globally: Sandeep Mathrani, CEO – ET RealEstate

NEW DELHI: Co-working major WeWork will focus on achieving profitable growth globally, including in India, in 2021 by increasing the occupancy level of its real estate portfolio, the company’s CEO Sandeep Mathrani said.

Further, Softbank backed-WeWork will revisit its plan to launch an initial public issue (IPO) only after it becomes profitable, said Mathrani, who became the new CEO in February after the exit of WeWork co-founder and former CEO Adam Neumann.

In a video conference, Mathrani said India is an important market for the US-based firm and has recently invested USD 100 million in WeWork India.

WeWork India’s contribution to global revenue is currently small but it will continue to rise as the country has great potential for flexible workspace business, Mathrani said.

Asked about WeWork’s top priorities for India, he said the global strategy is to achieve profitable growth through increase in occupancy level at all its centres.

“Our priority everywhere globally is profitable growth and streamlining our organisation and real estate portfolio in 2020,” he said, adding that in 2021, the company plans go towards having profitable growth and become EBIDTA positive.

Mathrani said the company has been able to reduce operating cost and cash burn significantly this year by streamlining the organisation and also its real estate portfolio.

The exercise of right-sizing organisations has been completed, while the streamlining of real estate portfolio is also 75 per cent complete, he added.

Mathrani said 65-70 per cent occupancy level is required for break even, which the company had achieved before the outbreak of COVID-19.

He noted that the pandemic has highlighted the importance of de-densification of office space and adoption of hub and spoke model.

He felt that India would benefit from this because of cost advantage.

Mathrani described the WeWork global investment of USD 100 million as a “strategic move” that shows its commitment to the Indian market. He mentioned that WeWork has sold its investment in its China business.

Asked whether the company has any plan to relaunch its public offer, Mathrani said the company is currently targeting to achieve profitable growth and positive cash flow, and then will decide the path forward.

“I am a big believer of we take one step at a time, we show profitable growth and then decide what the path forward is. Get to the cash flow positive and then decide,” Mathrani said.

In September 2019, WeWork had withdrawn its public issue that sought to value the company at USD 47 billion. The valuation reportedly dropped to less than USD 8 billion.

Karan Virwani, the CEO of WeWork India, said demand for flexible workspace has increased from large enterprises.

He said the share of large corporates in WeWork India centres has gone up to 67 per cent from 50 per cent but expressed confidence that small members would come back post pandemic.

WeWork India, which is owned by Bengaluru-based realty firm Embassy group, will not set up centres and then find clients, but it will prefer to take up clients and accordingly lease properties.

Virwani said the WeWork India has been able to reduce its cost by around Rs 250 crore.

WeWork India currently has 34 centres, comprising 60,000 desks and over 5 million sq ft area, in Bengaluru, Mumbai, Gurugram, Noida, Pune and Hyderabad.

Globally, WeWork has around 840 centres with 6.6 lakh membership.



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