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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Co-working spaces see 80% demand recovery – ET RealEstate

BENGALURU: Co-working companies are seeing a revival in interest after a pandemic-hit year as some companies — mostly small and medium enterprises — slowly bring some employees back to office.

Occupancies in the first two months this year have been about 80% of the year-ago period, while average occupancy is about 50%. Companies say that while many large players have signed up for these spaces after giving up long-term leases at office parks, many have decided not to bring in their employees before June.

“On a month-on-month basis, we have been adding 4-5% in occupancies since September and currently we are at 67% compared to about 90% last year. During the peak of the pandemic, we were down to about 50% and we expect it to go up to 75% by April,” said Amit Ramani, founder and CEO of Awfis.

Buoyed by the demand from corporates, many of whom are not keen to enter traditional long-term leases of 3-5 years, co-working companies are also looking to increase the number of seats. For example, Awfis is looking to add 24,000 seats by the end of December.

Karan Virwani, CEO of WeWork India, says that in this volatile business environment, companies are looking at greater flexibility, which is a key driver on how they choose their workplace for the future. “This is not just commitment in terms of tenure but also access to offices and ability to get workspace on demand.”

WeWork started a new product to attract more enterprises — companies can pay up to Rs 10,000 per month to get an access card that can be distributed among employees who can use it to enter any WeWork office across the country and work seven days a week. Current occupancies are up to 38% from just 5% last year.

Virwani added that demand in the current quarter has been similar to the one last year and expects to end at higher numbers. “Demand has increased from large occupiers as well like Commonwealth Bank, OnePlus. Many companies, whose leases ended during lockdown, chose not to renew but come to us. Even Ola used us for interim office space,” he added.

Gurugram-based 91Springboard says it has seen small and medium companies, with less than 50 employees, making a faster return every week. While occupancies in January were 70-75% of pre-Covid levels, this month it is 85-90%.

“We have clients who started with just six people in October before ramping it up to 100 this month,” said 91 Springboard co-founder Anand Vemuri adding that while larger companies have signed agreements, they do not plan a return before mid-year.

“Companies do not want to make long-term commitments for 3-5 years but for about two years. They also do not want to pay for fit outs upfront but looking for integrated solutions,” explained Vemuri.

Harsh Lambah, country manager India at IWG said his company is seeing larger work space requirements from bigger companies who want to realign their real estate portfolio. “Large enquiries are across multiple centres across cities and we are aggressively looking to open new centres.”

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TikTok ban puts brake on parent ByteDance’s India office space expansion plan – ET RealEstate

TikTok parent ByteDance’s move to lay off employees, following its permanent ban in India, has effectively shuttered the Chinese company’s office expansion plans here.

The company is unlikely to go ahead with its plan to occupy big space in Mumbai’s Goregaon suburb as committed in July, right in the middle of the pandemic and uncertainty over its future in the country, said people with direct knowledge of the development.

The Beijing-headquartered company had entered into a flexible office space deal for 1,250 seats at WeWork India’s Nesco property in Mumbai’s Goregaon suburb last year.

The company was expected to occupy this office this month.

However, it has not taken charge of the space and not even intimated WeWork India about any plan to do so.

“While WeWork India has already completed the interior and fitouts for the Internet technology company’s contracted space, there is no certainty that the latter would go ahead with the deal,” said one of the people.

The deal for the Mumbai office was struck last year with a plan to use the same for expansion and consolidating some of its operations here.

The agreement factors a lock-in period until the end of 2022.

ByteDance and WeWork did not offer any comment for the story.

Apart from this proposed office set-up in a co-working hub in Mumbai, ByteDance also has two operational offices in Bengaluru and Gurgaon through a similar arrangement with WeWork India and these would also be up for review.

The company supports some of its overseas operations from these offices.

According to industry experts, any move to cancel the plan to occupy the space will have legal ramifications too if the service provider decides to exercise his rights in the backdrop of financial losses.

“If a contracted entity does not go ahead with occupancy of the leased space, the company will have to make payment of rentals for the lock-in period. Forfeiting the deposit amount is an option, but that is usually equivalent to 4-6 months’ rent. This may then get resolved through an arbitration mechanism,” said a senior official of a co-working company.

According to realty industry experts, ByteDance was looking to expand its presence in Mumbai, Bengaluru and Gurgaon following the exponential growth of its TikTok app.

However, the India-China standoff has slowed decision-making on the real estate front.

ByteDance’s TikTok, Vigo Video and Helo were among 59 Chinese apps that the government banned on June 29 citing national security concerns.

The temporary block has now been converted into a permanent ban.

ET has already reported that the Chinese Internet company has started the process of laying off employees in India following this permanent ban on its most popular apps TikTok and Helo last week. As many as 800 people out of the 2,000-plus workforce may lose their jobs, while around 100-200 employees supporting global teams or in critical roles may stay. Its plan about the rest of the employees is not known.

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