2018-01-25 — ft.com
WeWork, the US co-working group backed by Softbank's Vision Fund, has become the largest corporate office occupier in central London, underlining the speed of growth of one of the world's most highly valued start-ups.
WeWork, which was valued at more than $20bn following its last fundraising in August, has rented more space in the key office districts of London since 2012 than any other company, leasing 2.6m sq ft of space, according to estate agency group Cushman & Wakefield. This has made WeWork the biggest occupier of offices in the capital after the UK government.
The company has become increasingly important to commercial property markets in cities such as London and New York, both leasing and buying buildings to offer shared offices. WeWork started in 2010 as a trendy co-working space aimed at millennial tech start-ups -- enticing participants via memberships, rather than leases, and through communal activities and perks such as free beer. But it is now working with larger companies to offer flexible working conditions.
In London, WeWork's take-up has been nearly double that of Google, which leased 1.3m sq ft over the five-year period, while Amazon and Deutsche Bank leased just over 1m sq ft and 0.9m sq ft, respectively. "Have they won the race for scale?" said Elaine Rossall, head of UK offices research and insight at Cushman & Wakefield. "Yes, I don't think anybody could keep up with their pace of growth."Rival property executives in the London property sector have been surprised at the rate of its expansion, with its City of London footprint alone more than doubling in 2017.
Some have raised questions about how sustainable its growth will be given worries over the strength of the London office market after Brexit.
In August last year, SoftBank and its Saudi-backed technology fund agreed to invest a combined $4.4bn in WeWork in one of the largest single investments into a private company on record.Other big financial groups are also moving into the flexible working space. Brookfield, the world's second largest real estate fund manager, has approached IWG, the world's largest shared office group. It last week made a bid for the company that valued it at £2.5bn, but was rebuffed. Blackstone, the world's biggest real estate fund manager with around £100bn in assets under management, bought flexible workspace provider The Office Group last June in a move which valued the company at about £500m.
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