WeWork seeks to expand operated office space business across India
By siliconindia | Thursday, 12 May 2022, 11:25 Hrs
Managed and Flexible office provider WeWork is looking to expand its operated office space business across the country, with corporate opting for a hybrid work model and demand for flexible space witnessing high demand.
In the company’s largest operator office deal so far, WeWork has entered into a partnership with a Noida-based real estate builder to manage 6.6 Lakh sq ft of office space totalling 8500 desks. Under this partnership and deal structure, the entire building profit and loss will be owned by the builder along with fitout investments.
“We are looking for such operator deals in strategic locations pan-India, and creating stronger partnerships with prominent developers and landlords. There has been much progress among landlords who have greater faith in flexible workspaces as an industry, and advisors such as Colliers have played a crucial role here. We look forward to working with them for more such partnerships in future,” said Karan Virwani, CEO, of WeWork India
Facilitated by leading advisory firm Colliers, the WeWork x Alphathum partnership is one of the largest commercial real estate transactions.
Set to open in Q4 2022, WeWork will further have the right to market the entire Tower A (G+28 floors) for managed office solutions to clients.
WeWork India turned profitable at the holding company level in the first quarter of 2022, aided by robust demand over the past year. The Bengaluru-based company, which started operations five years ago, reported an operating profit margin of Rs 25 crore for January-March, with around 40% year-on-year growth.
Post the pandemic, the demand and growth for spaces have accelerated, and the average occupancy levels are now 70-80%. In Q1 2022, flex operators accounted for 15% of the total leasing, and we see this number only going higher.
“WeWork is one of the largest flexible workspace providers in India that caters to a diverse mix of clients. With the Alphathum expansion, WeWork India will establish a stronger presence in the North. Large enterprises and startups prefer flex spaces to cater to a distributed workforce.,” said Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.
The company plans to expand its portfolio of co-working space by 2 million sq ft in 2022 as corporations embrace flexibility in their work models and demand flexible space soars among firms and established startups.
US-based office space provider WeWork Global has a 27% stake in WeWork India, a subsidiary of Bengaluru-based estate developer Embassy Group. The two groups entered into the partnership in 2017.
WeWork is present in 36 locations and has 65 000 desks across markets, including Bengaluru, Gurgaon and Mumbai, with 5 million sq ft of office space. It plans to add around 25,000 desks in 2022.