WeWork’s performance in Singapore has been sound, despite its financial woes elsewhere, said its spokesman. PHOTO: ST FILE
SINGAPORE – Troubled co-working giant WeWork intends to keep its 14 locations in Singapore open despite the severe financial pressure it is facing elsewhere.
The firm told the United States Securities and Exchange Commission on Tuesday that persistent losses, dwindling cash and increasing member cancellations have raised “substantial doubt” about its ability to continue operating.
However, a WeWork spokesman said its performance in Singapore has been sound. “Compared with other markets, we saw an earlier and faster return to work and inbound investments, which translates to demand for flexible workspace.”
Its locations here had an occupancy rate of 82 per cent in 2022. More updated figures for Singapore are unavailable, said the spokesman.
The occupancy rate for the Asia-Pacific region was 83 per cent as at March 31, according to the company’s 2023 first-quarter results.
This is the highest across WeWork’s global network, excluding markets run by franchisees.
The Straits Times reported in January 2020 that Singapore was a profitable market for WeWork, and it is understood that the business remains in the black, despite overall losses of US$397 million (S$536 million) for the company in the second quarter of 2023.
It is also understood that there are no plans to spin off the Singapore division or the Asia-Pacific business as an independent entity.
The company opened its largest location in the Asia-Pacific last September – a 213,000 sq ft facility across 21 floors at 21 Collyer Quay.
It signed a seven-year lease for the entire building, starting from the second quarter of 2021, with CapitaLand Integrated Commercial Trust (CICT).
It is also still a tenant at Funan, where it leases three floors of space, also from CICT.
WeWork accounted for 2.4 per cent of CICT’s total gross rental income in June 2023, and is the real estate investment trust’s (Reit) second-biggest tenant.
WeWork is also a tenant at two City Developments Limited (CDL) properties – City House in Singapore and St Katharine Docks in London.
A CDL spokesman said WeWork accounts for about 2 per cent to 3 per cent of gross rental income for its entire Singapore office portfolio and 9 per cent at its office assets in Britain.
“WeWork has been prompt in paying their rentals so far and we are comfortable with our exposure for the time being. With the latest news, we will continue to closely monitor the situation,” said the CDL spokesman.
A spokesman for ARA Trust Management, which manages Suntec City and the wider Suntec Reit, said WeWork is a tenant only at Suntec Office Tower 5 among the properties it manages, where it occupies about 60,000 sq ft across the 17th and 18th floors.
The spokesman said: “We understand that WeWork’s offices at Suntec have very high utilisation and are performing well.”
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