WeWork exits first Hong Kong location as part of global downsizing

Co-working firm reduces space in territory by 20% as it seeks profitability and an IPO

National Weekend Edition /
Apr.April 03, 2021 12:00 PM
Tower 535 in Hong Kong and WeWork CEO Sandeep Mathrani (Photos via SOM, Getty)

Tower 535 in Hong Kong and WeWork CEO Sandeep Mathrani (Photos via SOM, Getty)

WeWork, which recently struck a $9 billion deal to go public via a special-purpose acquisition company, is still working on its path to profitability. Part of that strategy involves shedding space around the globe.

In its latest move, the co-working company exited its 90,000-square-foot office in Hong Kong, according to the South China Morning Post. That amounts to a 20 percent reduction in the territory, leaving WeWork with 360,000 square feet of office space.

The company gave up eight floors at Phoenix Property’s Tower 535 in Causeway Bay.

The Tower 535 office was WeWork’s first Hong Kong location when it opened in 2016. The company’s lease with Phoenix Property ends in 2025, and the early exit may result in a penalty for WeWork, according to the report.

WeWork leased 830,000 square feet of office space in Hong Kong at its peak in 2019. The city’s wider property market has taken a hit since pro-democracy protests began later that year; the coronavirus pandemic has further weakened demand.

WeWork’s recent move to cut space builds on new management’s mission to slash the company’s once-massive global footprint and become profitable by the fourth quarter.

WeWork has been dumping leases in numerous cities for over a year. So far in 2021, WeWork has exited multiple Manhattan locations and at least one in Los Angeles.

Co-working and flex-office firms have struggled amid the work-from-home world, which has reduced the need for conference room and event space, and for related office operations. Meanwhile, WeWork competitor IWG has added more than 50,000 square feet of flexible office space in Hong Kong over the last six months.

[SCMP] — Dennis Lynch 


Related Articles

arrow_forward_ios
Monarch Alternative Capital CEO Michael Weinstock and Citigroup Center (Getty, Citigroup Center)
Here’s what tenants pay at Downtown Miami’s Citigroup Center
Here’s what tenants pay at Downtown Miami’s Citigroup Center
 Adam Neumann (Getty, Bal Harbour Florida)
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Ex-WeWork CEO Adam Neumann inks $44M deal for Bal Harbour properties
Fuse Group Investment CEO Eyal Peretz and attorney Michael Ehrenstein (Fuse, Ehrenstein Sager, Twitter via GUT Miami)
Fuse Group acquires Security Building in downtown Miami, plans to sue WeWork for alleged lease breach
Fuse Group acquires Security Building in downtown Miami, plans to sue WeWork for alleged lease breach
Omicrom’s Dan Statlander with (clockwise from left) Fountains Center, Boardwalk @ 18th, Grove Centre and City National Park (Omicrom Development)
Here’s what tenants pay at this newly recapitalized Boca Raton mixed-use portfolio
Here’s what tenants pay at this newly recapitalized Boca Raton mixed-use portfolio
Phillips Point office towers with Related’s Stephen Ross (JLL, Getty)
Here’s what tenants are paying at Related Companies’ Phillips Point in West Palm
Here’s what tenants are paying at Related Companies’ Phillips Point in West Palm
117 Northeast First Avenue (Getty, Gut Miami via Twitter)
Lender sues owners of downtown Miami WeWork building over allegedly unpaid loan
Lender sues owners of downtown Miami WeWork building over allegedly unpaid loan
The Southeast Financial Center (Wikipedia Commons, iStock)
Here are South Florida’s biggest office leases in 2020
Here are South Florida’s biggest office leases in 2020
Laura Kozelouzek, CEO of Quest Workspaces, and a Quest classroom
Office is out, school is in: Co-working operators try to lure students into workspace
Office is out, school is in: Co-working operators try to lure students into workspace
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...