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
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
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