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Homesingapore business'Business as usual' for WeWork in Singapore; customers will not be impacted...

'Business as usual' for WeWork in Singapore; customers will not be impacted by US bankruptcy filing

SINGAPORE: WeWork’s operations in Singapore will not be impacted by the company’s bankruptcy filing in the United States, said a local spokesman for the company on Tuesday (Nov 7).

In response to queries from TODAY, a spokesman for the flexible workspace provider said that it is “business as usual” and Singapore customers can continue using its 14 offices here.

“Singapore continues to be a priority market for us … (The bankruptcy filing) does not impact WeWork’s operations outside the US,” said the spokesman.

The co-working space provider rents office real estate from landlords and then leases these spaces out to individual members or companies in a shared office environment. 

In 2021, SoftBank Group, a Japanese multinational investment holding company, cut a deal to take WeWork public through a merger with a blank-check acquisition company at a valuation of US$8 billion (S$10.8 billion).

On Monday however, the SoftBank Group-backed start-up sought US bankruptcy protection.

Under the provisions of the US bankruptcy code, WeWork could rid itself of onerous leases, a law firm told news wire Reuters.

The company reported estimated assets and liabilities ranging from US$10 billion to US$50 billion, according to a bankruptcy filing.

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Profitability has remained elusive as WeWork grapples with its expensive leases and corporate clients cancelling because some employees work from home, reported Reuters.

Rental costs consumed 74 per cent of WeWork’s revenue in the second quarter of 2023 despite the company managing to amend 590 leases, saving about US$12.7 billion in fixed lease payments 

WeWork – once the most valuable US start-up worth US$47 billion – first opened its doors in Singapore in 2017.

Last September, it opened its 14th outlet in Singapore at 21 Collyer Quay near Raffles Place. Occupying all 21 floors of the former HSBC headquarters, the 220,000 sq ft office is WeWork’s largest location in the Pacific region.

CapitaLand Integrated Commercial Trust – which WeWork has a tenancy for 21 Collyer Quay and Funan – told property news outlet The Edge on Nov 1 that WeWork will remain its tenant. This was in response to news that the start-up might be filing for bankruptcy this week.

“It has been paying its rents on schedule. We are currently in discussions with the tenant while closely monitoring the ongoing developments,” a spokesperson for CapitaLand Integrated Commercial told The Edge.

A spokesperson told TODAY that WeWork’s employees in Singapore will not be impacted by the bankruptcy filing.

“In fact, we are still hiring,” the spokesperson added.

This article was originally published in TODAY.

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