24 July 2019
After launching in Singapore, co-working space provider WeWork is expanding into Indonesia, Thailand, Malaysia, and the Philippines this year. Photo: Bloomberg
After launching in Singapore, co-working space provider WeWork is expanding into Indonesia, Thailand, Malaysia, and the Philippines this year. Photo: Bloomberg

WeWork ramping up presence in Southeast Asia

WeWork, a US provider of shared workspaces, is pursuing plans to expand in Southeast Asia.

The New York-based startup aims to establish its presence in Indonesia, Thailand, Malaysia, and the Philippines this year, TechCrunch reports.

“We’re definitely expanding across Southeast Asia,” Turochas “T” Fuad, the company’s managing director for the region, told the technology news website in an interview.

Two years after arriving in Asia, WeWork acquired Singapore-based co-working company Spacemob last August and opened its first Singapore venue in December.

WeWork is now heading to Jakarta, Indonesia’s capital city, where it will open two locations by the third quarter this year.

It has also started hiring staff in Bangkok, Manila, and Kuala Lumpur.

In Jakarta, the company’s locations include Sinarmas MSIG Tower, where the company has secured five storeys to accommodate 1,400 people, and Revenue Tower, where it will have three floors to cover 800 people.

According to TechCrunch, WeWork has signed a revenue-sharing agreement with Sinar Mas for the office at MSIG Tower, which the Indonesian conglomerate owns.

“Both locations are in Jakarta’s central business district,” Fuad explained. “Each launch is planned months in advance, we’ve done due diligence to know what local companies are looking for.”

He said WeWork “helps to activate the building, but the landlord is going to enjoy the membership yield that we have”.

“This allows us to be quite flexible to work with landlords across the region. In this case, our goal is to generate incremental yield versus rental revenue alone, and bring [the office space] to life.”

In 2017, the fast-growing startup opened 90 new locations and expanded into new cities in Latin America, Asia, Australia, Europe and Israel.

The company announced last December that it plans to launch 1 million square feet of new space each month in 2018, while putting its new Powered By We business at center stage.

Described by WeWork as “office space as a service”, Powered By We offers various services such as location selection, construction, custom office decor, software to manage building operations, and back-end data support.

The company recently made a deal with Standard Chartered Bank in Hong Kong and Fung Group in China to redesign their office space.

Powered By We will also be introduced in Southeast Asia. “We’re aggressively talking to various enterprises from banking to retail and tech firms,” Fuad said.

After securing a US$4.4 billion investment from Japanese conglomerate SoftBank last year, WeWork announced that it would allocate US$500 million for its Asia-Pacific business excluding China and Japan.

But the company does not intend to make aggressive acquisitions in Southeast Asia, after buying SpaceMob and China-based Naked Hub, TechCrunch said.

Meanwhile, WeWork is tapping the bond market for the first time for financing.

It is selling US$500 million of bonds with preliminary yields of 7.75 to 8 percent, Bloomberg reported, citing a person familiar with the matter.

However, the seven-year bonds received a rating of BB- from Fitch, three steps into junk, while S&P Global Ratings rated the notes one step lower at B+, the report said.

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