A British rival to WeWork today said it was eyeing the bankrupt business’s portfolio for acquisition opportunities after it posted a boost in sales.
London-listed IWG, which operates the Regus and Spaces brands of commercial offices, said it had already acquired some sites from WeWork and was on the lookout to snap up more deals. Today it reported a 10% growth in revenues to £2.2 billion for the first nine months of the year.
CEO Mark Dixon said WeWork’s downfall would attract more customers to IWG as any restructuring would likely result in higher rents for customers to pay off its steep debts.
“Part of their problem is that they have not been pricing to make a margin, in fact they have been pricing in some cases to lose money,” he told investors.
“Them pricing normally to make a margin would be helpful [to us].
“Clearly, there will be some customers that will avoid using them because they will be closing quite a few centres and that’s a difficulty if you’re thinking about putting people into space.
“We’ve picked a few centres up last week, pre-filing, we’ll no doubt pick up some more in the coming weeks and months.”
Thousands of staff at London’s fastest-growing start-ups were today plunged into uncertainty over the future of their workplaces after the US parent of WeWork went bankrupt.
The firm, whose central London spaces have been used by a host of businesses from AI company Quantexa to banking giant HSBC said it had filed for Chapter 11 bankruptcy proceedings in the US as it struggles to pay off billions of dollars of debt.
But WeWork said its office spaces remain open and operational and the company will continue to provide member services. Locations outside the US and Canada were not part of the bankruptcy process, it added.
In its most recent accounts filed in the UK, WeWork posted a loss of £153 million as it was hit by a slump in demand following the onset of the coronavirus pandemic.
WeWork's strategy to focus on central London real estate meant it was doubly hit by with high lease costs as well as lower footfall relative to the suburbs amid a drop-off in commuters.
In August, Dixon told the Standard IWG was eyeing opening more sites in the capital’s suburban districts to match new working trends, with sites planned for Battersea, Barnet, Lambeth and Hampstead, among others.
“The affordability of London housing is not very good [and] people are fed up with the cost of travel," Dixon said.
“You’ll only get people back to an office in London if they live close by."
WeWork's London operations had begun to show tentative signs of recovery from the pandemic amid a rebound in commuter levels. In September, firm reported a significant jump in demand for space in London as more staff returned to desks after the school holidays, adding that all-access bookings at its 55 locations in the capital were 16.9% higher than a year earlier.
