WeWork is poised to shut another London site and is in talks over lease agreements in other locations after the beleaguered workspace business seeks to scale down its office estate in a bid to cut costs following its US bankruptcy filing.
The firm is understood to be in exit negotiations at The Cursitor, a site in Holborn. Customers at the Holborn location – which is no longer listed on the WeWork website -- are understood to have been notified of its upcoming closure.
It follows the closure of three sites in Shoreditch, after WeWork confirmed it had reached deals with landlords earlier this month. The company now lists 35 London sites on its website, down from a peak of 50, according to news site Bisnow.
WeWork declined to comment.
WeWork filed for chapter 11 bankruptcy in the US in November after it racked up almost $3 billion in long-term debt and warned there was “substantial doubt” it would continue to be able to operate.
The firm said it had entered into a restructuring support agreement and would deal with the debt by “addressing our legacy leases and dramatically improving our balance sheet”.
WeWork’s largest UK subsidiary posted a loss of £110 million for 2022 and said it owed nearly three quarters of a billion pounds to its US parent in signs the London office market’s sluggish recovery from the coronavirus pandemic has crippled its finances.
London-based WeWork International, which collects management fees and service revenue from WeWork’s UK workspace locations on behalf of its New York-based parent company, reduced its losses by around £40 million compared to the £153 million loss it made the previous year, according to figures recently published to Companies House, while revenues grew £37 million to £59 million. The company’s net liabilities jumped 41% to £377 million, while loans payable to its US parents grew 27% to £731 million, on which it paid interest of up to 5.9%.
The firm said: “Although the company began to see some recovery from the impacts of Covid-19 through the membership fee and service revenue from WeWork’s international operating locations during the year, full recovery has been slower than expected in certain markets.”
However, there are signs WeWork made a stronger recovery in the UK in 2023, after the firm said on-demand bookings, which offer “drop-in” workspace by the hour or day, surged 33% in November from a year earlier in the capital.
WeWork’s chief revenue officer Ben Samuels told the Standard: "Our members in London have not seen any changes really post the Chapter 11 filing.
“It's something that's happening in the background around financial reorganisation. From a member experience point of view, when they walk into our buildings, our spaces are as vibrant and as welcoming as they've ever been."
