When WeWork filed for bankruptcy in the US and Canada in November there were numerous property commentators ready to discuss what went so wrong for a offices giant once valued at $47 billion (£37 billion). But one month on, and while there is still plenty to do, the group's chief revenue officer insists that the business has lots that is working well for it, including in London where a bumper period for bookings has just taken place.
Speaking to the Evening Standard, Ben Samuels who is based in the capital and has worked for WeWork since 2017, says the reason for the Chapter 11 process "is to ensure that the business is set for future growth".
He adds: "The reason we're going through the very challenging restructuring we are right now is because we are going to set the business up for success."
He is referring to the move announced on November 6 which includes plans to exit certain buildings and renegotiate some expensive leases. While this is in the US and Canada and WeWork's other global markets and franchisees are not impacted by the proceedings, start-ups up to corporate giants that use WeWork buildings in the UK and elsewhere could understandably have been nervous about the headlines and what might happen to workspace they use.
At the time members across the globe received an email from chief executive David Tolley to say it was business as usual, that properties were open. For members in London that meant on site baristas would be serving coffee as normal, while events at certain buildings such as happy hour and yoga classes would continue to take place.
Samuels calls it "very proactive, thoughtful, I hope, communication plan to just let members know its business as usual".
He continues: "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."
That message of business as usual looks to have been received loud and clear in London, with high office use in the same month the high-profile bankruptcy update was announced. The co-working offices group, which had a meteoric rise here before being hit by big challenges such as the pandemic, says on demand bookings, which offers “drop-in” workspace by the hour or day, surged 33% in November from a year earlier in the capital.
All access bookings, a subscription membership that provides access to some 700 WeWork sites globally, improved 25% across its 36 London locations comparing January to November this year. Conference room bookings also rose.
The increase, which included big demand for its City locations, meant it was the biggest month on record for WeWork bookings (all access and on demand) in London.
So why are bookings in London rising? Samuels, who spent most of his career in banking prior to joining WeWork, points to a stronger return-to-office in the capital as more companies are encouraging employees back in the office more regularly.
He adds "More companies and landlords are recognising the value of flex in this hybrid era, not only giving employees more choice over where they work but giving businesses the wiggle room to expand or shrink their footprint as needed. And WeWork is uniquely positioned to meet this demand.”
The chief revenue officer comments: "I think the future is hybrid, that's for sure. The trend will continue the way it is, tilting the balance more towards in-office than it is today. And this is why everyone's going to need to find different solutions about how they approach the office."
Flexible workspace firms are among those in the real estate sector that stand to benefit from employers wanting some degree of flexibility and from firms that axed lots of floorspace during the Covid-crisis suddenly scrambling for high quality offices.
Businesses will increasingly seek a ‘flexible’ workspace option in their office portfolios within two years, a survey of property decision-makers by property agent CBRE found in July.
In London WeWork has recently seen a handful of big deals agreed with large companies to take private office space, meaning they have part of a building only their staff can use but also access to the shared amenities on site, and scope to use extra desks elsewhere if their space is full on a particular day.
More companies and landlords are recognising the value of flex in this hybrid era
While demand looks solid, the company still has to work on improving costs across its UK portfolio.
Samuels said many locations - including a number of flagship buildings - are performing well. But there are some sites where the firm signed a lease at the peak of the market "maybe on terms that don't really stack up in a post-Covid world". Options agreed or being discussed with some landlords in London include seeking rent reductions, exiting assets, management agreements, and in some cases one or both parties investing to upgrade offices and make them more attractive.
It could be that 2024 is a busy one for this co-working offices giant as it looks to move on from the challenges seen this year, work better, and win new customers.
