WeWork’s top UK subsidiary posted a loss of £110 million in 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.”
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”.
London is one of WeWork’s biggest markets globally, with the UK generating around £1 in 6 of the firm’s worldwide revenues and the capital accounting for 89% of its UK offices. Workspace sites in the UK generated a combined $493 million in sales in 2022, according to the firm’s US annual report.
WeWork International is not directly impacted by the bankruptcy proceedings but it warned its ability to continue trading as a going concern was “intrinsically linked to the ongoing trading position of the group,” adding that “the recent macroeconomic environment has caused higher member churn and weaker demand than contemplated under the group’s business plan.”
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."
