WeWork’s London Expansion Checked As Deals Cancelled
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Deals which would have seen WeWork lease 146K SF of new space in London and a further 80K SF in Glasgow have fallen through as the coworking company reviews its business strategy following its failed initial public offering.
Deals for WeWork to lease 80K SF at 43 Brook Green in Hammersmith, 42K SF at 60 Moorgate in the City, 22K SF at 3 Paris Garden in Southbank and 20K SF at 1 Ariel Way in White City are now no longer progressing, according to Property Week. It said that in some cases landlords had decided to pull out of deals and try and lease the space to other occupiers.
In Glasgow, a deal for WeWork to lease 80K SF at 6 Atlantic Quay has also fallen out of bed.
The deals were part of a slew of leases provisionally agreed by WeWork in the summer, as it continued the rapid expansion that has seen it become the largest occupier of office space in London. It occupies or has committed to occupy between 3.5M and 4M SF in the UK capital.
But in September the company tried and failed to raise new funds through an IPO. Because it was burning through cash so quickly, it had to take a $9B bailout package from its main backer, SoftBank, to avoid running out of money before the end of the year. As a result, it has been reviewing its leases and whether it should continue to expand.
Property Week said a deal for WeWork to occupy the whole of Peterborough Court, a 350K SF office on Fleet Street formerly occupied by Goldman Sachs, is now in doubt.
But it added deals are still expected to complete at 5 Churchill Place in Canary Wharf, where WeWork would lease 42K SF; and 165 Fleet St. in the City of London and Churchill House at 142 Old Street in Shoreditch, where it will undertake smaller deals.