Recovering demand for office space amid loosened Covid-19 restrictions across key markets has narrowed losses at WeWork.
The shared office space provider reported an 11 per cent rise in quarterly revenue to $661 million in its first set of quarterly results since going public in New York last month.
In London, where WeWork holds 1 per cent of commercial office stock, it claims its gross sales equated to 37 per cent of the capital’s leasing activity in the three months to September 30. Net losses at the group fell from $999.5 million to $844.3 million. Its total memberships rose almost 7 per cent to 578,000.
The shares closed up 31 cents, or 3.4 per cent, at $9.49 in New York last night.
Founded in 2010 by Adam Neumann and Miguel McKelvey, WeWork was once the world’s most fêted start-up, with a peak value of some $47 billion. It was forced to shelve a highly anticipated listing in New York in 2019 amid concerns over its business model and Neumann’s leadership. He left the group, which was bailed out by its largest shareholder, SoftBank.
The company, with 764 locations in 38 countries, landed on the American stock market in October via a $9 billion merger with a so-called “blank-cheque” vehicle. Executives say it is well placed to capitalise on hybrid working models.
WeWork’s physical occupancy rate across 932,000 desks stood at 56 per cent by the end of September; up from 50 per cent in the same period of 2020, although it has cut capacity over the past year. It rose to 59 per cent last month.
The company’s gross sales in the United States, where its offices account for about 0.5 per cent of total inventory, were equivalent to about 9 per cent of all leasing activity in the country in the last quarter, according to Sandeep Mathrani, its chief executive.
Mathrani, 59, said there had been a marked improvement in churn, or customers leaving. “As of the third quarter, churn had decreased to approximately 3.5 per cent, which is below pre-pandemic levels and some of the lowest levels in WeWork history,” he said. “For reference, in 2019 churn was typically between 4 to 4.5 per cent.”
The Times (Callum Jones) - https://www.thetimes.co.uk/article/01daa99c-4631-11ec-aa43-5cc5157b09b9?shareToken=328161af9011d5017cfa507b9ebac634