Singapore Among WeWork’s Best Performing Markets
SINGAPORE – The city-state belongs to a group of cities that are among the leading contributors to WeWork’s revenue, reported The Business Times on Wednesday afternoon (18 May, SGT).
In the cities – which comprise Singapore, London, Paris, and Seoul – the coworking space operator records an average occupancy rate of 83 percent. And building margins in these cities are 28 percent for earnings before interest, taxes, depreciation and amortisation (EBITDA), said Balder Tol, General Manager of WeWork Australia and Southeast Asia.
He also noted that Singapore also saw a 13 percent uptick from Hong Kong-based firms relocating to the city-state, and international enterprises are basing their regional headquarters in Singapore, using WeWork in a hub-and-spoke model, in which the city-state functions as a hub for the rest of Southeast Asia.
In Q1 FY2022 ended 31 March, WeWork recorded a 60 percent year-on-year growth in Singapore desk sales, which increased occupancy by 18 percentage points on an annual basis. In Southeast Asia, desk sales surged 70 percent year-on-year, with occupancy rising 20 percentage points over the same period. Revenue in Singapore also climbed 49 percent, while that for the region climbed 39 percent on an annual basis.
This demand has prompted WeWork into raising its revenue forecast for Q2 FY2022 from US$775 million to between US$800 million and US$825 million.
In particular, enterprise clients are fuelling demand for WeWork offices in Singapore and Southeast Asia, accounting for 46 percent of physical memberships in the region. And this demand from larger companies shows no signs of abating, said Tol.
“In Singapore, we see increased demand from enterprise organisations; we see at the moment across our entire portfolio we are out of enterprise space within our inventory. 21 Collyer Quay comes online at a timely moment because if we don’t have this inventory, I would have to say no to the growth of our enterprise opportunity.”
“The interest and enquiries that we get have continued to outpace our initial forecast. As of today, we have 97 percent of our Q2 FY2022 revenue forecast in the mid-range already committed. We have 70 percent of our Q3 FY2022 and Q4 FY2022 forecasts already committed for this year,” he added.