Big corporates opt for WeWork shared office tenancy
The tough economy, the trend towards flexible office environments and access to global markets are among the reasons behind more local corporations, such as Standard Bank, Naspers and Red Hat, moving their teams to WeWork’s co-working offices.
Officially launched locally in September, the shared workspaces company is a chain of co-working spaces that offer flexible working spaces and exclusive services to members, rivalling the traditional larger office set-up.
Since opening its doors, WeWork SA’s largest office space, based at The Link in Rosebank, has reached a 99% occupancy rate, with 43% of its members consisting of large enterprises.
Targeted at established corporations, freelancers and entrepreneurs, WeWork says it is disrupting the local real estate office sector by offering enterprise tenants sublet offices, which they may not otherwise be able to afford, eliminating overhead costs, and offering global networking opportunities.
T-Systems, FTI Consulting, Discovery Health and Platform45 are among the local enterprises that have taken up space at WeWork’s Rosebank-based building. They join the ranks of global corporates such as Microsoft in Seattle, financial services company HSBC in London, Deutsche Bahn in Germany and Carrefour in Paris, which are opting to move to these cosy corporate co-working areas.
Speaking to the media during a tour of its six-storey Johannesburg building this week,WeWork SA GM Stafford Masie said major local corporations are taking advantage of the benefits offered by shared working spaces, which challenge the typical expectation of traditional office space by reinventing the way people work through technology, providing flexibility.
“In SA, our doors flung open in early September and within a few weeks, we were about 30% occupied. So what you are seeing now is a building that hit 99% occupancy in a few months, with 43% consisting of large enterprises, and SMEs making up the rest.
“This is the new construct of how future enterprises will look; we will see more corporates moving their teams to co-working spaces, while executives remain in the fixed office space. It’s the new way of working because the overall commercial value proposition of a company locating itself in this space is quite obvious – the general challenges and costs associated with running and maintaining their own building and infrastructure are eliminated.”
The workspace company has around 609 000 global memberships, in over 127 cities and 33 countries across the globe.
In SA, the company’s two other offices are in West Street in Sandton, which opened earlier this year, and the Cape Town office, based at 80 Strand Street Building, which opened this week.
Members are able to work from any location in the world during business travel. Each WeWork floor has at least one multifunctional copier/scanner/printer, free refreshments and biscuits.
“As WeWork, we don’t just focus on filling the building with clients, but we also want to know who our members are and what they do, creating a global ecosystem. There is a lot of networking, cross-pollination and collaboration that happens between our members, with some of our start-up members getting business opportunities from the larger enterprises,” noted Masie.
Monthly packages range from a minimum of R2 850 for a “hot desk” membership (on-demand access to shared workspace and common areas), to over R40 000 for private office space.
Large corporations, which commonly hire smaller and agile teams, sign multi-year agreements with the company, while some firms, like Naspers, prefer to keep their executive teams in the space, according to Masie.
A study by commercial brokerage firm CBRE found 44% of large corporations choose to use a flexible open-platform office solution.
Centred on technology
WeWork has a team of engineers, data scientists, designers and product managers focused on building technology to help the company deliver ICT services on both the company’s mobile app and in the physical spaces.
Through the WeWork app, international members are able to select any office across the globe, book conference rooms, interact with fellow members, make formal announcements, co-ordinate meetings and source talent.
“Through our member app – which connects over 609 000 members – our members can access an international community, attend events based on their interests and search for services that can help their businesses grow,” explained Masie.
“We built technologies that enable members to efficiently source and deliver services around the world, while allowing them to gather data at scale and apply machine learning to be more intelligent and expedient in their decision-making.”
Aggressive expansion strategy
After months of financial trouble, last year WeWork signed a deal with SoftBank, which saw the Japanese tech giant inject an $8 billion (R117 billion) rescue investment and take over 80% of the shared workspaces company.
By November, the company’s value had plunged more than 80% to an estimated $4.9 billion.
The company has since embarked on an aggressive expansion strategy, having opened a record number of 52 buildings globally, last month.
“As our sole funder, SoftBank has decided that instead of going the IPO [initial public offering] route, they will put some more funds down and invest more money in the company. While I cannot divulge any expansion plans, I can say our core focus in SA is on filling up the three local buildings,” noted Masie.