This article is from the Australian Property Journal archive
WEWORK is tapping investors for funding as documents emerge that the US$20 billion co-working giant owes US$18 billion in rent.
According to the documents obtained by the Financial Times and Bloomberg, WeWork is planning to sell US$500 million in high-yield notes to debt investors.
According to reports, WeWork is burning through money.
Although the company’s revenue from memberships has more than doubled to US$822 million, equally its expenses more than doubled to US$1.81 billion.
WeWork reportedly recorded net losses of US$934 million.
The company currently has 220,000 members as of March and 251,000 desks across 234 locations.
This latest capital raising comes after the company raised US$4.4 billion last year from SoftBank.
Recently WeWork snapped up its smaller Chinese rival, Shanghai-based Naked Hub for US$400 million, in a bid to boost its footprint in China.
The documents also show WeWork occupies more than 14 million sq ft (approximately 1,300,643 sqm) of office space globally, and owes $18 billion in rent – although WeWork has the option of closing these offices if it cannot meet its rental obligations.
It is unclear whether the same clauses apply to the company’s office leases across Australia.
The acquisition of Naked Hub also bolstered WeWork interest in Australia, through Naked Hub’s 70% stake in Gravity.
Locally WeWork has committed to the York and George project at 379-385 George Street in Sydney, as well as HCF House at 403 George Street, and has reached heads of agreement at two other sites within the CBD. It has signed on to be the anchor tenant at Charter Hall’s redevelopment of 333 George Street.
In November, it opened its first Melbourne office over six floors in the London Stores building on Bourke Street, and its latest site in the city is across nine floors at 401 Collins Street.
Australian Property Journal
