Accounts show WeWork has £2 billion of lease commitments in the UK over the next 25 years.
Deals struck by the office provider suggest it is confident London will remain startup hub post-Brexit.
But risk that startups could shun the UK or suffer from funding shortfall after EU exit.
Profit warning from rival Regus and warning London could be entering property downturn.
LONDON — Hip office space provider WeWork has lease commitments in the UK of £2 billion over the next 25 years, accounts show.
US-headquartered WeWork launched in the UK in 2014 and now has 25 offices in London and two in Manchester. Accounts suggest more offices could be in development, although the company declined to comment on specifics.
WeWork doesn’t own its own offices. The company leases building space — either floors or whole buildings — before fitting them out as “WeWork” coworking spaces. It then rents desks and private offices to businesses looking for flexible space — typically, although not exclusively, startups.
UK accounts for 2016 show the company has “minimum lease payments under non-cancellable operating leases” of roughly £1 billion up to 2042 in Britain. A further £1 billion of deals stretching to 2038 have been struck since the end of 2016, a note in the filing states.
The £2 billion of lease commitments represent a bold — and potentially risky — bet on London remaining a startup hub post-Brexit. Rival office space provider Regus recently issued a property warning and there are signs London’s commercial office market could be entering a downturn.
A spokesperson for WeWork told Business Insider: “We’re committed to London — it has been a centre for commerce for centuries and always will be, and that’s why we’re investing here.
“Like all big changes, Brexit will create challenges and opportunities, and we think our members recognise that.”
‘We will not pull out of agreements with landlords’
Rival office space provider Regus saw its share price fall 30% at the start of the month after warning of weakness in the London office market. London coworking space the Rainmaking Loft recently announced plans to shut, blaming competition from WeWork and highlight the fiercely competitive nature of the London office market.
Brexit could exacerbate any brewing problems — startups face a potential venture capital shortfall of at least £2 billion post-Brexit, with the European Investment Fund denying VC funds capital. Around one in ten UK startups are also said to be considering relocated away …read more
Source:: Business Insider