WeWork’s flagship location at 21 Collyer Quay banks on growing enterprise demand
/ EdgeProp Singapore |
WeWork will open its largest location in Singapore at 21 Collyer Quay in July (Picture: WeWork)
SINGAPORE (EDGEPROP) - Co-working operator WeWork is gearing up to launch its largest location in Singapore: the 21-storey, 220,000 sq ft building located at 21 Collyer Quay in the heart of the CBD. WeWork took over the lease of the former HSBC building — owned by CapitaLand Integrated Commercial Trust — last year after the banking firm moved its headquarters to Marina Bay Financial Centre Tower 2.
The new WeWork location will open in three phases beginning in July. “This is absolutely our flagship location in the Pacific,” Balder Tol, WeWork’s general manager, Australia and Southeast Asia, said at a media roundtable on May 18. “It is quite unique, where we have a space spanning 21 floors that allows us to genuinely control the experience from the moment someone walks into the door until the end of their day.”
WeWork will open its largest location in Singapore at 21 Collyer Quay in July (Picture: WeWork)
The opening of WeWork’s 21 Collyer Quay location comes amidst the accelerating back-to-office momentum in Singapore, following further easing of workplace measures. In the first quarter of this year, WeWork saw an 18- percentage-point increase y-o-y in occupancy for its locations in Singapore, while desk sales increased 60% y-o-y.
Doubling-down on enterprise demand
Demand for WeWork’s spaces in Singapore is being increasingly driven by enterprises, which the firm defines as companies with more than 500 employees. As of March 31, 60% of the firm’s Singapore members are made up of enterprises, surpassing the 46% WeWork attributes to enterprise members globally.
According to Tol, many of its enterprise members are MNCs that use WeWork as part of its hub-and-spoke model across Asia Pacific. “We see a lot of interest from multinationals that are using WeWork as a platform to expand into the region,” he says. In addition to firms utilising WeWork to establish regional headquarters in Singapore, he also notes an increase in demand from MNCs relocating their Hong Kong regional hubs to Singapore.
A major appeal of WeWork, he says, lies in its ability to provide uniformity in terms of design and services across its various locations. “A lot of our enterprise members tell us that they take satisfaction in the consistency of the experience for their employees,” Tol explains. Another draw is its agility: in contrast to traditional office leasing and build-out processes which could take up to 24 months, Tol says that a majority of WeWork member organisations are able to move in within a span of eight weeks.
Within Singapore, demand has also grown as companies embrace a hybrid strategy. “Post-pandemic, it is very clear that there’s a preference from employees to enjoy increased flexibility,” Tol says. In a bid to retain talent, more organisations are opting for WeWork as a way to offer employees the freedom to work from any of its 13 locations (excluding 21 Collyer Quay) in the city-state.
In response to the demand spurred by enterprises, more than 80% of the 21 Collyer Quay facility is dedicated to office space targeting a single tenancy per floor. “21 Collyer Quay is really designed to double-down on the enterprise demand that we’re seeing at the moment,” Tol says.
To date, Tol says a third of the space that will be open in July has been committed, with demand coming from a range of industries including financial services, insurance and tech. Among the confirmed tenants is risk management firm Willis Towers Watson, which will be taking up a floor at the building. Tol is confident that the remaining space will be snapped up in due course. “We’ve had an incredible number of inquiries, both on the full-floor suites as well as for the co-working suites that we offer,” he says.
Tol: 21 Collyer Quay is really designed to double-down on the enterprise demand that we’re seeing at the moment (Picture: WeWork)
Experience-based elements
To bolster its enterprise value proposition, 21 Collyer Quay has a number of elements that are not offered at WeWork’s other Singapore locations. One of these is the option for full-floor tenants to choose from different predetermined layouts or to opt for full customisation based on their preferences.
A wider range of facilities will also be available. This includes a wellness centre that will be operated by an external vendor, a conference centre, an auditorium, an event space, and a bar area on the 18th floor that has panoramic views overlooking the Marina Bay area. According to Tol, the extended range of facilities are a response to the pandemic-driven shift towards a more experience-based environment that focuses on employee well-being. “For someone to be willing to make the commute into the office, they’d want more [out of the workplace],” he explains.
The full suite of facilities at 21 Collyer Quay will be made available in September when the building’s second phase comes online. “It will allow our members to come in not only for work, but to enjoy a multitude of facilities that allows them to have a one-stop shop for any type of activity that they would like to conduct on a daily basis,” Tol says.
More than 80% of the 21 Collyer Quay facility is dedicated to office space targeting a single tenancy per floor (Picture: WeWork)
High-margin market
Earlier this month, WeWork released its results for 1Q2022 ended March 31, reporting global revenue of US$765 million ($1.05 billion), up 7% q-o-q and 28% y-o-y. As of the end of March, it had 626,000 physical memberships across its 765 locations, an increase of 6% q-o-q and 32% y-o-y.
The company, which went public last October via merger with a special purpose acquisition company, narrowed its net losses by 37% q-o-q to US$504 million in the first quarter, while it also announced an upward revision of its revenue guidance for 2Q2022 to US$800 million-US$825 million, tightening the previous range of US$775 million-US$825 million.
Tol points out that among WeWork’s 42 markets, Singapore ranked among the group’s top revenue contributors during the quarter, in addition to London, Paris and Seoul. The four markets collectively saw average physical occupancy of 83%, far outpacing the 59% recorded for the next best tier of cities comprising New York, San Francisco, Boston and Los Angeles. The top-tier cities also recorded building margins — a measure of membership and services revenue, excluding operating expenses — of 28%.
For Tol, the opening of the new location will allow the group to continue tapping into the strong enterprise demand fuelling Singapore’s performance. “21 Collyer Quay comes online at a very timely moment because if we didn’t have this inventory, I would have to say ‘no’ to the growth of enterprise opportunities here,” he says.
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