This comes as no surprise, as the collapse was expected sooner or later. WeWork filed for bankruptcy at the beginning of the week in the United States. The American coworking giant, backed by the Japanese conglomerate Softbank, saw its value plummet from $47 billion to just $50 million in the space of a year. Weighed down by high rents, weighed down by its debts, hurt by soaring interest rates and the widespread use of home working, the start-up founded by Adam Neumann around designer coworking spaces has placed itself under Chapter 11 protection in the United States and similarly in Canada.
However, this filing only concerns WeWork establishments in these two countries, those outside North America not included in this procedure. " WeWork franchisees around the world are not affected either." says this leading player in shared office space. The twenty or so Paris sites should therefore continue to operate as usual.
In order to considerably reduce the company's debt and accelerate its restructuring, WeWork has been placed under protection and the leases on certain sites have been rejected. "largely non-operational "and discussions underway with its other backers. According to Reuters, " WeWork's bankruptcy court filings list 69 leases that the company intends to reject immediately, and the company said it is working to renegotiate leases with 400 landlords" .
" During this period, WeWork will continue to rationalise its portfolio of commercial office leases" says the American group. While WeWork had 777 sites in 39 countries Last June, with an average occupancy of 72%, further disposals are undoubtedly on the cards. " The time has come for us to look to the future by aggressively tackling our legacy leases and significantly improving our balance sheet." said David Tolley, CEO of WeWork, while expressing confidence in his company's ability to emerge from this difficult period: " WeWork has solid foundations and a promising future" .
WeWork bankrupt, IWG booming
Without the misfortune of some making the happiness of others, We Work's situation contrasts with that of another big name in the sectorIWG, the parent company of Regus and Spaces. The world leader in flexible working recorded revenue growth of +14% in the first half of 2023, and 8% in the third quarter. " The structural growth of hybrid work, combined with our market position, has resulted in continued sales growth" said IWG CEO Mark Dixon.
Not wishing to comment on the situation of its competitors, IWG notes that ". having already taken over a number of competitor sites, including more than 30 WeWork sites internationally, to meet the growing demand for hybrid working" . Cover versions that contribute to sustained growth. Since January 2023, IWG has opened 612 new sites around the world, after adding 462 the previous year, almost all of them through management or franchise partnerships. In contrast to WeWork's high leases, IWG has a low capital intensity.
IWG's development is driven by two trends: companies re-evaluating their property portfolios and reducing their city centre locations and, at the same time, the development of flexible workspaces in communities closer to residential areas, to limit employee commuting. " We are currently witnessing an unprecedented acceleration the "great lease termination" movement. Companies of all sizes are terminating their long-term commercial leases and replacing them with short-term agreements with flexible workspace operators such as IWG." says Mark Dixon.
This is true in North America, with more than 250 new IWG sites in the United States alone, but also in the United Kingdom and Europe. in France, one of IWG's key markets. The Group opened 13 new centres between January and September 2023, with around twenty more to come over the next few months, particularly in the regions. " Our national network continues to expand, with openings in regions where we did not previously have a presence, such as Douai, Clermont-Ferrand, Carquefou and Brest." says Christophe BurckartManaging Director France of IWG. According to IWG, the flexible working space sector is expected to grow by 600 % between now and 2030. This opens up excellent growth prospects for the world leader, which signed up 200 new centres in the third quarter. But also for WeWork, once its restructuring is complete?
