IS WEWORK TAKING IT TO THE NEXT LEVEL IN THE UK?

Andrew Barber

“It's Space as a Service - on a big scale."”

Bloomberg’s real estate and property investment reporter, Jack Sidders, had a bit of a scoop recently (October 27th), when he reported that WeWork, the global provider of coworking space and workplace services, was in exclusive talks to buy Devonshire Square "a 12-building campus in the City of London financial district from Blackstone Group” in a transaction aledgedly worth over £600 million.

If the deal comes to pass, it could be a game-changer for the property market in the UK. Such a transaction would take WeWork, its services and customer experience occupiers have come to expect, to another level. Put simply, the transaction would see the WeWork concept of 'Space as a Service' rolled out on a big scale.

Jack’s report suggests that WeWork has agreed a price of over £600 million for the scheme that has in excess of “620,000 square feet (57,600 square meters) of offices, stores, restaurants and a private members club.” He also reported that WeWork “ will “occupy the vacant space” while “adding more facilities.”

According to the Devonshire Square website there is currently 135,158 sq ft (12,557 sq m) available from Q4 2017 at ‘The Spice Building’ and a further 30,000 sq ft (2,780 sq m) available in ‘The Bengal Wing’. That's a total of 165,158 sq ft that could be converted into coworking space - nothing too unusual you might think.

What is more interesting is that, according to Jack’s report, WeWork “will take over management of the 5-acre (2-hectare) estate” meaning that WeWork’s style of space as a service will now influence the working lives of all the businesses and occupiers based at Devonshire Square. At a rough guess that’s potentially somewhere around 50,000 individuals - not to mention the thousands of people that visit the development each week.

That’s a huge number of people who will be exposed to the WeWork approach and it's brand values.

Even if the transaction doesn’t happen, that fact that a company such as WeWork is looking at large scale investments with management opportunities is a further indication of where the office market is heading. Traditional property companies will need to look at WeWork and understand that their success is not solely due to flexibility, free beer and funky paintwork - but a result of a focus on customer service and customer experience. WeWork’s has set the benchmark by which others are measured and it's brand profile is such that it has become the aspirational choice of office space for many SMEs, underlining the value of good public relations in the commercial property market.

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