With reports coming in that co-working major WeWork
in talks to buy a majority stake in its Indian business unit, real estate experts believe the move could prove to be much more advantageous for the US-based company, given the pace at which the business here is ramping up.
“The reports coming in on WeWork intending to buy up to a 51 per cent stake (mainly from their partner) is a clear indication of how strongly the co-working business has been ramping up in India, and also because of the fact that all the estimates on this segment thus far seem to be much, much better than the expectations,” said Gagan Randev, National Director, Capital Markets & Investment Services at Colliers International India.
He added the players in this space are expanding into marquee office locations and are seeing demand from a wide variety of clients including individuals. “It is thus not surprising that WeWork would try and consolidate its control given the pace of expansion happening in this segment and the resultant valuation boom,” said Randev.
According to a report by real estate services firm JLL, the share of co-working sector in total office leasing
has more than doubled to nearly 10 per cent in 2018 as compared to 4 per cent a year ago. “In times to come, some tier-II and III markets are also expected to witness emergence of co-working hubs,” said Ramesh Nair, CEO and Country Head, JLL India.
Today the commercial absorption has touched almost 13.5 million square feet in Bengaluru, the headquarters for WeWork India, which is a record high in the country. “This is because the co-working module has taken a positive momentum and the demand will continue to go up. Hence, it will be a smart move by WeWork (if the company buys back share in India business),” said Satish B N, managing director, India, Skydealz India Property Services.
WeWork India, however, called the buyback reports rumours. “We do not comment on rumours,” said the SoftBank-backed company in an emailed response. The value of the deal if it happens could be as high as $1 billion, reports suggested. Embassy Group
declined to comment on the report.
While Jitendra Virwani is the chairman and managing director of the Embassy Group, his son Karan Virwani heads the WeWork India
The co-working start-up operates around 3 million square feet office space across Bengaluru, Gurgaon and Mumbai. It has around 35,000 desks in 21 office spaces and is looking to double its business this year.