WeWork said to be in advanced talks to lease 100,000 sq ft in MYP Centre

Singapore

US-based co-working space provider WeWork is continuing to expand in Singapore.

The Business Times understands that the company is in advanced talks to lease about 100,000 sq ft at MYP Centre at 9 Battery Road, which could make it one of WeWork's biggest spaces in Singapore.

The bulk of the space that WeWork is negotiating to lease in the 28-storey building, formerly known as Straits Trading Building, is currently leased to Rajah & Tann.

The law firm operates out of about 90,000 sq ft on 11 floors in the building, but is expected to relocate later this year to Marina One, the mixed development project by M+S Pte Ltd; M+S is a 60:40 joint venture between Malaysia's Khazanah Nasional and Singapore's Temasek Holdings.

MYP Centre, which is on a 999-year leasehold site in the traditional Raffles Place financial district, is owned by listed MYP Ltd, controlled by the family of Indonesian tycoon and philanthropist Tahir, the founder of Indonesia's Mayapada Group; his son Jonathan is MYP's executive chairman.

MYP acquired the property in 2016 for S$560 million or S$3,524 per square foot on net lettable area.

It had bought the property from Sun Venture Group, which in turn had picked up the building from The Straits Trading Company for S$450 million in 2014.

WeWork was established in New York in 2010, and now operates in 425 locations across 100 cities. Its Singapore office opened in Beach Centre in December 2017.

Four months before that, WeWork had its start by acquiring co-working startup Spacemob, including its two Singapore spaces at 8 Claymore Hill and Ascent at 2 Science Park Drive.

Along with Beach Centre and the two Spacemob outlets, WeWork is in six other locations: City House, 71 Robinson Road, 8 Cross Street, China Square Central, Mapletree Anson and Suntec Tower 5.

In the second quarter of this year, the co-working space provider is expected to begin operating at two new locations - Funan along North Bridge Road and Arc 380 in Jalan Besar.

WeWork now has some 400,000 members globally, of which 30 per cent are enterprises (that is, companies with more than 1,000 employees). The remaining members are a mix of small and medium-sized enterprises (SMEs), startups and freelancers.

Last month, the group rebranded itself as The We Company to bring its business ambitions together for its expansion into newer business areas.

The We Company has three arms. Besides its co-working unit WeWork, there is WeLive (which provides co-living spaces) and WeGrow, a "conscious entrepreneur school".

Savills Singapore research head Alan Cheong said co-working operators and other flexible office-space providers have been an important source of demand that has, since 2017, taken up the office space vacated in older Singapore CBD buildings by tenants who have moved to newer buildings such as Guoco Tower, UIC Building, Duo Tower and Marina One.

WeWork aside, IWG (its brands include Regus and Spaces) and JustCo are also players with significant presence in the flexible office space market in Singapore.

June Chua, head of leasing at Cushman & Wakefield Singapore, said co-working operators bring a lot of value to the table for occupiers: "A company that decides to take space in a co-working centre does not incur capital expenditure from having to fit out the space - as against leasing conventional office space directly from a landlord.

"Getting capex approval can be challenging for some companies. Moreover, co-working operators host events and networking sessions for their members."

Some leasing agents say that as flexible office-space operators have expanded in Singapore, they have begun making more demands from landlords in terms of rental rates as well as in the structuring of deals.

A seasoned office-leasing agent who declined to be named said: "A lot of flexible space operators want deals with a profit-sharing model rather than a traditional lease.

"Landlords on their part, are looking at their own situation. Some landlords may be agreeable to a profit-sharing model, some might not."

Many Singapore office landlords have also ventured into the flexible space arena. For instance, CapitaLand last year took a 50 per cent stake in The Work Project. Its locations in Singapore include Capital Tower and Asia Square Tower 2, both owned by CapitaLand Commercial Trust.

City Developments Ltd (CDL) has a stake in Distrii, a co-working space operator from China that last year opened its first outlet outside China at Republic Plaza, owned by CDL.