WeWork Dumps Two Locations in Hong Kong, SCMP Reports
What’s New: U.S. co-working space chain WeWork is dumping about one-fifth of its Hong Kong locations as small enterprises in Hong Kong failed to take up its space offerings in the city, local media reported.
The New York-based company gave up at least two floors in Hysan Place in Causeway Bay and six floors in Harbour City in Tsim Sha Tsui, about 182,000 square feet in the two prominent office buildings in Hong Kong’s most crowded office districts, the South China Morning Post reported, citing agents familiar with the matter.
WeWork signed 10-year leases with the landlords of the office buildings, Wharf Reic and Hysan Development, in July 2019 and November 2018, the SCMP said. Both contracts started late last year. It is unclear whether the landlords will seek compensation for breach of lease, the newspaper said.
Background: Termination of the leases underscores pressures on the office-sharing giant amid the Covid-19 pandemic.
Bloomberg reported earlier that WeWork missed April rent payments for some locations and was approaching landlords about rent abatements, revenue-sharing agreements and other lease amendments as it seeks to trim liabilities.
The withdrawal in Hong Kong marked the first such move for WeWork since it entered the city four years ago, according to the SCMP. WeWork currency runs 12 co-working spaces in the city with the world’s most expensive property market.
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