WeWork sets its eyes on China
Coworking space giant is actively scouting Shanghai for locations
November 18, 2015 03:30PMBy Rich Bockmann
From left: Adam Neumann, Miguel McKelvey and Shanghai (credit: Instagram)
From the New York website: After opening locations in the U.K., Israel and the Netherlands, WeWork has its sights set on a new and potentially massive international market: China.
The coworking giant, fresh off a $10 billion valuation, is actively searching for locations to set up shop in Shanghai, a source with knowledge of the company’s plans told The Real Deal.
WeWork’s Shanghai plans, however, don’t appear to be as far along as those for Berlin, where the company is most likely to open its next international location, the source added.
Another source indicated Goldman Sachs may be advising WeWork in its Chinese expansion, with the company looking to partner with local real estate operator Shanghai Huge Enterprises, a subsidiary of Chinese conglomerate Legend Holdings. This claim, however, could not be independently verified.
A representative for WeWork declined to comment.
Since getting its start at 154 Grand Street in Soho in 2010, the fast-growing startup has expanded domestically and abroad. It opened its first international office in London in October of last year, followed by locations in Tel Aviv and Amsterdam.
Through the first half of the year, WeWork was the most active tenant in Manhattan, leasing nearly 600,000 square feet of space.
Having a local Chinese partner would help WeWork navigate some of the cultural differences such as changing its food options and amenities (goodbye, keg parties?) to ones better suited for Chinese white-collar workers, according to Afzal Tarar, founder of advisory firm Arcis Capital and a former partner in PwC’s Shanghai office.
In addition, the company may also look to change its name to one that would translate better to Chinese office workers.
“Coming up with a catchy Chinese name is important. WeWork would not translate well to Chinese,” Tarar said, adding that most major Western companies in China operate under a distinct Chinese name.
The company is also likely to face competition from local players like UR Work and People Squared.
Konrad Putzier and Hiten Samtani contributed reporting.
Source: The Real Deal