WeWork concerns cast shadow over Singapore’s real estate sector

Signage is displayed on glass doors at the WeWork Cos. 32nd Milestone co-working space in Gurugram, India, on Monday, Feb. 18, 2019. Photographer: Ruhani Kaur/Bloomberg

Concerns about WeWork Cos. may amplify the negative impact of a weakening economy on Singapore’s commercial real estate investment trusts, according to Credit Suisse Group AG.

Poor sentiment on the company could further damp demand for co-working spaces amid slowing gross domestic product growth, hurting office REITs, analysts led by Nicholas Teh wrote in a report.

“Office REITs have mentioned in recent briefings that corporate demand has slowed, while the narrow drivers are tech and co-working,” the analysts wrote. “There are growing market concerns around the sustainability of co-working demand, going forward.”

WeWork this week withdrew its planned initial public offering amid difficulties with its fundraising. The company has also been rattled by the departure of its chief executive officer and market concerns over demand.

The New York-based firm is the leading player among flexible work space operators in Singapore, which has seen such facilities triple since 2015, Credit Suisse said, citing Colliers research. Together with other major players such as IWG PLC and JustGroup Holdings Pte., WeWork has contributed to co-working space being a key demand-driver for REITs in the city-state.

Credit Suisse noted that the impact may vary depending on the client. While WeWork’s losses have mounted, JustGroup’s financials show the company is closer to profitability and IWG has already broken even, the analysts noted.

“We note that profitability across operators can vary substantially and, for now, believe concerns would be about the sustainability of WeWork’s leases, rather than significant consolidation in the industry as a whole,” the report said.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.