India: WeWork in talks with Blackstone to lease space at 247 Park in Mumbai suburb

A file photo of Karan Virwani, promoter of WeWork India. Photo: Hemant Mishra/Mint

US-based co-working office space provider WeWork, which recently received a $4.4 billion funding from Japan’s Softbank Group Corp, is close to signing a lease deal with Blackstone Group to take up around 60,000 sft space at 247 Park, a commercial building at Vikhroli in Mumbai, said a top company executive.

In 2015, the New York-based global private equity firm had acquired the entire 1.1-million sqft building from its previous owners HCC Real Estate Ltd and IL&FS Milestone Realty Advisors Pvt. Ltd for over Rs1,000 crore.

In an interview with Mint, Karan Virwani, promoter of WeWork India said that the company is in advanced stage of discussion to sign a leasing deal with Blackstone. He plans to set up a new WeWork co-working centre with around 1000 seats within the property.

Blackstone has declined to comment on the development.

“We really want to grow as fast as possible. We wanted to choose places with good visibility but we are also going to grow at every single micro market. The idea is to be at the central location and start spreading out from there,” said the 25 year-old scion of Embassy Group, a Bengaluru-based real estate firm.

The company, which announced entry into India early last year has so far opened two centres each in Bengaluru and Mumbai, with a total of around 4000 seats. It plans to open four more centres, taking the total number of seats to 10,000 by February, 2018, he said.

With special focus to strengthen its presence in the three metros — Mumbai, Delhi-National Capital (NCR) and Bengaluru at the moment, WeWork has closed a few large leasing deals in the past two months. In July, it has signed up with real estate firm Prestige Group to lease a six-storey commercial building called Prestige Atlanta spread across 60,000 sqft at Koramangala in Bengaluru.

In August, the company has also leased an entire four-storey commercial property at Andheri, which previously housed the headquarters of broadcaster Star TV India, to set up its second co-working office in Mumbai. The new place would start operation by December this year and would have around 800 seats.

The company is also gearing up to open its first centre in New Delhi by February next year. It has leased an entire 100,000 sqft building at Gurugram, Virwani said.

“The challenge so far has been to manoeuvre different cities, finding the right rentals and properties, and also understanding how to do things locally and trying get the right real estate,” he said adding that the company is also looking at shifting from straight leases of properties to management agreements or revenue sharing model with owners and developers.

According to Bloomberg, WeWork is valued at around $20 billion and is among the top five technology start ups globally. Founded by Adam Neumann and Miguel McKelvey, the firm is present across 95 locations in 21 countries and is backed by several global investors including JP Morgan Chase, Harvard Management Company, Wellington Management, Hartford Funds Management, Legend Holdings and Hony Capital.

Virwani along with Nikhil Arora from WeWork Global and former JLL executive Juggy Marwaha are spearheading and leading WeWork’s business in India.

As per property consultant JLL India, co-working office segment is expected to grow by 40-50% and is likely to receive $400 million in investments by 2018 by the end of the year in India.

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This article was first published on Livemint.com