AM Bid signs up
WeWork welcomes Scots tenants amid management wrangle
WeWork creates a leisurely environment
One of Scotland’s most anticipated office developments welcomes one of its first tenants this week just as its own growth is showing signs of slowing.
AM Bid, Scotland’s largest bid and tender specialist, will move into the 40,000 sq ft WeWork facility in George Street, Edinburgh. It is one of a number of firms which have signed up for the co-working offices.
WeWork has become a global phenomenon in the real estate market but its expansion has been tempered by concerns over its governance, losses and the decision to postpone a flotation in New York.
Other tenants in the Edinburgh offices include the home security startup Boundary, led by Robin Knox and Paul Walton, and Upgrade Pack, a travel tech business run by two Edinburgh born entrepreneurs who have raised £3.4m towards expansion.
Andrew Morrison: opportunity for collaboration
AM Bid, which originated in North Berwick, is celebrating its fifth anniversary next month and managing director Andrew Morrison said the time is right to establish a headquarters in the capital. It will have an initial six staff in the office.
“The facility is set up to create a great working experience and also offers opportunity for collaboration with other businesses working there,” he said.
Edinburgh will be WeWork’s first venture into Scotland and its third in the UK after London and Manchester but it comes at a sensitive time for the New York based company.
It rents office space from landlords, then renovates and subleases it to individuals and startups through short-term contracts. It has expanded its network almost five times in two and a half years, and is now in about 530 locations across 111 cities in 29 countries. It is the biggest private-sector office tenant in New York.
Prospective investors were concerned about its governance and spiralling losses
Its growth has been attributed in large part to its flexibility and its ability to capture those who would otherwise work from coffee shops or home. But critics say this also exposes its business model to uncertainty and risk.
The controversy surrounding its delayed flotation has led its landlords in New York and London to prepare for any drop in demand from the company which is seeing a shift from rapid expansion to leaner growth.
The company was set up in 2010 by Miguel McKelvey and Adam Neumann who last week resigned in the wake of the halted IPO. Prospective investors were concerned about its governance and spiralling losses.
There have also been questions about its valuation. In 2018, Morgan Stanley said the firm was worth $104 billion while a private placement in January put the value at $47bn. However, the postponed IPO would have given the business a valuation of $15bn.
Artie Minson and Sebastian Gunningham, the new CEOs are now said to be planning an overhaul of the company and its management.
The company is selling Mr Neumann’s private jet which some investors said was a sign of poor corporate governance.
The new management is also expected to slash thousands of jobs and sell off businesses outside WeWork’s core office-rental operation, according to the Wall Street Journal.