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Doubts over covenants

Plug pulled on WeWork’s plan for Glasgow office letting

WeWork

The company provides a casual work environment

WeWork’s plan to open co-working offices in Glasgow has fallen through over concerns about its financial stability, according to industry sources.

It is understood landlord Fore Partnership had concerns about the strength of WeWork’s covenant and pulled out of the letting in Bothwell Street.

WeWork aborted a planned flotation in September and its valuation plummeted before shareholder SoftBank injected further support.

The company is said to have agreed to take all available space at 50 Bothwell Street, and fitting out had already begun when the decision was taken to abandon the deal. 

The 77,000 sq ft office building was acquired in partnership with Kier Property in 2016 for £23m.

Basil Demeroutis, managing partner at Fore Partnership, told trade publication Property Week: “Clearly there are concerns about the strength of the WeWork covenant and it will take some time for landlords and lenders to work through that and feel comfortable in dealing with them again.”

A WeWork spokeswoman said: ”We’re committed to the EMEA region and to our strong community here. We consider many buildings across markets in which we’re located but of course may not decide to proceed with all of them.”

WeWork recently opened an office in George Street, Edinburgh but its New York based new management team is reviewing the cost base of the business amid speculation that 4,000 jobs worldwide might be cut.

Bloomberg reported that WeWork is assessing its expansion plans in London and whether to proceed with about 28 potential letting deals in the city.

The agents on 50 Bothwell Street are Knight Frank and CBRE.



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