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

Mumbai: US-based co-working office space provider WeWork, which recently received $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 sq. ft of 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 sq. ft 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, Karan Virwani, director of WeWork India, said that the company is in advanced discussions to sign a lease deal with Blackstone. He plans to set up a new WeWork co-working centre with around 1,000 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 in 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 the Embassy Group, a Bengaluru-based real estate firm.

The company, which announced its entry into India early last year, has so far opened two centres, one each in Bengaluru and Mumbai, with a total of around 4,000 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 on strengthening its presence in the three metros—Mumbai, Delhi-National Capital Region (NCR) and Bengaluru—WeWork has closed a few large leasing deals in the past two months. In July, it signed up with real estate firm Prestige Group to lease a six-storey commercial building called Prestige Atlanta spread across 60,000 sq. ft at Koramangala in Bengaluru.

In August, the company 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 centre would start operations by December this year and would have around 800 seats.

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

“The challenge so far has been to manoeuvre in different cities, find the right rentals and properties, and also understand 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 a 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, the co-working office segment is expected to grow by 40-50% and is likely to receive $400 million in investments by the end of the year in India.