Exclusive | WeWork dumps about fifth of coworking space, in breach of leases signed with major Hong Kong landlords
- New York-based company has given up two floors in Hysan Place in Causeway bay and six floors in Sun Life Tower in Harbour City in Tsim Sha Tsui
- Analysts say landlords Hysan Development and Wharf have burned their fingers, can’t chase WeWork for compensation
WeWork, the US real estate firm, is returning about 20 per cent of its Hong Kong premises to their owners, as start-ups, small enterprises and other short-term tenants failed to take up its offering of shared working space in the city.
It has given up 182,000 sq ft in Causeway Bay and Tsim Sha Tsui, two of Hong Kong’s prime office districts, according to agents familiar with the matter.
Two floors in Hysan Place in Causeway bay and six floors in Sun Life Tower in Harbour City in Tsim Sha Tsui have been put on the market for new tenants. According to Land Registry records, WeWork signed a 10-year lease for the Hysan Place floors in November 2018, with the contract starting in November 2019. The 10-year lease for the Sun Life Tower floors was signed in July 2019 and started in December 2019.
Hysan Development and Wharf Reic, two of Hong Kong’s major retail property operators and WeWork’s landlords at Hysan Place and Harbour City, respectively, declined to comment on the early surrender and on whether they expected any compensation for breach of lease.
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The withdrawal is its first in the four years since it entered the Hong Kong market. WeWork continues to operate a coworking space covering four floors in Hysan Development’s Lee Garden One development in Causeway Bay. It acquired 1 million sq ft of office space, or 1 per cent of the world’s most expensive property market, during a stunning acquisition spree. The coworking industry as a whole accounts for 3 per cent of office space in Hong Kong.
