Coronavirus could be beginning of end for WeWork in Hong Kong as start-up indefinitely delays opening three branches
- The operator of shared office space had planned to open in Causeway Bay, Tsim Sha Tsui and Kowloon Bay last year, but these plans have been pushed back
- Company says its top priority is to ensure that its members have a safe working environment across its global operations
WeWork has indefinitely delayed the opening of at least three co-working spaces in Hong Kong that were planned for late last year. Now, market observers believe the coronavirus pandemic could force the company to retreat from the city as it takes a toll on an economy already in recession.
The cash-strapped company had planned to open stations in Hysan Place in Causeway Bay and Sun Life Tower in Tsim Sha Tsui at the end of 2019, while its operations in Octa Tower in Kowloon Bay have already been delayed by more than six months.
“At the moment, we are focusing on our top priority of ensuring members across the world to have a safe workplace environment,” the company said in an email, referring to the Covid-19 pandemic. It, however, did not provide any update on the opening of the three centres. WeWork’s operations have been hit in the city for over a month as people avoid crowds and work from home in a bid to prevent the disease from spreading.
The virus has now infected more than 190,000 people, claiming at least 7,800 lives, mostly in mainland China. As the pandemic spread globally, it’s weighing on the city’s economy that has already been hit by anti-government protests last year. Dozens of small businesses related to retail, food and drinks and tourism have closed, while many are barely surviving.
“The cost of surrendering the space may be just too high,” said Vincent Cheung, managing director of Vincorn Consulting and Appraisal. “We see a lot of co-working spaces are at least half empty while some are even worse.”
He added that keeping the leased space idle and not making further investments, such as hiring staff and saving on facilities maintenance fees, is the best way to stop the bleeding.
