WeWork India Inking Deals To Lease 10 Lakh Square Feet In Four Months

Office-sharing startup WeWork has entered into deals with Blackstone Group and Enam Securities in India as it aims to lease 10 lakh square feet by March 2018.

To achieve this aggressive expansion target, the firm has roped in new property owners to lease about seven properties across Delhi, Bengaluru and Mumbai, WeWork India Director Karan Virwani said over the phone from Mumbai.

The joint venture between New York-based WeWork and the builder Embassy Group, has already leased out 3.3 lakh square feet space through two separate deals in Bengaluru and one in Mumbai. “We will open seven new properties – three each in Bengaluru and Mumbai and another one in Delhi,” Virwani said.

The newly-leased space in Mumbai is owned by Blackstone Group, Enam Securities Group and Mumbai-based Vinod Govani, while the Bengaluru properties are owned by Embassy and Prestige groups. The upcoming property in Delhi is owned by Salcon Real Estate, Virwani added.

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WeWork India has so far raised $30 million. Of this, $5 million came from from New York-based parent WeWork and $25 million from Embassy Group, documents filed with Registrar of Companies show.

The startup is raising another $15 million from the Embassy Group to meet its working capital requirement, two people privy to the development told BloombergQuint requesting anonymity.

Virwani, declined to comment on the fresh investment from Embassy Group but confirmed that the new landlords such as Blackstone will put in money to meet capital expenditure for the new spaces. “Most of the new landlords are putting decent money to meet capex. We are entering into revenue sharing deals with them,” he said. He declined to comment on the total capex committed.

On an average, all the properties will have a seating capacity of 1,500-2,000 desks, Virwani, the oldest scion of the Embassy Group spearheaded by billionaire developer Jitu Virwani added.

The seven-year-old company which rents out desks and offices to small businesses, freelancers, large enterprises and startups, is also the world's fifth most valuable technology company and is targeting 10,000 seats in India by February 2018.

In the existing properties in Bengaluru Virwani said the firm is seeing a 90 percent occupancy in WeWork Galaxy and about 60 percent occupancy in the one-month old EGL Bengaluru. “In BKC Mumbai we are seeing 70 percent occupancy,” he added.