The fast expansion of WeWork in Australia has come to a halt evidenced by two important office leasing deals between the coworking operator and two of the country’s biggest landlords falling through.
The coworking giant had plans set since July for what could have been its largest deal yet in Australia, to take up 20,000 sqm across an entire tower at 55 Market Street in Sydney’s CBD. However, the deal has fallen over.
WeWork had also been considering ANZ’s former headquarters at 100 Queen Street in Melbourne with plans to take up as much as half of the tower. According to market sources, this deal has also fallen through.
The company’s potential purchase of historic building, 401 Collins Street, which it almost completely occupies, is now also on hold, according to sources.
After reports of the group putting all new lease agreements with property owners on ice in an effort to control costs, this is the first indication of WeWork’s global problems trickling into the Australian market, significantly slowing the company’s growth.
A few months ago, WeWork’s paperwork made public revealed corporate governance troubles in the lead up to its highly anticipated IPO.
After a few weeks, the company lost its chief executive, co-founder Adam Newmann. The company withdrew its plans to list on the stock exchange and saw its valuation plunge from $46 billion to $8 billion following a bail out by Japan’s SoftBank Group Corporation.
According to the New York Times, in the next five years WeWork is planning to lay off 6,000 employees - half of its 12,500 global workforce.
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