China takes the limelight as the main focus for WeWork in Asia, but the company is pushing ahead with plans to grow its presence in Southeast Asia. After launching in Singapore in January, WeWork is aiming to expand into four more countries this year, according to its head of the region.
The company is kicking things off by announcing its entry into Indonesia, the world’s fourth-most populous country and Southeast Asia’s largest economy, with plans to go on to Thailand, Malaysia and the Philippines before 2018 is out.
“We’re definitely expanding across Southeast Asia,” Turochas ‘T’ Fuad, who joined WeWork when it acquired his Singapore-based startup SpaceMob last year, told TechCrunch in an interview.
The next step to that is Jakarta, Indonesia’s capital city and a global megacity, where WeWork today announced its first two locations: Sinarmas MSIG Tower, a location that will cater to 1,400 WeWork members across five floors, and Revenue Tower, where it has secured three floors that cover 800 people.
The offices will open in Q3 2018, but already one company — b2b e-commerce startup Bizzy — has committed to renting over half of the occupancy at MSIG Tower, and WeWork expects demand to be high.
“Both locations are in Jakarta’s central business district,” Fuad explained. “Each launch is planned months in advance, we’ve done due diligence to know what local companies are looking for.”
In the case of MSIG Tower, the company has partnered with Indonesian conglomerate Sinar Mas, which owns the building, on a revenue-share agreement.
“We’re helping to activate the building, but the landlord is going to enjoy the membership yield that we have,” Fuad said. “This allows us to be quite flexible to work with landlords across the region; in this case, our goal is to generate incremental yield versus rental revenue alone, and bring [the office space] to life.”
Bangkok looks to be next based on WeWork’s job site, which lists four open roles in the city. Elsewhere, the company is hiring for one person to join its team in Manila and there’s another role in Kuala Lumpur.
A common area at WeWork Beach Centre in Singapore
WeWork acquired SpaceMob and it recently announced a deal to buy China-based rival Naked Hub, but it isn’t seeking to do more M&A in Southeast Asia at this point. It is also not looking to raise further capital.
The company has pulled in over $6.9 billion from investors to date, a large part of which came via SoftBank’s huge $4.4 billion investment last year. WeWork allocated $500 million of that capital for its “Asia Pacific” business — APAC minus China and Japan, where it works directly with SoftBank — and Fuad said the unit “still has a tonne of cash.”
Still, if it is working with heavyweights like Sinar Mas, you’d imagine that there would be opportunities to deepen the alliance perhaps by raising strategic investment for the regional business.
“There’s no comment on this just yet,” Fuad said. “[The $500 million] is a lot of money and we’ve just started out over the last six months.”
Watch this space then.
WeWork is actively engaging corporates in other ways though, mainly through its ‘Powered By We’ service that essentially enables companies to contract WeWork to redesign their office space. The U.S. firm just struck deals with Standard Chartered Bank in Hong Kong and Fung Group and WeWork China investor Hony Capital, and it is working to do the same in Southeast Asia, where Fuad said there is a “healthy pipeline.”
“We’re aggressively talking to various enterprises from banking, to retail and tech firms,” he added.
Note: The original version of this article was updated to correct that Bizzy is moving into MSIG Tower not Revenue Tower, and to amend that Fung Group and Hony Capital are not related entities.