WeWork picks South Africa for first African expansion

Johannesburg, Feb. 7, 2019 (Reuters/NNN) U.S. shared workspace provider WeWork plans to launch in South African later this year, the Managing Director, Eugen Miropolski, said on Thursday.

Miropolski said in Johannesburg that the company would open its first location in the up market Johannesburg suburb of Rosebank in the third quarter of the year.

The move by the $47 billion New York-based company will mark its first African expansion.

WeWork leases office spaces and sublets them out to individuals and start-ups.

The model creates a mismatch between its erratic income stream from clients who can rent for as little as month and the fixed rent it has promised to landlords.

The firm, backed by Japan’s SoftBank Group Corp, will team up with Redefine Properties, one of South Africa’s biggest real estate companies in the expansion.

The model is being rolled out to landlords, and is expected to become increasingly common for the company, the source said.

“Expanding here is an obvious choice for us: it’s our first location in Africa and, with its global outlook, South Africa is the gateway to the rest of the continent, so we’re excited to welcome new members and grow our community here,” Miropolski said.

Miropolski also said WeWork had no immediate plans to expand elsewhere on the continent.

“We’re looking to expand our footprint across Africa, and we’re very excited about the potential here. But right now, we’re fully focused on launching in Johannesburg and building our local community,” he said.

In its first release of financial results in August, the privately held firm reported a net loss of $723 million for the first half of 2018 versus $154 million a year earlier. (Reuters/NNN)
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Editing by Joseph Idika/Silas Nwoha