WeWork collapse poses £3bn threat to UK landlords

Concerns from landlords have been growing that they could be exposed to billions of pounds in owed rent if WeWork were to close after the co-working giant issued a warning about its future earlier this month.

WeWork’s UK subsidiaries have signed leases worth £3.1bn at 56 locations in the UK, according to analysis from The Telegraph, leaving dozens of landlords exposed by the potential collapse.

Last week, WeWork said in its second-quarter results that there was “substantial doubt about [its] ability to continue as a going concern” unless there was a rapid turnaround in the business.

Interim chief executive David Tolley said the firm needed to reduce tenancy costs and raise additional capital over the next 12 months to keep afloat.

WeWork has been offloading a number of its leases and properties through property arm WeWork Capital Advisors, but despite slimming down, its 3m sq ft of space in London still makes it the capital’s largest private tenant.

Major WeWork locations include a 285,000 sq ft office in Canary Wharf’s 30 Churchill Place, owned by Brookfield Property Partners and the Qatari royal family, and a 300,000 sq ft office on the South Bank owned by Almacantar.

Tolley, who said the firm was confident it could turn things around, cited excess supply, increasing competition and macroeconomic volatility as key problems driving higher member churn.