To meet growing demand for flexible offices, WeWork, the leading global flexible space provider has formed a franchise partnership with SiSebenza, a pan-African real estate investor, to expand its international business.
According to global commercial real-estate services company, Jones Lang LaSalle (JLL), flexible offices, shared, serviced and co-working spaces will account for 30% of all offices globally by 2030.
WeWork said the key drivers of growth in the flexible office sector included the increased adoption of a hybrid model —working from the office and remotely; cost-conscious occupiers seeking flexibility in lease terms; and innovation in the workplace to drive collaboration and optimise space utilisation.
“Franchise partnership — an asset-light growth strategy — enables us to meet the growing demand for more flexible space solutions in other markets and further strengthen our underlying business,” said CEO Sandeep Mathrani.
The New York Stock Exchange-listed company has 779 offices globally with workstation capacity of more than 900,000. It offers dedicated desks, private offices, office suites and office buildings that cater for 1-100 people.
WeWork also has franchise and joint-venture partnerships in China, Latin America, India and Israel.
The deal concluded at an undisclosed amount gives SiSebenza exclusive rights to expand the SA franchise and operate the WeWork franchise in Ghana, Kenya, Mauritius and Nigeria.
SiSebenza partners with global companies entering African markets. The company clinched the deal that saw WeWork open its first office, The Link, in Rosebank, Johannesburg in 2019.
With two other offices — 80 Strand in Cape Town and 155 West Street in Sandton — WeWork plans to expand in existing localities and open new offices in major cities in SA, SiSebenza founder Andrew Robinson told Business Day.
He said globally and in African markets, most businesses were moving away from owned or long-lease offices to “house” teams in community-centred and innovative spaces that cultivate culture and interpersonal collaboration.
“This partnership enables us to leverage our real-estate expertise and knowledge to support WeWork’s expansion into markets where there is investment capital for this asset class,” said Robinson.
WeWork also offers a subscription membership that provides access to localities worldwide, a pay-as-you go access to workspaces and meeting rooms, as well as space-as-a-service offering for cost-conscious occupiers moving away from long-term leases.
In its 2022 fourth-quarter earnings, WeWork recorded more than 18% year-on-year revenue growth to $848m, with global occupancies growing 12% year on year to 75%.
The company said its occupancy and market share growth demonstrated the office sector’s shifting landscape as more companies moved away from traditional offices and adopted flexible offerings such as WeWork.
SiSebenza will follow WeWork’s model to lease space from property owners. With SA’s office sector battling high vacancies, much of this is premium grade, well-located, priced right and well-suited for flexible space needs, said Robinson.
Robinson said that with increasing occupational costs, occupiers wanted choice and flexibility from an office space. WeWork is positioned to meet growing demand for accessible, convenient and flexible workspaces for both collaborative and focused work.
“Load-shedding is resulting in increased demand and enquiries for flexible offices where there is back-up power,” said Robinson.
Justin Thom, a director at Galetti Corporate Real Estate, said flexible offices appealed to start-ups, freelancers, and small and medium-sized enterprises that required flexibility. Many of these businesses have limited financial resources, so they prefer the short-term, all-inclusive nature of flexible office space.
Big corporates are adopting flexible offices with access to a diverse range of workspaces to accommodate different types of work and collaboration, as part of their real-estate strategies.
“The shift to a hybrid model and move towards space-as-as service featuring amenities, cafes, pause areas and communal areas that encourage collaboration and creativity, drive demand for flexible offices,” said Thom.
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