WeWork drops prices on co-working spaces in wake of Covid-19 pandemic
One of the WeWork offices in Australia.
The world’s largest flexible space operator is now renting desks in its co-working spaces for less than what it had charged for an unguaranteed place on its communal hot desks before the pandemic.
WeWork is even throwing in free rent for the first few weeks depending on when a customer joins and if they commit to a three-month contract at $299 per month for their own desk.
Headquartered in New York, WeWork has long dubbed itself as the home for “freelancers to Fortune 500s”. However, recent promotions and announcements signal the flexible work giant is going to extreme lengths to attract and retain new customers, charging prices one third of the average desk space costs and even inviting the humble pooch to work.
Its internal blog brags about motivating employees, optimising time as a Gen Z office worker and the best ways to retain employees – which now seems like advice it could benefit from reading.
The prices are a far cry from what it once charged, and two thirds less than what it costs to rent a desk at any other co-working space in Sydney.
Offices are not the only thing on special; WeWork is renting hot desks for as a little as $29 a day, while meeting rooms start at $10 an hour.
The promotion covers 400 desks within one to 49-person offices across 17 of its 19 co-working sites across the country. There are strings attached, with a minimum term of three months and a maximum of 13.
While the price has confused those who monitor the flexible work space sector, a WeWork spokesman refused to provide membership numbers for its 19 offices nor defend the cost to rent a desk.
“We’ve seen demand from businesses of all scales accelerate over the first half of 2022 as companies implement flexible working strategies,” he said. “Our occupancy in Q1 2022 for Australia also increased 13 points year over year, while total consolidated desk sales for the Q1 period reached pre-pandemic levels.”
While it reported a 21 per cent quarter-over-quarter jump in the first quarter of this year, it arrived after WeWork pulled out of three venues in Perth, Melbourne and Sydney.
Jim Groves, the founder of flexible desk monitor Rubberdesk, said he did not believe WeWork was struggling but the price surprised him
“It is unusual … very low,” Mr Groves said. “I think it’s a good marketing strategy. I don’t think it would get a conversation going if it were discounted less.”
US-listed WeWork manages 10 offices in Sydney, four in Brisbane, four in Melbourne and one in Perth.
While there are no offices in New Zealand, there are near 30 offices in Southeast Asia, 16 in Hong Kong and 71 in China, 34 of them in Shanghai and 20 in Beijing.
Rubberdesk’s June 22 Australian Flexible Office Space report saw vacant office space in Sydney drop 22 per cent while prices rose 4.5 per cent.
Across the country there were 2474 vacant offices, 156,875sq m of vacant space and 27,057 vacant work stations.
The median rate per person per office was $900 in Sydney, twice what WeWork is charging new customers. Brisbane is at $690, Melbourne at $687, Perth at $669, Canberra at $585, Adelaide at $557 and Hobart at $400.
