U.S. coworking space giant WeWork plans to roll out a revenue-sharing scheme with Asia-based landlords and developers, aiming to establish new facilities with partners, rather than rent a set of floors in a building.
WeWork Asia's Head of Real Estate and Managing Director, Evan Kleinberg, told Mingtiandi in an interview that the "participating lease" strategy will see the company partner with landlords or developers to create new facilities within a landlord's building and sublease the spaces to end-users.
Under the arrangement that WeWork is offering, the building owner has the option to inject capital into the creation of the facility that will be operated through a joint venture, or lower WeWork's upfront payments in exchange for a share in the income that the co-working space operator will generate, the news outlet added.
WeWork is scheduled to open a new center in Kuala Lumpur's Equatorial Plaza in the first quarter of 2019 with local developer Daman Land under the new strategy, adding to its participating lease deals with Sinar Mas Land in Indonesia and with the Fung Group and Sino-Ocean Group Holding Ltd. in China.
In total, the US$42 billion startup has opened 123 locations across nine Asian countries after its two-year operations in the region, according to the Jan. 2 report. Kleinberg said the timing is right for the company to expand the scheme in Asia as landlords and developers recognize the WeWork model and the changing nature of the workforce.