WeWork India expects to clock revenue of Rs 1,500 crore in FY23: CEO
WeWork India has its best operational year in 2022 both in terms of profitability and revenue and expects to clock revenue of Rs 1500 crore in FY23, said Karan Virwani CEO of WeWork India.
The firm clocked 250% growth in earnings before interest, taxes, depreciation and amortisation (EBIDTA) registering Rs 175 crore profit in 2022, as against a loss of Rs 120 crore last calendar year. WeWork clocked revenue of Rs 1300 crore between January-December as against Rs 760 crore last calendar year.
“It’s been a great year financially for us and the business is generating enough profits to grow. We have not only witnessed growth in our managed office business but also in the digital all-access business that registered 6x growth this calendar year,” said Virwani.
WeWork India turned profitable at the holding company level in the first quarter of 2022, aided by robust demand over the past year
“The need to raise capital is very limited now and we are looking at how we can grow our business both in terms of revenue and profits as well as a potential acquisition,” said Virwani.
The Indian arm of the US-headquartered firm plans to expand its portfolio to 95,000 desks by adding over one million sq ft of flexible office space across the country by March 2024.
The company currently has 70,000 desks in 41 locations. WeWork leased 2.5 mn sqft this calendar year as compared to 1.7 mn sqft between January to December last year with 90 per cent occupancy across its assets.
US-based office space provider WeWork Global has a 27% stake in WeWork India, a subsidiary of Bengaluru-based estate developer Embassy Group.
The two groups entered into a partnership in 2017.
The demand for flexible space is expected to be largely driven by consulting, IT-BPM, and e-commerce companies that are establishing multiple satellite offices in suburban locations in metro cities.
As of the third quarter of 2021, about 88% of the total number of flexible workspaces were in metropolitan areas.
Since the launch of the American shared workspace provider in India, Embassy Group operates desks across the top six markets in the country, including Bengaluru, Gurgaon and Mumbai, totalling around 5.5 million sq ft of space.
According to property consulting firm Vestian, the flexible workspace market is growing progressively in the country with operational stock across the seven key cities totalled approximately 45 million sqft till H1 2022. Bengaluru accounted for the maximum penetration in flexible space stock and seat distribution amongst the cities (H1 2022), with its share of stock pegged at 35%.
“During the period 2015 to H1 2022, the co-working market grew nearly 6X in terms of stock, added over the years, and it has picked up pace due to increased demand arising from start-ups, SMEs, and large corporates,” said Shrinivas Rao, CEO, Vestian.
Vestian expects the share of flexible workspace leasing to increase by more than 25% in 2025 while the total stock is expected to be 1.5 times in 2025 when compared with the total stock in 2022.