WeWork India turned profitable at the holding company level in the first quarter of 2022, aided by robust demand over the past year.
The Bengaluru-based company, which started operations five years ago, reported an operating profit margin of Rs 25 crore for January-March, with around 40% year-on-year growth.
“We are past the Covid period and working on our cost structure and continue to grow the business. The demand has bounced back strongly, and we expect to close the year with Rs 1,000 crore revenue and grow our EBITDA profit margin by 10-20%,” CEO Karan Virwani told ET.
The co-working operator reported revenue of Rs 800 crore for 2021.
The company plans to expand its portfolio of co-working space by 2 million sq ft in 2022 as corporations embrace flexibility in their work models and demand for flexible space soars among firms and established startups.
“Around 70% of the planned expansion for this year is already pre-committed by some large companies, who are booking flexibility and hybrid office structures. The firm has closed 12,000 desk transactions in terms of leasing and pre-lease in the first quarter of 2022. The demand is beating our expansion pace,” said Virwani.
The company has seen a strong revival in demand. It leased about 1 million sq ft of office space to large enterprises and smaller firms in the January-March quarter, compared to 1.7 million sq ft for the entire 2021. This is the highest quarterly leasing by the firm.
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.
Metro cities remain the stronghold of flexible work spaces, accounting for about 88% of the total flex stock as of the third quarter of 2021.
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 had entered into the partnership in 2017.
WeWork is present in 36 locations and has a total of 65, 000 desks across markets, including Bengaluru, Gurgaon and Mumbai, with 5 million sq ft of office space. It plans to add around 25,000 desks in 2022.