IWG Takes Over WeWork's Office Space In Hong Kong

IWG Plc. IWGFF, formerly known as Regus, a flexible workspace firm has taken over rival WeWork’s Hong Kong office space in an expansion drive. 

What Happened

IWG took over an office located at Hysan Place in Hong Kong that was vacated by WeWork as a part of its retrenchment efforts, reported the Financial Times. 

WeWork appointed Newmark Group Inc. NMARK formerly known as Knight Frank, a brokerage firm, to advise it on restructuring its UK leases as a part of a worldwide review. The office space firm uses a special purpose vehicle for each lease, thus making it immune from challenges posed by landlords who may not have received rent. 

Why It Matters

According to FT, IWG’s war chest has been bolstered after it raised $403.13 million through a share placing, the company plans to use it for an expansion drive.

Mark Dixon, the founder of IWG, owns nearly 30% of the business and has invested $114.68 million of his own money in the raising said it was a way of “making sure we’ve got enough cash to participate in the opportunity that’s coming.”

The beleaguered WeWork, on the other hand, had to scrap its initial public offering last year as the company’s valuation eroded and ceded valuable market share. 

SoftBank Group Corp SFTBY last month wrote down its $10.3 billion investment in WeWork to merely $2.4 billion, reported FT. 

IWG’s stock has fallen 30% since the beginning of the year, but its market value remains above $3.7 billion.

IWG Price Action

On Tuesday, IWG OTC shares closed 2.21% higher at $3.70. The company’s shares traded 0.26% higher at $3.85 at press time in London on Wednesday.

Image Credit: IWG