WeWork to push ahead with rapid Australian expansion
WeWork is continuing its dramatic expansion in Australia even as doubts emerge about the valuation of the float of its global operations, with reports it could attract a price of less than half of initial expectations of about $US47 billion ($68 billion).
The company is continuing to build up in top locations across Australia and in its latest move is targeting about 14,000sqm in an overhauled building that used to be the ANZ bank headquarters in Melbourne.
It is also understood to be looking at a major Brisbane deal with the owner of the Melbourne property, the GPT Wholesale Office Fund.
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But they come against a subdued backdrop as the valuation on WeWork’s parent for its initial public offering could fall below $US20bn as some existing investors push the workspace company to shelve the planned offering, the Wall Street Journal has reported.
Despite plans to begin a roadshow to market the shares to new investors this week, WeWork and its underwriters were planning to figure out what changes might be needed to help garner enough demand for an IPO.
The Melbourne building that WeWork is lining up to occupy includes the 100 Queen St tower and associated heritage buildings bought by the GPT-run fund for $274.5 million in late 2016.
Sitting in the heart of Melbourne CBD’s western core, the property comprises a 34-level A-Grade office tower and three heritage buildings with a total net lettable area of 38,963sqm.
GPT declined to comment on the leasing transaction but chief executive Bob Johnston said at the recent results the company was in discussions with a number of parties in relation to the building.
As part of the initial deal, ANZ leased the office space until June 30. The bank also retained its ownership of the heritage-listed bank branch at 388 Collins Street and security deposit premises in the basement of 90 Queen Street under a perpetually renewable 99-year lease.
“The former ANZ headquarters, with frontages to Collins, Queen and Little Collins streets, is one of Melbourne’s most desirable and convenient office addresses,” Ritchie said at the time.
WeWork has declined to comment on the prospective locations or the activities of the Ark fund, which is targeting the purchase of 401 Collins Street and another tower on Spring Street.
This article originally appeared on www.theaustralian.com.au/property.
