Singapore (Oct 7): WeWork’s aborted IPO, announced amid questions over corporate governance, mounting losses and unrealistic valuations, has raised questions over whether the office space leasing company can meet its commitments for properties it plans to lease that are not operational yet. Among those in key global cities is 21 Collyer Quay in Singapore, better known by its former name, the HSBC Building.
In July, CapitaLand Commercial Trust’s manager announced an agreement with WeWork to lease the entire 21 Collyer Quay for seven years starting 2QFY2021. The building is on a 999-year leasehold site and has a net lettable area of around 200,000 sq ft. Its valuation is $462.2 million, which accounts for around 4.3% of CCT’s portfolio value of $10.7 billion.
Upon the expiry of HSBC’s lease in April next year, CCT will spend $45 million in asset enhancement initiatives on the building. According to the real estate investment trust, the return on investment is 9%. In response to queries from The Edge Singapore, a CCT spokeswoman reiterates that “there is no change” to its binding lease agreement with WeWork.