Setting the context

Offering over 220,000 sq.ft of leasable area, 21 Collyer Quay is WeWork’s largest location in Singapore. It forms part of WeWork’s “Raffles Place Trio” alongside MYP Centre and 30 Raffles Place, which provide over 200,000 sq.ft of additional flexible WeWork space in close proximity.

21 Collyer Quay is entering the market at a time when demand from large corporates for flexible space is growing. Following the COVID-19 pandemic, enterprises are seeking more flexible real estate solutions to help them adapt to changing economic conditions and business needs quickly, as well as respond to employees’ preferences for hybrid work arrangements. These market trends have also impacted WeWork’s properties, including those at Raffles Place. While its other two Raffles Place properties were originally designed with mostly smaller offices meant for to be traditional co-working space, WeWork reconfigured several floors in these properties to meet enterprise clients’ needs.

Responding to the market

Given this context, Elizabeth highlighted that WeWork positioned 21 Collyer Quay to mainly cater to enterprises in response to market demand and to complement its other Raffles Place properties. 80% of the 21 Collyer Quay facility is dedicated to dedicated tenancies with their own private entrances, sized from 1/3 of a floor to a full floor, with provisions for contiguous floors to offer options for larger requirements as well as tenant expansion in the future. Considering that 90% of its enterprise clients customise their spaces, WeWork has built several floors in this facility to warm shell to accommodate enterprises’ fit-out needs.

Flexibility is another tenet of WeWork’s approach to responding to changing market conditions. In terms of design, the enterprise floors in 21 Collyer Quay can accommodate different density options and different models of collaboration that clients may require in their offices. In terms of delivery, 21 Collyer Quay will be delivered in three phases to optimise the introduction of a large amount of floorspace to the market. Flexibility is key to responding to changing market conditions, and while real estate is an inherently fixed asset, WeWork’s approach demonstrates how flexibility can be introduced through thoughtful design and delivery approaches.

Setting the value proposition

WeWork’s fundamental expertise lies in space optimisation to help tenants yield savings on total rent. Nevertheless, Elizabeth acknowledged that WeWork’s spaces still largely compete with conventional office leases and are compared against them based on per square foot rents. To differentiate itself from competition, WeWork needs a value proposition that justifies its per square foot rental premium. Part of this lies in the value-added service that WeWork offers its tenants. The other part lies in space optimization and providing attractive destinations and spaces for work that will draw in employees – even those with the option to work from home.

In 21 Collyer Quay, its unobstructed views of Marina Bay on every floor have formed a strong value proposition for corporate tenants. Besides this inherent feature of the building, WeWork has incorporated a range of lifestyle amenities within the building. These include common areas for socialising, F&B, a wellness centre, and a bar area on Level 18. All of these contribute to making 21 Collyer Quay an attractive place to come, work and spend the day.

Managing trade-offs

Dedicating space to these differentiating amenities necessarily creates a trade-off with providing more work units that generate additional revenue. Elizabeth noted that justifying this trade-off is not straightforward, and this topic continues to generate robust debate in the company today. Nevertheless, she highlighted the value of combining design recommendations with market research to justify the case for investing in these amenities. Working with a wide network of brokers, Elizabeth collated market feedback on the amenities that prospective tenants were looking for to inform the design of 21 Collyer Quay. This market intelligence, combined with WeWork’s design guidelines, helped to build the case for incorporating value-adding amenities into 21 Collyer Quay. Elizabeth’s sharing was a reminder of the importance of data – and the data gaps in our industry that still need to be addressed – for quantifying the value of investing in amenities and place more generally.

Elizabeth also emphasised the importance of seeking win-win opportunities when delivering these amenities with partners. Sub-leasing real estate to partner operators of F&B and wellness amenities is an opportunity for WeWork to generate additional income that contributes to the financial viability of the overall property.

Ultimately, an integrated development approach that strikes a balance between design and economics will underpin the optimal value proposition for 21 Collyer Quay and WeWork’s future developments. Implementing this integrated approach in turn requires both strong design and corporate real estate fundamentals within the WeWork team. On this note, it was encouraging to hear about WeWork’s organisational transformation efforts in the last few years – including leadership changes and the key role of its internal Real Estate Advisory team – and how they put WeWork in good stead to implement this integrated development approach on 21 Collyer Quay and its other projects in future.

The article above represents the views and opinions of a participating event delegate.  ULI Singapore thanks our members for their contributions during and post event.  We encourage the wider community to join ULI and join in these meaningful exchange of knowledge and insights as part of our mission. ULI Singapore and the Young Leaders Group Committee would also like to thank WeWork for hosting this discussion and for providing a guided tour of its flagship space.