Spaces, the co-working arm of European flexible office giant IWG, has taken over a 5,000 square metre (54,000 square foot) office space next to Shanghai’s Xintiandi complex, securing the location in the Infinitus Tower from former occupier Kr Space, according to a statement today.
Kr Space had defaulted on its rental of the location just south of Huihai Road before IWG reached an agreement with the building’s owners to ensure an operational flexible office facility in the prime commercial complex when it officially opens in June this year.
The announcement by IWG came just under one month after Kr Space was hit with a HK$500 million ($63.8 million) lawsuit for backing out of a lease in Hong Kong, with the venture capital-backed startup said to have closed at least six centres in mainland China.
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IWG which secured the location through negotiations with the building’s owner — a joint venture between Vanke Property and LKK Health Products Group, a unit of the famous oyster sauce maker, and Vanke Property — held out the deal as part of its strategy of partnering with landlords to expand its global footprint.
“We remain focused on partnering with landlords and investors in China and around the world to grow our network and ensure millions of people have the opportunity to work precisely where, when and how they choose,” Mark Dixon, Founder and CEO of IWG plc said in a statement.
The partnership with the Vanke-LKK joint venture provides IWG with a prime Shanghai location for its Spaces business less than five months after the upscale co-working operator opened a 77,000 square foot (7,153 square metre) full building facility at Sun House in Hong Kong’s Sheung Wan area.
The new centre occupies the 26th and 27th floors of the 31-storey Infinitus Tower, a project which was known as Corporate Avenue 3 until Shui On Land sold the property along Hubin Road to the LKK Vanke joint venture for RMB 5.7 billion in 2015.
Kr Space Tale of Woe Continues
As IWG celebrates its new location, Kr Space may be occupied fighting the HK$500 million lawsuit that Hong Kong-listed Chinachem served up in April along with accusations that the co-working startup had broken its five-year lease of an 83,000 square foot (7,712 square meter) space in the developer’s One Hennessy Office building in Hong Kong’s Wanchai district.
Kr, started life as a spinoff of Alibaba-backed tech news provider 36Kr, had opened the Infinitus Tower location in December last year as its first flagship community in the Huaihai Lu business district, offering a total of 800 desks and individual offices that can accommodate from one to 15 persons.
Kr Space president Zhong Shu said at the time the Infinitus Tower location represent the company’s top-end location and that, with its prime location, was targetted at a high end clientele.
In February this year, Kr Space was said to be closing down six “money losing” locations in mainland China spanning 30,000 square meters (322,917 square feet) as it underwent a “business adjustment”, according to local press accounts.
IWG Continues APAC Expansion
IWG said in the statement that the Infinitus Tower acquisition is part of a wider expansion strategy by the group in Asia, adding to a total of over 680 centres that the company operates under its stable of brans across the region.
IWG added that Spaces is undergoing a major roll-out in key commercial hubs in Asia, with multiple openings recently in Shanghai, Hong Kong, Tokyo and Singapore.
The company’s Signature by Regus business will open its first centre in Asia in May 2019, occupying 7,000 square meter over the penthouse floors of Asia Square Tower 1 in Singapore. The city-state will also be home to the first No.18 in Asia, an exclusive cosmopolitan member’s club for businesses and executives, IWG announced in January.
In April, Regus alos opened a new location in Shanghai’s Waigaoqiao Free Trade Zone in Shanghai, with the mainline flexible office brand also having recently opened new centres in Xian, Nanjing and Chengdu.