Court approval for WeWork bankruptcy: fate of French offices.

The American coworking giant WeWork currently operates 15 workspaces in France, all located in Paris. However, the company has recently faced financial and debt issues, leading them to file for bankruptcy and protection under Chapter 11 of the Bankruptcy Code. In the near future, the consequences are expected to be limited, as U.S. law allows for continued operations, and the process does not affect its branches outside the U.S. and Canada.

In its statement, WeWork claims that its "global operations will continue as usual." This means that the company's luxurious shared workspaces will not be closing immediately. However, in order to negotiate with its creditors about debt repayment, the company must present a plan for organizing its operations and warns that they will "cease leasing several locations," specifically the least profitable ones. It is worth noting that WeWork leases its dozens of spaces around the world from property owners.

According to the official website, as of today, WeWork owns 660 workspaces in 119 cities around the world. In France, there are 15 locations listed, all of which are in Paris and its surroundings, with a total area of 150,000 square meters. What will happen to these spaces?

While Paris with its borders is relentlessly moving towards collaborative work (over 3,000 locations in the capital, compared to 360 in 2015), WeWork is facing difficulties. According to data provided by Frenchweb, in 2022 the company generated revenue of 10.6 million euros in France, down from 13.1 million the previous year, marking a 19% decline.

It is quite possible that if WeWork locations in Paris close, they could be quickly acquired by local competitors amid the growth of this market. There are quite a few of them: Morning, Wojo, Spaces, Comet, and other international players like IWG, which is a leader in France.

Despite the difficulties faced by WeWork, the coworking market is developing well. According to a study by Welkin & Meraki, the global coworking market could reach $120 billion by 2025, compared to $30 billion in 2018. "Bankruptcy will not affect the market. It is very healthy. Certainly, the need for flexibility will remain," explains Victor Carro, co-founder and CEO of Comet.

Thus, there is a high likelihood that if the WeWork spaces in Paris close, they could be quickly replaced in the context of market growth. According to a report by Ubiq (formerly Bureaux à Partager) based on research by Cushman & Wakefield, the number of co-working spaces in France grew by 20% in 2022, with an occupancy rate of 91%. At the same time, the spaces increased by 27%. "With the active consolidation of players in the co-working sector and initiatives from French real estate companies such as Nexity (Hiptown, Morning), La Française (Wellcome), Icade (Imagine Office), or RATP (Urban Station), we expect to see further transformation of traditional offices into flexible offices," predicts Medi Dziri, CEO of Ubiq.