WeWork snaps up largest space in Australia as co-working boom rolls on

Co-working giant WeWork has inked its largest lease to date in Australia, snaring a prime spot in 320 Pitt Street in Sydney in another sign of  strong demand for flexible office space across capital cities.

The latest lease of 11,000 square metres, or 10 floors, brings WeWork's presence in the country to 15 sites across Sydney, Melbourne and Brisbane, with new locations announced, including its first Perth location which will open in September.

WeWork's tenth Sydney location at 320 Pitt Street.Credit: WeWork

Globally, co-working office tenants represent about 20 per cent of office markets and that is tipped to grow considerably.

The property at 320 Pitt Street is owned by ARA Australia and is 29-storeys in the heart of Sydney;'s midtown business corridor. Major upgrade works are well advanced and include an expanded new lobby and end-of-trip facilities.

WeWork will occupy the whole low-rise of 10 floors and will have a self-contained exclusive ground-floor entry. The lease deal was concluded by agents from JLL Australia and Knight Frank Australia.

Lachlan Buchanan, head of real estate at WeWork Australia & New Zealand, said the new lease at 320 Pitt Street, will provide space for companies ranging from startups to large international enterprises to thrive.

"320 Pitt Street has a wonderful ability to cater for larger requirements, allowing our members to scale quickly as well as support the large enterprise companies who now represent over 40 percent of our global membership," Mr Buchanan said.

Rohan Neville, head of asset management at ARA Australia, said 320 Pitt Street is at the heart of Sydney’s evolving Midtown, with close proximity to public transport including the nearby Metro station in Martin Place.

The deal comes as Sydney and Melbourne office vacancy rates are at near record lows, which has consequently pushed rents to near highs.

The Property Council of Australia will release its bi-annual office market report on Thursday August 1 and will reveal how tight the space is for leasing.

While there is some supply coming into the markets, particularly in Melbourne, leasing agents say the space is being ear-marked by the co-working office and tech tenants, as well as the traditional banks.

Artist's render of interior of WeWork's planned new site at 320 Pitt Street. Credit: WeWork

There is also a dash for space by financial institutions which are looking to divest wealth management operations as a result of the recommendations from the Banking Royal Commission earlier this year.

Aaron Weir, partner, head of office leasing, NSW, at Knight Frank said securing WeWork to the repositioned 320 Pitt Street will provide optimum flexibility for occupiers.

"Tenants’ accommodation needs can be met on a traditional, direct basis or as a flexible corporate real estate solution, which is located within the same tower. Flexible workplace solutions are high on the list of priorities for corporate occupiers globally," Mr Weir said.

JLL’s Justin Hayes, director, office leasing – NSW, said, WeWork has secured the whole low-rise of 10 floors and will have a self-contained exclusive ground-floor entry.

"This is the first WeWork office in this evolving part of the Sydney CBD and the company’s space solutions will provide flexibility to future tenants looking at 320 Pitt Street," Mr Hayes said.

JLL’s Mr Wong said the war for talent is a key driver in location decisions by businesses that want to harness creativity and will only become more prevalent.

"WeWork’s landmark presence at 320 Pitt Street will add to the unique diversity of the Midtown precinct, making it an even more appealing, new option for tenants with workplace flexibility and staff retention in mind," Mr Wong said.