Megaworld-WeWork deal seen to draw more foreign firms to Philippines

MANILA, Philippines – Megaworld Corporation is expecting more multinational enterprises (MNEs) to locate in the Philippines through its partnership with United States-based WeWork.

WeWork, which designs and builds coworking spaces, recently began operations in the country.

Megaworld senior vice president Jericho Go told reporters on Wednesday, March 6, that having WeWork set up its first space in Uptown Bonifacio, Taguig City, will allow foreign companies eyeing the Philippine market to test the waters.

"The advantage of having WeWork is they are able to supply the Philippines, not just Megaworld, with a fresh set of multinational companies, some of which haven't started operations in the Philippines," he added. 

Go, however, noted that they are not after the quantity, but quality of future clients looking for permanent, larger, and built-to-suit office spaces. (READ: Building a case for working in a coworking space)

"Some of those are really startups, and there are a few that are established. What you really want to get are the established brands because these are the guys that are happy to sign big spaces and long-term leases," he said.

"[It's] very important for a developer like Megaworld to ensure that you have high-quality MNEs, Fortune 500 companies [as clients] to get for longevity and sustainability."

The firm is eyeing to reach P20 billion in terms of rental revenue by 2020. This includes commercial and retail sales as well.

WeWork offers a monthly membership scheme, letting MNEs have a soft landing without having to spend too much on a built-to-suit office space, while getting a feel of the working environment.  

"The brand itself becomes a magnet for corporations who want to be associated with the company (WeWork). So, the beauty there, once you become a member, it gives you global access to WeWork facilities," Go also said.

Aside from the Philippines, WeWork's other locations in Asia include Singapore, Hong Kong, Malaysia, Thailand, and Indonesia. Overall, the firm is present in 100 cities and 27 countries. (READ: 'Coworking' grows amid search for new office lifestyle)

"In a nutshell, I think, having a WeWork brand in a Megaworld development...basically adds to the prestige of not only the company, but also to the development [it is located in]," Go said.

He pointed to the strategic location of the coworking space in terms of accessibility to transport systems in the pipeline, such as the Skytrain and the Metro Manila Subway.

Rapid expansion

Aside from the first location in Uptown Bonifacio, WeWork head of community and member experience Eyad Zahra said they are expecting to open a second branch at the RCBC Plaza in Makati City.

"There's so much opportunity to support the businesses here in Manila. Every district will be important to us," he added. 

Go also said they are looking at Eastwood, McKinley Hill, and McKinley West as other possible locations. 

Despite having only begun operations last December, a WeWork spokesperson told Rappler that the 4,081-square-meter facility in Uptown Bonifacio has already reached full capacity of 806 members.

While Megaworld sees WeWork's operations in the Philippines as a chance to attract more foreign companies, the current share of foreign-owned firms is only 30%, while Filipino-owned companies make up 70%. Overall, WeWork has around 400,000 members globally.

WeWork also said that most of these are small and medium-sized enterprises (SMEs).

Go noted that WeWork's model is "very friendly" in terms of accommodating SMEs given that the membership system is on a monthly basis and a "rent-per-use arrangement."

"Other models, they basically lock you [in] for 3 months or 6 months.... [WeWork is] affordable – for you to become a member, it's only for a few thousand pesos," he added– Rappler.com