WeWork has agreed a series of incentives with developer Hines on the lease of the former Central Bank of Ireland HQ in Dublin.
The troubled co-working firm and Hines negotiated a series of changes, including an extension of the rent-free period of the lease as well as a contribution from Hines to the cost of fitting out the offices at what is now called Central Plaza on Dame Street in Dublin 2, according to two people familiar with the matter.
The incentives were hammered out several weeks ago, before WeWork filed for bankruptcy in the US, said the people who asked not to be named as the information was not public. While several months rent-free on leases are commonplace in Ireland, it is relatively unusual for landlords here to make substantial contributions to fit out costs. Earlier this month tech firm Intercom delayed moving into its new headquarters in Dublin, citing the increased cost of fitting out the premises.
WeWork agreed to lease about 73,000sq ft across eight floors at Central Plaza in 2018. While terms of the deal have not been released, WeWork agreed to pay a rent of €60 per square foot, according to a person familiar with the negotiations. That did not change during the fresh round of negotiations, the person added.
The co-working firm has yet to open the premises. Contractors are fitting out the site at present.
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It will open next May, WeWork said on September 19th, when it announced it had begun fitting out the premises.
“We continue to experience strong appetite from SMBs [small and medium businesses] and large enterprises in Dublin,” WeWork global head of real estate Peter Greenspan said at that time, with an occupancy rate of more than 90 per cent across its Dublin business.
The company is still on track to occupy the space, a WeWork spokeswoman said in response to questions from The Irish Times. She declined to comment on the specifics of the agreement with Hines.
A spokesman for Hines declined to comment.
Usually when a tenant rents out a newly completed office, they would fit out the building to their liking. Depending on the terms of the deal, that could include everything from suspended floors and ceilings to bathrooms and the type of desks installed.
WeWork is the anchor tenant at the 11,148sq m (120,000sq ft) Central Plaza development.
[ WeWork, anchor tenant for old Central Bank building, files for bankruptcy protection in US ]
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Company chief executive David Tolley said in September WeWork was “taking immediate action to permanently fix our inflexible and high-cost lease portfolio” that he described as a legacy of a “period of unsustainable hypergrowth”.
The company filed for bankruptcy protection in the US on November 6th.
In a statement at that time, WeWork said it had entered into a restructuring support agreement with stakeholders to “drastically reduce” the company’s debt while further evaluating its commercial office lease portfolio.
WeWork is requesting the “ability to reject the leases of certain locations”, which the company says are largely non-operational, as part of the filing, it added.
The firm is one of the biggest tenants in Dublin, with close to 400,000sq ft rented in the city.
