LONDON — Hip office space provider WeWork has lease commitments in the UK of £2 billion over the next 25 years, accounts show. US-headquartered WeWork launched in the UK in 2014 and now has 25 offices in London and two in Manchester. Accounts suggest more offices could be in development, although the company declined to comment on specifics. WeWork doesn't own its own offices. The company leases building space — either floors or whole buildings — before fitting them out as "WeWork" coworking spaces. It then rents desks and private offices to businesses looking for flexible space — typically, although not exclusively, startups. UK accounts for 2016 show the company has "minimum lease payments under non-cancellable operating leases" of roughly £1 billion up to 2042 in Britain. A further £1 billion of deals stretching to 2038 have been struck since the end of 2016, a note in the filing states. The £2 billion of lease commitments represent a bold — and potentially risky — bet on London remaining a startup hub post-Brexit. Rival office space provider Regus recently issued a property warning and there are signs London's commercial office market could be entering a downturn. A spokesperson for WeWork told Business Insider: "We’re committed to London — it has been a centre for commerce for centuries and always will be, and that’s why we’re investing here. "Like all big changes, Brexit will create challenges and opportunities, and we think our members recognise that." Rival office space provider Regus saw its share price fall 30% at the start of the month after warning of weakness in the London office market. London coworking space the Rainmaking Loft recently announced plans to shut, blaming competition from WeWork and highlight the fiercely competitive nature of the London office market. Brexit could exacerbate any brewing problems — startups face a potential venture capital shortfall of at least £2 billion post-Brexit, with the European Investment Fund denying VC funds capital. Around one in ten UK startups are also said to be considering relocated away from Britain post-Brexit. WeWork's spokesperson said: "When we speak to our members, the ability to recruit talent from the EU and to be able to access the single market are often mentioned as priorities. But the vast majority have their heads down and will work around whatever change comes at them." The Royal Institute of Chartered Surveyors warned this week that three-quarters of its members believe London's commercial property market is entering a downturn. WeWork's expensively kitted out offices, which famously feature free beer taps, carry hefty rents: hot desking costs around £400 per month and a private office is roughly double that. In the event of any downturn or funding squeeze, companies may look to cut costs. Access to a Regus office space costs around £300 a month, for example. The bulk of WeWork's customers are on relatively short-term contracts, meaning they could back out in as little as 6 months if economic conditions sour. However, WeWork sees this as a strength of its business — if times are uncertain, it can offer flexibility. The spokesperson said: "In a downturn, people want flexibility and community and, as that’s what WeWork offers, we’re confident that we’ll continue to grow at pace. We don’t anticipate ever getting to this, but we will not pull out of agreements with landlords." Accounts suggest WeWork's London bet looks good so far. To keep on track it must average earnings of at least £80 million a year to pay off lease commitments up to 2038. Revenue for 2016 was £60.9 million, up from £11.9 million in the 15 months to December 2015. Pre-tax losses narrowed from £14.3 million to £11 million. Founded in 2010, New York-headquartered WeWork was valued at $20 billion (£15.2 billion) earlier this year and has raised over $8 billion (£6.1 billion) to date from backers including Goldman Sachs and Japan's SoftBank. The company has 150,000 "members" worldwide and leases 10 million square feet of office around the world. Regus has five times as much real estate as WeWork but is valued at just £1.9 billion. WeWork justifies its valuation by arguing that it is closer to a tech or lifestyle company than to a property business. However, Frank Cottle, chairman of rival services office business Alliance Business Centers, told the Wall Street Journal he sees the company as "nothing but Regus with a paint job." Regus first came to prominence during the dotcom bubble of 2000s but was forced to radically downsize when the dotcom bubble popped.
the Royal Institute of Chartered Surveyors has underscored its commitment to operating in London , despite the possible disruption caused by Brexit . Brexit accounts for earlier this year revealed the UK company has around £2bn ($ 2.6bn ) in leases up to five , while a spokesperson said Brexit would provide "challenges and opportunities" but added: "we will not pull out of agreements with landlords". The company's optimism is at odds with a recent warning from the Royal Institute of Chartered Surveyors , which said 75% of its members said London 's commercial property market was entering a downturn.