The flexible workspace provider IWG has reported record revenues and a doubling of profits for the first half of the year, as it predicted the pandemic “big bang” in hybrid working would become permanent.
The company said it had signed almost as many lease agreements between January and June as in the whole of last year, as it reported that the shift in the world of work sparked by Covid looks set to endure in the UK and globally.
It said it signed up for 400 new locations around the world in the first half of the year, of which only 5% are owned by the company.
IWG, one of the largest providers of flexible workspace, including under the Regus and Spaces brands, reported an operating profit of £94m for the six months up to 30 June, more than double the £37m it made a year earlier.
Meanwhile, its system-wide revenues rose by 14% compared with a year earlier to £1.7bn, mostly driven by growth in its largest region of Europe, the Middle East and Africa, as well as in its digital platform, Worka.
The overwhelming majority of office-based organisations have opted for a hybrid workplace model since the pandemic, where staff split their time between their desks and home or another remote location.
However, some employers have criticised the new working pattern, arguing it is harmful for team collaboration, productivity and staff mental health and urged workers to come in more often.
Somewhat ironically, one company trying to institute such a shift is the video-conferencing provider Zoom, which shot to prominence when it enabled colleagues to work together during Covid lockdowns. It emerged on Monday that it has told staff they will need to travel in at least two days a week, providing they live a “commutable distance” from the office, or within 50 miles.
The more complex nature of the post-Covid workplace has prompted some of the largest international employers to make plans to cut their office space over the next three years, according to a recent survey by property consultants Knight Frank and commercial real estate firm Cresa. The move is also expected to enable some firms to cut their rental costs.
IWG, which has almost 3,400 locations in more 120 countries, of which there are more than 300 in the UK, said it believes there is more room for growth in the “structurally growing hybrid working industry” as companies and building owners re-examine their property strategy.
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Mark Dixon, the chief executive and founder of IWG, said the company was “well placed to deliver further revenue, profitable growth and reducing leverage as more companies permanently embrace hybrid working as their preferred model with IWG set to be the biggest beneficiary”.
IWG has also been expanding its workspaces in suburban locations in the UK since the pandemic, after it found that the cost of living crisis had led to employees choosing to work from office buildings closer to their homes in order to save on commuting costs.
The company’s footfall data has also previously shown that the structure of the working week has undergone a significant shift in the past few years. Many office-based staff mostly work from their desks during the core midweek days – Tuesday, Wednesday and Thursday – bookending the working week at home, a finding which has been supported by public transport usage.
