Flexible office rental firm IWG posts 'record' revenue

IWG operates offices through its Regus and Spaces brands.

Office rental firm IWG has posted a 34% increase in annual profit amid a strong demand for flexible working spaces as businesses continue to adjust to new working practices.

The results come as office occupancy worldwide is still dealing with the aftermath of the pandemic and companies reevaluating how much space is required. According to consulting firm Aecom, as of January, office vacancy rates in Irish cities have risen to as much as 18%.

Swiss-based IWG operates 3,514 locations across 120 countries through brands such as Regus and Spaces. It operates 15 locations in Ireland.

In late February, the company announced that it would be opening four new flexible working spaces in Limerick, Blackrock in Dublin, Blanchardstown in Dublin, as well as Clonmel in Tipperary.

Chief executive of IWG Mark Dixon said that 2023 was a “record year” for the company both in terms of revenue and network size.

“We continue to see significant growth potential," he said.

The company’s revenue over 2023 grew by 8% to £3.3bn (€3.85bn) while earnings before various deductions came to £403m (€471m) - up 34.3% year-on-year.

IWG’s fee income from managed and franchised businesses was up 49.3% to £50m.

It signed 117,000 rooms during 2023 with 115,000 signed but not yet opened. Revenue per available room stood ast £381 per month in 2023.

Despite these positive numbers, the company remains cautious in its outlook.

“The demand for hybrid working solutions continues to grow as businesses globally seek to reduce costs and respond to the needs of their employees. The Group remains cautious in its outlook and continues to focus on driving efficiencies and cost control,” the company said.

Mr Dixon said moves towards hybrid working represents a “colossal financial opportunity for IWG” with 1.2bn office workers globally.

“The reasoning for the transition towards hybrid working is clear and compelling for companies of all sizes and their employees with positive impacts on productivity, lower costs, increased flexibility and above all significantly enhanced worker happiness,” he said.

Additional reporting Reuters