Unprecedented demand for flexible offices as pandemic ‘permanently alters’ world of work

Office space provider IWG says interest has risen to levels it has never seen before

Ben Chapman@b_c_chapman
Tuesday 27 April 2021 14:30
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<p>More than a year into the pandemic, many office workers are still working from home part or all of the time</p>

More than a year into the pandemic, many office workers are still working from home part or all of the time

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Demand for flexible office space has reached “unprecedented” levels as more companies change the way they operate during the pandemic, according to the world’s largest provider of co-working spaces.

International Workplace Group (IWG), which operates globally through brands including Regus, said the world of work had been “permanently altered by the pandemic”.

It expects to see continued growth in demand for hybrid working where staff split their time between the office and home.

This year has been one of the toughest ever for the company as sales plunged 20.9 per cent between January and March compared to the same period in 2020, which had been IWG’s best-ever quarter.

The FTSE 250-listed firm has seen a surge in demand from large businesses seeking to use several of its sites to provide their workforce with flexibility.

More than a year into the pandemic, many office workers are still working from home part or all of the time, in line with public health restrictions.

IWG hopes to benefit from employers who have seen an opportunity to offer their staff more flexibility while also cutting down on rent bills for expensive city-centre offices.

Among those to be seeking to grasp the opportunity is the government, which is to allow civil servants to work from home and in IWG's “drop-in” office spaces in 10 cities.

In March, IWG signed its biggest-ever deal, allowing the 300,000 employees of Japan’s Nippon Telegraph and Telephone to use its 3,300 workspaces around the world.

Law firm Irwin Mitchell has become the latest to announce flexible working plans. It told its 3,000 staff they can work when and where they like, as long as clients are happy.

The company said in a stock market update on Tuesday: “Occupancy is improving, enquiries reached pre-Covid-19 levels, an increasing pipeline of corporate customers on network-wide deals and, most importantly, service revenues starting to improve.

“These early signs of improvement continue to take root in many parts of the business.

“We expect continued progress in our growth strategy, with a healthy pipeline of franchise partners and various JVs and management deals with the real estate industry itself.

“Discussions have restarted on several master franchise deals. We are seeing increasing levels of openness and interest from partners wanting to work with us to grow the platform. Interest is at a level unseen in our history.”

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