Transforming Vacant Spaces into Profitable Workspaces: IWG's Strategic Expansion in the UK and Ireland

The workplace landscape has undergone significant transformations in recent years, with the rise of flexible office spaces playing a pivotal role in shaping the way people work. And this trend isn’t just restricted to one area of the country — it's truly global. IWG (International Workplace Group), one of the largest flexible workspace operators in the world, has seen significant growth in the UK & Ireland, for example, and is eager to ramp up the momentum even further.

A recent webinar delved into IWG's strategy for transforming vacant spaces into profitable workspaces across the UK and Ireland. Key speakers included IWG's UK & Ireland CEO Richard Morris and IWG Partnerships Director Julian Chambers, who shared valuable insights on the company's expansion plans and the evolving landscape of flexible workspaces.

The Evolution of Workspaces in the UK and Ireland

The discussion began with a focus on the changing dynamics of the workspace environment post-pandemic. Emphasizing the shift towards hybrid working, Morris highlighted that more than half of office workers now seek flexible working arrangements. This trend positions IWG at the forefront of meeting these evolving demands.

“Today, we have 4,000 locations across 120 countries, and we have 10 unique brands,” said Morris. “So, put all those things together, where we are today makes us completely unique. We're six times larger in terms of our network coverage compared to our nearest competitor, and we feel the time is now to continue accelerating the expansion of our network, increasing coverage so that we become the go-to platform for flexible workspace as businesses look to change the way they use office real estate.”

As the market leader, IWG currently has close to 300 locations operating throughout the UK and Ireland. Morris notes that the company has been opening around 60 locations a year, but wants to increase that number to 150 next year. Eventually, over the next three years, the goal is to expand the IWG network to include over 1,000 locations in the UK and Ireland.

Throughout the webinar, several specific markets were referenced as being full of potential for IWG, including Belfast, Northern Ireland; Milton Keynes, England; and Derry (Londonderry), Northern Ireland.

IWG’s Value Proposition for Building Owners

Chambers, overseeing partnerships in the UK and Ireland, elaborated on IWG’s strategy of growing through partnerships. He explained that while IWG has been successful with franchising, they also offer a managed client partnership agreement for building owners who prefer not to operate a flexible workspace business themselves. This flexibility in partnership models allows IWG to cater to a wide range of investors and property owners.

"We've got independent building owners who own a single building in a region across the UK,” said Chambers. “We've got some larger medium-sized property investment companies who are set up for buying buildings, investing in buildings, keeping buildings and operating them, and then equally we've signed up some very large companies who want to offset some of the risks by bringing in IWG to manage the space on their behalf."

By taking a portion of their commercial real estate portfolio and transforming it into an IWG flexible workspace, building owners and business investors alike have an exciting opportunity to get ahead of a seismic shift in the commercial real estate industry, drive operating income from day one and turn empty building space into profitable revenue.

"Let's not forget the fact we've been doing this for 35 years,” Chambers said. “We know how to optimize space. We know how to drive efficiency. We know how to drive profitable revenue. We can help building owners come up with a floor plate that maximizes the potential returns.”

They pointed out that, on average, building owners could achieve profitability within 9 to 12 months, with some even recovering their investment in under a year. This profitability, combined with IWG’s expertise and robust operational model, presents a compelling case for business investors in the UK and Ireland to collaborate with IWG.

Targeting Diverse Locations and Brands

Addressing IWG’s multi-brand strategy, Morris highlighted their diverse range of brands like The Clubhouse and Signature, catering to different customer preferences and building types. This diversity enables IWG to transform various properties into high-quality workspaces. 

"We have five brands active in the UK right now, and when we look at new openings, we're open to using all of them, and it depends on the particular building,” said Morris. “We can undertake an assessment of the market and decide what the best brand is for that market. A new tower in a city centre might be a different brand than a multi-use workspace on an industrial estate somewhere, for example."

Chambers added that IWG's brands could thrive in almost any location, from city centers to business parks, underscoring the versatility and potential of their expansion in the UK and Ireland. 

The Importance of Green Buildings and ESG

Responding to a question on ESG (Environmental, Social and Governance), Morris emphasized IWG's commitment to aligning with increasing customer expectations and regulatory frameworks. IWG's focus on green buildings and energy-efficient practices highlights their dedication to sustainability, which is becoming increasingly important to corporate clients.

“When we're looking at the design of our locations, we make sure that they fulfill criteria as part of our overall global strategy to get to net zero, whether that's the supply chain, the materials that we use or anything else,” said Morris. “All of that is selected in order to give good energy efficient performance within our buildings."

A Forward-Thinking Approach to Workspace Solutions

As IWG continues to grow its network and partnerships in the UK and Ireland, their focus remains on providing flexible, convenient and sustainable workspace solutions. The webinar highlighted IWG's strategic approach to expansion, emphasizing the importance of adapting to changing workplace needs and the potential for profitable collaborations in the real estate sector.

“We want to expand in partnership with people who have fantastic buildings in fantastic locations where we can offer a fantastic service and amenity to the local community,” said Morris. “We've got the platform, we’ve got the systems, we’ve got the expertise. Now, we want to work with building owners and add to this unique network of brands."

For more information, visit iwgplc.com/develop-a-location.