The owner of the Regus, Spaces and the No.18 serviced office accommodation brands is reported to be considering splitting the business as the market evolves towards the WeWork model.
It is reported that Regus founder and CEO of IWG, Mark Dixon, is proposing to hive off its operating brands from the company’s property portfolio with the brands continuing as a standalone franchise. Such a move would pave the way for a potential sale of the property portfolio, worth an estimated £200m. As well as creating value for shareholders the franchise system could facilitate faster expansion of the individual brands.
Regus is still the predominant brand in the serviced accommodation market with 3,000 offices worldwide. However, it has come under pressure from WeWork of late, which despite a much smaller portfolio of under 300 offices has a market valuation of £20bn.
It is anticipated IWG could make an announcement within the next few weeks.
Such a move, allowing a more agile IWG to compete more effectively with WeWork, isn’t unlikely given Dixon’s 40-odd-year track record of innovation.