WeWork and IWG will vie for an “asset light” future to recover after the pandemic. And with that, branding becomes even more important in the world of work.
Co-working space providers see light at the end of the tunnel, despite the stop-start return to offices.
IWG (International Workplace Group) posted revenue of $1.4 billion for the first half of 2021, and a profit of $722 million on an adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] basis.
The results are down on the $950 profit in the same period of 2020, but the UK-headquartered company is confident franchising will lead to growth after the pandemic.
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Rather than directly lease buildings, IWG can lend its brand cachet, with names like Regus and Spaces and their respective technology platforms, to other real estate companies or buildings. It represents a quicker route to new countries, leaning on local expertise.
[caption id="attachment_439915" align="alignright" width="300"] WeWork Menachem Begin Tel Aviv. Picture: WeWork[/caption]
It added 17 new franchise agreements across 10 countries for the six months ended June 30, with an additional 64 committed locations, according to its interim first-half results. It also added its first franchise agreements in the U.S., and entered into a joint venture with Hysan to operate across Hong Kong and the Greater Bay Area (Hong Kong, Macau and Guangdong).
“We continue to make progress with our franchising and partnering agreements which are central to our capital-light expansion strategy,” said CEO Mark Dixon.