While the real estate world turns its eyes to WeWork’s impending $3.5 billion IPO, the company behind Regus, which operates five times more flexible office globally than the co-working pioneer, is expanding a franchising program in a bid to offer its own office investment opportunity.
IWG, which owns Regus, Spaces and other brands announced last week that it is offering flexible office franchises in Singapore, and the company is bringing the opportunity to own your co-working centre to Hong Kong and mainland China in September, according to a statement this week.
The sale plan by the company, which operates more than 50 million square feet (4.64 million square metres) of serviced offices, comes after IWG in April sold a master franchise for its Japan operation, and as it brings new, higher-end office offerings to the APAC region this year.
Japan and Taiwan Sold as Master Franchises
“IWG’s franchising programme is an easy channel for investors and interested parties to access the massive opportunity flexible workspace presents,” Nigel Barnes, Vice President for Development in Asia Pacific for IWG said in a statement.
In April, the Luxembourg-based company sold a master franchise for its Japan business to Tokyo-based conference room provider TKP Corporation for £320 million ($446 million). Just last week IWG again worked with TKP when it agreed to sell its 14 serviced office locations in Taiwan, along with the exclusive rights to use the Regus, Spaces and HQ brands on the island, to the Japanese firm for £22.7 million in cash, subject to adjustments for cash, debt and working capital, according to an announcement to the London Stock Exchange.
In the Taiwan agreement, as in the Japanese deal, TKP committed to a development plan to expand IWG’s centre network in the territory, with the serviced office operator obligated to provide services and support in return of an ongoing platform fee based on the revenues of the business.
Selling Centre Clusters in Singapore
In Singapore the company indicates that, rather than targetting a master franchise partner, it is marketing franchise opportunities to investors interested in opening “clusters” of serviced offices in the Southeast Asian financial hub.
“The serviced office market is one of the most exciting growth markets in the world, and the next frontier for franchise operators,” Matthew Kenley, Head of Partnership Growth for IWG said. “We are excited to partner with new franchise operators to bring the many benefits of flexible working to more people and businesses across Singapore.”
The company says that in Singapore it is focusing on partners which can open and operate clusters of five or more centres over a two to three year period. Kenley told Mingtiandi that it expects to find franchisees that understand its business model, with existing landlords likely to be among that group.
Developers or other partners in Singapore would have the opportunity to franchise the traditional Regus serviced office brand, the design-centric Space co-working line or the more economy-driven HQ division.
IWG indicates that franchise holders would win the rights to use the company’s existing systems and apps along with the marketing power of its network of more than 3,300 centres globally.
Onward to Hong Kong and Mainland China
While the Singapore franchise campaign was announced on its own last month, IWG has made clear that similar opportunities are available in other Asian markets, including Hong Kong and mainland China.
“Flexible working engages with the way people and companies want to work in a fast-evolving APAC region,” Barnes said. “We want to work with strong local partners to build national networks, who see the same opportunity that we do in the towns and cities across the region.”
The company pointed out that it will expand its footprint to eight new cites in Asia Pacific this year, adding to the 700 locations it has already established in 150 cities within the region.
Trying Out High-End Shared Spaces in Singapore
Having opened its first Spaces location in Hong Kong one year ago, IWG has brought still more flexible office brands to the region in 2019, including opening its first high-end, Signature by Regus venue in Singapore’s Asia Square during June.
Later this year the company plans to roll out another premium office offering in Singapore, when it opens the first of its No18 boutique workspaces in Perennial Real Estate’s Capitol Piazza near City Hall MRT station.
IWG says it is also opening new Spaces locations in Singapore, Manila, Jakarta, Bangkok, Hanoi, Kuala Lumpur and Penang.