What is hybrid working and how can you invest in this booming trend?
The world of work is changing significantly. Hybrid working is here to stay and IWG, the world's largest flexible workspace provider, is actively seeking property partners who are looking to capitalise on the booming flexspace sector amidst surging demand.
One of the lasting legacies of the pandemic is the accelerated uptake of hybrid working, which has become the new norm as employees want more flexibility in how and where they work. In fact, 41% of Singapore workers would rather continue working remotely than receive a bigger bonus. Businesses realise, too, that employees no longer need to be in the office nine-to-five for the work to continue.
The uptake of hybrid working – where employees split their time between their company headquarters, their home, and a local flexible workspace – also impacts office real estate. Already, several companies have downsized their office spaces, as they no longer need to accommodate all employees at the same time.
Even before the Covid-19 pandemic, Singapore’s total island-wide flexible workspace within the commercial sector had been posting annual double-digit growth since 2015, or a 31% compounded annual growth rate (CAGR). It is forecasted to grow by a further 3% in net lettable area (NLA) to reach 3.6 million sq ft in the next few years, providing an optimistic outlook and further opportunities for real estate investors as companies rethink their workplace strategies.
IWG has been the go-to flexible office and co-working space provider, providing companies with professional workspaces closer to employees' homes for over 30 years.
As the owner of numerous flexible work brands including Regus, Spaces and Signature, IWG currently has a far-reaching global network of 3,500 centres in more than 120 countries, and counts 83% of the Fortune 500 firms among its global customer base. Last year alone, amid a strong demand for hybrid work solutions, IWG added over two million new customers, bringing its total number of customers to-date to a whopping eight million.
Flexible workspaces are now considered as the leading option for franchise investment. In 2021, IWG experienced significant momentum in its franchising programme, more than doubling the number of new franchise location commitments, with a total of 120 centres committed compared to 67 in the previous year. Today, IWG wants investors and landlords to benefit from the soaring demand for flexible workspace, with partners also able to capitalise on the provider's more than 30-year experience and proven business model. IWG provides perfect hybrid work solutions for all – from large multinationals to small and medium sized enterprises (SMEs) and startups – providing current and prospective franchisees and partners a high-growth investment opportunity.
“Last year was an incredibly successful year for our franchise partnerships, as more businesses committed to hybrid models. As this growth continues, we look forward to adding a thousand new locations to our network in 2022, bringing hybrid working solutions closer to where employees are based,” says Mark Dixon, Founder and CEO of IWG.
IWG aims to expand its network by partnering with property owners looking to diversify and de-risk their portfolio, as well as helping them to capitalise on the accelerated uptake of hybrid working by many businesses and workers who want to work from anywhere. Hybrid work solutions are growing fast, both in city centre locations with companies seeking more flexible office and coworking spaces, and in the heart of local communities, bringing places to work closer to homes and other amenities. IWG is actively seeking partnerships with a variety of property owners, investors and entrepreneurs, including hotel owners, transport operators and many more.
For instance, IWG opened its sixth Spaces location in Singapore at One Raffles Place. The 33,723 sq ft space occupies four levels of the six-storey mall, featuring three meeting rooms, 18 dedicated desks, 539 workstations, and five parking spots. Here, workers can access a convenient selection of F&B outlets in the mall, in addition to limitless eateries and shopping options within walking distance. Spaces One Raffles Place joins IWG’s locations at shopping and lifestyle destinations, including Wisma Atria and United Square.
IWG launched its sixth Spaces location in One Raffles Place
Previously, most of the flexible workspaces have been centred around the town and central business district (CBD) areas of Singapore. But, as hybrid working cements itself as the new status quo, IWG has found significant demand for its workspaces in more suburban areas, closer to the homes of Singaporeans. Flexible workspaces in suburban locations are typically located near transportation hubs and have ample parking, which is important for business professionals. Shops, restaurants and entertainment facilities are also within easy reach, which are likewise key considerations for new tenants.
“In the future, work will be happening in the heart of local communities everywhere. Visits to IWG’s locations outside Singapore’s city centre have been steadily growing, posting a 37% increase from February to March this year,” says Darren Rogers, Country Manager for IWG in Singapore, adding that there are many benefits of working closer to home, such as environmental and cost savings from shorter commutes, and a better work-life balance for employees.
Hence, it is no surprise that IWG is deepening its footprint into the heartlands of Singapore. Most recently in March, IWG launched its eighth location outside the CBD area – a new 10,328 sq ft Regus centre at the Hiap Hoe Building at Zhongshan Park in Balestier – adding to its other decentralised locations in Paya Lebar, Joo Chiat, Tampines, and Jurong.
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Regus center at the Hiap Hoe Building is IWG's latest located outside the CBD area
With its latest addition, IWG now operates 26 centres in Singapore across four brands: Regus, Signature, Spaces and No 18.
Flexible workspace is the fastest-growing sector of the global workplace market. As more businesses shift towards the hybrid work model, which has proven to be better for people, planet and profits, IWG’s property partnerships present new opportunities for real estate investors.