“It’s a hub to the suburbs and the rings around London, Birmingham and Manchester,” said Mark Dixon, managing director of the IWG. “Interest in working from home and local solutions has slipped.”
Two-thirds of IWG’s 3,500 offices around the world are in suburbs and small towns, and one-third in large cities. The company has around 350 offices in the UK, 60% of which are in suburbs or small towns.
A gradual shift to the hub-and-spoke model – where companies are headquartered in a large city like London or Birmingham and smaller satellite offices in the regions – was underway before the crisis, but the pandemic has given a big push.
“People have tasted the relative luxury of not having to travel,” Dixon said. At the same time, companies should always have offices that staff can go to for social interactions, meetings and business reviews. “You don’t want to meet people in your main room or in your bedroom. ”
IWG has office space in more than 1,100 cities, while its struggling rival, office space startup WeWork, has focused on major capitals such as New York and London.
However, IWG has not been immune from the Covid-19 crisis. The company’s pre-tax losses on continuing operations widened to £ 236.5million in the first six months of the year, from £ 176million a year earlier. She took charges of £ 156million for credit losses and office closures as she reduced her portfolio by 4%.
The current quarter will be difficult, but the firm expects things to improve in the fourth quarter.
“This global crisis has radically changed the way businesses will work. In the new world of work after Covid-19, office space will still be needed, but there will be a greater need for more flexible space, ”Dixon said. “Some big banks are thinking about it, Facebook – it’s pretty universal.”
More companies will have staff distributed with more satellite offices, more employees will work closer to home or continue to work from home, he added.