Yahoo Finance IWG eyes growth in decentralised locations as companies embrace hybrid working
IWG’s newest workspace, the Regus centre at Hiap Hoe Building in Balestier, is its eighth decentralised location (Photo: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - As Singapore transitions towards a fully reopened economy, many organisations are still figuring out what a post-pandemic workplace looks like. But what’s clear is that hybrid working is here to stay, observes Darren Rogers, country manager for Singapore at flexible workspace provider IWG. “It’s a new way of working that’s being embedded into how we operate culturally,” he tells EdgeProp Singapore in an interview.
See also: IWG rides pandemic-led demand for flexible working
The push for hybrid work arrangements is fuelled by demand from employees. Institute of Policy Studies in April said that in a survey of over 2,000 Singapore workers over a nine-month period, more than half felt that flexible working arrangements should be the new norm for workplaces.
In response to this demand, many companies are shifting towards hybrid work arrangements, which include allowing employees to work from locations outside the city centre. According to Rogers, IWG sees around 34% more utilisation for its decentralised locations, situated in city-fringe and heartland areas including One North, Tampines, Jurong, Joo Chiat, Paya Lebar, Novena and Changi Business Park.
Growing footprint
IWG’s most recently-opened location is the latest addition to its portfolio of decentralised outposts – the 10,328 sq ft Regus centre located at Hiap Hoe Building at Zhongshan Park, in Balestier. The centre, which fully opened in April across two floors in the building, marks IWG’s eighth decentralised location.
Today, IWG has 22 locations in Singapore spread across the four flexible workspace brands it operates in the city-state: Regus, Spaces, Signature by Regus and No18. They have a combined total net lettable area of 492,814 sq ft. While IWG previously operated up to 26 locations in Singapore, Rogers says the firm’s footprint in the city-state has actually grown around 30%, despite the lower number of locations. He attributes this to upgrades towards bigger facilities in response to customers’ needs. For example, while its 10,000 sq ft Regus centre at 77 Robinson Road was closed last year, IWG opened a new, 22,000 sq ft Regus location just down the road at CapitaLand’s Plus Building at 20 Cecil Street.
Similarly, the company had previously operated another 10,000 sq ft Regus centre at Paya Lebar Square, which was closed in favour of the much larger, 52,000 sq ft Spaces location at the newer Paya Lebar Quarter next door.
IWG sees around 34% more utilisation for its decentralised locations, including its 52,000 sq ft Spaces centre in Paya Lebar (Photo: Samuel Isaac Chua/The Edge Singapore)
Catering to different versions of hybrid
While more organisations are embracing hybrid working, it varies from firm to firm. “I think every large organisation is grappling with that question: What does hybrid mean to them?” he says.
For companies such as Standard Chartered and Japanese telco Nippon Telegraph and Telephone - both of which signed deals with IWG last year - this means allowing employees to work from any of IWG’s over 3,000 offices around the world. Other companies, Rogers says, may take different approaches, such as having employees come into the office three days a week, or use the office as a collaborative-focused or client-facing space.
Ultimately, he believes that while central offices in the CBD will remain important, IWG’s decentralised locations will see sustained demand as companies diversify their real estate strategy to offer the flexibility sought by staff. “It doesn’t mean giving up real estate. Rather, it’s a question of how do companies want to engage employees?” he says.
To that end, companies are increasingly drawn to flexible workspaces offered by IWG. Besides the breadth of its locations all across Singapore, a major appeal of the firm is the wide range of options across its different brands that cater to different segments. While the Regus brand generally caters more to corporates seeking functional spaces, the Spaces brand offers a co-working environment that often resonates more with creatives, Rogers explains. The Signature by Regus brand offers a more prestigious, exclusive experience, while No18 targets those seeking a more eclectic aesthetic. Ultimately, it boils down to customers having a spectrum of choices. “There’s no other provider that has the range that IWG has in Singapore,” he observes.
In addition, opting for workspace at IWG helps companies to adopt a core-flex model that de-risks the organisation for growth, allowing them to expand their office space easily as and when needed, rather than being tied to constrictive lease agreements. “Unlike a conventional lease, because we operate flexibly, they can add on another 1,000-2,000 sq ft as they grow,” Rogers explains.
1,000 new locations globally
In March, IWG announced plans to open 1,000 new locations globally this year with a particular focus on suburban areas, driven by the demand for the hybrid work model.
According to Rogers, Singapore and the wider Asia Pacific region will play a significant part in the company’s growth trajectory. “Asia Pacific is a huge growth market for us, as the UK, the US and Europe markets are very mature,” he says.
Rogers: We’ve got some good centralised footprint, but we haven’t decentralised as much as we really want to (Photo: Samuel Isaac Chua/The Edge Singapore)
Last December, IWG signed a master franchise deal with real estate developer Ratanakorn Asset to open at least 40 new flexible workspaces in Thailand over the next 10 years. The company has also seen an expansion in Hong Kong, where it has taken over four locations previously held by rival WeWork since the start of the pandemic.
For Singapore, more decentralised locations will be a focus for IWG as it continues to ramp up its presence in the republic. “We’ve got some good centralised footprint, but we haven’t decentralised as much as we really want to and that’s where we’re seeing the rapid growth,” Rogers says.
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