WeWork rival IWG cautious on 2023 despite record Q1 revenue

(Reuters) - Office rental company IWG Plc on Tuesday said it remained "cautiously optimistic" about its outlook for 2023 in the wake of macroeconomic challenges, despite reporting a record first-quarter revenue.

The update comes at a time when office-focused property firms are battling a steep fall in valuations and tenants are reassessing real estate requirements in the wake of a bleak economic outlook.

Companies such as IWG, however, have tried to cash in on surging demand for flexible spaces, particularly in suburban areas, as corporates increasingly embrace hybrid working models in the aftermath of the coronavirus pandemic and cut down on city-centric real estate investments.

IWG said it was confident core profit would remain in line with management's expectations, with net debt falling during the year.

The group said its non-recourse bridge facility with an initial balance of 330 million pounds ($412.1 million) during The Instant Group acquisition had been reduced to 199 million pounds.

It added that it was evaluating options for refinancing or repaying the balance of this debt before its maturity in September.

The London-listed owner of the Regus and Spaces brands said its revenue for the three months ended March 31 rose 25% to 760 million pounds, as pricing strength and cost-cutting steps offset inflationary pressures.

($1 = 0.8008 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Janane Venkatraman)