Office giant IWG turns corner from Covid ‘trough’ at start of 2021

Office rental company IWG said the first three months of 2021 had been the “trough” of the pandemic but believes a “clear inflection point” has been reached with better momentum expected as the year progressed.

Bosses at the firm pointed out that the monthly decline in businesses quitting office space stabilised in February and has been increasing in March and April.

But compared with the same period a year ago, it was a painful performance for the company, with total revenue down nearly 24% to £528 million.

IWG put the drop down to the Covid-19 pandemic, and also highlighted that the first quarter of last year – which the most recent results are compared with – was the best three months in the company’s history.

The firm now hopes it can cash in on a growing demand for offices in less central locations.

As staff got a taste of working from home, and cutting out a commute, many companies are considering opening more rural or suburban offices, closer to workers.

“We have seen an unprecedented demand for our flexible work products, which is a confirmation of the positive trend of continued demand for hybrid working,” IWG told shareholders on Tuesday.

It added: “As we leave the first quarter of 2021, we are well positioned for a world of work permanently altered by the pandemic.

“Changes to the geography of where work takes place and a new flexibility demanded by companies and workers provide an attractive dynamic marketplace for our future development.”

The business said that it had closed more sites than it opened, and by the end of March ran 3,301 sites across dozens of countries.

It opened 43 new locations, including 10 through an acquisition in Italy, and closed 55.

Yet the number of square feet of office space in IWG’s portfolio increased by 0.4 million.

Earlier this month, chief executive Mark Dixon told the PA news agency he believed offices of the future will be around the corner from workers’ homes or just down the street.

He explained the shift could allow people in the UK to live in so-called 15-minute towns, where most amenities, and work, are within a quarter-hour commute by foot, bike or public transport of residents’ front doors.