Office space providers weren’t expecting recovery from the pandemic to delay for this long
As reported by Realty.com, office space provider IWG has announced that it will close down further underperforming centres as market recovery is taking longer than expected.
Alike other markets around the world, the office space sector has been damaged by the pandemic as employers shift to shorter leases and employees adopt work-from-home arrangements, forcing providers to remodel their properties and businesses to hybrid working.
FTSE 250 firm said, “we have made additional provisions to further network rationalisation as the recovery from the pandemic continues to take longer than we anticipated last summer.”
Amid the transition to remote working, IWG has seen higher demand for suburban locations and hybrid working spaces.
The work-from-home approach and economic decline from the pandemic have squeezed margins and hit revenues of office space providers such as IWG, WeWork, and Workspace.
IWG has recently secured a deal with Japanese telecommunications group Nippon Telegraph and Telephone, offering the client access to any of its 3,3000 and more offices, instead of sole desks at a specific location.
The Regus brand owner revealed an adjusted operating loss from continuing operations of USD240.42 million for the year ended 31 December 2020, compared to a profit of USD189.9 million a year earlier.
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