IWG To Open 10 Co-Working Spaces Under Its First Aussie Franchise

AUSTRALIA – IWG has inked its maiden franchise deal in Australia, whereby it will operate an additional 10 co-working spaces under its Regus brand, reported The Australian Financial Review on Monday (21 September).

Specifically, the flexible office space provider has teamed up with the Adams Group, which owns NightOwl Convenience. The latter runs convenience stores and service stations in Queensland.

Under the partnership, Regus will establish co-working spaces measuring 1,000 sqm each along with ten coastal Queensland areas. These comprise Cairns, Noosa, Mackay, Gladstone, Bundaberg, Townsville, Hervey Bay, Airlie Beach, Rockhampton, and the Sunshine Coast.

“The franchising or partnership route has been coming for a number of years. We’ve really just cemented that and started to roll that out more aggressively here in Australia,” said IWG’s Australia Country Head Damien Sheehan.

IWG’s Head of partnership growth in Australia and New Zealand, Mark Bhardwaj, shared that the franchising method will let the company expand its presence, specifically in Australia’s regional and countryside areas, to over 100 flexible office spaces.

Notably, the firm has been significantly impacted by the coronavirus outbreak. In fact, the occupancy rate of its co-working spaces across Australia plunged by as much as 30 percent. Leasing inquiries also halved from 1,800 per month before the pandemic since Melbourne implemented a second lockdown.

Sheehan noted that rental activity at its flexible offices in Melbourne and Sydney has declined significantly, particularly in the CBD, as workers are hesitant to ride public transportation. Still, IWG’s co-working spaces in regional markets like Darwin, Adelaide, and the Gold Coast are faring better as occupancy levels are over 90 percent.

“We’ve seen strong inquiries and people physically being in our suburban centres, so they’re happy to jump in their cars and go into those (co-working spaces) that are not in the core CBD.” As such, IWG is especially upbeat on signing franchise deals to enter “tier-two cities” such as Orange, Bendigo, Geelong, and Newcastle.

While working from home has recently gained popularity, Sheehan doubts that it would cause an exodus of employees from the CBDs.

“I think it’s too early to tell, but what we absolutely know for sure is that no longer do companies have to try and source employees from within a 25km radius and have them commute into a central hub… and that’s the biggest upside here.”

Currently, IWG runs 77 flexible offices across Australia, with two openings earlier this year – Spaces 60 Martin Place in Sydney and Spaces Riparian Plaza in Brisbane.