IWG Is Buying Up Coworking Spaces

the biz dojo - feature
BizDojo has joined International Workplace Group (IWG). *Feature image grabbed from BizDojo’s Facebook
  • IWG Plc has acquired BizDojo, New Zealand’s largest coworking brand.
  • BizDojo joins IWG’s other coworking brands, including Spaces and No.18.
  • New Zealand may become a focal point as big-brand competition intensifies across the Asia Pacific region in 2018.

IWG Plc’s expansion strategy is a familiar one. Since 1989, growth by acquisition has seen the Regus brand swell to more than 3,000 business centres worldwide.

Last year, IWG’s business centre portfolio grew by 1 million sq ft in a single day when the company acquired one of its largest UK serviced offices rivals, Basepoint Business Centres, for £100 million.

Other big-name business centre brands to join Regus in recent years include MWB Business Exchange (2013), Evans Easyspace (2014) and in 2015, Avanta Serviced Office Group, Abby Executive Suites and Businessuites.

Also in 2015, IWG (then Regus) took a major step into the coworking industry by taking on Spaces, the Dutch coworking brand founded in 2008.

Now IWG is betting on the impressive growth of coworking by bringing more brands into the fold.

Last year, IWG quietly acquired European coworking brand, No.18 — a boutique coworking brand in Stockholm. During an interview for the BCA, IWG’s UK CEO, Richard Morris, explained that No.18 will slot into the IWG network alongside Spaces.

“No.18 has a luxury design, almost boutique,” he said. “Spaces is different; it is inspiring and contemporary, which appeals to the creative, digital and technology sectors.”

“We buy small innovative companies and bring them into our global network development programme, so we can have a range of different product offerings. As such, our network of 3,000 locations, which we’re continuing to build out, is not uniform.”

BizDojo joins IWG

IWG has diversified its offering further with the purchase of yet another coworking brand.

This week it emerged that BizDojo, New Zealand’s largest coworking provider, has been acquired by IWG. Regus currently operates 14 locations in New Zealand across Auckland, Wellington and Christchurch, with more on the way — including a new location from Spaces set to launch in August 2018.

BizDojo has reportedly experienced financial difficulties at its Auckland location, which was placed into liquidation last month with thousands of dollars of rent outstanding.

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Although it’s unclear if this is related to the acquisition, it appears IWG is taking on all of BizDojo’s locations including its troubled Auckland workspace. IWG’s press release states, “The group’s global community will now expand to include BizDojo’s workspace centres and members across New Zealand.”

Having absorbed BizDojo’s established national brand and with a new Spaces location set to launch in Auckland this August, IWG is intent on staking its claim in New Zealand.

But the company is far from unchallenged.

In July 2017, Lorne Somerville, a commercial leasing specialist from Barfoot and Thompson, noted that in 2016, “Kiwi coworking offices totalled about 13,900 square metres” and projected that figure to triple by the end of 2017.

“In Auckland during 2016/2017, more than 25,000sq m of additional coworking space [was] delivered by the four main players in the industry,” which at the time included Smales Farm, Generator, BizDojo and Regus/Spaces.

Notably, WeWork hasn’t yet entered the space race in New Zealand, although both WeWork and Spaces — and many more brands — are expanding aggressively in other Asia Pacific locations including Australia, China, Hong Kong, and Singapore.

One of them is naked Hub, which is reportedly eyeing a Hong Kong listing and has taken a 70% stake in Australian brand Gravity, which operates three coworking spaces in Sydney, Melbourne and Brisbane.

In its newly released report, Asia Pacific Coworking Trends (February 2018), Cushman & Wakefield commented:

“With memberships growing at higher than a global average of 40%, coworking operators have been an important demand catalyst across Asia Pacific. Coworking has taken the region by storm, leasing more than 8.0 million sq ft over the last two years.”

Spaces takes on WeWork in 2018

With the advantage of an IWG-sized entourage, Spaces is laying down the gauntlet and planning a huge global expansion drive over the coming year.

In January 2018, Spaces launched five new locations including its first location in Finland and new additions in Johannesburg, Amsterdam, London and Somerville, MA.

In February, Spaces plans to open another five new locations across four continents, including Culver City (Los Angeles) and Perimeter (Atlanta) in the U.S., Sao Paulo in Brazil, Cape Town in South Africa, and their inaugural Greek workspace in the city of Athens.

IWG and Spaces has the rest of the year mapped out, with more new locations planned for the U.S. and Canada, Latin America (including a first for Peru) Europe (The Netherlands, UK, Spain, Finland, Greece and Germany), Asia, and South Africa.

We’re just one month into the New Year and already, big-name challengers are muscling in on the competition, buying up rival operators and staking their claim to new (and old) territories. The 2018 space race is on.