As demand for flexible workspaces continues to rise, established operators are opting for a fresh approach to ensure business sustainability.
Referred to as “capital-light” contracts, the model allows coworking companies to operate and manage spaces on behalf of landlords, then splitting a share of the profits. By doing so, both parties greatly reduce their exposure and risk to economic uncertainty.
Companies such as WeWork and IWG have leaned into this model in recent months, with the latter saying that doing so has helped the company “capitalize on the growing pipeline of property owners and landlords seeking to maximize their returns…”
However, IWG recently cautioned investors that its annual earnings will be on the lower end of market expectations, but that the alleviation of inflation could help it rebound.
According to IWG CEO Mark Dixon, the shift to hybrid working has boosted demand for the company’s services. During the first nine months of the year, IWG signed over 250 management agreements, making up 90% of its total of its deals.
