What’s going on:
Office rental firm IWG has reported a 48% increase in its half-year profit — reaching £198 million, according to Reuters. The company’s growth is being attributed to a rising demand for coworking spaces and improved pricing.
As the labor force adjusts to the post-pandemic economy, more companies are moving towards permanent hybrid work models where employees split their time between home and the office. Consequently, the demand for flexible office spaces — like those offered by IWG — is on the rise.
Why it matters:
The uptick in IWG’s profit indicates a broader trend in the office rental market as more companies adopt hybrid and remote work options in 2023. This shift in demand is reshaping the market for traditional commercial office spaces across the U.S., and has implications for city planning, public transportation, and more.
How it’ll impact the future:
IWG’s updated figures are a good data point when examining the health of the coworking industry. Moving forward in 2023 and into 2024, more companies are likely to adopt a hybrid work environment, which will only drive demand for flexible office spaces, coworking establishments, and related digital platforms even more. The rise of such spaces might lead to a decentralization of work locations in downtown areas, possibly resulting in a more even spread of economic activity across cities and even between urban and suburban areas. However, recent pushes to return to the office by The White House and the remote work pioneer Zoom, leave more questions on how commercial real estate will adapt in the remainder of 2023.
