WeWork’s Rival IWG Examines Separation of Its Digital and Tech Assets

The 30 St Mary Ax skyscraper, known locally as “The Gherkin” and a building in which IWG (International Workplace Group) provides office space, is seen in London on April 24, 2014. REUTERS / Stefan Wermuth

  • Revenue down 0.3% in the third quarter
  • “Encouraging” outlook for the rest of the year
  • Justification of the rupture to release the hidden value – analyst
  • The company will provide an update on its review next year

Nov. 2 (Reuters) – Office leasing company IWG (IWG.L) plans to separate its digital and tech businesses from its real estate assets, the company said on Tuesday, breaking its silence on a media report in September on a possible break-up.

The owner of the Regus and Spaces brands, which has offices in more than 3,300 locations in 110 countries, said he has started to assess the strategic and business rationale for such a move and will provide updates during the first half of 2022.

“The potential to exploit the group’s intellectual property more widely, as well as the ownership structure of the real estate portfolio, is under further examination,” the company said in a statement.

In September, Sky News reported that IWG was exploring a multibillion-pound breakout and said the company was also considering listing in the United States for its Worka workspace booking app.

IWG CEO Mark Dixon declined to comment on Tuesday on the profile of the companies reviewed or any financial aspect.

London-listed IWG stocks were up 2.3% at 12:45 GMT, outperforming the FTSE 250 (.FTMC) index, which was down 0.1%.

“The whole point is to unleash any hidden value. This is just the start,” said Andrew Shepherd-Barron, analyst at Peel Hunt.

“IWG is always concerned with hidden value wherever possible and has done so in the past through the sale of master franchise agreements. But it is not yet clear that there is value. hidden here to release, ”Shepherd-Barron said.

In addition to its physical office spaces, the company has several digital businesses that allow customers to find and reserve workspaces online, such as Worka and Meetingo.

IWG said its revenue fell 0.3% in the third quarter to 550.8 million pounds ($ 752 million) as an increase in COVID-19 cases around the world hit customer plans for bring back staff working remotely to offices.

IWG said its pre-2020 operations occupancy rate was 71.2% in the third quarter, just above 70.1% a year ago.

The company said, however, that the outlook for the remainder of the year remains encouraging.

($ 1 = 0.7322 pounds)

Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and David Clarke

Our Standards: Thomson Reuters Trust Principles.

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