Serviced offices group Regus have posted six-month results to June 2011, turning profits of £13m
compared to a £6.1m loss in the same period last year. Revenue is up 10% at £565.5m, an impressive figure indeed in this day and age.
A strategy of renegotiating leases with some UK property owners appears to have paid off. In 2010 Regus was in the news when arrangements were struck with landlords to refurbish properties and offer more competitive rents. A ‘significant minority of 150 unprofitable offices’ were said to be targeted in the move. At the time, this was reported as the first time a renegotiation of leases on such a scale had been attempted. This was a response to the current economic climate, described by Regus as a ‘challenging environment’.
Since then, the ‘flood of companies that are starting to embrace flexible working’ has been pinpointed as the reason for renewed optimism in the serviced offices industry. Expansion has continued with the opening of forty-eight new centres and the company launching into three new markets: Latvia, Uganda, and Serbia. Overall, there are plans to open a further 900 serviced offices over the next three years, bringing the total to more than 2,000 worldwide. Currently their global customer base is reported to total 904,086.
Established in 1989, Regus now has 1,119 centres, in 88 countries. This makes it the world’s largest provider of serviced offices. Partnerships have been struck with airline companies, aimed at satisfying the needs of business travellers. In the UK there are 158 centres showing the average number of consolidated workstations increase from 34,700 in 2010 to 38,153 in 2011; 33,302 are mature workstations, generating £93m revenue.
The past year has been very positive for the UK market as Mark Dixon, chief executive, explained: ‘As we enter the second half of the year Regus remains well-positioned … and is on track to deliver a full year performance in line with our expectations.’ Yorkshire is mentioned as ‘very much a growth market’ with the prospect of doubling its network of serviced offices.
What about the rest of the UK? ‘There are lots of cities where we’re not represented,’ Dixon added.
Mature operations, defined as businesses owned and operated before January 2010, are highlighted as integral to Regus’ success. Mature occupancy in serviced offices is at ‘a record level’ of 86.7%. This is close to ‘optimal levels’, which signals a scaling back of sales and marketing. In the UK, mature occupancy levels rose to 84.4% from 72.7% in the previous year.
Regus expects the future of serviced offices to ‘be influenced by a wide variety of factors including, but not limited to, technological advancements, globalisation, and changing workforce dynamics’.
The concept of mobile workers features prominently in Regus’ literature. It states that, by 2013, more than a third of the global workforce will be mobile, utilising technological innovations such as smart phones and iPads. Coupled with evidence that ‘upwards of 50% of office space is empty at any one time’, Regus sees ‘a fundamental shift to flexible working’ occurring.
Growth has been achieved without relying on bank finance, which further positions Regus as a leading light in the provision of serviced offices for years to come.
Previous Post
How Many New Hotels Does York Really Need?
