100 franchises in 5 years, IWG plc growth plans revealed
Co-working business, International Workplace Group (IWG plc) has its eyes set on dominating the emerging industry Down Under, unveiling an aggressive nationwide plan. If successful, the IWG plc growth strategy would see more than 100 new franchised co-working centres over the next five years.
The announcement marks a significant step for the international business, which currently operates two brands within the Australian market, with more to come. Despite having 79 centres up and running, the latest venture sees a renewed focus on the domestic franchise sector.
Damien Sheehan, IWG plc country head said introducing a franchised model allowed the brand to accelerate its growth potential, while offering an entry point to the developing industry.
“We are focused on expanding our footprint with franchise partners to cater to the growth in the market as it really does become mainstream,” Sheehan told Inside Franchise Business.
“With the right partner or partners, we believe we can commit to 100 centres as a minimum in the next five years. So, in total, our portfolio will consist of 150 to 200 new centres, when taking into consideration what the market can absorb.”
The rise of co-working spaces
It’s the perfect time for the IWG plc growth strategy to take hold.Interest in the space has been brewing steadily, driven primarily by an emerging millennial workforce.
Since the first co-working concept was introduced in San Francisco in 2005, more than 16,500 spaces have opened worldwide, with Australia ranked sixth globally for co-working growth per capita.
In its Australian Co-Working Market Report 2017/18, flexible work provider Office Hub revealed that cultural changes were among the biggest catalysts for industry evolution.
“A key driver of co-working growth is the presence and rising status of millennials in the workplace. Millennials are now reaching their 30s and 40s, becoming decision-makers and sourcing offices that suit their working styles,” the report stated.
“According to Office Hub data which tracked more than 76,000 people looking for flexible office space in 2017-18, co-working is most popular among 25-34-year-olds and steadily decreases in popularity the older the age group. As the world’s new business leaders are increasingly people-focused and digitally fluent, the uptake of co-working will continue to rise.”
Sheehan agreed, revealing that attitudes around flexible working arrangements were evolving drastically.
“Employers and employees are tuning in to the benefits of flexible working. It’s no longer just seen as a solution for SME’s, start-ups and tech companies,” he said.
“In fact, new research from IWG’s Global Workplace Survey reveals 84 per cent of Australian’s would choose a job which offered flexible working over a job that didn’t.”
The country head also revealed that the IWG plc growth strategy would focus not solely on metropolitan growth, but regional as well.
“The tier two cities offer an interesting expansion opportunity as transport networks improve, families look to relocate to gain better balance in their lives and with the technology and comms platform available. It really does not matter where you sit,” Sheehan said.
As part of the aggressive IWG plc growth plan, the co-working business will be targeting regions such as Geelong, Bendigo, Ballarat, Townsville, Cairns and Wollongong.
“It also allows companies to access a greater and diverse talent pool across Australia and not just within a 50km radius of their current office locations,” Sheehan said.
IWG plc growth
In order to meet its target of over 100 franchised co-working spaces in the next five years, IWG plc has significantly ramped up its expansion efforts.
Sheehan said that in addition to the newly announced plans, there were a number of centres currently in the works.
“There are approximately 20 new locations being considered in the pipeline which would add another 60,000sqm to the total,” he said.
“We are focussed on franchise partners that would commit to three to five centres over a five-year period. There is a long runway to come in terms of growth.”