IWG, the world’s largest serviced office group, has agreed to sell its Japanese business for £320m in cash to Toyko-listed TKP, as demand for flexible offices reshapes the global market.
The two companies will have a franchise arrangement, which is expected to be completed next month, in which TKP will operate the 130 flexible co-work centres in Japan with IWG’s brands. TKP is Japan’s leading provider of conference rooms and banquet halls for rental.
Co-working space by late 2018 accounted for the 7.9 per cent of office space taken up in Tokyo’s 23 wards, compared with less than 0.5 per cent almost a decade earlier, according to real estate broker CBRE.
SoftBank-backed WeWork spent $2.5bn expanding its global operations last year, the Financial Times reported, which included a push into the Japanese market.
IWG, previously known as Regus, reported a fall in profit last year, partly due to the cost of increasing and reshaping its portfolio in response to the trend for WeWork-style office space.
Mark Dixon, chief executive of IWG, said on Monday: “Partnering and franchising are increasingly important elements of our growth strategy.” Such deals accounted for a third of IWG’s growth in 2018, according to the company’s accounts.
Spaces, the company’s shared office brand, has more than 180 sites globally. The FT reported in March that IWG is in talks about selling part of the business or raising more funds as it looks to cash in on the success of Spaces.