We see very robust momentum in terms of flexible workspaces
Demand for a flexible workspace has replaced the traditional office setup in India, with IT sector resuming operations in Tier-I and Tier-II cities with lesser occupancy. Harsh Lambah, Country Manager (India), and Vice President (Sales, South Asia), International Workplace Group (IWG), spoke to Bizz Buzz on the existence of a hybrid format of workspace in the country
Work from home is not a long-term solution and companies have recognised that because to keep the productivity high, that's not the ideal solution. So, what we are seeing right now is the hybrid way of work
The enterprise sector will now look at flexible workspace with more serious view so that it could offer the end users a larger part of the solution. I think we can offer flexibilities to all sorts of emerging occupations like startups, entrepreneurs and SMEs
A larger number of workspaces have lesser occupancy now. How has this impacted revenue generation of IWG?
We were as impacted as any other industrial sector or companies. But being the national leader in having a network of 100 workspaces across 16 cities, we took quite a few early decisions to ensure to take necessary steps including meeting all the guidelines that were brought out by the WHO and the Indian government in terms of health safety in our workspaces. Secondly, we worked with our existing customers to give them comfort and the convenience, listening to them and seeing what they would like to do in terms of their current agreement place. So, we offered them the flexibility. We also worked with our customers where they wanted to move their contracts to some other centres across the country. So, we worked with all the customers, new and existing, and came through much stronger and consolidated. We curtailed costs wherever we could and I think we are now at a good position to take advantage of the opportunities that are coming to us through the new way of work.
Work from home concept is gaining traction again. It is more so in the IT sector as some software majors may shift a significant percentage of their workforce to WFH permanently. What is the impact of this trend on the co-working sector and commercial real estate?
This has a larger impact on the whole of commercial real estate sector because everybody will be looking into how they can realign their real estate assets and in the best way possible because now less space will be filling in their office occupancy. Having said that, work from home is not a long-term solution and companies have recognised that because to keep the productivity high, that's not the ideal solution. So, what we are seeing right now is the hybrid way of work. So, it is going to be a combination -- people are going to be given the flexibility to partly WFH and from the office for a period of time. We did a research recently across 100 countries and about 60 per cent of the people came out and said that they want the commute to go down. So, as a reflection of that we have actually seen occupancy and inquiries at our centres. The occupancy has gone up in workspaces which are in closed sub-urban and residential areas. Our recovery will be quite sharp and upwards.
What kind of future do you predict for co-workspace in the country? What flexibilities can be looked into from the perspective of an investor (franchise), employer (companies) and employee?
From our perspective, I think we see a very robust momentum in terms of flexible workspaces. I think we have seen the trend that the pandemic has brought forth. We are aware as to cater to the new and emerging needs of our customers. You will see changes in the format of the products that we have. I think co-working might see lesser demand but more demand for office space. The enterprise sector will now look at flexible workspace with more serious view so that it could offer the end users a larger part of the solution. I think we can offer flexibilities to all sorts of emerging occupations like startups, entrepreneurs and SMEs.
What was the revenue generation of IWG in 2019 and 2020 (post lockdown)? What is the target for this year?
We don't give numbers by country because we are a listed company on the London Stock Exchange. But as for now, we are trying to regain the confidence of the customers by ensuring that we build on the health and safety aspects at our workspaces, and that ensure we offer all the comfort and convenience.
IWG was also looking into franchise collaboration for business expansion. How has been the response so far?
We started this just before the pandemic and we have some discussions ongoing right now. And I can tell you, we are looking at franchises as one of our two key drivers in terms of growth. So, we are looking at franchise partners, for cities and State areas. We are also looking at growing our network through acquisition targets that could provide value to business network and propositions.
Any plans for fund raising?
No. All our funds are accrued internally. So, we are absolutely very strong and stable even after the pandemic.
But IWG's share prices have steadily declined. Is there a strategy to revert this negative trend?
That's everybody's focus and it's a reflection of what is happening in the global markets nowadays. But our share prices are in a good position right now. And I think as we go along building the business, creating new alliances, putting new franchises in place, you will see that reflected in the share price.
Covid cases are surging again. Not only worldwide but all over India. Although highly unlikely, but if such as situation arises where there is a complete lockdown, what is IWG's strategy to deal with this uncertainty. How do you plan to minimise losses?
In case there is a situation where the cases rise again and there is a lockdown, our workspaces are still available for access to our customer in case they have their part of the necessary people who need to go to work. Like even when the lockdown was in place last year, certain sectors were allowed to go to work because they were important for the industries economy to run. So, those customers will still be allowed to access the workspaces 24x7. We have learnt through the pandemic and we are here to support our customers and we are also aware that we have to adhere to local guideline and protocols laid down by the government.