Mark Dixon (Iwg): 'The future of smart working is in mini offices close to home'

"People want to work in the office without going back to the office". This is why, while companies such as Zoom or Amazon are issuing ultimatums to employees to return to the office, Mark Dixon, ceo and founder of Iwg (a colossus of 'rented' offices, present in 120 countries, especially with the Regus, Copernico and Signature brands) aims to open 1,600 new office spaces by the end of 2025 (500 of which in Europe). In Italy by next year there will be 20 new openings in a dozen cities: Genoa, Milan, Bologna, Parma, Florence, Cagliari, Rome, Fiumicino, Naples, Andria, Bari, Caserta and Palermo. These include three floors (the 7th, 8th and 9th) in Milan's iconic Torre Velasca and an entire building in Lorenteggio Village. Six in Rome and the hinterland. Most of the new locations, however, will be in small to medium-sized cities or outside urban centres. Because, according to Dixon, the market for flexible office space can only grow if it can solve the two main concerns of companies: collaboration and productivity.

"Returning to the office is a total anomaly," he explains. "The quickest way for a leader to improve productivity is to stop forcing workers to waste time travelling. It makes no sense with technology. On the other hand, many employees are no longer willing to work in overalls, from home. One third of Iwg's demand comes from people who no longer want to work from home, because very few have the discipline, space and conditions to do so. To work, you need a professional environment'.

For Dixon, the future of management lies in opening 'proximity offices': 'Big service companies, which have their headquarters in Rome or Milan, but branches and employees in the rest of Italy, demand it. You Italians have a strong shortage of qualified personnel. Trained professionals must be attracted and retained. But manufacturing companies with a strong export vocation are also 'magnets' for workers from other provinces as well as for foreign service companies that support them and need to have small, flexible 'branches' close to their customers'. So, a flexible network of spaces around the world, accessible via the members' app, offering workers the advantages of a professional environment without wasting time travelling. For companies, it is a cheaper, more flexible and more accessible proposition than traditional leases.

"The success of the new model," Dixon further explains, "is based on offering our customers maximum flexibility, whether it is a coworking space or a meeting room for one day, or a company taking out an annual subscription for all its employees.

Iwg aims for a more asset-light model, in which it collects commissions (often 10-20% of revenue) to manage office space on behalf of landlords, rather than taking on lengthy leases itself. "Investors want to diversify the portfolio. We provide them with revenues and operational efficiencies that generate higher margins than a traditional lease'. This model is antithetical to its competitor, WeWork, which emerged from bankruptcy in June 2024 thanks to a rigorous turnaround plan that eliminated more than $4 billion in debt and retained four assets in Milan (after declaring Chapter 11 in November 2023 also due to long and expensive leases, even 15 years). 'We work in real estate,' clarifies Dixon, 'but we are not a real estate company. We are more like the Uber of work, we provide services'. In the third quarter Iwg's turnover was $931 million (+1.3% compared to $919 million in 2023). In the first nine months it reached 2.77 billion (up 0.4% and remained flat in constant currency). Interestingly, while owned and leased workspace revenue was $809m in the third quarter - virtually flat from $808m a year ago - managed and franchised workspace revenue grew 17% to $157m from $136m. "It was a positive quarter," Dixon pointed out, "with strong commission revenue growth of 46% in the managed & franchised segment, margin expansion in the company-owned & leased segment, and further cashflow generation that reduced net debt. The medium-term goal remains to reach USD 1 billion in annual Ebitda. That in 2023 was about USD 523 million. Net debt has been reduced to $734m, down from $775m a year ago'. A fortnight ago, Iwg repurchased £10.8m of its £350m convertible bonds, maturing in 2027, at an average price of 94.4 per cent, reducing the amount outstanding to £158.2m. 'A functional debt management move,' Dixon concluded, 'which potentially sets the stage for further buybacks.