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Taking advantage of growing interest in alternative office arrangements, two companies are teaming up to build a coworking giant that will allow firms to rent office space whenever they need it. IWG PLC, a flexible office operator and rival to WeWork, announced it was investing about $350 million in a venture with the Instant Group, which operates an online listing site for office space.
They are setting out to create the world’s largest online marketplace for flexible office arrangements, which The Wall Street Journal calls the “Airbnb of office space.” Tenants will be able to find and book office spaces and various other corporate accommodations, including hotel meeting rooms.
Since the pandemic began, demand has grown for furnished office space with short-term leases. Many companies have embraced hybrid work schedules, which is also sparking greater interest in on-demand meeting rooms and offices that can be booked by the day or hour.
Forty-one percent of office tenants in a mid-2021 survey conducted by the property brokerage JLL said they expect to use more flexible office space because of the pandemic. That is up from 29% in 2020.
IWG operates more than 3,000 office spaces worldwide under brands like Regus and Spaces. IWG and Instant Group say they plan to take their joint venture public within the next two years.
Still, vacancies in coworking spaces are prevalent despite growing demand, particularly in urban centers. Coworking giant WeWork Inc. said it was profitable in the fourth quarter of 2021 for the first time since the pandemic began, but a third of its space remains vacant.