IWG to turn empty shops into offices in repurposing blitz

Hundreds of disused shops across the UK could be turned into serviced offices as part of a repurposing push being lined up by flexible working giant IWG. The company behind brands including Regus, Spaces and Openoffice has already earmarked dozens of sites across Britain for conversion, many of which are in “very advanced” talks with landlords, according to chief investment officer Thomas Sinclair. He added that the scheme, operated under IWG’s Spaces brand, would likely grow to encompass “many hundreds, if not thousands” of former shops. “We see an enormous opportunity in the UK,” Sinclair told EG. While its business model has been temporarily hobbled by pandemic-induced lockdowns, IWG has spent the past year experimenting with the retail-to-office concept at a shopping mall in Napa, California. The trial, using a 21,000 sq ft former retail site with 107 workspaces and seven meeting rooms, will provide the blueprint for future openings. Sinclair said it has been successful enough that IWG “will be rolling this out apace” in the US and the UK, where the company hopes to take advantage of the disruption faced by town centre retailers and shopping centres. “[We have seen] the sheer quantum of retail space in the UK,” Sinclair said. “That space needs repurposing or reactivating in almost every instance. What has changed is that we are starting to see demand from people to work closer to where they live, matched nicely by these retail sites.” More than 15,000 UK shops have closed permanently in the past year, according to the Centre for Retail Research, as repeated lockdowns combined with an existing shift towards ecommerce put pressure on the sector. IWG’s retail-to-office scheme comes as part of a move towards making its office network more focused on regional towns, as corporations increasingly turn to a hybrid working model in the wake of the pandemic. IWG founder Mark Dixon has pinned his hopes on the pivot to revitalise his business, the biggest of its type in the world, after it reported a £650m loss last year. Last month, Dixon described more fragmented, close-to-home office networks as “the workplaces of the future”. Sinclair said: “I would describe this [retail-to-office] as a logical extension of our regional strategy… we saw the regional demand accelerating very dramatically through Covid.” “We are fielding a very significant amount of interest from landlords in the UK at the moment. It is just a question of sequencing the rollout from our perspective.” Earlier this week, it was reported that IWG would provide the Department of Work & Pensions and other government departments with access to its offices in the UK. That followed similar deals with Japanese conglomerate Nippon Telegraph and Telephone to provide its 300,000 employees with access to IWG’s global office network, as well as with FTSE 100 bank Standard Chartered for its 95,000 workers. To send feedback, e-mail alex.daniel@egi.co.uk or tweet @alexmdaniel or @estatesgazette Picture © Regus