IWG Exits Russia, Citing Ukraine Invasion

Serviced office provider IWG, the parent company of Regus, has announced its decision to close all its workspaces in Russia. The move comes in response to the ongoing invasion of Ukraine, with the company gradually withdrawing its operations from the country.

Key Takeaways

• IWG is closing its nine Russian offices.
• The decision is a direct response to the invasion of Ukraine.
• The company is "pulling out gradually" and cutting all investment.
• Withdrawal timeline depends on lease expirations.

IWG's Withdrawal From Russia

Mark Dixon, founder and chief executive of IWG, confirmed the company's exit from the Russian market. Speaking at the Mipim property conference in Cannes, Dixon stated that while IWG had a "small business" in Russia and was previously expanding, all investment has now been halted. The company is "pulling out gradually," with the exact timeline for the complete withdrawal dependent on the expiration of existing leases.

Dixon, who founded IWG (then Regus) in 1989, has overseen its growth into the world's largest serviced office provider, boasting approximately 3,300 centers across more than 120 countries. The FTSE 250 company operates under brands such as Regus and Spaces.

Rationale and Support for Displaced Companies

The decision to leave Russia was described by Dixon as "the right thing to do" given the "very difficult situation." IWG's Russian offices primarily served international companies, many of which have been scaling back their own operations in the country. In parallel, IWG is actively supporting companies that have been forced to relocate from Kyiv, with many clients moving to Poland, Romania, and Portugal.

Global Occupancy and Pricing Trends

Outside of Russia, IWG is experiencing a positive trend in occupancy rates. Dixon reported that occupancy has returned to 75%, a significant recovery from the lows during the pandemic and nearing pre-pandemic levels of 80-85%. Furthermore, pricing is also on the rise, as the company is no longer offering discounts to its customers.

Sources

• Serviced office provider IWG to close workspaces in Russia, The Times.