Why this investor signed a deal to open five IWG centres close to homes in the capital.
With extensive experience in raising funds to acquire commercial real estate, James Wright is perfectly placed to embark on a new venture: the opening of five new flexspace centres in London over the next three years.
His career started in banking in the run up to the financial crisis, he left in 2010 to join CBRE, and later Capita, as Head of Real Estate Finance. While at the latter, Wright made waves by spearheading the creation of the group’s annual market trend analysis report – a major overview of the UK’s property lending market, taking in leverage, pricing and relative value, among other key indicators.
At the end of last year, after spending some months in franchising talks with IWG, Wright decided the time was right to make a move and commit to doing something different. So along with his old school friend, Jamie Graham – who is his business partner for the venture – he signed a 10-year agreement with the flexspace provider.
Wright and Graham’s company, WG1 Offices Limited, is one of three new businesses to sign IWG’s Cluster Franchise Agreement to open centres in the capital’s more residential areas. These will meet the demands of former commuters who now have the flexibility to work closer to home, as more and more businesses begin to operate a hybrid model in the aftermath of Covid-19.
Why now? Adoption of the ‘hub-and-spoke’ model, where businesses downsize central HQs and open up more regional bases nearer to employees’ homes, is driving a desire for more flexible workspaces throughout the UK and the rest of the world.
Wright says he’s noticed the acceleration of the rise in hybrid working, including by large enterprises such as NTT and Standard Chartered bank, and points to their groundbreaking deals with IWG as evidence of the shift. Made earlier this year, these partnerships will offer a combined workforce of almost half a million people access to IWG’s global network of flexspaces.
Demand for IWG workspaces in some M25 commuter hotspots surged by as much as 175% during the pandemic. This move towards local working was behind Wright and Graham’s decision to focus on opening centres across northeast London territories, including the York Way and Caledonian Road areas of King’s Cross, Highbury and Islington, Hoxton and Bethnal Green.
The abundance of housing stock and commercial real estate in these areas makes them particularly suitable for ‘spoke’ office developments, according to Wright. “If those big deals are coming through, where do we see young professionals from Standard Chartered or the equivalent corporate clients living?” he asks. “Where do we see suitable office stock that we could get access to, and where do we see transport and ancillary services that can accommodate the type of workers that we’re going to want and need? These areas tick all of those boxes.”
IWG’s scale and heritage made it the ideal franchise partner for Wright. Founded more than 30 years ago and with 3,500 centres around the world, IWG offers a variety of workspace brands that cater for different types of customers. Wright and Graham’s agreement currently focuses on IWG’s Regus, Signature, Spaces and HQ brands, but Wright says there is the possibility of exploring opening centres under other IWG brands.
With no franchising experience, Wright is on a new journey, excited about what lessons the opportunity will offer him. “Understanding the relationship between the parties is very different to what I’ve done before,” he says. “I’ve always been more prepared for joint venture agreements, limited partner agreements or asset manager roles. This is very different. I think the relationship is much more supportive and synergetic than a lot of those other roles.”
While the franchise agreement is at the very early stages, Wright and Graham are optimistic about the future of the franchise and are confident IWG is the right partner to make their plans a success.
“IWG is the longest standing, best capitalised and most profitable of the large operators in the space,” says Wright. “So it is the right partner for this sector... The plan is to open those centres as quickly as we can, and seek out new opportunities thereafter. So that means either target new centres in the same areas, or look more broadly into adjacent areas and expand the franchise.”
Are you ready to come on board as an IWG franchise partner? Find out more about IWG’s franchising partnerships today.