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Regus reports impressive numbers despite conditions

Regus, the world’s largest provider of executive office space, recently reported that they continue to track to financial expectations. Their revenues rose 24.7% in the 4 months prior to October 31st, to £367M or 550M USD, with total capacity up 2.3% to 168,908 workstations.

This is highly impressive given the current economic conditions, and given that it is widely reported that executive office suite rents are down and vacancies are up.

Industry sources suggest that part of their success is their aggressiveness in marketing non-rent revenues, such as Regus Businessworld membership card, virtual offices and other add-ons. While it’s not clear from Regus’ statement that this is the case, it is clear that they are finding ways to continue to generate cash and profit quite effectively.

Their statement, however, did go on to say that their board sees 2009 as quite a challenging year, but their strong business model should help Regus “meet these challenges” and their strong cash position and balance sheet should allow Regus to “exploit opportunities to drive continued growth.”

With a cash balance of $240M in the bank, I believe Regus is in fact well positioned to buy executive office companies or other related ventures very cheaply who may struggle in 2009 because of a lack of cash. This is definitely not the Regus of 2002-2003 who struggled quite significantly (in the US). It will be interesting to see how this progresses.

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About the Author

Mike Sullivan

Mike Sullivan is a marketing professional who previously worked at one of the large executive suite companies in the US. It was there he began thinking about how people use office space, and how innovative offerings from executive suites, coworking facilities and virtual offices can improve the way people work. Connect with Mike Sullivan on LinkedIn.

3 Responses

Elizabeth Sanchez November 21st, 2008 at 4:31 pm

Regus’ numbers are not surprising in some sense. The largest provider of executive office space has a marked advantage by its sheer market penetration. With all the doom and gloom in the commercial real estate market, this is a beacon of light that should help get the serviced office industry get some positive publicity — and maybe more growth.

Melanie Jones November 24th, 2008 at 7:19 pm

With this news, the likelihood of serviced office industry consolidation seems at least possible if not probable. Regus is sitting on hordes of cash, enough to make some strategic acquisitions of executive office suite players that might not be as well-prepared to weather the economic storm. I remember when Regus struggled after 9-11. What a comeback.

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