Office Space News
Published November 21st, 2008 by Mike Sullivan
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.