IWG and Derwent boosted as White collar workers return to the office

White collar workers are increasingly returning to their London offices, two UK property firms said yesterday.

Office space provider IWG reported a ‘very strong recovery’ and said occupancy rates were bouncing back after coronavirus restrictions lifted.

And Derwent, a London-focused landlord, placed a fresh £200million bet on the city’s property market as it predicted that demand for high-quality space would continue.

Office workers arrive at Victoria Station in London. Flexible office space provider IWG reported a ‘very strong recovery’ and said occupancy rates in the capital were bouncing back

It has bought two buildings in the ‘knowledge quarter’ in Euston Road and Tottenham Court Road, where many life science organisations are based.

But both firms think hybrid working will continue, with staff coming into work two or three days per week.

WFH threat to the young

Younger office workers will struggle to climb the corporate ladder if they don’t return to the office, a top asset manager claims.

Stephen Bird, whose company has changed its name from Standard Life Aberdeen to ‘Abrdn’, said staff would not be noticed, echoing Chancellor Rishi Sunak’s comments last week.

Firms are deciding whether or not to bring staff back five days a week. Bird said: ‘I don’t think I would’ve been noticed on Zoom. I was very fortunate to be able to come in and see other people operating and emulate some of their behaviour’.

Abrdn posted a 77 per cent jump in first-half profits to £163million.

Rival M&G said it had swung to a £248million half-year loss, from a £826million profit.

Despite this, Derwent boss Paul Williams predicted a ‘war for space’, claiming tenants wanted ‘the right space, not just the cheapest space’.

Derwent said rental income in the first half of 2021 rose from £84.4million to £90.1million, with office rent collection rates for the June quarter at 95 per cent.

The value of its portfolio fell from £5.4billion to £5.38billion, compared to a year earlier. Shares rose 1.6 per cent, or 61p, to 3772p.

Meanwhile, IWG is seeking to capitalise on the shift to flexible working by opening new branches outside London. The company, formerly known as Regus, said it added more than 900 business customers in the first half of 2021.

Boss and founder Mark Dixon said: ‘This fundamental shift in the way people work is clearly a positive tailwind and we are seeing increasing levels of interest from enterprises wishing to transform their working practices.’

But revenues still took a hit, falling 19.3 per cent to £1.1billion in the six months to June 30.

Losses narrowed from £237.8million to £191.9million. Its occupancy rate was 66.2 per cent, down from 73.4 per cent a year earlier. Shares rose 2.7 per cent, or 8.6p, to 328p.

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