By Beatriz Marie D. Cruz, Reporter
MULTINATIONAL office space provider International Working Group Plc (IWG) expects to boost its coworking spaces next year amid a total ban on Philippine offshore gaming operators (POGOs).
In an interview with BusinessWorld, IWG Country Manager for the Philippines Lars Wittig said the ban could push developers to refurbish vacated POGO spaces to cater to different office needs, including coworking spaces.
“The developers, landlords are right now affected by the POGOs being discontinued in the Philippines,” he said. “So, there is a higher degree of urgency to reinvent your buildings so that you can attract more or different types of workspace requirements.”
“If you had a lot of POGOs who were willing to pay premium for conventional space, you might postpone the investment into flexible workspace. But with the POGOs also gone, and with a higher vacancy rate, the landlords are now eager to make that development to the next level,” he added.
Vacated office spaces surged 65% this year to 690,000 square meters (sq.m.) from 418,000 sq.m. last year, mainly due to the POGO ban, according to Leechiu Property Consultants.
IWG plans to add 17 to its 33 hybrid working spaces in the Philippines in 2025. It also plans to partner with more local developers to boost its presence nationwide.
Mr. Wittig said the demand for flexible workspaces has been increasing due to the unpredictability of workspace requirements.
“Even the biggest, most traditional employers cannot predict what their workspace requirements are five years from now, even three years, or even one year from now,” he said. “So, they make it permanent to go flexible… because that gives them the agility to be able to expand or the opposite.”
Hybrid working spaces also improve employees’ productivity by avoiding long commutes, allowing companies to retain talent.
“[Employers] like the fact that they don’t have to invest in conventional office space because you take out at least for five or 10 years, and then you have to make a capital investment. With us, there’s zero,” Mr. Wittig added.
The entry of foreign direct investments would boost the growth potential for IWG’s coworking spaces, Mr. Wittig said.
“The fact that we are getting closer to a free trade agreement with the EU is a big driver for foreign investors to come here,” he said, noting that this could increase the occupancy for hybrid working areas.
IWG is one of the biggest coworking space providers in the world, known for brands like Regus, Spaces and HQ. It has almost 10 million customers in 4,000 locations across more than 120 countries. The company’s clients include startups and Fortune 500 corporations, Mr. Wittig said.
IWG charges P6,000 to P8,000 per employee per month, though the cost varies based on workspace requirements.
On the average, Philippine companies sign up for IWG’s coworking spaces for at least 10 months, while the longest time is around three to five years, Mr. Wittig said.
The benchmark cost to build a coworking space is about $1 million (P58 million). It includes amenities such as Wi-Fi, meeting rooms, office supplies and a coffee maker.
IWG is aiming for 85% minimum occupancy rate for its coworking spaces in the Philippines this year, he added.
