IWG bullish on nation's evolving work environment

International Workplace Group, a Switzerland-based provider of hybrid working solutions, will expand its service network to more than 2,000 locations across China over the next decade, said a senior executive.

Currently operating over 130 workspace locations across 35 cities in China, primarily in first and second-tier cities, IWG has recently begun expanding into smaller urban areas. The London-listed company aims to accelerate its establishment of locations in cities such as Changzhou, Jiangsu province; Tongxiang, Zhejiang province; Shangrao, Jiangxi province; Weihai, Shandong province; and Mianyang, Sichuan province.

Hybrid working solutions refer to a group of workers that are distributed across various locations, from traditional offices and factory spaces to remote locations, including within employees' homes themselves. Such a model offers employees flexibility and choice, and has driven new approaches to agility, collaboration and ways of working over the past two decades.

Global office market trends have garnered significant attention. Especially after the COVID-19 pandemic, many companies have started to reassess their office layout strategies, increasingly favoring flexible working models, including remote and distributed work.

These trends have led to declining occupancy rates, rising vacancy rates and downward-trending rents in prime business districts, a phenomenon observed not only in China, but also in major cities abroad like New York and London, said Edward Hu, general manager of IWG China.

"In response to these trends, we recognize that the future office market will feature more new formats and demands. Therefore, our development plans and the concept for new centers are based on an understanding of future office market trends and a focus on new working styles," said Hu.

With over 30 years of experience and currently operating more than 4,000 locations throughout the world, IWG has conducted in-depth big data analysis and assessments of the space requirements for each location.

"Typically, we establish each point in a center across one or two standard floors. The area sizes range from as small as 800 square meters to as large as 6,000 sq m, usually covering two floors," he said, adding a layout spanning two floors and measuring between 1,500 and 2,000 sq m is considered the ideal size.

Believing that China's service sector represents a major industry with significant demand for office space services, Hu said that the manufacturing sector may have ample space locally, but in other regions, it could still require office space solutions for employees at sales units, marketing and service teams.

"Additionally, in high-end service industries such as consulting, human resources and finance, demand for our services is even stronger," he said. "These industries tend to be more capital-intensive rather than labor-intensive, leading to high demand for premium office spaces within office buildings."

Having entered the Chinese market three decades ago, IWG, with the support of over 10,000 employees worldwide, now operates more than 4,000 workspaces in over 120 countries.

Vladimir Kazbekov, vice-president and chief operating officer of Shanghai-based New Development Bank, said China has made notable strides in liberalizing its services sector, creating new opportunities for further advancement and attracting foreign investment.

For example, the Ministry of Commerce announced earlier this month that China plans to allow wholly owned foreign hospitals in Beijing, Shanghai and seven other cities or regions.

Echoing that sentiment, Wang Bo, deputy director-general of the department of trade in services and commercial services at the Ministry of Commerce, said China's dedication to expanding market access, aligning its compliance mechanisms with international standards and implementing a negative list for cross-border trade in services underscores its strong commitment to this process.

A negative list specifies industries where foreign investors are prohibited from operating. They are permitted to operate in any sectors not included on the list.

A recent Harvard Business Review article listed four key strengths of China's economy, namely its innovation ecosystem, investment in the Global South, ultra-competitive markets and 1.4 billion consumers, and suggested that leaders of multinational corporations seize opportunities in China.