Small towns drive growth for office firm IWG as workers abandon daily commute

Office and hybrid workspace group IWG has said workers shaking off long daily commutes were driving a “dramatic” jump in demand within small towns as it opened hundreds of new sites.

The London-listed company, which operates in about 120 countries, reported system-wide revenues of 2.2 billion US dollars (£1.6 billion) for the first six months of 2025.

This refers to revenues generated from its managed, franchised and partner locations, excluding fee income.

It was about 2% more than the same period a year ago and its highest ever amount for the half year, the firm told investors.

IWG operates under a swathe of workspace brands including Regus, Spaces, and Signature.

It opened nearly 500 centres globally over the period, with the majority in local communities, suburbs and rural areas.

It highlighted a “dramatic increase” in new locations within small towns, with recent signings in the US including Franklin and Berwyn where the populations are below 5,000.

Chief executive Mark Dixon said it reflected people turning away from long daily commutes – but also highlighted a trend of some businesses replacing city-centre offices with smaller, flexible workspaces.

“The shift towards hybrid and more localised working is propelling our business forward with the fastest growth that we have ever seen in history,” he said.

Flexible working has become the “default model for a significant proportion of white-collar workers”, he said, adding: “The days of needing to be tethered to a central HQ are behind us.”

“In the last six months, more locations were opened than in the entire first decade of our existence.

“We now have around one million rooms in 121 countries with a significant pipeline.”

IWG reported an operating profit of 68 million US dollars (£50.3 million) for the half-year, unchanged from 2024.

However, it said earnings for the year were likely to be at the “lower end” of its forecast range due to it investing in the growth of its franchised business.

Shares in IWG dropped by more than a 10th in early trading following the update.