IWG has executed a partnership deal at an undisclosed amount with AppleOne Properties Inc. (API) to develop its first workspace franchises not only in the Philippines, but also in Southeast Asia.
According to IWG Head of Partnership Growth Asia-Pacific Matthew James Kenley, they started to offer this unique opportunity in the country six months ago as part of their global franchising program.
“The rational behind franchising for us is clearly the demand for our sector,” he told reporters during their ceremonial signing of the tie-up agreement held recently at the Diamond Suites and Residences in Ayala, Cebu City. “On a global scale, our business is accelerating; the growth is accelerating. And in order to keep up with that demand and to open new centers, we want to franchise. We think that franchising is definitely a way of doing that.”
Within the region, the Philippines is the most successful market for IWG, whose 28 shared office space locations in 10 cities across Metro Manila, Cebu, Davao and Clark are mostly fully occupied.
“Having fantastic partners, like the AppleOne, and working within provinces and across the Philippines, it enables us to work much smarter, work much better and accelerate growth,” he said.
The first shared workspace center that IWG opened outside of Metro Manila in 2013 was exactly located at API’s building in Ayala, Cebu. It is also now present in another AppleOne tower located in the IT Park.
“So it is only natural that it is with our good friends and partners that we are now taking this giant leap there for further expansion,” IWG Country Manager for the Philippines, Thailand, Vietnam, Cambodia and South Korea Lars Wittig said, while noting the company’s goal to grow its network to about a hundred locations nationwide in the near future.
The serviced office market is among the most exciting growth sectors in real estate, especially in Cebu, given its robust economy. It is for this reason that API is now beefing up its commercial office business with its franchise partnership with IWG.
“This is part of our expansion program for the Visayas. I think we will be putting up 10 centers all over Visayas in a span of five years,” bared API Chief Executive Officer and President Ray Manigsaca.
In addition to the two existing API buildings in Cebu where Regus is located, both parties will work together to develop eight more new centers by 2024 in six cities across the Visayas region: Cebu City, Lapu-Lapu City (Mactan), Mandaue City, Dumaguete City, Iloilo City and Bacolod City. Given the average size of a Regus center with 500 workstations, they will have a total inventory of around 5,000 shared office spaces.
The franchise deal is not limited only to Regus, but also to other IWG’s brands, especially workspaces, which is a lot big in size. Once completed, the 10 shared coworking space hubs franchised by API will join the IWG global network that currently consists of 3,400 locations across 120 countries.
“We’ve got hotels, we’ve got residences. We’re venturing into mixed-use developments, as well, with our other projects in Mactan. So I think partnering with IWG is just a natural progression of having a rebalance of our portfolio,” API Executive Vice President Joy Veloso said, while citing that this will help increase their office portfolio to contribute around 10 percent to their overall business performance.
“API has a proven track record, and will be a strong franchise partner as we ramp up our presence in the Philippines and expand our global position,” stressed Rowena B. Natividad, head of partnership growth, IWG Philippines.