The Office Group operates in the flexible workspace industry, offering serviced offices, coworking spaces, meeting rooms and virtual offices to businesses across London, the United Kingdom and Germany. As a leading provider of flexible workspaces, The Office Group competes with companies like WeWork, IWG and The Instant Group.
The flexible workspace industry has grown rapidly in recent years, driven by changes in the workplace and the growth of remote work and distributed teams. Flexible workspaces provide businesses with office space on flexible terms, allowing them to scale up or down as needed. Key offerings in the industry include:
- Serviced offices – Fully furnished private offices that can be rented on flexible terms
- Coworking spaces – Shared work areas for individuals or teams, often with access to meeting rooms and amenities
- Virtual offices – Mail handling and administrative services without dedicated office space
- Meeting rooms – Hourly or daily rental of meeting and event spaces
Providers range from large multinational companies like WeWork and IWG to independent local operators. The flexible workspace industry has expanded rapidly, reaching over 5 million members globally prior to the COVID-19 pandemic. However, occupancy and growth stalled in 2020 due to lockdowns and remote work. As the world emerges from the pandemic, the industry is recovering but faces new uncertainties about the future of work.
About The Office Group
The Office Group (TOG) was founded in 2002 and offers flexible workspaces across London, the UK and Germany. As of 2022, The Office Group has over 75 business centers with capacity for 30,000 members across 65+ locations. TOG offers:
- Over 1 million sq ft of coworking space
- Over 3,500 private offices available
- Meeting rooms, business lounges, private event spaces
- On-site dining options, wellness facilities, parking
- Enterprise solutions for larger clients
The Office Group was acquired by multinational workspace provider IWG plc in 2015 but continues to operate under its own brand. It targets small and medium-sized businesses with its flexible workspace solutions.
TOG Locations and Markets
The Office Group has operations concentrated in three key geographies:
London, UK
London is TOG’s largest market with over 55 locations. TOG’s London workspaces are concentrated in the main business districts like the West End, Midtown and the City of London. Key centers include:
- 106 Queen Victoria Street, City of London
- One Henrietta Street, Covent Garden
- Bankside House, South Bank
- Whitechapel Technology Centre, Whitechapel
Other UK Cities
Outside of London, TOG has locations in major UK cities including:
- Bristol – Millennium Promenade, Cathedral Square
- Birmingham – Cornwall Buildings, Newhall Street
- Manchester – King Street, Spinningfields
- Leeds – Platform, New Station Street
Germany
TOG entered the German market in 2017 and has grown to over 10 locations. German centers are located in Berlin, Frankfurt, Hamburg and Munich.
In total, TOG has over 65 centers across the UK and Germany. While London remains its largest market, TOG has been expanding steadily into other UK and European cities.
TOG Products and Services
As a flexible workspace provider, The Office Group offers multiple products and services for clients:
Coworking Spaces
TOG operates shared coworking spaces suitable for individuals, startups and small teams. Coworking options include:
- Dedicated desks – Assigned desk rental
- Hot desks – Unassigned, flexible seating
- Coworking memberships – Monthly plans with varying levels of access and hours
Coworking spaces provide amenities like WiFi, printing, conference rooms, cafes and breakout areas. Many TOG centers also have wellness facilities and outdoor terraces.
Private Offices
| Office Type | Details |
|---|---|
| Private Office | An enclosed office unit for 1-10 people |
| Studio | Larger enclosed office from 10-30 people |
| Floor | Full floor occupancy for 30+ people |
Private offices come fully furnished with varying lease terms. TOG offers private offices sized from 2-person rooms to spaces for 100+ people.
Meeting Rooms
TOG provides meeting and conference room rentals by the hour, day or month. Rooms seat from 6 to 100+ attendees with presentation equipment, whiteboards and catering options.
Virtual Offices
TOG offers virtual office plans with mail handling, phone answering and administrative support. Virtual office clients can also access TOG workspaces on an hourly basis.
Enterprise Solutions
For larger clients, TOG provides customized workspace solutions including:
- Dedicated HQ office space
- Multi-location access with centralized billing
- Workspace management platform
- IT, AV and workspace design services
Enterprise solutions are tailored for large corporations, governments and institutional clients.
The Flexible Workspace Industry
The Office Group competes in the flexible workspace industry, which encompasses:
- Coworking spaces
- Shared offices
- Executive suites
- Serviced offices
- Managed offices
Flexible workspace provides office accommodation and services for mobile, distributed and growing companies. Benefits include:
- Flexible lease terms – spaced rented by month, quarter or year
- All-inclusive pricing – utilities, amenities and services bundled
- Scalability – ability to upsize or downsize
- Turnkey spaces – fully furnished and equipped
- Business services – admin support, mail handling, cleaning etc.
- Networking – community events and programming
The flexible office market was estimated at $26 billion USD globally pre-pandemic. Major competitors in the industry include:
| Company | Locations |
|---|---|
| WeWork | 800+ globally |
| IWG/Regus | 3,300+ globally |
| Servcorp | 160+ globally |
| Industrious | 90+ in U.S. |
| Spaces | 300+ globally |
While growing rapidly, the industry faces challenges related to flexibility, occupancy costs and lease liabilities.
Industry History and Growth
The modern flexible office industry emerged in the 1990s as companies increasingly required mobility and flexibility. Early providers offered basic serviced offices and virtual offices. Coworking spaces later became popular in the 2000s and 2010s among startups and freelancers.
Growth accelerated as companies sought flexibility and began adopting distributed workforces. Between 2015 to 2019, the 3 largest providers (WeWork, IWG, Servcorp) tripled combined revenue to over $10 billion. However, their rapid growth also led to high costs and losses.
Impacts of COVID-19
The COVID-19 pandemic and shift to remote work temporarily reduced demand for office space. Occupancy dropped sharply in 2020 as lockdowns were implemented. Many flexible office providers had to renegotiate leases and reduce footprints. WeWork and Knotel were notably impacted, with dramatic valuation drops.
However, flexible office providers have benefitted from enterprises seeking more distributed footprints. Demand is projected to rebound as companies plan hybrid work models post-pandemic. Mature providers like IWG and TOG have weathered the downturn through lease flexibility.
Future Outlook
Despite near-term challenges, the flexible workspace industry still represents less than 5% of the total office market. Continued growth is expected driven by:
- Desire for flexibility and agility from businesses
- Growth of distributed and hybrid work models
- Enterprise adoption of hub-and-spoke office footprints
- Shift towards shorter office leases and variable costs
However, the industry may see consolidation as niche players are acquired by larger operators. Landlords are also expected to compete more directly with flexible space under their own brands.
Financial Performance and Valuation
As a privately held company, The Office Group does not disclose detailed financial results. However, public filings provide some insight into performance as part of parent company IWG plc:
- Revenue – TOG generated £153 million in revenue for 2018
- Locations – TOG had 60+ locations and capacity for ~20,000 members in 2018
- Profit – TOG was profitable on an operating basis in 2018
- Sales – Average desk sale price was ~£700/month including services
In 2019, TOG accounted for around 15% of IWG’s global revenue and 17% of operating profit. As of 2015, TOG was estimated to be worth around £200-250 million.
Competitor Benchmarking
Using public data from competitors WeWork and IWG:
- WeWork had ~$800-1,000 revenue per desk per month pre-pandemic
- IWG averaged £551 revenue per workstation per month for 2018
- WeWork and IWG had negative operating margins, while TOG was profitable
This suggests TOG has historically had strong performance relative to larger but less profitable peers.
Services, Technology and Operations
As a flexible workspace provider, The Office Group’s key services and capabilities include:
Site Selection and Design
TOG has in-house real estate, design and construction teams that identify and build out locations. TOG targets prominent, high-quality buildings in prime business districts. Workspace interiors focus on natural light, high ceilings and architectural features.
Office Management
Dedicated property management teams oversee each location. Daily operations include cleaning, maintenance, security and hospitality services. Many sites also have full-time Community Managers to assist members.
IT and Technology Infrastructure
TOG locations provide secure WiFi, LAN connections, telecoms systems and AV technology. Enterprise-grade internet ensures high bandwidth. Members can request technology services and support.
Member Experience
TOG focuses on hospitality, designing spaces and programming events to foster community. Onsite teams assist with requests and there are member apps for room bookings, billing and space management.
Sales and Account Management
In-house sales and account management teams handle new business, renewals and upselling. Dedicated account managers provide ongoing client service and support.
Partners and Vendors
TOG partners with many vendors to equip and service its spaces. Key partners include designers, architects, internet/telecom providers, caterers, technology vendors, and security and cleaning providers.
Office Group Marketing and Customers
The Office Group primarily markets its flexible workspace to small and medium-sized businesses across sectors including:
- Technology – software, fintech, cybersecurity etc.
- Professional services – consulting, marketing, HR, legal etc.
- Financial services – asset management, wealth management, trading
- Healthcare and life sciences
- Consumer goods and services
- Government and public sector
TOG highlights the flexibility, community, locations, and hospitality of its spaces. It advertises availability through:
- Direct sales team and inbound inquiries
- Website listings and online ads
- Promotions, events and partnerships
- Broker and agent networks
Given its mid-market positioning, TOG has lower enterprise exposure compared to WeWork and more corporate focus versus smaller coworking brands.
Customer Base
A sampling of Office Group members and clients includes:
- Skyscanner – Tenant across multiple London offices
- Deliveroo – Uses TOG as headquarters and satellite offices
- Monzo – TOG provides coworking space as they scale up
- Adara Partners – Private equity firm based out of TOG Victoria
- Beryl – Bike sharing startup housed in TOG Hammersmith
While TOG does not disclose exact member figures, it likely has hundreds to low thousands of member companies at any given time across its portfolio.
Leadership and Investors
The Office Group’s headquarters are located in London. Leadership includes:
- Charlie Green, CEO
- Olly Olsen, Founder and Deputy Chairman
- John Stephenson, Chief Financial Officer
- Leanne Tritton, Chief Operating Officer
- Alun Peacock, Managing Director UK
- Markus Schuster, Managing Director DACH (Germany)
The Office Group was founded in 2002 by Olly Olsen. It was backed by private equity firm Blackstone before being acquired by IWG plc in 2015. IWG is a leading global flexible workspace provider founded in Brussels in 1989. It has over 3,300 locations worldwide and trades on the London Stock Exchange. The Office Group continues to operate as an independent subsidiary led by its existing management team.
Conclusion
In summary, key points about The Office Group include:
- Leading flexible workspace provider focused on London and UK markets
- Offers full range of services including coworking, offices, meeting rooms
- Acquired by IWG plc but continues independent operations
- Targets SMEs and corporate segments versus startups
- Has expanded to 65+ locations across UK and Germany
- Provides quality spaces in premier business districts
- Focuses on design, hospitality and community
Within the rapidly growing flexible workspace industry, The Office Group competes as a premium operator with its concentration in central London and corporate clientele. Its acquisition by IWG gives it the backing of a global workspace provider while retaining its own niche and branding in the market. Going forward, The Office Group is well-positioned to benefit from the ongoing shift towards flexible and distributed workplaces as it continues expanding across the UK and Europe.
