IWG confirmed that it has agreed a deal to sell 130 co-working office sites in Japan to Tokyo-listed property company, TKP Corporation for £320m. TKP will now partner with IWG and operate its Regus and Spaces brands on a franchise arrangement. As a result IWG's share price rose by nearly 23%.
Its chief executive, Mark Dixon, has long argued that the company is undervalued compared to its main rival, WeWork, which benefited from a recent injection of $2.5bn from SoftBank. He said that IWG will now become "more valuable without its assets than with its assets".
The deal (which is subject to clearance) works for both parties as it allows IWG to realise capital to invest in modernising its portfolio so that it can compete with the likes of WeWork and allows TKP to expand quickly in a growing market, leveraging off an existing and well-known brand with the back-up of an established infrastructure and technology.
More importantly it shows that the serviced office sector is now a recognised asset class with soaring values.
IWG shares soar as it seals £320m TKP Japan office space franchise deal