As IWG rolls out flexible workspaces across Asia, Davao City’s second Regus hub in the Philippines is now 98% occupied
In just three years, the Filipino city of Davao, on the southerly island of Mindanao, is already proving a success story for IWG. The company opened Regus Topaz Tower Centre in 2016 – the largest of its flexible workspaces in the country – with investment from local real-estate developer Damosaland. Running consistently at 90% occupancy, it proved there was demand for a second location.
Taking notice of this, IWG unveiled Regus Felcris Centrale at the end of 2018 and it is now 98% occupied. Overall, IWG has about 150 locations in Southeast Asia and, in Manila, there are 25 branches, including two Spaces.
What’s the story behind IWG’s Davao triumphs? Lars Wittig is IWG country manager for Regus and Spaces in the Philippines. He has lived and worked in Davao since 1992 so knows the market incredibly well. “It is quite typical for developing countries that the national capital region dominates the economy and it quickly becomes very rural when you go outside,” he says. “In the Philippines, about 20% of the population, which is about 110 million people, are concentrated in Metro Manila, which is a highly congested city.
“In order to alleviate this pressure on the capital, which is suffering productivity loss due to the congestion, there has been a government drive to focus instead on suburban locations and other cities. But, even before this, we had decided we needed an extensive national network to satisfy our customers.”
Opening offices in Davao made sense to IWG. However, three years of due diligence were still required to ensure the investment would pay off, with a thorough analysis of micro economic indicators (such as how many McDonald’s, Starbucks and five-star hotels there were) was undertaken.
“The economy in Davao has been booming, growing at about 8.5% per year, which is higher than the national average,” says Wittig. “We never stopped monitoring market developments.” Finally, after shaking hands on a deal with Damosaland (it 100% owns the sites, while IWG manages them), the first project was able to go ahead in August 2016 and in just two years had already exceeded expectations.
Regus went from zero to 79 enquiries a month in Davao and, for every customer signing up, it assigned between one and 140 desks each. The sites have not only been acting as incubators for local start-ups but are also attracting SMEs that want to expand nationally, as well as established multinational companies looking for a base. Users come from a broad range of industries – business processing outsourcing, manufacturing, IT, chambers, consulting, logistics and trade, and lease Regus office space for anything between one month and two years.
“We pioneered the flexible working market here,” concludes Wittig. “Probably the biggest surprise to us was that very early on we started getting a good lot of local businesses – I had expected we would be the landing platform for incoming investors from the capital and abroad. But we proved to be the launching platform for local entrepreneurs to gain access to our nationwide and international network.
“And it was especially gratifying to see that we not only brought good businesses into the city but also promoted local entrepreneurs. In fact, we are regarded as one of the most successful businesses in recent times in Davao.”
Interested in a co-working space in Davao? Learn about the options available at IWG’s operating brand Regus
