Monday 21 January 2019

Deloitte hired to aid Iconic Offices' expansion plans

Company wants to raise fresh equity for expansion into continental Europe

Chief executive Joe McGinley
Chief executive Joe McGinley
Gavin McLoughlin

Gavin McLoughlin

Serviced office company Iconic Offices has hired Deloitte to help raise equity for an ambitious growth plan.

The company, which is planning to expand into continental Europe, has assembled a portfolio spanning 14 locations in Dublin and 250,000 square feet.

It said it is aiming to expand its portfolio by 538,000 square feet over the next five years - both in Dublin and on the continent - with space to accommodate 7,000 workstations. It aims to add 100 new jobs in that period - mostly in Dublin. The serviced office model involves a company managing an office space and renting it out by the workstation.

Iconic said it has posted annual growth of more than 100pc every year since it was founded in 2013 and a 500pc increase in ebitda run rate (a projection based on initial performance) since drawing down a €4m debt facility.

"This has led to the doubling of headcount to a 50-plus-strong workforce, as well as increasing the total number of workstations to in excess of 2,000.

"Further expansion will see the Iconic Offices portfolio grow by a minimum of 1,000 workstations over the next 12 months," Iconic said.

Chief executive Joe McGinley said the capital injection it is seeking would "transform the business, will see Iconic Offices reach its full potential, and will allow us add lots of new talent to the company".

New York-based WeWork - valued at around $20bn (€16bn) - is the most high-profile operator in the industry, and has recently become the biggest private tenant in London, according to data gathered for Bloomberg by commercial property news service CoStar.

Growing demand for flexible leases has drawn increasing competition. Blackstone bought The Office Group for about £500m earlier this year and plans to expand the business while British Land Co, the UK's second-largest Reit, has started Storey, a new flexible workspace brand.

There were almost 1,140 serviced office and co-working facilities in London in April 2017, up from around 490 in 2012, according to data collated by broker Instant Offices.

Founded in 2010 in New York, WeWork started life offering short-term offices and has expanded into a diverse range of areas, from co-living to kindergartens, all of which centre on the idea of creating a community. Created by Israeli Adam Neumann and American Michael McKelvey, the company has also begun branching out from purely leasing office space and has now begun purchasing properties in London and New York.

Additional reporting Bloomberg

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