Billionaire Doubles Fortune on Workspace Demand Surge
Mark Dixon, the billionaire founder of Regus Plc (RGU), the world’s largest operator of serviced offices, has more than doubled his fortune in the past year as increased demand for flexible office space propelled the company’s share price to an all-time high.
Regus shares have surged 106 percent since last October, compared to a 30.3 percent gain in the FTSE 250 index. Dixon, 53, owns a 34.2 percent stake in the company valued at $1.1 billion, according to data compiled by Bloomberg.
“We think our growth is still just in its infancy,” Dixon said in an Aug. 27 interview with Francine Lacqua on Bloomberg Television’s On the Move. “What we measure with our customer base is -- do they feel more confident? And we’re certainly seeing more confidence.”
Andrew Brown, a company spokesman, said Dixon declined to comment on his net worth.
Regus had 744.7 million pounds ($1.2 billion) in revenue in the first six months of 2013, a 22.3 percent increase from a year earlier. The company operates 1,600 business centers in 100 countries, and leases space to individuals and companies, including Google Inc. and Nokia Oyj. (NOK1V)
More than 1.5 million customers use Regus’ facilities, according to the company, which include offices, business lounges and conference rooms. It plans to increase the number of business centers it operates to 2,000 by next year, according to the company’s 2012 annual report.
“It’s been phenomenal for the past year,” said David Greenall, an analyst at RBC Capital Markets in London, who has an “outperform” rating on the company. “There was a lot of distrust during the downturn, but every quarter its numbers have been in-line or better.”
Dixon founded Regus in Brussels, in 1989. A high-school dropout, he moved to Belgium after selling a U.K. bakery, The Bread Roll Co. While looking for an office in the capital, he was struck by the number of professionals working out of cafes and hotel lobbies. Brussels became the site of the company’s first business center.
He expanded into China, Latin America and the U.S. over the next decade. When Regus sold shares in an initial public offering on the London Stock Exchange in 2000, the company had 335 offices in 48 countries.
The expansion hurt the company three years later, as vacancy rates soared in the aftermath of the global recession in 2001. The Bloomberg REIT Office Property Index dropped as much as 23 percent between August 2001 and January 2003.
Its U.S. unit, Regus Business Center Corp., filed for Chapter 11 bankruptcy protection in 2003. To raise money, Regus had to sell more than half of its U.K. business for 57 million pounds.
The company has managed the financial crisis of 2008 and its aftermath better, Greenall said.
“It had a fairly checkered history,” he said. “There’s been consistent demand, as companies look to reduce their cost basis. And you have to remember, they’re at least ten times bigger than their nearest competitor.”
Limited inventory has also helped. New office supply in the U.S. represented just 0.3 percent of existing stock, less than half the 10-year average of 1.2 percent, according to commercial real-estate services firm, CBRE Group. Fewer new office buildings has helped keep vacancy rates low and rent levels stable.
“For us, a slowdown is as much an opportunity as a threat,” Dixon said on Bloomberg TV in August.
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