Regus, the oldest coworking operator, closes its first site in Russia

One of the founders of the Russian coworking market, the Belgian Regus is closing its first site in the Russian Federation near the Foreign Ministry building, which it has been developing for over 20 years. The operator has recently been systematically reducing the number of facilities, which may be due to the withdrawal of Western tenants from the country, on which the company was focused. Experts do not rule out that the company may eventually pass to Russian management or leave the market altogether.

Regus, the oldest co-working operator in Russia, closed the site in Smolensky Passage near the Foreign Ministry building in the center of Moscow, two sources told Kommersant in the real estate market and confirmed the company’s CEO Irina Baeva. According to her, the facility was closed by mutual agreement with the owner of the space – “Corporation A.N.D.” Sait-Salam Gutseriev. They did not respond to Kommersant’s request there.

Sources of “Kommersant” in the market say that Regus may abandon a number of sites. The director of the office real estate department at ILM said that the operator’s premises are already being offered in the Citidel business center near the Kursky railway station. They did not respond to Kommersant’s request there. Deputy Director of Ricci | Offices Anton Gryaznov says that information is circulating in the market that the company is going through some difficulties. Irina Baeva claims that the rest of the company’s centers are operating as usual.

Regus began to decline smoothly in Russia even before the pandemic, notes Elena Medushevsky, deputy director of the office real estate department at Nikoliers. The operator refused to represent in Yekaterinburg, confirms Ksenia Kharkevich. In 2020, the operator closed the co-working space in the Naberezhnaya Tower in Moscow City, and later in the Voentorg complex on Vozdvizhenka. In June 2022, Regus was the sixth operator in Moscow with a portfolio of 22,000 sq. m. m, or 3.1 thousand jobs, said Ricci. At the beginning of 2022, the company ranked second with 27,000 sq. m. m.

The closure of the site in Smolensky Passage and the discussion of the release of other sites could be due to the low occupancy of these premises, Anton Gryaznov believes. The facility could be unprofitable for the operator, Ksenia Kharkevich agrees.

Regus was very popular mainly with small foreign companies, says Viktor Rozenberg, head of OF.ru’s brokerage department. But their interest has waned due to the 2014 sanctions and also in the midst of the pandemic, Kharkevich adds. The negative effect intensified in 2022, when Western companies began to leave the Russian market. In addition, in the current realities, it is difficult for European shareholders to conduct financial and operational management of a company operating in the Russian Federation, adds Mr. Rozenberg.

At the same time, the flexible offices and co-working segment began to recover from the crisis. According to Knight Frank, at the peak of the release of such premises in October 2022, the share of vacant space among the operators of the capital sites was 37%, now it is 23%. According to Nikoliers, in January-June 2023, the volume of transactions in the segment almost doubled, to 29.7 thousand square meters. m.

Taking into account the continuing trend of foreign companies leaving the Russian Federation, Ksenia Kharkevich does not rule out such a scenario with Regus. Anton Gryaznov considers it logical if the operator completely leaves the Russian market or transfers control to local top management.

Daria Andrianova