What's going on?
IWG, the world’s largest shared office firm and rival to WeWork, announced a big payout to shareholders on Tuesday – a move that might just keep its investors onside…
What does this mean?
IWG slogged to an 8% increase in profit for the first half of 2019, compared to the same period last year. Investors, however, might’ve been distracted by its other announcement: IWG also said it’ll increase its dividend by 10% and buy back $122 million worth of shares, in turn increasing the value of those remaining. That might seem like a bold move, given the current climate of economic uncertainty – especially in the UK, where IWG’s shares are listed (in the less-than-secure British pound). And if IWG loses tenants in the storm, it’ll have a lot less income to its name.
Why should I care?
For markets: Offense is the best defense.
Rival WeWork looks set to list on the stock market in the next few months, and it’s already caught investors’ eyes. The company has proven itself with a revolving door of startups and big names alike, and IWG may worry its own investors will see something in the the cool kid of office-sharing. But $47 billion WeWork still hasn’t made a profit, and that’s where IWG has the upper hand. By increasing its dividend and buying back shares, IWG’s reminding shareholders just what it has to offer – which may be why its stock rose 3% on Tuesday.
The bigger picture: It’s not all golden in real estate.
Looks like mall owner Intu – and others like it – have a tough time ahead. The company cut its dividend last week and warned shareholders that it expects its rental income to fall. Luxury department store Barneys plans to close a number of stores after filing for bankruptcy protection on Tuesday (tweet this), and recently rescued sportswear outlet Jack Wills hopes to lower its own store rental costs too.