OBG talks to Mark Dixon, Group CEO and Founder, Regus

Mark Dixon, Group CEO and Founder, Regus

Interview: Mark Dixon

How has demand for office space in African economies evolved in recent years? What role is flexible space playing in new market dynamics?

MARK DIXON: Businesses investing in Africa want flexibility, particularly with regard to where they set up, how much workspace they use, and how they respond to new opportunities and challenges. This is the same in every market, not just in Africa. In new markets, businesses do not want to be constrained by long-term property arrangements. They also want speed and ease of implementation, cost-effective help with setting up and operating, and practical support with aspects like power supply, IT and telecoms networks to get their offices working.

This desire for speed is especially strong in the new oil and gas markets. For example, in Uganda we have seen oil and mining companies coming into the country on a contract basis and wanting to be on the ground within 10 days or less. This is not feasible with the traditional office model, but can be achievable with more flexible workspace arrangements.

Hydrocarbons remain the major business driver for us in Africa. In East Africa we are seeing significant interest from multinationals working in oil opportunities in Kenya and Uganda, and gas exploration in Tanzania and Mozambique. In West Africa there is international interest in Ghana’s new oil industry. And, of course, there are still opportunities in established oil markets like Algeria, Nigeria and Angola. Obviously there is also investment potential in sectors such as natural resources, infrastructure, manufacturing and food, among others.

What affect has foreign investment had on the development of local businesses in Africa?

DIXON: There is certainly huge investor interest in Africa. In five years time everyone will be talking about Africa alongside Asia as the regions driving global development. We are moving from A to AA. Foreign direct investment has helped expand the middle class and strengthen domestic demand so we are seeing greater local entrepreneurial activity. Local firms are using flexible workspace to gain an impressive local presence without significant upfront investment or long-term leases, and then pursue more intra-regional trade. For example, in East Africa local companies are using our network in Kenya, Uganda, Rwanda and Tanzania to expand into neighbouring markets. It is hard not to overstate the potential and dynamism we see in Africa.

To what extent are working habits changing in emerging markets, and in Africa in particular?

DIXON: Though flexible working has been limited in most parts of Africa until now, local businesses are seeing the possibilities. When we talk about the opportunities in Africa, it is not just about investment flows. It is about a larger shift in working habits. For example, the desire to address productivity issues linked to time wasted in traffic congestion has spurred new ways of working, like co-working.

When we launched campus-style offices in Casablanca, the space was full after just two months. The availability of flexible workspaces galvanises local businesses to adopt flexible working. In Algeria, until a year ago, we had mainly multinationals at our centre; today more than 50% of customers are local. Our research shows that emerging markets are fast grasping the benefits of flexible working. Last year, one of our studies showed that 72% of firms globally saw a direct link between flexible working and improved productivity. But the link was even more prevalent in emerging markets like China, India and Brazil – up to 90% of businesses in China experience this effect, for example.

We believe the “younger” emerging markets of Africa will follow these “older” emerging markets in embracing flexible and remote working trends. These patterns make Africa both a fascinating market to watch, as well as a compelling investment opportunity.

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The Report: Algeria 2013

Construction & Real Estate chapter from The Report: Algeria 2013

Cover of The Report: Algeria 2013

The Report

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