Regus Shares Upgraded by Goldman Sachs to Buy

Regus shares have been upgraded by investment analysts at Goldman Sachs Group Inc. from a 'neutral' to a 'buy' rating.

The company, which is found on the FTS 250 Companies and has a global turnover of £1.5bn, expanded into its 100th company in June. Championing the serviced office model, Regus has also begun opening business lounges in international airports and, most recently, motorway service stations.

The firm currently has a GBX 227 ($3.64) price target on the stock, up from the previous target of GBX 173 ($2.77). These figures indicate a potential upside of 25.41% from the stock's previous close.

The company's continued drive for expansion into new territories isn't strictly limited to global expansion, said Regus founder Michael Bow.

“It changes people’s lives,” he says. “The status quo today is that you get on a train and you go to an office and you work with other people. That’s changing. We’re working with local councils to open up Regus offices in small towns and villages. Where do you work if you live in a little village in West Sussex – you can’t go and work in the pub. Now you can work down the road and you get to see your kids.”

The positive upturn has been reflected in the first two quarters of 2013, with many office markets reporting increases in construction and falling vacancy rates.

The market shift has been attributed to the flexibility in office broker's terms - terms that better suit the priorities of many modern businesses.

Jonathan Weinbrenn, head of global corporate sales at Search Office Space, said: “My department is dealing with an ever-increasing demand for flexible office solutions – office space with no or little requirement for capital costs, and where the tenant is totally in control of the on-going facilities costs.”

“Flexibility around term is so critical coupled with options to upscale or downsize the space."

Mark Dixon continued: "We think we’re ahead of a trend in a major shift in how people work."

“We are becoming more and more mainstream. I spend my life explaining to people what we do but in two to five years time I won’t have to explain anymore, because it will be mainstream.”