The Executive Centre sells furnished private offices, coworking access and custom managed workplaces to multinational companies, smaller businesses and professionals across Asia-Pacific and the Middle East. Apollo-managed funds, affiliates and other long-term investors provided the Hong Kong-based company with $585 million, primarily to refinance existing debt and position it for further expansion.
For a private office, a customer chooses a center, specifies its team size and other requirements, gets a quote based on office type, size, term and add-on services, and moves into a furnished, lockable space. Packages can include internet, phones, reception, IT support, cleaning and mail handling; meeting rooms can be booked separately. The offering is priced through flexible workspace agreements and paid add-ons, giving customers office capacity without managing a conventional long-term lease.
For larger organizations, The Executive Centre can take responsibility for more of the workplace project. Its team evaluates locations, manages broker and landlord relationships, translates the customer’s needs into a design, completes the fit-out and operates the finished office. The managed-office product uses an open-book, cost-plus model: rent, amortized fit-out spending, operating costs and a fixed service fee are combined into one monthly payment.
The wider product range includes hot and dedicated desks, day offices, virtual business addresses, meeting rooms and event spaces. The Executive Centre says it operates more than 260 centers across 38 cities in 15 markets and has more than 60,000 members. It also says multinational corporations make up 83% of its member network, reflecting the enterprise customers targeted by its private- and managed-office products.
Apollo-managed funds, affiliates and other long-term investors supplied the financing. Apollo said proceeds will primarily refinance existing debt and that the transaction positions The Executive Centre for further expansion. The investor described the arrangement as a tailored solution and presented it as part of its hybrid-capital activity in Asia.
Because refinancing is the primary use, the full $585 million is not expansion capital. The next business question is how much capacity the transaction creates for additional centers and managed-office projects, and how quickly any expansion can add monthly-fee contracts.