Flexible office operator The Office Group saw its income increase last year, according to financial accounts, showing it is possible to make a profit in the coworking sector.

Results for Cheetah Holdco, The Office Group’s holding company, show that pre-tax profit rose from £11M to £14M, a jump of 27%. Revenue rose 8% from £90M to £97M.

A big part of the rise in revenue and profit was driven by TOG opening three new buildings in 2018: Tintagel House in Vauxhall, 151 Wardour St. in Soho and Thomas House in Victoria. All three were fully let by the end of the year, and TOG said that at Tintagel House, its largest ever site at 100K SF, the fees tenants are paying are ahead of budget.

That bodes well for the company’s expansion plans: TOG acquired eight buildings over the course of the year and one after its year end, which will take it to 47 buildings in total when all these sites are open. The portfolio covers 1.75M SF and is 95% occupied, the results said.

The company owns the freehold of some of its buildings and leases others. The value of its wholly-owned property portfolio was £289M at the end of the year, an increase of £20M on the year before. However, this was not an external valuation.

As for the leased portfolio, TOG has an average lease length of 17 years and has committed to paying £756M in lease payments over that period.

In 2017 Blackstone paid £319M for a majority stake in the company, a deal which put an enterprise value of more than £500M on TOG. Since then, the leverage in the company has also jumped: TOG’s debt rose from £188M to £344M in 2018, with an old debt facility cancelled and a new one put in place.

Earlier this month, TOG announced its first overseas expansion, opening sites in five buildings in Germany, where Blackstone has a major presence in the office market. Three of the buildings are in Berlin, with one in Frankfurt and one in Hamburg.