Office rental firm IWG Plc said on Tuesday it was cautiously optimistic about the rest of the fiscal year despite posting a bigger half-year loss, even as a resurgence in global COVID-19 cases and renewed lockdowns in some markets threaten the pace of recovery.

The fast-spreading Delta coronavirus variant and the subsequent tightening of curbs in some places have compounded worries for office space providers, as businesses opt for shorter leases and many employees continue to work remotely.

Reiterating that it still expects a strong recovery in 2022, the FTSE 250 firm said the pace of the rebound from the COVID-19 pandemic was coming through slower than originally anticipated.

“We look forward to the second half with cautious optimism having implemented the necessary changes to our network and cost base,” Chief Executive Officer Mark Dixon said in a statement.

Switzerland-headquartered IWG, which has more than 3,300 locations across 110 countries, said half-year open centre revenue fell 14.6% to 1.06 billion pounds ($1.47 billion), while occupancy declined 6.9 percentage points to 68.4%.

Multinational real estate adviser Savills last week said office demand was still down 42% compared to pre-pandemic levels, and IWG in June had warned that its 2021 core earnings will be well below last year’s crisis-hit base