Insight

Paper:
Shared
Space

RESEARCH

Co-working Space
An alternative to offices

Edmund Tie & Company Research www.etcsea.com

 Co-working Conventional
 Flexible Office
membership  Privacy
Sharing – the real estate buzzword VS
 Networking  Corporate
Following the global trend, sharing economy and events image
or collaborative consumption has taken off  Hassle-free
in recent years in Singapore, Malaysia and
Thailand. From peer-to-peer shared services
such as Grab and Airbnb, to shared items like
Co-working
bicycles from ofo and Mobike, sharing is now
all the buzz. The concept of sharing has also The most common shared space is co-
influenced the real estate market. working space. In addition to leasing office
spaces, managers at co-working spaces, often
With increasing occupation costs, it has
known as community managers, organise
become more expensive for companies,
events to encourage social interaction among
including both startsups and corporates
members. They may also target specific
to conduct business. Shared spaces not
industries to build the community. While the
only encourage community building, spur
initial target market for co-working spaces
collaborations and ideas, they are also
was for the IT community, freelancers and
affordable alternatives to conventional real
entrepreneurs, corporates are increasingly
estate options.
choosing co-working spaces to increase
As shared spaces continue to make an impact in flexibility in their real estate strategy, as well
the real estate market, Edmund Tie & Company as to attract the millennial workforce who are
Research is publishing a series of papers to drawn to the co-working environment.
discuss the shared spaces market. This is the
Co-working is not like serviced offices and
first of the series which focuses on co-working.
conventional offices as the environment tends
to be more creative and informal, focusing
on the sense of community and sharing
of resources. Underpinned by technology,
Sharing economy co-working spaces provide opportunities
Noun for networking and collaborations in an
increasingly borderless and global business
The sharing economy is defined as the
environment (Figure 1). This often comes at a
peer-to-peer based activity of obtaining,
lower cost and is less of a hassle as compared
giving, or sharing the access to good
to conventional offices.
and services.
Source: “The sharing economy: Why people The rates and lease terms of co-working spaces
participate in collaborative consumption” by Juho vary among hot desks, fixed desks and private
Hamari, Mimmi Sjöklint and Antti Ukkonen (2016). offices, depending on the needs of its members.
This flexibility is important for entrepreneurs or
corporates, due to the constant changes in their
needs. Members of co-working spaces also
benefit from the wide membership networks as

Co-working membership

1. Membership is 2. The monthly rates differ 3. More than 50 per cent of the
offered mainly on for hot desks, fixed desks membership for co-working
a monthly basis. and private offices. spaces are subscribed by MNCs.

Edmund Tie & Company Research | 2

 More than 50 per cent of the
membership for co-working
spaces are subscribed
by MNCs.

Figure 1: Co-working space, WeWork. Source: WeWork

well as the activities and events organised by set-up in Singapore. Most of these companies
the operators and members. are small and tend to be in co-working spaces.
In recent years, financial institutions have
Demand for co-working spaces also jumped onto the bandwagon and started
co-working spaces for fintech companies, so
Millennials are making up most of the
that they can work together to develop better
workforce and will soon take up key
solutions for its employees and customers.
management positions. Supported by
For instance, The Open Vault at OCBC is
technology, millennials are used to working
a 2,400 sq ft fintech co-working space in
anywhere and anytime, with many preferring to
New Bridge Road that focuses on wealth
work in informal environments such as cafés.
management, credit and financing, insurance,
They also challenge the need to comply with
cybersecurity and artificial intelligence (AI).
conventional office cultures.

Certain sectors and economies are more • Multinational corporations (MNCs)

receptive to co-working than the others: Contrary to popular belief, more than 50
per cent of co-working memberships are
• Gig economy subscribed by MNCs. Co-working spaces offer
The gig economy or freelance economy is one companies flexibility in lease terms, which in
of the main drivers for co-working spaces. By turn help corporates manage the fluctuating
encouraging entrepreneurship opportunities, staff members amid economic uncertainties
the Singapore Government’s plan for an and project-based work. For instance, HSBC in
innovative economy has increased the number Hong Kong has taken up some 300 hot desks
of freelancers over recent years. Co-working at WeWork. In Singapore, to prepare for their
spaces are suitable for the gig economy as they new co-working space in Paya Lebar Quarter,
offer affordable Central Business District (CBD) Lendlease has moved about 100 staff into
addresses with flexible terms. The informal setting The Work Project at OUE Downtown. Other
and opportunities to mingle and collaborate with companies that have subscribed to co-working
like-minded people are also important for these spaces include Facebook, IBM and Microsoft.
entrepreneurs and freelancers. The co-existence of MNCs and startups in co-
working spaces can create mutual benefits and
• Technology companies, encourage collaborations among small and
e.g. financial technology (fintech) large companies.
The rise of fintech, promoted by the Government,
has encouraged more technology-based firms to

Edmund Tie & Company Research | 3

The market for co-working spaces related events within a mall setting. It also aims
in Singapore to support a business community made up
of different industries, which will include the
Around a quarter of the co-working spaces creative industry and fintech companies.
are concentrated in the CBD
Co-working spaces are gaining a competitive
As of end May 2018, there are about 110
edge with targeted markets and services.
co-working spaces in Singapore, amounting to
around 1.1m sq ft. Around 21 per cent of these Co-working spaces differentiate themselves in
are in the CBD (Figure 2). Cost savings from various ways. About 67 per cent is operating
using a co-working space is the most apparent under major operator networks, with some
in the CBD, where savings can amount to targeting specific industries. For instance,
approximately 50 per cent as compared to a one of the largest co-working spaces in the
traditional office space. CBD is the Singapore FinTech Coworking
Hub 80RR located at 80 Robinson Road.
With more project completions in the CBD,
Occupying 100,000 sq ft, this hub offers the
the distribution of co-working space will
technological infrastructure and environment
change. By the end of 2018, the total amount
that fintech companies can tap on. By focusing
of co-working spaces will grow by around
on an industry, operators can organise events
42 per cent year-on-year (y-o-y) to around
and training sessions to cater learning and
1.4m sq ft. Some 372,000 sq ft of co-working
networking opportunities for members.
spaces have been confirmed for the next two
years, out of which, approximately 59 per cent To increase their competitive edge, some co-
are planned in the CBD. One of them, Spaces working operators have incorporated unique
by IWG, will occupy around 35,000 sq ft in One themes and services. For instance, The Great
Raffles Place when it commences operations Room is a hospitality inspired co-working
in 2019. A unique aspect of this space will be space with lavish interiors and custom-made
its ability to host and launch retail and fashion- furnishings.

Marina Bay
3%

Raffles Place
8%
Outside CBD CBD
79% 21% Shenton Way/Robinson
Road/Cecil
Street/Anson
Road/Tanjong Pagar
10%

Figure 2: Distribution of co-working spaces in Singapore. Source: Edmund Tie & Company Research

Edmund Tie & Company Research | 4

Operators are building up their network in JustCo has also announced that it will work
Singapore and beyond together with Frasers Property Limited and
GIC Private Limited to build its presence in
There are a few key players in the co-working
Southeast Asia and other Asia Pacific markets
industry who take up a majority share of the
including Thailand, China, Japan and Australia.
co-working market (Figure 3). This includes
This will further expand its value connection,
homegrown brand JustCo, which currently
technology platform and services.
operates around 175,000 sq ft spread over five
locations. WeWork, together with Spacemob, Besides expanding its physical presence,
has around 117,000 sq ft in four locations. It will JustCo is also embarking on curating
continue to grow its network in Singapore with communities for corporates. For example,
five additional locations (total space around JustCo will manage Verizon Innovation
183,000 sq ft) including one of its largest Community, which is a collaboration with
office spaces at 8 Cross Street. When all the Verizon Communications, an American
co-working spaces in the current pipeline are multinational telecommunications giant, in
completed, WeWork will be the largest operator Ocean Financial Centre. The community, which
in terms of its market share in Singapore. has a space of 10,000 sq ft, will comprise
members from cybersecurity, fintech and
WeWork will also be expanding into other
digital media sectors. Another United States
Southeast Asian cities such as Jakarta, Kuala
conglomerate will also work with JustCo
Lumpur, Bangkok and Manila by end 2018.
to curate and manage two floors of its
In Jakarta, strong pre-committed rates were
headquarters in Bangkok, Thailand.
reported for WeWork in Sinarmas MSIG Tower
and Revenue Tower.

350000
300000
250000
sq ft

200000
150000
100000
50000
0

Occupied space Upcoming space

Figure 3: Size of selected co-working operators. Source: Edmund Tie & Company Research

Edmund Tie & Company Research | 5

More landlords are partnering with co- is an integrated media studio with recording
working operators facilities. City Developments Limited and
Many landlords are beginning to recognise Chinese co-working operator Distrii have also
the importance of innovation and creativity joined forces to open a 62,000 sq ft tech-
in workspaces and have begun to introduce driven co-working facility in Raffles Place
co-working spaces in their developments. (Figure 6). This is Distrii’s first overseas location
For instance, Collective Works at Capital outside of China. Besides office spaces, there
Tower is 50 per cent owned by CapitaLand is also a multi-purpose hall and a café run by
(Figures 4 and 5). It is around 22,000 sq ft with German burger chain Hans imi Glück. The
a mix of private and open spaces designed space is equipped with a customised mobile
to encourage collaboration. In addition, there application for members to unlock meeting or
conference rooms and share files.

300000
JustCo
250000

200000
sq ft

The Great Room

150000
Collective Works
(Capital Tower)
100000
Distrii
50000

0
Frasers Property (Together CapitaLand City Developments Limited
with GIC)

Occupied space Upcoming space

Figure 4: Size of selected co-working spaces that are co-developed/co-owned with developers in Singapore.
Source: Edmund Tie & Company Research

Figure 5: Collective Works, Capital Tower. Figure 6: Distrii, Republic Plaza. Source: City Developments Limited
Source: WorkSmart Asia

Edmund Tie & Company Research | 6

CONCLUSION
The co-working trend has risen in technology. The trend of “everything
popularity. Due to the proliferation of co- becoming a café”2 will continue to grow,
working operators, the market is becoming as the line blurs between work, live, learn
saturated and we may see some and play.
consolidation of operators. Co-working
The success of co-working spaces
operators will continue to differentiate
has incentivised many companies to
themselves in terms of their physical
incorporate co-working elements into
design and other value-added services.
their workplace. This is also part of
By 2025, millennials will form around 75 per the space optimisation strategy that
cent of the workforce, effectively shaping companies are implementing. While
the future of working1. As this generation reducing the space utlilisation per
values qualities such as collaboration, person, companies have increased the
flexibility and mobility, shared spaces are amount and type of collaborative spaces.
ideal to meet their needs. This trend is likely to continue with the
increase in CBD office rents.
As the real estate market calibrates
to accommodate the trend of shared 1
“Big demands and high expectations. The
spaces, there will be more demand for Deloitte Millennial Survey.” by Deloitte (2014).
2
cross-disciplinary shared spaces. People “In the Future Everything will be a Coffee Shop.”
by Stephen Gordon (2011).
can work anytime and anywhere with

Edmund Tie & Company Research | 7

Regional case study – THAILAND

Besides Singapore, shared spaces are growing shared spaces. MNCs also take up shared
in size across the region. In Thailand, co- spaces when their offices are full and when
working spaces started around five years ago. there is a need to find alternative spaces to
Today, there are more than 100 co-working house their employees. Landlords are pleased
space operators. Some operators have also with these new concepts as it ensures their
introduced co-working spaces in unique continuous income.
locations. For instance, convenient stores like
Moving forward, co-working operators are
Family Mart at Sukhumvit 33 have introduced
expected to expand rapidly. International
co-working spaces in their stores (Figure 7).
brands such as Regus, which provides both
Major demand drivers are the startups and serviced office and co-working spaces, are
small- and medium-sized enterprises (SMEs), planning to expand their brand outside of
which take up around 80 to 90 per cent of Bangkok to target a wider range of customers.

Figure 7: Family Mart at Sukhumvit 33. Source: Mango Zero

Edmund Tie & Company Research | 8

Airtel X Sathon

Managed by Airtel Lifestyle, this modern co- and light snacks. Memberships range from
working office in Bangkok is located close to daily to monthly packages for hot desking
Rama 4 Road and Sathorn Road and is within or dedicated offices, with up to five hours
walking distance of Lumpini MRT station. of meeting room use per month. The two
Some of the unique features of this designer- meeting rooms can also be booked on an
focused working space include a shared hourly basis. The collaborative meeting rooms
library of lighting and design materials. There include audiovisual equipment geared for
is also a lounge area with free beverages presentations as well.

Figure 8: Airtel Lifestyle. Source: Airtel Lifestyle

Edmund Tie & Company Research | 9

Regional case study – M A L AY S I A

APW Bangsar
Co-working spaces have taken off
in Malaysia, and such spaces are
often located together with F&B
outlets. One unique example is APW
Bangsar in Kuala Lumpur, which
was formerly used as a commercial
printing factory. APW Bangsar is
now converted into a space which
has F&B outlets,
co-working spaces (6,000 sq ft) as
well as event spaces (from 1,800 –
4,144 sq ft). Some of the activities
here include weekend flea markets,
yoga classes, networking events
and workshops.

Figure 9: Site Plan of APW Bangsar. Source: A Place Where

Edmund Tie & Company Research | 10

Figure 10: Co-working spaces and Meeting rooms @ Uppercase. Source: Uppercase

Figure 11: Event Space @ APW Bangsar. Source: UnionSPACE

Edmund Tie & Company Research | 11

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ONG Choon Fah
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Authors: ONG Choon Fah Constance LEUNG Isabelle SETO

Chief Executive Officer Director, Consulting Research Analyst
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choonfah.ong@etcsea.com constance.leung@etcsea.com isabelle.seto@etcsea.com

Saleha YUSOFF David GEORGE

Malaysia Director, Thailand Director,
Research & Consulting Business Space/Valuation/
+603 2024 6302 Research & Consulting
saleha.yusoff@ntl.my +66 2257 0499 ext 134
david.g@etcthailand.co.th

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