THE RISE OF CO-WORKING SPACE IN ASIA PACIFIC: BOON OR BANE?

Bangkok--24 Aug--CBRE Co-working space has enjoyed tremendous growth in recent years supported by the start-up boom; demand for greater flexibility among both employees and corporate; and advances in technology allowing people to work anywhere at any time. CBRE has recently launched its Viewpoint, The Rise of Co-working Space in Asia Pacific: Boon or Bane?, and the key highlights of the report are: Globally, co-working space has enjoyed tremendous growth in recent years—surging from just 75 spaces in 2007 to more than 7,800 in 2015. Most co-working spaces in Asia Pacific are located in gateway cities including Hong Kong, Singapore, Shanghai, Tokyo, Sydney and Melbourne. CBRE Research estimates there are a total of 300 co-working spaces in these locations. Cities in Asia Pacific lag behind those in the West, such as New York and London, which each host at least 120 co-working spaces. Tokyo is home to roughly 100, while Hong Kong, Singapore and Shanghai host 40-60 each. Local and regional co-working space operators still dominate in Asia Pacific, accounting for a 60% market share. However, several international players are expanding aggressively. Dr. Henry Chin, Head of Research, CBRE Asia Pacific, commented, "Competition among co-working space operators is intensifying as they open more centers, lease larger spaces and increase their presence in prime areas. This will increase real estate occupancy costs and squeeze profit margins. Co-working space operators need to plan expansion carefully, keep costs in check and be aware of this increasing competition—as well as conducting thorough assessments of supply and demand dynamics." "Operating a co-working space is not the same as straightforward office leasing or providing a space for people to work—the key to running a successful co-working space is creating an experience; building a community; and facilitating business and learning opportunities for end-users." "While the rise of co-working space in Asia Pacific is by no means a disruptive threat to the traditional office format or leasing model, it does have a number of implications for occupiers and landlords alike, for example pointing to the need for a new approach towards office design to facilitate better collaboration and interaction between people. Landlords may want to consider whether to lease space to co-working operators or develop their own co-working platform following a detailed evaluation of the costs and benefits." Mr. Nithpat Tongpun, Head of Office Services, CBRE Thailand, comments "It is undeniable that co-working space is a new rising trend in the Bangkok office market. However, it is necessary that co-working operators in Bangkok truly understand the demand level, all associated costs and investment returns so that they have a clear picture of the market as the competition in co-working space has been increasing." Follow us on Facebook: CBRE.Thailand Twitter: @CBREThailand LinkedIn: CBRE Thailand Instagram: CBRE Residential Thailand