CBRE investigates the rise of co-working spaces and the role they play in the office market.
Co-working spaces are popping up all over Asia as a response to changing working habits. CBRE’s recent study, ‘The Rise of Co-working Spaces in Asia Pacific: Boon or Bane?’, has drawn on some interesting points.
Firstly and most obviously, co-working globally has grown. Starting with just 75 spaces in 2007, by 2015 this reached 7,800. CBRE Research estimates that only 300 of these are in Asia Pacific, but notably in Hong Kong, Singapore, Shanghai, Tokyo, Sydney and Melbourne which are all considered to be gateway cities.
This is in stark comparison to western cities where both London and New York are gauged to have 120 co-working spaces each. Tokyo is hot on their heels with 100, with Singapore, Hong Kong and Shanghai having in the region of 40 to 60 each. Whilst there are some major companies that dominate the co-working sector, within Asia Pacific 60 percent of the market is operated by local and regional co-working spaces.
Dr. Henry Chin, head of research, CBRE Asia Pacific, commented, “Competition among co-working space operators is intensifying as they open more centres, 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.”
When asked to comment on Bangkok’s role in the growth of co-working spaces, Mr Nithpat Tongpun, head of office services, CBRE Thailand, said, “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.”
