Colliers International reports of the changing face of the traditional office setup.
Co-working space has joined the list of “alternative” office accommodation – serviced offices, mini-office, homes offices, etc – as a new choice for the new generation of office workers. But is co-working space a viable alternative for the Bangkok market, or will it remains a fringe option for today’s urban warriors?
Surachet Kongcheep, associate director of research, Colliers International Thailand comments, “The Bangkok office market continued to grow over the past six or seven years, average vacancy rate was less than 10%, the lowest it has been in the past more than 10 years. At the same time, office rents skyrocketed over the past three to four years. Higher rents in the main areas close to the mass transit system of Bangkok are the main factors affecting the decision-making of some small companies, start-up or SME business.”
“Apart from start-ups and SME businesses that may not be ready or confident enough to commit to a lease in a traditional office building, co-working space is finding favour among a wide variety of freelancers that are looking for a workplace that is more formal than the home environment, more informal than the traditional office yet offers the benefits of convenience and a more professional presentation of their business.” Surachet added co-working space also tends to appear more relaxed than serviced offices, and most importantly, generally offers a lower rent. It generally provides the bare minimum but also the core essentials of general office space, i.e. a worktop, a high-speed Wi-fi connection, meeting room and access to printers and other office equipment.
Flexible solutions
Co-working space has been booming globally over the past few years. Most users are people whose work relies heavily on the Internet, including both freelancers and start-up businesses. In many cases, users are constantly travelling and value the freedom of being able to work from anywhere with a good internet connection. The number of co-working spaces is continuing to increase in the USA, Europe and throughout Asia, including Thailand.
Numbers of co-working space in Thailand.
The popularity of co-working space in Thailand is following the global trend. While co-working space is unlikely to have a major impact on traditional office buildings and landlords in Thailand at the moment, its growing acceptance and popularity is undeniable locally, regionally and around the world. Co-working space is becoming an attractive alternative for the new generation of workers who value greater flexibility in the workplace, as well as proving particularly suitable for freelancers that do not need to work out of traditional offices.
Some co-working space operators in Thailand are continuing to expand their product into new locations and new formats, often in partnership models, especially in view of the large pipeline scheduled to be completed in the next one to two years. Surachet also added, “We can therefore expect awareness of co-working space as an alternative workplace concept to spread more widely in Thailand, although it will remain a niche player in the overall office scene. Its impact on traditional office space is likely to be more in the form of encouraging more flexibility in building design and operations, rather than the much more significant disruption to traditional retail space resulting from the growth of online shopping.”
Traditional office spaces adapting
“In many locations around the world the traditional serviced office operators are facing new challenges from many co-working space operators. Some large, traditional serviced office operators are also converting to facilities that offer both serviced offices and co-working space in the same location, such as Regus in the USA. While some co-working space providers, such as the US-based WeWorks, have already entered the Shanghai and Hong Kong markets and transform to the globally companies and continue to expand to other countries. In addition, some of them may expand into Thailand and some serviced office providers in Thailand may convert some parts of their premises to co-working space and that will directly impact all co-working space operators and all office landlords,” Surachet summarised.