SINGAPORE: Ethan Lum works in sales, travels a lot and is one of just three Singapore-based employees of an American firm. It makes it hard to "justify" the company renting an office, so he instead uses WeWork about six to eight days every month.
Apart from the flexibility offered by the co-working space, the amenities make it easier to network and meet new people, said the 27-year-old.
"I'm quite an extroverted person; I do like mingling," Mr Lum added."WeWork creates a nice environment to do that."
In November, however, the New York-headquartered firm gave up spaces in two prime locations at Manulife Tower and UE Square. This was after WeWork said in in April that it planned "to remain in its current buildings in Singapore for the foreseeable future”, albeit after completing lease negotiations and real estate "rationalisation" processes.
In response to queries from CNA, WeWork's head of development for Singapore Richard Paine said it was a "difficult decision" to not renew the two leases and that Singapore remained a “priority market”.
Despite the troubles faced by perhaps the most recognisable name in the co-working market, other operators in Singapore told CNA they have seen increased if not continued strong demand, with analysts also pointing to steady growth and particularly within the central business district.
Singaporean company JustCo, which operates 20 locations locally, registered an almost 20 per cent rise in demand in the last 12 months, compared with the same period the year before, said co-founder and chief commercial officer Kong Wan Long.
The company also saw "double-digit per cent" growth in revenue and occupancy since 2022, he said, adding that it intends to expand to Taipei and Osaka.
At flexible workspace operator The Hive, demand for its 1,115 seats went up by 21 per cent between January and November, and its four locations across Singapore are 95 per cent occupied, said head of marketing and communications Samantha Wordsworth.
“Our occupancy remains strong, underscoring the consistently strong demand for flexible work environments. Despite reports suggesting fluctuations in the co-working market, The Hive continues to thrive,” she added.
Demand comes from a diverse range of companies from small and medium enterprises looking for flexible lease terms to large multinationals looking to offer employees a variety of locations, said Ms Wordsworth, pointing to increased interest from tech start-ups and creative industries.
Another brand, The Work Project, expanded two of its 10 locations in the past year, by adding a floor each to co-working spaces at Capital Tower and CapitaGreen. The former has already sold out while the other is 95 per cent occupied, said chief executive officer Junny Lee.
She said that according to company estimates, The Work Project would be able to release 75,000 sq ft of space in the central business district every year and sell out the seats, though this falls below early-2023 levels when businesses were rapidly returning to offices after the COVID-19 pandemic.
Demand at fringe locations and business parks, while not as strong, still comes in at a healthy 90 per cent occupancy, Ms Lee added.
When 42-year-old Joscelin Kwek started a PR and marketing agency during the pandemic, the goal was to try and avoid office rental fees while having a space that could accommodate what were, at the time, ever-changing work arrangements.
Rented seats at WeWork fit the bill then. But as the size of Ms Kwek's team grew, using a co-working space became less cost-effective and it “just didn’t add up” to keep buying more seats, she said.
Late in 2023, she decided to secure an office space which she currently shares with two other companies. It has saved her up to S$5,000 (US$3,717) a month.
Having a dedicated office space has created a sense of belonging and committing to it also meant committing to growing the company, which has assured her employees, said Ms Kwek.
Real estate agency Huttons Singapore's senior director Lee Sze Teck said that as a company grows, it might want its own office space and address for branding if not privacy purposes as well.
But the emergence of artificial intelligence, flexible work arrangements and cost-cutting measures are all factors affecting demand for office space, he noted.
“Even with more workers returning to office, the demand for office space is growing at a slower pace, and some companies are reducing their need for co-working space,” he added.
Despite headwinds, demand for office space is still projected to be stronger moving forward - and demand for co-working spaces may grow in tandem, said Mr Lee, though he suggested that consolidation may take place as operators seek operational efficiencies and profitability.
Mr Piers Mallitte, who heads the Workthere office space rental arm of real estate services firm Savills, similarly said that the traditional office market isn't going anywhere, with landlords continuing to see the benefit of direct leases with tenants.
Yet with a co-working operator there are also plus points such as shared costs, he added, describing Singapore's co-working market as “positively mature” and still growing.
For Ms Priscilla Cheong, the founder of a social media agency, the freebies that come with her JustCo membership - coffee, water, snacks - amount to it being "cheaper than going to Starbucks" to work.
Not having to compete for power plugs and seats, and having multiple locations to choose from, are other advantages that have made it worthwhile.
She signed up with the co-working space after suffering a lack of productivity at home to begin with. But there are times when the comfort and convenience of being able to ply her trade out of her house prove too hard to resist.
"For months where I don't really go as often, I feel like I just wasted my money," said Ms Cheong, who's on a six-month plan. "I haven’t decided yet, I might cancel it.”
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Apart from the flexibility offered by the co-working space, the amenities make it easier to network and meet new people, said the 27-year-old.
"I'm quite an extroverted person; I do like mingling," Mr Lum added."WeWork creates a nice environment to do that."
In November, however, the New York-headquartered firm gave up spaces in two prime locations at Manulife Tower and UE Square. This was after WeWork said in in April that it planned "to remain in its current buildings in Singapore for the foreseeable future”, albeit after completing lease negotiations and real estate "rationalisation" processes.
In response to queries from CNA, WeWork's head of development for Singapore Richard Paine said it was a "difficult decision" to not renew the two leases and that Singapore remained a “priority market”.
Despite the troubles faced by perhaps the most recognisable name in the co-working market, other operators in Singapore told CNA they have seen increased if not continued strong demand, with analysts also pointing to steady growth and particularly within the central business district.
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NUMBERS UP
Singaporean company JustCo, which operates 20 locations locally, registered an almost 20 per cent rise in demand in the last 12 months, compared with the same period the year before, said co-founder and chief commercial officer Kong Wan Long.
The company also saw "double-digit per cent" growth in revenue and occupancy since 2022, he said, adding that it intends to expand to Taipei and Osaka.
At flexible workspace operator The Hive, demand for its 1,115 seats went up by 21 per cent between January and November, and its four locations across Singapore are 95 per cent occupied, said head of marketing and communications Samantha Wordsworth.
“Our occupancy remains strong, underscoring the consistently strong demand for flexible work environments. Despite reports suggesting fluctuations in the co-working market, The Hive continues to thrive,” she added.
Demand comes from a diverse range of companies from small and medium enterprises looking for flexible lease terms to large multinationals looking to offer employees a variety of locations, said Ms Wordsworth, pointing to increased interest from tech start-ups and creative industries.
Another brand, The Work Project, expanded two of its 10 locations in the past year, by adding a floor each to co-working spaces at Capital Tower and CapitaGreen. The former has already sold out while the other is 95 per cent occupied, said chief executive officer Junny Lee.
She said that according to company estimates, The Work Project would be able to release 75,000 sq ft of space in the central business district every year and sell out the seats, though this falls below early-2023 levels when businesses were rapidly returning to offices after the COVID-19 pandemic.
Demand at fringe locations and business parks, while not as strong, still comes in at a healthy 90 per cent occupancy, Ms Lee added.
"DIDN'T ADD UP"?
When 42-year-old Joscelin Kwek started a PR and marketing agency during the pandemic, the goal was to try and avoid office rental fees while having a space that could accommodate what were, at the time, ever-changing work arrangements.
Rented seats at WeWork fit the bill then. But as the size of Ms Kwek's team grew, using a co-working space became less cost-effective and it “just didn’t add up” to keep buying more seats, she said.
Late in 2023, she decided to secure an office space which she currently shares with two other companies. It has saved her up to S$5,000 (US$3,717) a month.
Having a dedicated office space has created a sense of belonging and committing to it also meant committing to growing the company, which has assured her employees, said Ms Kwek.
Real estate agency Huttons Singapore's senior director Lee Sze Teck said that as a company grows, it might want its own office space and address for branding if not privacy purposes as well.
But the emergence of artificial intelligence, flexible work arrangements and cost-cutting measures are all factors affecting demand for office space, he noted.
“Even with more workers returning to office, the demand for office space is growing at a slower pace, and some companies are reducing their need for co-working space,” he added.
Despite headwinds, demand for office space is still projected to be stronger moving forward - and demand for co-working spaces may grow in tandem, said Mr Lee, though he suggested that consolidation may take place as operators seek operational efficiencies and profitability.
Mr Piers Mallitte, who heads the Workthere office space rental arm of real estate services firm Savills, similarly said that the traditional office market isn't going anywhere, with landlords continuing to see the benefit of direct leases with tenants.
Yet with a co-working operator there are also plus points such as shared costs, he added, describing Singapore's co-working market as “positively mature” and still growing.
For Ms Priscilla Cheong, the founder of a social media agency, the freebies that come with her JustCo membership - coffee, water, snacks - amount to it being "cheaper than going to Starbucks" to work.
Not having to compete for power plugs and seats, and having multiple locations to choose from, are other advantages that have made it worthwhile.
She signed up with the co-working space after suffering a lack of productivity at home to begin with. But there are times when the comfort and convenience of being able to ply her trade out of her house prove too hard to resist.
"For months where I don't really go as often, I feel like I just wasted my money," said Ms Cheong, who's on a six-month plan. "I haven’t decided yet, I might cancel it.”
Continue reading...