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As the co-working trend gains popularity, a new office space concept is beginning to take a larger share of the market.
By Nikki De Guzman
Gone are the days when solopreneurs, freelancers and the like are okay with either staying home or fighting for space at their local cafés to do their work. In the same manner, those working for companies no longer want to work in tiny enclosed cubicles. This is how the way we work has changed in recent years.
With the evolution of the way we work comes the birth of the co-working trend, which, in the broadest terms, describes any situation wherein two or more individuals are working in the same place together, but not always for the same business or organisation.
As the co-working concept builds momentum, the need for a designated common space has become more pronounced, thus the rise of dedicated co-working spaces.
In the second part of our feature on shared and flexible offices, we shed light on co-working spaces and the new office space concept that has ensued.
Co-working spaces
In the past few years, the co-working space business has evolved from being a niche market to a full-fledged alternative to traditional offices, as manifested in the rise in the adoption of flexible working. It has come a long way since the first “hackerspace” — considered one of the first forms of co-working spaces — was introduced to the market in 1995.
With the rise of start-up businesses and the growing popularity of flexible working, the global office market is seeing, now more than ever, a need to accommodate an increasing demand for shorter-termed shared and flexible workspaces.
In Singapore, the demand for co-working spaces all over the island has been encouraging enough for a growing number of space providers to open a business in the city-state. Co-working spaces here are operated by a range of operators, from small, single-space providers to regional and international co-working space companies.
Seed of growth
As with any micro and startup business, as well as an independent player, planning ahead the same way more established companies and institutions do is trickier. This is the reason these companies, when it comes to office lease expenditures, are usually unwilling to commit long-term, and therefore, have created the gap between what traditional offices can offer and what these businesses need.
Traditional offices are usually offered on a lease term that lasts multiple years. For example, a common practice in Singapore when leasing out office spaces is for durations of at least two to three years. These long-term lease durations do not allow much flexibility for smaller players in getting a better grip on their rental expenditures.
“These parties tend to be very cost-conscious and are concerned (about) being committed for a long lease period,” said Kong Wan Sing, Founder and Chief Executive Officer at JustGroup’s co-working space business, JustCo.
This sort of mismatch between small businesses — including individual workers — and traditional office space rental practices is the seed of growth of the co-working space business. Sarantha Gattie, co-founder of The Working Capitol at Keong Saik Road, said: “The idea of co-working spaces, or shared working spaces, is that you can have a shorter term of lease.”
Just like serviced offices, co-working spaces are operated on a rolling renewal basis. However, unlike business centres that usually charge based on services offered or office space sizes, co-working space rents are usually determined by a single, particular unit — a desk — that provides a more simplified contractual commitment between user and landlord.
Shared (office) space
Primarily utilised by individual workers and micro businesses because of flexible lease tenures, co-working spaces are usually offered on membership packages. These packages tend to vary, based on the type of desk and frequency of use.
Desks are categorised into two types: hot desks and permanent desks. A hot desk can be occupied by multiple individuals during different time periods, while permanent desks are assigned to one particular user regardless of schedule.
Packages can also be determined by a member’s frequency of use. While typically offered on a monthly renewal basis, most co-working space packages offered in Singapore are differentiated by either the number of hours or days a member can access and use the space each month.
The crossover
The success of the co-working trend has caused serviced office operators to adapt to co-working space concepts to accommodate a wider spectrum of professionals. According to DTZ’s How We Work report, “business centres can be found extending their offering to include co-working (spaces) as a workspace solution”.
But serviced offices were not the only ones to recognise the benefits of adapting. Equally, co-working spaces have evolved from being purely shared venues. Co-working spaces nowadays offer not just communal workspaces but also private office suites, boardrooms and meeting rooms, on the back of ever-changing demand, therefore blurring the distinction between business centres and co-working spaces increasingly.
Apart from communal workspaces, co-working spaces like The Working Capitol also offer private office suites, board rooms and meeting rooms. (Source: The Working Capitol)
Fringe benefit
Along with the ease and flexibility offered by co-working spaces, some businesses and individuals renting co-working spaces benefit from many other advantages, on top of cost savings.
Fiza Malhotra, Head of Business Development at The Hub, said: “I think the biggest advantage is whether you want to be a part of a community that helps you to grow, or you just want to an individual operator who works more in isolation.
“A lot of what we do is support growth and (provide) guidance because we (offer) a community — we are not just a space…we give our members a platform where they can get access to events, mentorship, and access to the people in our network.” Members of The Hub also gain access to Hubnet, the company’s network of digital connection platforms, where they can get an instant connection to over 11,000 The Hub members across 49 countries.
Beyond the provision of space, The Working Capitol and The Co. also offer services that include networking events and skills-enhancement programmes. JustCo, on the other hand, has a team focused on incubation that will help “connect (their) users to respective companies from which they can benefit”.
In the near future
The shared and flexible office market is now a worldwide phenomenon, with the number of co-working spaces worldwide estimated to grow tenfold in the coming years.
As demand for co-working spaces continues to grow, operators whom CommercialGuru spoke to remain bullish on the local market.
“Singapore is still the most business-friendly economy in the world, (and many) businesses formed in Singapore this year. Most of these businesses are start-ups and foreign firms, and (they) have cited rental as one of their top expenses; (that’s where) co-working spaces come in — to meet that need (for flexible spaces),” said Kong, adding that this boosts demand for co-working spaces, which allows them to reduce spending with the flexibility in leasing.
In agreement, Gattie added: “A big chunk of co-working space users come from start-ups and they aren’t going anywhere. There will always be new start-up businesses, it’s being taught to younger people now. I think it’s something that will definitely go on for a while, at least in the near term.”
Globally, as flexibility is no longer just sought by one business sector, continued demand for co-working spaces is expected by analysts and operators alike. According to DTZ, as the shared and flexible office market grows at an unprecedented rate, “there will be close to 50,000 co-working spaces by 2018”.
Type: Co-working space
Operator: The Executive Centre
Nearest MRT: Raffles Place, Downtown and Telok Ayer MRT
Nearby Amenities: Marina Bay Sands, Lau Pa Sat, Telok Ayer Market
Price per desk: Hot desk at $680 per month; permanent desk at $730 per month.
Situated on the 11th floor of MBFC Tower 1 is The Executive Centre’s (TEC) co-working space, which provides a collaborative work environment for individuals and businesses alike.
An optimal choice for small businesses, start-ups, and independent professionals to work and network, TEC’s ready-to-use co-working space is fully equipped with state-of-the-art IT and communications infrastructure. It also offers meeting and conference facilities, as well as a breakout area.
Co-working desks are offered via a monthly package, while permanent desks are also available at a premium. Packages include 24/7 use of co-working spaces, access to the breakout and café area, the use of TEC’s business address at MBFC, complimentary gourmet coffee and tea everyday, as well as a daily supply of newspapers.
MBFC, a 33-storey Grade A office building, is well-connected to key transportation nodes, such as the Raffles Place, Telok Ayer and Downtown MRT stations. Nearby amenities include the Marina Bay Sands integrated resort, Gardens by the Bay, Lau Pa Sat, as well as other retail and lifestyle amenities.
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