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Co-working spaces have become so widely popular in Singapore that more of them are springing up in the city area offering luxury services.
By Nikki De Guzman
When the first co-working space in Singapore entered the market in 2009, the concept of the shared workspace business – a common space for office work offered on higher flexibility, based on the frequency of desk usage, usually per month – slowly caught on with solopreneurs and freelancers, among others.
Seven years on, the number of co-working spaces has grown significantly, in tandem with the increasing demand from a larger set of consumers.
However, as the competition in the co-working market operation becomes stiffer, the level of competitiveness among space providers has gone beyond just the type and design of space, and has become more sophisticated in terms of services and locations.
In this issue, we take a closer look at co-working spaces and find out how its footprint in Singapore has grown, and how the services have developed over the years. We also ask operators what more can we expect in the fast evolving co-working arena going forward.
From option to solution
Gone are the days when co-working spaces solely catered to freelancers and activity-based workers. Apart from those looking to work with flexibility, co-working spaces have also gained traction from entrepreneurs looking to venture into the corporate world, and international companies looking to enter a new market.
In fact, in a media release on co-working spaces earlier this year, workspace provider Regus said the flexibility co-working spaces provide to end-users allow for what seems like a trial-and-error in setting up a business without the complicated leasing commitment.
“Co-working allows businesses to expand rapidly without committing to lengthy leases, and adapt to changing circumstances in a flexible way,” Regus country manager for Singapore Paul MacAndrew said.
“For instance, firms looking to move in a new direction can use a co-working space to test the waters (in a specific location) before making any concrete changes to their business. On the other hand, if conditions in a particular market take a turn for the worse, downsizing will not incur the hefty penalties associated with traditional leasing arrangements.”
MacAndrew added that the rise of co-working represents a real opportunity for corporates as well as smaller businesses, as “they can use this solution creatively in a way that suits their needs. Moreover, co-working helps companies free up capital to invest in growth initiatives”.
Apart from the lease flexibility and cost-efficiency these office spaces provide to its patrons, co-working spaces are becoming more popular for other reasons. One of them is the connections these users can get and build through the shared space.
Beyond desks and chairs
Earlier this year, in a report entitled Co-working in Singapore: Creating a Smart Nation, Cushman & Wakefield said the selling points of co-working spaces include “the intangible qualities of working in a creative sphere such as lease flexibility, space for communal interactions and invitations to networking events and business contacts”.
The property consultancy added that “community is essential in a co-working experience”—an observation that is also backed by several conducted surveys by co-working space operators.
According to a poll by Regus, the majority of shared office users see co-working spaces as an ideal place to meet and collaborate with individuals and businesses from a variety of industries. The same was also revealed by a separate poll conducted by Co-working Spaces entitled The Global Co-working Survey 2015-2016, where 75 percent of the respondents are mainly motivated to use shared office spaces because of the opportunity to connect with other people from a variety of industries.
Industry experts say this is one of the reasons why a growing number of co-working space operators, particularly the newer ones, are providing the market more than just desks and chairs. Collision 8, which opened its doors on 1 August, is one operator stepping up its offerings to the market.
Set across 8,600 sq ft on the eighth floor of High Street Centre, Collision 8 is described by its founders as both a community and a co-working space designed to build collaboration opportunities and foster innovations amongst its members.
In an interview with CommercialGuru, Aurum Land Director and Collision 8 co-founder Michelle Yong explained how Collision 8 helps industries beyond their office space needs.
“Collision 8 caters to members of two categories: the ones who need the physical space, and the ones who want to be part of a community,” said Yong. “Apart from helping our members with the workspace, we also want to help our members spark ideas and build business alliances that help take their business to the next level.
“For those who are looking for the physical space, Collision 8 has a fantastic location – we are within walking distance to three MRT stations – Clarke Quay, Raffles Place and City Hall. In terms of the fit-out and design of the space, we have gone quite up-market and aspirational to match the views of Marina Bay Sands, Raffles Places and Fort Canning. For those who are looking to be a part of a community, we started Collision 8 as an anchor space where they can come together to innovate and collaborate,” added Yong.
The members-only co-working space, whose current location at North Bridge Road can house up to 178 users, also facilitates entrepreneurial projects and cross-industry collaboration. It offers its members business matchmaking, corporate innovation exchanges, interactive workshops and curated events.
As co-working spaces evolve in terms of their services and features, these shared office spaces are beginning to take prime office spaces in Singapore’s central business district (CBD), allowing patrons to be closer to the financial centre on more flexible terms.
Making their way downtown
In JLL’s co-working space report in July, it said there are about “30 co-working spaces dotted all over the island with a real estate footprint of (about) 250,000 sq ft”. It also estimates about 20 percent of these workspaces are in the CBD.
Collective Works Capital Tower is billed as the first co-working space in a prime office building in Singapore. (Photo: Collective Works)
However, co-working spaces are already gaining traction in prime locations. In recent months, some co-working spaces opened in the downtown core of Singapore.
In a joint venture with Singapore developer CapitaLand, Collective Works opened the 22,000 sq ft “office of the future” on the 12th storey of Capital Tower on Robinson Road. The operator’s second location is billed as the first co-working space to open in a Grade A office building in the CBD.
During its unveiling in June, Collective Works founder Jonathan O’Byrne said: “Interest has been very strong and from a broad range of industries. We are in discussion with more than 60 companies looking to join Collective Works Capital Tower over the next few months.”
According to O’Byrne, its members come from a variety of industries including finance and technology, and a range of businesses from growth-stage startups to decentralised teams of multinational companies (MNCs).
As most of the clients of co-working spaces like Collective Works are usually located in the CBD, industry watchers reckon being accessible to these businesses is an added advantage.
“(Capital Tower) provides phenomenal corporate image and ecosystem of support to members of Collective Works,” O’Byrne said, adding that the new space is situated in an “enviable position” in the CBD with access to transportation, shops and MNCs.
While most of the co-working spaces in Singapore are located in city-fringe areas, the city-state’s downtown core saw new co-working spaces open their doors, including JustCo, which opened in 120 Robinson Road last November, and The Great Room offices which opened at One George Street earlier this year.
Room to grow
While office space rents here are expected to fall further, which ultimately will allow businesses to secure prime offices at more affordable rates, co-working space operators here remain unfazed.
Collective Works’ O’Byrne said: “Clients that are purely cost driven have never been the target Collective Works customer. Our clients choose to pay for experiences, engagement and service because they understand the value from a network like Collective Works is so far beyond the cost per square foot. We have never been the cheapest option and don’t intend to be.”
Collision 8’s Yong, on the other hand, sees the current market conditions as an opportunity for business expansion.
“Serviced offices and co-working spaces are countercyclical (to market conditions) because they give members or users the flexibility to expand and contract according to their needs,” she said. “In that respect—with the market currently softening—it offers co-working space operators like us the opportunity to expand our businesses given the more attractive rates.”
Looking ahead, operators are optimistic about the future of co-working spaces here.
O’Byrne said: “I think co-working has hit a tipping point where it’s too big to go away. With Singapore’s unique combination of limited landmass and a powerful position on the Asian economic stage, there will always be demand for co-working here.
“What exactly co-working will look like in the next five years is anybody’s guess because the market is evolving so fast,” he said, adding that the main challenge for new operators entering the market is all the experience they have missed out on over the past five years.
Despite missing out on having significant lead time to build-up their communities, Cushman & Wakefield said “new entrants to the co-working arena will be a boon to the co-working ecosystems here”.
But as operators continue to develop newer concepts for their spaces and continuously improve the range of their services to maintain an edge over competitors, consumers are expected to get the best benefits as the array of choices they’ll have is expected to continue increasing.
Check out our selection of shared workspaces on Commercial Highlight.
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