Hitting the Big Time
In terms of office space absorption, the co-working office sector is among the quickest expanding sectors in the Greater China market, growing from a small number of sizeable centers just a few years ago to 546 locations in the major city markets in the region as of end-Q1 2018.
The co-working office sector continues to grow in the region on the back of a number of sound rudiments, including:
- An inflow of capital from corporates and VC firms
- The emergence of millennials and a new age of entrepreneurialism
- More MNCs looking for flexible lease terms and cost-saving alternatives
- Progressive technology pressing the co-working revolution forwards
Given the sector’s early period, the co-working market in Greater China is still somewhat fragmented in some city markets. For example, in more developed co-working office markets, like Beijing and Shanghai, the number of operators running one center in the city is comparatively small. However, in other markets like Shenzhen and Guangzhou, the number of operators running one center in the city is much more substantial.
Many corporates are progressively selecting co-working space in Greater China as a space solution. Deploying their staff to co-working spaces allows corporates to lessen their real estate operational and maintenance overheads as most of the office supplies (including furniture, phones and high-speed Internet) and services are packaged together in the membership fees. The savings from renting desks in a co-working space is likely to power increasing demand for co-working spaces from corporates and enterprises in the region.
As the co-working market in Greater China heats up, some property developers are also jumping on the bandwagon, either through partnerships with operators or by operating co-working spaces themselves in their own properties.
