Co-working sector set for rapid expansion

CO-WORKING is among the fastest growing sectors by space absorption in China’s office market and domestic operators are playing a dominant role, a research released yesterday by Cushman & Wakefield showed.

By the end of the first quarter, the number of coworking locations opened in key Chinese cities has surged to about 550 from a few venues just some years ago, according to the global property services provider.

“The rapid growth of coworking offices has reshaped the office property market landscape in the country on the back of several solid fundamentals,” said Jonathan Wei, managing director and head of occupier services at Cushman & Wakefield China.

“They include an influx of capital from corporate and venture capital firms, the rise of millennials and a new age of entrepreneurialism, more multinational companies seeking flexible lease terms and cost-saving options, as well as advanced technology spurring the coworking revolution.”

It’s notable that in Beijing, Shanghai, Guangzhou and Shenzhen, domestic operators now account for 79 percent of the market in terms of the number of locations, the research showed.

But the co-working sector in China is still in its infancy with some city markets being very fragmented. In Guangzhou and Shenzhen, the number of operators running only one location is quite huge, while mature markets like Beijing and Shanghai have most operators operating multiple locations.

As demand for co-working space heats up and more property developers join in, the co-working sector in China will consolidate with many small players losing out to those with larger networks.