Lux­ury co-work­ing spa­ces on the rise

Singapore Business Review - - CONTENTS -

Step­ping into The Work Project’s co-work­ing spa­ces, the ex­pe­ri­ence is more akin to check­ing into a high-end ho­tel rather than clock­ing into a bustling open-space of­fice. Gone are the bean bags and game rooms, trap­pings meant to at­tract young en­trepreneur­s. In­stead, mem­bers are given ac­cess to lux­u­ri­ous of­fice spa­ces with an art gallery and ver­ti­cal garden.

Es­tab­lished in 2016, The Work Project is the fourth largest co-work­ing operator in Sin­ga­pore, with five lux­ury pre­mium spa­ces in the is­land, and one lo­ca­tion in Hong Kong. In Cap­i­tal Tower alone, the operator over­sees 50,000 sqft of space across three dif­fer­ent lev­els, fea­tur­ing 800 work sta­tions and an in-house pre­mium ca­ter­ing ser­vice. Roughly 20% of this ex­pan­sive area is ded­i­cated to train­ing work­shop and con­fer­ence fa­cil­i­ties, pop­u­lar amongst cor­po­rates that want to hold train­ing ses­sions and re­gional gath­er­ings, ac­cord­ing to The Work Project founder and CEO Junny Lee.

De­sign, per­for­mance and ser­vice

“What you can typ­i­cally find in the mar­ket is co-work­ing spa­ces with some nice furniture, and it pretty much just ends there,” said Lee. “But I think lux­ury is so much more than just a cou­ple of small de­sign as­pects.”

The Work Project con­sid­ers lux­ury on three fronts, ac­cord­ing to the founder, which jus­ti­fies the pre­mium price for more es­tab­lished en­trepreneur­s and cor­po­rates. First is in the space’s de­sign, which did not scrimp on ma­te­ri­als — be it from lux­ury fab­rics used in top ho­tels and sourced from dif­fer­ent parts of the world, to top-of-the­line furniture from mak­ers such as Ralph Lauren.

The sec­ond as­pect of lux­ury which the operator fo­cuses on is in the space’s per­for­mance. “It’s what of­ten hap­pens with co-work­ing spa­ces, you find nice de­sign de­tails but when it ac­tu­ally comes to the workspace it­self, the per­for­mance is not so good,” said Lee.

“Per­for­mance is re­ally im­por­tant be­cause we want our mem­ber com­pa­nies to do the most pro­duc­tive work and to be as suc­cess­ful as they can pos­si­bly be,” he added, cit­ing the operator’s use of work­sta­tion desks and ta­bles from es­teemed Ital­ian and Swiss brands.

MARK at The Work Project Cap­i­tal

Tower was de­signed in col­lab­o­ra­tion with Has­sell Stu­dio. The operator’s third pil­lar for lux­ury is in ser­vice and hos­pi­tal­ity, en­sur­ing that it com­ple­ments the space’s im­pres­sive vis­ual de­sign and workspace per­for­mance. “Just pro­vid­ing re­cep­tion and clean­ing ser­vices for us is not re­ally meet­ing the en­tire needs of our cus­tomers. We go be­yond that,” said Lee. The Work Project’s mem­bers also gain ac­cess to host­ing spa­ces such as Omote­sando Cof­fee, the Mark C suite lounge.

Rapid ex­pan­sion and de­mand

With The Work Project aim­ing to pro­gres­sively ex­pand to Tokyo, Syd­ney and Mel­bourne in ad­di­tion to the 100,000sqft of space it launched in the past month, lux­ury co-work­ing op­er­a­tors are only set to con­tinue ex­pand­ing through­out the rest of Asia. “We be­lieve that flex­i­ble workspace is now fully es­tab­lished as an oc­cu­pier sec­tor, serv­ing an im­por­tant mar­ket niche. We see par­tic­u­lar growth po­ten­tial at the pre­mium end of the flex­i­ble workspace mar­ket, espe­cially for those op­er­a­tors fo­cus­ing on pro­vi­sion of ameni­ties and hos­pi­tal­ity-re­lated ser­vices,” prop­erty con­sul­tancy firm Col­liers In­ter­na­tional said in a re­port.

Pre­mium hos­pi­tal­ity-led co-work­ing space operator, The Great Room, is bank­ing on this op­por­tu­nity as it con­firmed its fourth Sin­ga­pore lo­ca­tion span­ning 15,000 sqft in Raf­fles Ho­tel.

“Although we are a young com­pany, we have been very en­cour­aged by the strong pipe­line of de­mand for our pre­mium cowork­ing spa­ces,” said Jaelle Ang, co-founder and CEO of The Great Room, which launched in 2016 and now has five lo­ca­tions in Sin­ga­pore, Hong Kong and Bangkok in Thai­land. “When we started, we iden­ti­fied this seg­ment of busi­nesses who need en­ter­prise-level in­fra­struc­ture with the soul and en­ergy of a startup; it was thought of as a niche seg­ment. But un­sur­pris­ingly, many busi­nesses want it all. For the key Asian fi­nan­cial centres like Sin­ga­pore and Hong Kong, the pre­mium seg­ment we are in is the largest op­por­tu­nity, fastest grow­ing and has the high­est mar­gins within flex­i­ble work­ing.”

Mem­ber­ship at The Great Room’s ex­ist­ing Sin­ga­pore lo­ca­tions start at $2,500 a month, 20% higher than the cur­rent price of We­work’s desks, which is cur­rently one of the largest play­ers in the co-work­ing mar­ket. The Great Room at Raf­fles is ex­pected to be more pricey as it targets ‘grown-ups’, or

“Mem­ber­ship at The Great Room’s ex­ist­ing Sin­ga­pore lo­ca­tions start at $2,500 a month, 20% higher than the cur­rent price of We­work’s desks.”

es­tab­lished com­pa­nies and cor­po­rates, said Ang. She notes that de­mand for flex­i­ble cowork­ing spa­ces is ac­cel­er­at­ing as com­pa­nies ex­plore dif­fer­ent ways of op­ti­mis­ing space per worker and keep­ing 20% to 30% of their to­tal real es­tate re­quire­ment as flex rather than all core with long, locked-in leases. The move is fur­ther re­in­forced by 2019 GAAP ac­count­ing rules that de­mand in­creased trans­parency and ef­fi­ciency re­lated to real es­tate costs.

To date, The Great Room re­ports that they al­ready have early com­mit­ments and would ex­pect to hit 50% oc­cu­pancy when they open in mid-2019.

Boom­ing de­mand

In Sin­ga­pore, IWG, which man­ages the Spa­ces and Re­gus brands, re­mains the largest flex­i­ble workspace operator with 23.5% mar­ket share and an es­ti­mated port­fo­lio size of 65,000sqft. New York-based We­work, which ear­lier ac­quired Space­mob in Au­gust 2017 to boost its re­gional pres­ence, trails be­hind the Lon­don-listed gi­ant along with Just­group who each hold around 12% and a port­fo­lio over 330,000sqft. Mean­while, The Great Room is the sev­enth largest Sin­ga­pore operator with an es­ti­mated port­fo­lio size of 76,000sqft. Ang pre­dicts the de­mand that the de­mand for flex­i­ble work­ing space as a per­cent­age of com­mer­cial of­fice space to grow about 10 fold in the next 10 years from the cur­rent 2-3% to 30% by 2030. They plan to tap on this op­por­tu­nity by ex­plor­ing next lo­ca­tions in tan­dem with the firm’s in­creas­ing mem­ber­ships. “In Sin­ga­pore, we are in talks for fur­ther ex­pan­sion as our cur­rent three lo­ca­tions are al­ready at run-rate oc­cu­pancy. Many of our en­ter­prise mem­bers have multi-city mem­ber­ships with us and our goal is to have sites in the key Asian cities,” Ang said.

The Work Project

The Great Room

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