CPN gathers partners for co-working space
New venture aims to raise mall traffic
Central Pattana Plc (CPN), the SET-listed retail and property developer under Central Group, has teamed up with Malaysian partners to open a co-working space business in Thailand next year.
The partnership aims to increase customer traffic at malls as online shopping proliferates in Thailand, augmenting CPN’s office building business, and growing longterm income.
Isareit Chirathivat, CPN’s senior vicepresident of leasing, said the company recently set up Common Ground Thailand with registered capital of 400 million baht to operate co-working space in Thailand.
Central Pattana holds a 51% stake in the joint venture, with the remaining 49% belonging to Common Ground Group Malaysia and MSB, a property investment company from Malaysia.
Mr Isareit said the company expanded into co-working spaces because it wants to diversify its office building business.
“Co-working space is a rising trend in Thailand,” he said.
There are several international co-working space companies invested in Thailand, including We Work from the US and Just Co from Singapore. Co-working spaces have grown as the working lifestyle of the new generation has changed and businesses look to cut costs, affecting entrepreneurs and large companies alike.
It is projected the co-working space market in Asia will increase from 2% of the office business to 30% by 2030.
Moreover, the growth rate of small and medium-sized enterprises (SMEs) in Thailand stands at 8-10% per year, which is higher than in neighbouring countries. One out of six Thai SMEs (or over 500,000 entrepreneurs) are located in Bangkok, said CPN.
These SMEs are looking for working spaces in prime locations but access to premium rental offices is limited and comes at a high price, while some larger companies are also seeking to reduce their costs.
“Common Ground wants to be a new co-working space option here. It is not only located in prime locations but also has international networks that can help members in many business aspects, ranging from accounting to law consultants,” Mr Isareit said.
He said the company expanded its business partnerships a few years ago, starting from the Central complex in Malaysia, which was built via a partnership with Dusit Thani and Tesco Lotus.
Nattakit Tangpoonsinthana, CPN’s executive vice-president of marketing, said the new company will invest 800 million baht to open 20 co-working spaces across the country by 2023. The company’s first co-working space is expected to open spanning 4,000-4,500 square metres in Bangkok next year. Central Pattana expects revenue of 500 million baht over the next five years.
“Opening a co-working space is a key piece of the jigsaw that will push Thai SMEs towards major growth, expanding their business and marketplaces with Central Pattana, Central Group and its tenants,” Mr Nattakit said.
He said the co-working space will meet the needs of modern working life through the theme of “holistic lifestyle integration”, and will support Thailand as a hub for SMEs and startups in Southeast Asia.
The investment in co-working space is also expected to support sustainable growth for Thailand’s economy, said Mr Nattakit.
Erman Akinci, a co-founder and chief financial officer of Common Ground, believes this collaboration with CPN will help increase the business value and create lifestyle innovations for Thai entrepreneurs.
He said Thailand is the third regional location for Common Ground in Asia after Malaysia and the Philippines.
“At Common Ground, entrepreneurs can use our services at any branch around the world, increasing the chances of business connections in a more open and diverse atmosphere,” said Mr Akinci.
Juhn Teo, co-founder and chief executive of Common Ground, said by 2020, the company plans to increase branches in Southeast Asia to 50, up from 15 from year-end.
The company targets the new generation of workers — 80% SME entrepreneurs, startups and freelancers, and 20% large companies.