Boom in coworking space seems unstoppable
Demand from corporate users driving growth
Supply of coworking space provided by international and regional operators in Bangkok has seen a rapid growth. So far this year, five operators have opened new facilities at 10 locations across the city, totaling more than 23,000 square meters of space. The key driver contributing to this growth is the focus on corporate users, among whom coworking is fast gaining popularity, according to JLL, a professional firm specialising in real estate.
"At present, coworking facilities by international and regional operators in Bangkok are sized between 1,000 and 3,400 sqm. Most of these facilities are situated in prime office buildings with easy access to a BTS or MRT station," says Yupa Sathienpabayut, Director of Office Leasing at JLL.
Some of these operators have continued to expand aggressively, having already secured, as of this writing, a total of over 30,000 sqm of office space for their new facilities scheduled for opening in 2019.
The two largest facilities will be operated by Justco (8,000 sqm at Samyan Mitrtown near the Samyan MRT Station) and WeWork (7,600 sqm at T-ONE Building with a direct link to the Thonglor BTS Station).
"Our observations show that some coworking operators have a more ambitious expansion plan but have trouble finding suitable locations and buildings, due to the undersupply of prime office space in Bangkok. This explains why most of the upcoming facilities will be located in prime office developments whose construction has not yet fully completed," says Ms Yupa.
Corporate users driving demand for coworking
What initially began as a platform for freelancers and startups, flexible space providers are now tailoring their offering to accommodate corporate users.
Ms Yupa says "While many corporate users in Bangkok are in an experiment with coworking, our discussions with large occupiers show that more companies have become keen to consider coworking space as an alternative workplace option."
The short contract commitments and individual membership structures allow companies to quickly accommodate changes in headcount and support mobile workforce such as sales or project teams, and remote-working employees, more efficiently and cost effectively.
"However, most of the companies that are interested in coworking are considering the use of this alternative workplace option as a complementary solution rather than replacing their traditional offices," says Ms Yupa.
Even so, the growth potential for this new office format is substantial.
A recent research by JLL indicates that flexible work spaces (coworking space and serviced office) in Southeast Asia have grown by circa 40% CAGR in the last three years and now take up 2% of the office stock, from 0.5-1.0% in 2015.
The growth of flexible work spaces in Southeast Asia is in line with the rapid growth in Asia Pacific, where flexible space stock recorded a compound annual growth rate of 35.7% in 2014-2017, much higher than in the United States (25.7%) and Europe (21.6%) over the same period.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
About JLL Thailand
The firm’s operation in Thailand began in 1990 and today is the country’s largest international property service provider with 1,600 employees and more than five million square metres of property and corporate facilities managed. In Euromoney Real Estate Survey 2018, JLL was voted as Thailand’s number one overall real estate advisor for the 8th consecutive year and also won top votes for agency/letting, research and valuation in the same survey. The firm was also named Thailand’s five-star winner in the commercial property consultancy and commercial real estate agency categories at the International Property Awards Asia Pacific 2019/2020. For more information, visit jll.co.th.