Trio of APAC Co-Working Operators Merged as Industry Consolidates

An APAC player is having a go at building a WeWork-style empire, with newcomer Flexi Group announcing its consolidation of three regional operators to create what it bills as Asia Pacific’s largest operator of flexible workspaces.

The startup led by CEO Chris Edwards has merged regional players The Hive, Common Ground and The Cluster under one umbrella, Flexi said Tuesday in a release. With the merger, the group will boast a portfolio of 45 locations across Hong Kong, Singapore, Malaysia, Australia, Thailand, Taiwan, Vietnam, Philippines and Japan.

As the first in a series of planned consolidation activities, the merger is supported by investment from Singapore-based Catcha Group and Malaysia’s Emissary Capital, according to Flexi, which is expected to be headquartered in Kuala Lumpur.

“We are delighted to launch The Flexi Group as the leading provider of flexible workspaces in the Asia Pacific region,” Edwards said. “The pandemic has changed the way the world works, with businesses of all sizes shifting their workplace strategies towards flexible solutions, employee well-being, and collaborative spaces, and we are excited to be at the forefront of that trend.”

Asset-Light Strategy

Flexi touts an asset-light approach to its real estate ventures, partnering with landlords on joint ventures instead of taking on large and unwieldy rental agreements.

The group’s landlord partners in Asia include developer Chinachem in Hong Kong, state energy firm Petronas in Malaysia and mall operator Central in Thailand, with more to be added in the next few months, according to the startup.

Edwards said the landlords work with Flexi to help engage the tenants in their buildings, offering them access to best-in-class events, flexible work solutions and bookable meeting and event spaces.

“Asset owners can also unlock revenue potential as our partners see increased returns of up to 30 percent versus a traditional lease structure,” the CEO said.

The Hive offers the widest network of the three merged brands, with 21 locations in seven countries, while Common Ground has strength in Malaysia, Thailand and the Philippines, and The Cluster is concentrated in Australia. Flexi plans to continue expanding with new locations in Australia, Malaysia, Thailand, the Philippines and Singapore over the next 12 months.

Lessons Learned?

Flexi’s launch comes a few weeks after co-working pioneer WeWork announced that it would be closing about 40 underperforming locations in the US after reporting a greater-than-expected third-quarter loss as more employees return to centralised offices post-pandemic.

The shared office provider co-founded by eccentric mogul Adam Neumann went public in October of last year through a SPAC arrangement that valued the once-highflying company at $9 billion.

But the euphoria that greeted WeWork’s long-awaited IPO, complete with a booze-soaked party in Manhattan with former CEO Neumann in attendance, was short-lived as the company’s NYSE-quote stock proceeded to sink 72.4 percent since listing, including a 70 percent drop in 2022 to date.