CapitaLand has just turned up the flame under China’s red hot co-working market through a tie-up with Beijing-based shared office provider URWork.
Under the terms of a partnership announced on Friday between Singapore’s largest real estate developer and the co-working startup founded by former China Vanke vice chairman Mao Daqing, CapitaLand will provide space for new URWork co-working centres in CapitaLand malls in China.
With URWork aimed squarely at serving tech startups, the agreement also includes a role for International Enterprise (IE), a branch of the Singapore government dedicated to promoting cross-border trade, to support SMEs looking for a foothold in China.
Co-Working Centres in Wuhan and Beijing
As part of the memorandum of understanding signed by the three parties, URWork and IE will also help to create investment opportunities for C31, the venture capital unit of CapitaLand. The initiative is further said to be aimed at supporting Singaporean entrepreneurs operating in China, by providing giving them easier access to business services, and discounted memberships at URWork’s centres.
“CapitaLand aims to provide real estate of the future and working closely with sharing economy players and technology startups is an important pillar of this strategic thrust,” explained CapitaLand President & Group CEO of CapitaLand Lim Ming Yan. CapitaLand already opened its first co-working space in Singapore this past June at its Capital Tower project, and Lim said that the developer will also be providing co-working spaces in the newly launched chain of Lyf residences under its Ascott serviced residence group.
URWork, which was founded in May 2015 after Mao left China Vanke, now has 36 branches in 11 cities across China. The Sequoia Capital-invested firm has been valued at RMB 5.5 billion ($799 million), and has so far raised $77 million in venture funding.
While the agreement is just an MOU at this point, the CapitaLand and URWork indicated that two URWork centres will be opened at CapitaLand malls on the mainland over the next six months.
First up will be a 4,100 square metre centre at CapitaMall Minzhongleyuan in Wuhan, which is set to open in phases starting from this month. That centre in Hubei province will be followed by a 1,300 square metre facility in CapitaMall Wangjing in Beijing, which is slated to open in the first half of next year. Combined, these two co-working spaces are expected to accommodate more than 600 workstations.
The partnership has already put in place an entrepreneurship mentoring system and integrated business advisory services network, including link-ups to investors.
Using Co-Working to Drive Retail Traffic
The partnership should provide URWork with access to space, thanks to CapitaLand’s network of 65 malls across China, with six more slated to open on the mainland next year.
For CapitaLand, the cooperation agreement should also provide a base for activity in those shopping centres, as many developers struggle to find useful applications for upper floors of retail centres that frequently reach eight or more floors.
Shanghai-based co-working startup naked Hub, which recently received $33 million in investment from Gaw Capital, is also reportedly opening a centre in a soon-to-be opened mall on Xikang Road in the city’s Jing An district. Many market analysts see co-working centres as an effective method for mall developers to ensure weekday visitors to their shopping centres, and to provide a built-in clientele for restaurant and entertainment venues.