Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

Flexible Office Space in Asia Surges 150% in 3 Years, Operators Double, JLL Finds

2018/05/23 by Greg Isaacson Leave a Comment

The Working Capitol Singapore

Opened in 2015, The Working Capitol on Singapore’s Keong Saik Road comes complete with a cafe

Asia Pacific is leading the global surge in flexible offices, with total co-working and serviced office space in the region soaring 150 percent from 2014 to 2017, according to a new report by property consultancy JLL.

During those three years, net lettable area of flexible space increased at a compound annual growth rate of 35.7 percent in key Asia Pacific markets, compared to 25.7 percent in the US and 21.6 percent in Europe. Total flexible space now measures nearly 1.3 million square metres across the dozen regional markets sampled by the agency.

Beijing and Shanghai boast the highest flexible office penetration rate – the ratio of flexible space to overall grade A office stock – in the region, at more than 3.5 percent each, while Hong Kong ranks lowest with just over one percent.

Shanghai alone has more than 1,000 shared or serviced space locations, most of them very small, according to the report “Spotting the Opportunities: Flexible Space in Asia Pacific,” which was published by JLL last week.

Flexible Office Players Double in Three Years

The data from the global brokerage covers high-profile co-working and serviced office providers that lease out space on the open market, and excludes incubator and accelerator space as well as internal co-working spaces.

According to JLL, the number of major co-working operators in Asia Pacific more than doubled from 45 to 103 in the 2014-2017 period, even as established service office providers such as IWG (formerly Regus) and The Executive Centre continued to roll out new spaces and develop their own dedicated co-working products.

The years 2016 to 2017 proved to be an “inflexion point” for the industry in Asia, the report notes, as international players such as WeWork entered the fray, and local operators quickly ramped up, including naked Hub and Ucommune in China, Awfis in India and The Working Capitol in Singapore.

Co-Working Shrugs Aside Asian Leasing Obstacles

Susan Sutherland JLL

Susan Sutherland, Head of Corporate Solutions Research, JLL Asia Pacific

The rapid growth of the sector is all the more remarkable given the various obstacles to co-working adoption in Asia, such as the availability of short lease terms for traditional offices, which takes the edge off many companies’ appetite for flexible space. Office lease terms in Asian markets (except for Japan and Australia) tend to be around three years, compared to the 10-year contracts typically offered in the US and Europe.

Moreover, the cost advantages of co-working nearly disappear in some markets when the greater density of shared office facilities is taken into account. In Singapore, for instance, JLL finds that traditional office leases are only five percent pricier than flexible offices after adjusting for differences in floor space per person – and this does not account for additional charges that some co-working providers levy for services, such as bookings for meeting rooms and events.

“Cultural norms may also impact the adoption of flexible space in the region,” commented Susan Sutherland, Head of Corporate Solutions Research, JLL Asia Pacific in a statement. “With a more hierarchical corporate culture in Asia that is not always in sync with the casual environment of many coworking hubs, providers may need to adapt to cultural preferences to ensure a smoother transition to flexible working for some corporates.”

Governments Step in to Boost Sector

On the other hand, a number of governments in the region are jumping on the co-working bandwagon as part of a broader push to support startups and entrepreneurs. The Singapore government has set up LaunchPad, a startup ecosystem inspired by Silicon Valley, while the New South Wales government opened the 17,000 square metre Sydney Startup Hub in Sydney’s business district this past February. Both facilities are home to flexible office venues, such as Beijing-based Ucommune’s first overseas location in LaunchPad.

In addition, a growing roster of landlords are getting in on the act, with high-profile examples including Swire Properties’ Blueprint in Hong Kong, City Developments Ltd (CDL)’s Distrii-branded space in Singapore, and CapitaLand’s first Chinese co-working centre C3 in Shanghai.

Among 12 Asian markets surveyed by JLL, Shanghai, Beijing and Bengaluru lead the pack for total flexible office space, with over 200,00 square metres of net lettable area in each market. Hong Kong, Tokyo and Melbourne each have about 100,000 square metres, while Singapore is home to roughly 80,000 square metres, and Seoul lags with just over 50,000 square metres.

Related Stories

  • WeWork Names Former Brookfield Exec as New CEOWeWork Names Former Brookfield Exec as New CEO
  • Credit Suisse, Citigroup, BOA Abandon Ucommune IPO Amid Valuation QuestionsCredit Suisse, Citigroup, BOA Abandon Ucommune IPO Amid Valuation Questions
  • Ucommune Said to File for US IPO in Wake of WeWork DebacleUcommune Said to File for US IPO in Wake of WeWork Debacle
  • WeWork Formally Cancels IPO as Layoffs, Cost Cuts LoomWeWork Formally Cancels IPO as Layoffs, Cost Cuts Loom

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Flexible Office Tagged With: Co-working, daily-sp, flexible office, JLL, Susan Sutherland

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Yardi Refurbish or Rebuild

Get Mingtiandi Delivered

Sustainability Forum

MTD TV

MTD TV Panel: Vietnam Logistics Real Estate Gains Favour With Investors in 2020

Proptech Forum: Logistics Tech

Logistics Experts Reveal How Tech Is Reshaping Asia’s Distribution Centres

More MTD TV Videos

Latest Stories

Albert Yeung Emperor International

Blackstone Buys Kowloon East Building From Emperor International for $65M

RFR-Vanke Midtown Condominium Project in Manhattan

Vanke Manhattan High-Rise Risks Foreclosure as ICBC Files New York Lawsuit

close to universities like University College London and universities like St Martins College Art and Design

Mapletree Explores US$1B Student Housing REIT IPO and More Asia Real Estate Headlines

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

PGIM Real Estate Buys Office Building on Singapore’s Robinson Road for $107MPGIM Real Estate Buys Office Building on Singapore’s Robinson Road for $107M

Grosvenor Latest Global Investor to Back Taronga Real Estate Tech FundGrosvenor Latest Global Investor to Back Taronga Real Estate Tech Fund

Join the Mingtiandi Multi-Family Investment Forum 2021Join the Mingtiandi Multi-Family Investment Forum 2021


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team