Singapore’s GIC is leading a RMB 100 million round of investment in Beijing-based lifestyle real estate startup 5Lmeet, according to a statement released on 5Lmeet’s official WeChat account Monday.
This marks the sovereign wealth fund’s first foray into China’s red hot co-working market. Kaifeng Culture Tourism Investment Group Ltd, a local government fund based in China’s Henan province, is the other lead investor.
5Lmeet Now Valued at Over RMB 3 Billion
Founded in early 2016 by Mao Daqing, former vice chairman of China Vanke, 5Lmeet’s services extend beyond co-working and include lifestyle amenities.
The company has opened one center so far, in Beijing’s Dongcheng district, which includes an open office, bookstore, gym, rooftop garden, restaurants, and event space. At least ten more 5Lmeet spaces are in the works, according to the company, which also hopes to expand into Shanghai and Henan province.
5Lmeet’s announcement this week comes less than three months after it completed a Series-A round of financing, which saw the startup raise over RMB 400 million from investors including Jinyun Electrical and Junzi Capital.
GIC Optimistic About China’s Sharing Economy
GIC is “optimistic about the potential of China’s major cities, specifically in the three areas of urban renewal, the sharing economy, and real estate innovation,” said GIC managing director and China real estate head Sun Jianjun in the statement issued by 5Lmeet.
GIC’s decision comes as the China’s co-working scene enters a period of rapid expansion.
WeWork, a US startup and now Manhattan’s largest office space provider, opened its first Asia location in Shanghai last July. URWork, which aims to be China’s answer to WeWork, has over 35 branches across China and reached a valuation of over USD 1 billion in late January.
URWork was also founded by Mao Daqing. Unlike 5Lmeet, which focuses on round-the-clock lifestyle services, URWork operates as more conventional co-working provider, servicing the office needs of its members.
“The coworking industry has great growth potential in China, driven by both policy and market forces,” Joe Zhou, China Head of Research at Jones Lang Lasalle, told Mingtiandi.
More than 500 co-working spaces have opened in Shanghai and Beijing since the beginning of 2015, according to a whitepaper published by JLL in October.
The boom is fueled by the Chinese government’s support for start-ups, the entry of millennials into China’s workforce, and the country’s growing sharing economy, the whitepaper’s authors say.
Singapore Investors Keen on China’s Co-working Startups
GIC is only the latest Singapore-based investor to pour millions into a Chinese flexible working startup in recent months.
Just weeks ago, City Developments Ltd. announced that it had invested RMB 72 million to acquire a a 24 percent stake in Shanghai-based co-working operator Distrii, which runs nine co-working spaces with over 2000 desks across the Chinese financial center. Following the investment, Distrii now plans to expand into southeast Asia by opening a 5,600 square meter shared office space in Singapore.
CapitaLand has also established a mainland co-working tie-up. Southeast Asia’s largest real estate developer signed a memorandum of understanding with URWork in December to open co-working centres in dozens of CapitaLand malls in China.