Homegrown space provider JustGroup is rapidly scaling up its presence in the segment of co-working spaces, with plans to open two new shared offices in the heart of Singapore’s Central Business District (CBD) next April.
Its co-working brand JustCo currently offers 50,000 square feet of space at two locations – 120 Robinson Road and 6 Raffles Quay. With a combined floor area of more than 100,000 square feet, the upcoming facilities at UIC Building and Marina One will more than triple the company’s footprint in the burgeoning real estate segment in Singapore.
Spanning approximately 40,000 square feet across two levels, the new space at UIC Building will have up to 1,000 desks, as well as features for various work purposes including quiet pods, stand-up meeting rooms and an event space with tiered seating arrangements.
Apart from these, Channel NewsAsia understands there will also be special facilities such as a Venture Lab where early-stage start-ups can meet representatives from larger businesses and prospective investors, as well as a Silicon Valley-style project space for companies to brainstorm and develop their ideas before testing out prototypes.
For the space at UIC building, the first storey will open in April while the second storey is slated for its official launch in November 2017.
Over at Marina One, the new location will be fitted with approximately 500 working desks, making it the largest single-storey co-working space locally, according to JustCo. Its location at the heart of the Marina Bay financial district will also offer a “unique opportunity” for businesses of various sizes “to set up in a prestigious location that previously would have been reserved for the large corporates”, said founder and CEO Kong Wan Sing.
On why the firm has decided to “super-size” its presence with two new mega shared offices in the pipeline, Mr Kong told Channel NewsAsia: “The demand for co-working in Singapore is growing rapidly so we’re increasing our space to meet the demand. Plus, there is a shift in the types of companies using co-working space to bigger and well established companies so we’re expanding our offering by adding prime buildings and locations like Marina One.”
In addition, Mr Kong believes that the physical expansion will expedite the growth of its community, therefore offering its members a bigger network to tap into. “New members are instantly connected to a network of individuals and businesses who can help them expand, find new clients, partner up or connect with investors,” he added.
Industry observers noted that JustCo, which unveiled its first space along Robinson Road last September, is among the most aggressive players in the local market. Its parent company JustGroup also has a serviced office arm JustOffice, which operates on a rental workspace concept catering to larger businesses.
“In order to meet the needs of the millennial generation, serviced office providers have begun offering the option of co-working. If you look at JustCo’s footprint, they are expanding aggressively to build up their brand and defend market share,” said Ms Christine Li, research director at Cushman and Wakefield.
“They already have a community which helps them to project how much demand there is for co-working spaces so that gives them the confidence to expand,” she added.
MEGA CO-WORKING SPACES IN CBD: MORE IN THE PIPELINE?
JustCo is not alone in rolling out sprawling co-working spaces in the CBD area. Earlier in the week, The Working Capitol (TWC) unveiled a 55,000-square-foot facility along Robinson Road, its second location after opening its first at Chinatown in 2014.
Spread across 11 floors, the new addition by TWC offers options for businesses with staff ranging from one to 200 people. Initial members include a FinTech (financial technology) lab by RHB Bank and a 100-person tech unicorn that will be occupying an entire floor. A unicorn is a start-up that is valued at one billion dollars or more.
Ms Li from Cushman and Wakefield attributed this take-up of prime offices by co-working space operators to the lingering glut of office spaces and softening rents. According to Ms Li, almost 2.3 million square feet of office space will hit the market next year.
“This supply situation means there are now many options in the market. The rental differences between CBD and suburban locations have also narrowed so it probably makes more sense for these players to expand in the CBD.”
However, a steady stream of new players have since jumped into the rapidly-growing segment and Ms Li noted that even as the concept of co-working remains highly in demand, consolidation is bound to occur. Players who derive their revenue predominantly on cheap rents and have yet to establish their niche will be most at risk.
“Nearly 80 per cent of co-working spaces are located outside of the CBD and their rents are quite manageable. So some players charge their members a bit more and depend on that little premium to be sustainable,” Ms Li explained.
“Overtime, if they do not build up their community and continue to rely on this difference in rent to survive, it will be tough because there are many regional and global players coming into Singapore,” she added.
Source : Channel NewsAsia – 9 Dec 2016