The crash of WeWork, one of the largest co-working providers in the US, has raised concerns about the future of the sector.
Since the collapse two months ago, office landlords and building owners have also been feeling jittery about signing on co-working operators as anchor tenants in their buildings.
However, JustCo, the leading Singapore-based co-working space provider, plans to continue expanding aggressively across Asia, says its founder and CEO Kong Wan Sing.
“It’s true, we have noticed that landlords and building owners are more cautious and are naturally getting more selective of the co-working space operator that they choose to work with,” says Kong in an e-mail response to queries from The Edge Singapore.
But he is confident that the disruption of the commercial real estate space by co-working will persist. Says Kong, “We will continue to break down the walls of traditional offices.”
Kong cites “strong and sound corporate governance, and financial prudence” as JustCo’s main differentiating factors. He also believes the co-working space has great growth potential in Asia as it currently occupies just 5% of the commercial real estate space in the region.
Just last week, JustCo made its first foray in Japan by announcing it had formed a new joint venture with Japanese construction and real estate giant, Daito Trust Construction Co. The joint venture JustCo DK (Japan) Co – 51% owned by Daito Trust and 49% owned by JustCo – will invest US$74 million ($101 million) to help JustCo expand in Japan.
The target is to open seven to nine centres in Tokyo between 2020 and 2021. The addition of these new centres will increase JustCo’s regional presence to eight markets across Asia Pacific, namely its home market in Singapore as well as Australia, China, Indonesia, Japan, South Korea, Taiwan and Thailand. Indeed, with close to 40 centres at present, Kong says “JustCo is the only Asian co-working space provider with a multi-city presence across the region”.
Some building owners and property developers are also starting to manage their own co-working spaces. Examples include Keppel Land’s Kloud at Keppel Bay Tower, Lendlease’s maiden flexible workspace brand csuites at Paya Lebar Quarter and Aurum Land’s launch of Core Collective and Collision8 (now Found8). However, Kong is not overly concerned as “these players operate on a different business model that appeals to a different target audience”.
Within the co-working realm, there has been a shift in relationship between co-working space providers and building owners, observes Kong. For instance, GuocoLand appointed JustCo to manage its co-working space at 20 Collyer Quay in April. JustCo will introduce a multi-faceted co-working community that will allow other tenants within the building to enjoy its communal spaces — such as the café, lounge and event spaces — as well.
In May last year, JustCo was also appointed by telecommunications giant Verizon, to manage its first Asian Innovation Community Space at Ocean Financial Centre in Collyer Quay.
According to Kong, Singapore continues to be one of the strongest markets for JustCo, with average occupancy rate of 90% across all its centres.
And despite the economic turmoil after five months of protests, Hong Kong is still one of the key economic centres in Asia Pacific. “Hong Kong holds great potential for co-working and it is in our pipeline for expansion,” says Kong.
In fact, the current situation in Hong Kong could also be an opportune time for JustCo to enter the market. The economic uncertainties have led to an increase in demand for flexible workspaces from large multinational corporations including Fortune 500 companies, who see value in workplace flexibility, cost savings and community engagement, notes Kong.
Elsewhere in Seoul, South Korea, the firm also launched its eponymous JustCo Tower in July. The 16-storey, multi-level co-working building is billed as the first “smart building” to pilot the use of JustCo’s proprietary workplace solutions and technology.