Is co-working space a dying industry in Malaysia?
At a property conference this week, it was revealed that a co-working space provider, or one of the early players in the market here, has ceased operations.
No reasons were given but it is believed that the company suffered looses due to heavy competition.
Knight Frank Malaysia managing director Sarkunan Subramaniam is worried about what will happen in the co-working space environment.
"This co-working space, they were formerly in a different shape. As far as the current situation is concerned, it is all about market share and getting the quantum.
"But what is going to happen is what worries me. I think in two years' time we are going to see quite a number of this co-working space either merging or dropping totally out of the market. We have already seen this recently with one company going bust," he said.
There are currently around 40 players in the market, and this translates to over 170 centres in Klang Valley.
Among them are WeWork, Regus, Colony, CoLabs The Starling and Common Ground.
Newcomer is Wotso which has just set up a 14,000 sq ft hub in Mercu Summer Suites located on Jalan Cendana in Kampung Baru, Kuala Lumpur. The set up is by way of a joint venture between UEM Sunrise Bhd and Wotso's Australian parent BlackWall Ltd.
While co-working space can work for the growing millennial workforce because of the low cost, can it work for the companies long term?
Sarkunan said, there is a lot of risk going into co-working space.
"If the co-work space provider is going to go partner with someone who is over stretched and may not be in the market, they are taking a lot of risk. For landlords (owner of office spaces), it is important for them to see the financial stability of that particular group and how big a market share they have. A lot of them now just want to partner with the landlords but landlords are desperate. Landlords just want to spread out rent but rent proposition may not there.
"So you really need to do your due diligence on your partner on their brand and financial backing, and see whether this guy is going to be around in the future. All these are very important to look at," he said.
Sarkunan said, while co-working space providers are currently looking for market share, next will be survival.
Co-Working Space Rates/Month Rates/Day Selling Point
MaGIC RM150 RM30 Spacious.
Uppercase RM450 N/A Has showers and personal lockers.
START RM450 RM35 Free van shuttle service.
BMGS Pudu RM180 N/A Opportunity to explore the ASEAN
market, especially China.
Common Ground RM499 N/A Premium location and emphasis on IT-based community.
CEO Suite KL RM800 N/A Spacious and fully furnished workspace.
Common Ground RM399 N/A Premium location and emphasis on IT-based community.
Servcorp RM230 N/A Premium location and wheelchair accessible.
WORQ RM300 N/A High event volume and amenities available.
The Startup RM150 RM30 Many F&B options.
The Co. RM650 RM50 Near Monorail, spacious.
Impact Hub RM500 N/A Global co-working franchise and flexible membership.
Colony RM528 RM27 Premium location with luxurious amenities.
Co-Labs RM250 RM15 Showers available and access to nearby university’s facilities.
KLEX RM350 RM20 Diverse community, nearby mall.
(source:vulcanpost)
At a property conference this week, it was revealed that a co-working space provider, or one of the early players in the market here, has ceased operations.
No reasons were given but it is believed that the company suffered looses due to heavy competition.
Knight Frank Malaysia managing director Sarkunan Subramaniam is worried about what will happen in the co-working space environment.
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| Can co-working space providers survive the business? (FILE PIC) |
"This co-working space, they were formerly in a different shape. As far as the current situation is concerned, it is all about market share and getting the quantum.
"But what is going to happen is what worries me. I think in two years' time we are going to see quite a number of this co-working space either merging or dropping totally out of the market. We have already seen this recently with one company going bust," he said.
There are currently around 40 players in the market, and this translates to over 170 centres in Klang Valley.
Among them are WeWork, Regus, Colony, CoLabs The Starling and Common Ground.
Newcomer is Wotso which has just set up a 14,000 sq ft hub in Mercu Summer Suites located on Jalan Cendana in Kampung Baru, Kuala Lumpur. The set up is by way of a joint venture between UEM Sunrise Bhd and Wotso's Australian parent BlackWall Ltd.
While co-working space can work for the growing millennial workforce because of the low cost, can it work for the companies long term?
Sarkunan said, there is a lot of risk going into co-working space.
"If the co-work space provider is going to go partner with someone who is over stretched and may not be in the market, they are taking a lot of risk. For landlords (owner of office spaces), it is important for them to see the financial stability of that particular group and how big a market share they have. A lot of them now just want to partner with the landlords but landlords are desperate. Landlords just want to spread out rent but rent proposition may not there.
"So you really need to do your due diligence on your partner on their brand and financial backing, and see whether this guy is going to be around in the future. All these are very important to look at," he said.
Sarkunan said, while co-working space providers are currently looking for market share, next will be survival.
Co-Working Space Rates/Month Rates/Day Selling Point
MaGIC RM150 RM30 Spacious.
Uppercase RM450 N/A Has showers and personal lockers.
START RM450 RM35 Free van shuttle service.
BMGS Pudu RM180 N/A Opportunity to explore the ASEAN
market, especially China.
Common Ground RM499 N/A Premium location and emphasis on IT-based community.
CEO Suite KL RM800 N/A Spacious and fully furnished workspace.
Common Ground RM399 N/A Premium location and emphasis on IT-based community.
Servcorp RM230 N/A Premium location and wheelchair accessible.
WORQ RM300 N/A High event volume and amenities available.
The Startup RM150 RM30 Many F&B options.
The Co. RM650 RM50 Near Monorail, spacious.
Impact Hub RM500 N/A Global co-working franchise and flexible membership.
Colony RM528 RM27 Premium location with luxurious amenities.
Co-Labs RM250 RM15 Showers available and access to nearby university’s facilities.
KLEX RM350 RM20 Diverse community, nearby mall.
(source:vulcanpost)
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