Firms look to co-working spaces to lower costs

Instead of being tied down to a rental agreement, a growing number of firms and individuals are looking to pay for office facilities as and when they need the space.

An office format called co-working, is trying to fill the gap. It has been gaining popularity in the past two years, with more than 20 such providers popping up around Singapore.

WorkCentral is the newest kid on the block, joining the likes of The Hub and The Co in offering open, collaborative workspaces for companies and individuals. Such co-working spaces offer flexibility to companies looking to keep overheads low and not commit to a long-term lease.

Member companies can access the facilities any time they wish to, which also include a dedicated room with fixed line telephones.

After opening its new premises in Dhoby Ghaut last month, Work Central already has 10 members. It says part of the appeal of co-working spaces is the opportunity to collaborate with co-workers.

“When you wish to, you could have a chat with a co-worker (from a different member company) at the pantry or by the water cooler,” said Mr Paul Lee, founder and CEO of Work Central. “They’re not necessarily people who are directly related in terms of the industry they’re in, but one of your fellow co-workers that could provide a service for you. For example, if they’re a web designer, and you need to set something up, it’s convenient and easy to just have that working relationship right there.”

While the concept itself is not new, co-working spaces have been gaining traction recently. Last year, the Infocomm Development Authority (IDA) partnered with global workplace provider, Regus to set up work spaces in libraries for individuals and small companies.

Besides opportunities to collaborate, Regus says co-working is also cheaper than traditional service offices.

“It’s very cost effective and yes, cost is a massive part of it,” said Mr Paul MacAndrew, Regus’ country manager in Singapore. “Obviously if you went out and you opened up a space yourself, it’d cost you a lot of money and people don’t want to be fixed to a desk. They want the flexibility to work where they want and when they want. Absolutely, cost is a big factor.”

TREND TO GROW

Property research firm, SLP International, says this trend will only continue to grow. With new offices in the Marina Bayfront area expected to be completed in next few years, SLP said the new supply could open up more spaces for such co-working spaces, especially on the city fringe.

“The startups who might have limited budgets and a bit more high risk, and they’re not sure if their business idea could work or not, will still be attracted to the low cost type of working space, so there is still a market for co-working spaces,” said Mr Nicholas Mak, SLP’s executive director.

“There’s even the possibility that some of the co-working spaces could be located in the CBD, but the cheaper rents are likely to be those commercial spaces which are more in the city fringe area, and if they are located near transportation nodes, for example MRT stations. They can still attract this startups and small companies.”

Both WorkCentral and Regus are looking to expand their co-working space footprint. Regus said it plans to bring in more co-working options next year, while Work Central hopes to eventually make inroads into Indonesia.

Source : Channel NewsAsia – 20 Nov 2015

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