A recent report by Cushman & Wakefield shines the spotlight on the Asia Pacific coworking market with research revealing a 40% growth in memberships, which is well above the global average.
“Coworking in Asia, China specifically, is making coworking in the US look like it’s standing still,” Liz Elam, Executive Producer of GCUC, said after the first GCUC China edition in 2015. What was said by Liz at the time, still remains true, even today, and not just in China.
The top trends powering this remarkable growth, as outlined by Cushman & Wakefield are as follows:
1. Coworking is Going Corporate
Large corporations in Asia are using coworking spaces to attract, retain talent and further grow their business, similar to what is happening in Europe and the US. “Demand from corporates has been one of the biggest expansion drivers of coworking in several Asian cities over the last two years. Memberships of enterprise clients have more than doubled over the last 12 months”. In addition to large corporations embracing this trend, the same can also be said for SMEs who are also adopting the shared model to help them grow.
2. Developers are Making Coworking Spaces a Staple
Developers are starting to realise the value of offering mix-use spaces, as it becomes increasingly evident that coworking and real estate are stronger together. “Landlords, either by themselves or by partnering with an operator, are embracing coworking concepts to give life to their buildings.”
3. Coworking as In-House Innovation-Hubs
Globally, the lifespan of large companies has been decreasing over the years. Cushman & Wakefield found that “only 12% of those companies have survived between 1955 and 2016. Creative destruction and market disruption are driving them out of business as they lack the dynamism and innovation that are crucial for survival in a hypercompetitive global economy.”
Because of this, large companies are partnering with coworking providers, or building their own in-house shared workspace environment as they recognize that these spaces foster innovation. Coworking spaces expose their employees to more than what they would get in a corporate office, as they have the opportunity to interact and work with developers, freelancers, entrepreneurs, startups and creatives, all of which can help them build and scale the business.
4. The Road to Expansion Paved by Mergers and Acquisitions
“Coworking operators are merging with each other and scouting for investors in a bid to strengthen their foothold in growing markets.” This strategy allows operators to expand, learn, and provide a wide variety of services in addition to helping “fend off competition and (…) thwart WeWork’s aggressive expansion plans in the region.” Bigger operators are seeing the huge benefits of merging with smaller players to guarantee a successful entry into a new market. It is predicted that mergers and acquisition deals will pick up their pace in 2018 as competition increases.
5. Southeast Asia is the New Battleground for Coworking
Government support and funding is powering the development of startups and incubators in the region, which combined with the fact Southeast Asia houses some of the world’s most dynamic and fastest growing economies, has meant that the evolution of shared workspace environments has accelerated quickly. Coworking in Asia is an attractive business solution not just for the many benefits and services it provides, but also because it is a cheaper option compared to traditional leases. Coworking in Asia, like in many other regions around the world, has successfully revolutionised the real estate market.