Serviced Offices vs Coworking Spaces

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 1
contents.
Key Trend: Increase usage of Coworking Spaces among MNCs

What are MNCs using coworking for? Then use examples

Innovation or incubation centre
To keep in touch with the latest innovation and work with partners
Unilever Level3
WeWork is already the largest occupier of corporate real estate in New York, according to Cushman & Wakefield in its co-
working report in April.

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 2
contents.
Services Provided and Pricing

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 3
contents.
Other Notes

Ascent and Ascendas Singbridge

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 4
contents.
Financial Economies Leaked from WeWork

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 5
contents.
 Coworking Industry

Industry Research

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to
parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its contents.
Table of Contents

1 What is Coworking?

2 Positives and Negatives (Users/Landlord Perspective)

3 Financial Economies of Coworking Spaces

4 Market Size and Growth

5 Key Trends in the Coworking Industry

6 Appendix: Property Players who have Ventured into Coworking

7 Appendix: Comparison Table of Selected Singapore Coworking Operators

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 7
contents.
Overview of the Coworking Industry

A flexible, membership-based, community-oriented, sub-leasing model that

Definition: focuses on creating space which supports collaboration, openness,
Coworking Model knowledge sharing, innovation and user experience.

Flexible
Key Characteristics:
Renters are allowed to move in and out and upgrade or downgrade with short
notice periods
Coworking Space Pay as you use for extra services (printing, conference room etc) or locations
Rent a shared desk, dedicated desk or a private room (that can accommodate
more than 100 people -> for corporates)

Community-oriented
Coworking spaces organize many community building programs and events to
create a strong sense of community and to build up a business network
amongst its members (Eg. Entrepreneur talks, movie nights, networking events,
etc)

Open office design to increase communication/collaboration

In general, most of these co-working spaces apportion at least 50% of their floor
space to areas where co-workers can socialize, collaborate and exchange
ideas1 (Eg. lounges, roof gardens, sandbag corners etc)

(1) Cushman and Wakefield

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 8
contents.
Positive and Negatives of using a Coworking Space (User Perspective)
Security and privacy remains the main disadvantage of coworking spaces

Positives Negatives

Cost Savings Security and Privacy

Users of coworking spaces can save Coworking spaces present higher risks
18% to 26% in using a coworking space of loss/theft of intellectual property,
where higher rent is offset by savings sensitive information, or physical
on design, set-up, administration, property due to the nature of open
maintenance and occupancy costs 1 offices and the natural churn of
members
Innovation-Friendly
The open-concept of coworking spaces
alongside breakout areas helps
encourage communication and cross-
pollination of ideas from people in
different industries.
On avg, each member talks with 5.2
other members a day2

Supportive Business Network

Community events and close working
environment allows members to
network with other members
71% of members collaborated with
(1) FlySpaces
(2) Desk Mag other members in the past 12 months 2
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 9
contents.
Positives and Negatives of renting to coworking operators (Landlords Perspective.)
Lack of control over final tenant mix and security is the main disadvantage of renting to coworking operators

Positives Negatives

Improve Occupancy Rate Tenant Mix/Lack of Control over end

Coworking operators represent another Users
form of demand for space that the Landlords lose control over their tenant
landlord can rely on to boost occupancy mix, which might have negative effect
as coworking operators aggregate on existing tennats. e.g., coworking
smaller demand for space into a more member might dress too casually as
sizable demand for space compared to the standard dress code of
other tenants

Improve Branding/Image of Property Security Issues

As coworking spaces are increasingly Members of coworking spaces tend to
popular, they are often welcomed as fluctuate more than corporate
prestigious additions to a building (akin companies. Hence this increase in
to having a prestigious tenant). churn of people walking throughout the
Furthermore the coworking space might building presents increased security
also be seen as an ammenity to other risks
tenants who can make use of the
coworking space

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 10
contents.
 Financial Economics of Coworking Spaces
Renting of desks make up only 40-46% of coworking space operators revenue
Property Owner/Landlord

Revenue Mostly fixed long term lease

Stream Moving towards, revenue/profit sharing model with Coworking Space
Operators (higher upside, higher downside)

Coworking Space Operator

Revenue/
Key
Expense
Metric
Streams
Revenue per square
foot (RPSF)

Source: Desk Mag

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 11
contents.
 Users of Coworking Spaces
Coworking space has become increasingly accepted by established corporations

Initially Today
Early Adopters Only Early Adopters + Mainstream Companies
Creatives As the concept of coworking has become more
Freelances mainstream, so has its acceptance among the
multinational corporations who are increasingly
Solopreneurs
using it.
Startups (especially tech)
According to WeWork:
14 percent of its 80,000 members are
employed by a company with 500 or more
employees. The list includes Dell Inc., McKinsey &
Co. and Salesforce.com Inc. Of the world's 500
most valuable companies, 52 have employees
working out of a WeWork. A year ago, fewer than
five did.

According to Serendipity Labs:

corporate employees make up 45 percent of
members at its two U.S. locations, including
Main reasons why corporates are using coworking spaces: workers from PepsiCo, Microsoft, and Heineken
Temporary house project teams According to ServCorp:
Seek to foster collaboration and an entrepreneurial MNCs represents over one-half of its clients,
culture which includes the Qatar office of UBS and AIDAs
Seek business opportunities from the other smaller Hong Kong office
members

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 12
contents.
Coworking Industry - Global
Historical growth of number and members of coworking spaces is 51% CAGR and 73% CAGR respectively

Number of Coworking Spaces Number of Members

16,000 90% 1,400,000 120%

13,800 80% 1,180,000
14,000 1,200,000 100%
12,000 11,300 70%
1,000,000
60% 835,000 80%
10,000
50% 800,000
8,000 60%
40% 600,000
6,000
30% 40%
400,000
4,000 20%
200,000 20%
2,000 1,130 10%
43,000
- 0% - 0%

No. of Spaces Growth Rate No. of Members Growth Rate

Both the number of coworking spaces and the number of members using coworking spaces have
been experiencing tremendous historical growth in the past (51% CAGR and 73% CAGR
respectively)
No. of member growth is higher than spaces growth as new spaces are larger and has more efficient
Source: Desk Mag
designs that can serve a larger number of members
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 13
contents.
 Different source. Hence numbers are slightly different from previous slide
Coworking Industry - Global
No. of coworking spaces and members will grow at 23% and 41% CAGR respectively to 2020

Forecast of No. of Coworking Spaces Forecast of No. of Members

A GR
GR C
CA %
. 8% 41
23

11,000 | Number of coworking spaces (locations) 976,000 | Global coworking members in 2016
available now (2016) 3.8 million | Global coworking members in 2020.
26,000 | Number of estimated coworking spaces 41% | Compounded annual growth rate in coworking
available in 2020. space members, 2016-2020
23.8% | Compounded annual growth rate in coworking
spaces, 2016-2020 Source: Emergent Research

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 14
contents.
Key Trends in Coworking Industry - #1
The average number of members per coworking space is increasing

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 15
contents.
Key Trends in Coworking Industry - #2
Coworking spaces are expanding even though they may be unprofitable

The rapid expansion of coworking spaces may lead to situations of localized oversupply

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 16
contents.
Key Trends in Coworking Industry - #3
Coworking members, once acquired, are quite sticky

The stickiness of coworking members is one reason why coworking spaces are expanding even though
currently unprofitable

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 17
contents.
Coworking Space in South East Asia
Brokers estimate that 10-15% of office stock in SEA will be occupied by coworking operators by 2020

Key Points

Short-term collaborative workspace solution

is growing at staggering rates per annum,
and Cushman & Wakefield project that it will
occupy 15% of total office supply in
Southeast Asia by 2030. JLL on the other
hand forecasts 10-15% of office stock by
2030.

While most coworking spaces are situated at

bustling/capital cities, there is a noticeable
trend of coworking spaces at exotic locations
(holiday) such as Bali to cater for digital
nomads

A lot of the growth of coworking spaces in

South East Asia is attributed to freelancers.
There are 10 million freelancers in Southeast
Asia, and are projected to make up 40% of
the workforce by 2020

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 18
contents.
Appendix: Property Developers who have ventured into Coworking Not exhaustive

Property companies either JV with coworking operators or launch their own brand

JV Capitaland has a JV with Collective Works to launch Collective Works Capitol

Tower a 22,000 square feet space at level 12 of Capitol Tower. This was the
first coworking space in a Grade A CBD building in Singapore

Keppel has their own coworking space at Keppel Towers that measures 6,400
square feet in size.

CDL invested SGD 14.8mln for 24% stake in Distrii, an operator of coworking
JV spaces in China. Distrii will lease 60,000 square feet of space at CDL's Republic
Plaza Tower 1, a prime Grade A office building connected to the Raffles Place
MRT Station.

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 19
contents.
 Appendix: Coworking Spaces in Singapore Not exhaustive

Collective Workspace JustCo The Hub The Working Space Mob

Works Capitol

Number of 2 1 4 2 2 1
locations
Cheapest From 240 From 350 From 98 From 345 From 255 From 375
Hot Desk (40 hours of (Unlimited) (1 day hot (80 hours of (10 days of hot (unlimited)
Membership hot desk desk usage) hot desk desk usage)
usage) usage)
Dedicated From 700 From 500 From 750 From 770 From 729 From 580s
Desk
Private Room From 1,600 From 1,300 From 800 N.A. From 900 N.A.
Membership
International No, only SG No , only SG No, only SG No, only SG No, only SG No, only SG
chain?
Real Estate Capitaland Owned by
Partners? (50:50 JV for Keppel Land Around 40 coworking spaces in SG. 80% outside
Collective CBD
Works Capital
Tower) Prices are in SGD a month

Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated
or distributed to parties outside the presentation. No liability whatsoever is accepted with respect to the use of this document or its 20
contents.