"Commercial real estate has changed so much over the last five years," says Kong Wan Sing, founder and CEO of JustCo, Singapore's leading co-working space operator. "Co-working is no longer regarded as just a swing space or a space for off-site meetings. It's a real shift that is already taking place in the US, with corporates moving their headquarters into co-working space. And this trend is happening in Singapore."
JustCo has taken up 80,000 sq ft on two floors at one of the Grade-A towers at Marina One, a mixed-use development by M+S, a joint venture company set up by Khazanah Nasional and Temasek Holdings. The co-working space at Marina One is scheduled to be ready by 3Q2017 and is already 30% taken up. JustCo's Kong foresees corporates, including Fortune 500 companies, accounting for 60% to 80% of the members at Marina One's co-working space, given that it is a landmark mixed-use project in the Marina Bay-Downtown Core area.
So far, 60%, or over one million sq ft, of a total of 1.88 million sq ft of office space has been taken up at Marina One, according to an M+S spokesperson. JustCo will also be operating a co-working space of 50,000 sq ft on two floors at UIC Building. Developed by listed United Industrial Corp, the 23-storey, Grade-A office tower is part of a mixed-use development that includes the 54-storey V on Shenton apartment tower. The co-working space at UIC Building is already 40% pre-leased ahead of its opening in June. At least 60% of those who have signed up for the co-working space are big corporates, says Kong. JustCo's flagship co-working space at 120 Robinson Road takes up a total of 30,000 sq ft across five floors. Members there include bike sharing app company Mobike; Line, a messenger, chat and video call app; and US unicorn company Cloudflare, a content delivery network and security services provider.
The other co-working space operated by JustCo is at 6 Raffles Quay. Like the one at 120 Robinson Road, it is also fully taken up currently. According to Kong, it took five to six months for the first two co-working spaces to stabilise and achieve 90% occupancy. He expects a similar take-up rate at UIC Building and Marina One.
Including the new JustCo co-working spaces in the pipeline at UIC Building and Marina One, the total space operated by the company will be around 300,000 sq ft, estimates Kong.
Co-working space ramp-up
JustCo will therefore have 43% of the total 700,000 sq ft of co-working space coming on stream in Singapore by end-2017. According to Desmond Sim, head of CBRE Research for Singapore and Southeast Asia, the amount of co-working space will increase from about 400,000 sq ft at the end of last year to 700,000 sq ft by end-2017.
Says Kong: "The ramp-up of co-working space has been tremendous, especially in the past year, with more new players entering the business." JustCo has been able to double the amount of co-working space it operates over the past year as it has funding from Paris-headquartered and French-listed private equity firm Tikehau Capital Partners and Singapore-based Pinetree Capital Partners. "They came in about 1½ years ago, and have been very supportive," Kong reveals.
He feels that there is more room for growth in the Central area. Besides the CBD, he sees opportunities for co-working space in Suntec City and the Orchard Road neighbourhood.
Serviced offices still in demand
Prior to starting JustCo two years ago, Kong founded JustOffice as a serviced office provider in 2011. Today, he still operates about 100,000 sq ft of serviced office space in Singapore, in buildings such as Asia Square, AXA Tower, PWC Building, Samsung Hub and Westgate Tower. "There are still people who prefer to be in a serviced office environment," he says. "They don't want to know who their neighbours are and prefer to be in an enclosed office suite. But in five years, that could change."