Lendlease joins growing trend of developers running co-working spaces

Lendlease is planning its own flexible workplace brand within its upcoming Paya Lebar Quarter mixed-use development, according to The Business Times.

That would make the Australian firm the latest among developers to run their own co-working platforms here amid an increasingly crowded landscape.

“To cater to the demand for high quality flexible workspace from corporate occupiers, we are exploring a new co-tenancy workplace product for larger startups, creative and corporate teams,” Richard Paine, managing director for Paya Lebar Quarter, said in response to queries from BT. “We look forward to sharing more information in the next few months.”

Outside of this new brand, Paya Lebar Quarter will also have a 52,000 sq ft co-working space by IWG’s Spaces operating in its 880,000 sq ft of office space.

A Colliers International report on flexible working spaces last week found that there is now about 2.7 million sq ft of flexible workspace across Singapore. That is nearly triple the roughly 1 million sq ft here as at the end of 2015.

Several other developers and landlords here including Keppel Land, Mapletree Investments and Ascendas-Singbridge have already started their own co-working brands.

The trend of developers initiating their own co-working products is catching on in much of the Asia-Pacific. Examples include SOHO China’s 3Q and Indian developer giant RMZ Corp’s CoWrks brand, said Christine Li, senior director and head of research at Cushman & Wakefield.

“This is a strategy that is gaining traction because of the disruption landlords face when global co-working players start to expand aggressively in the markets.”

One benefit of running one’s own flexible workng space is that developers can potentially “capture all the revenue” as opposed to sharing revenue by partnering other co-working space providers, she said.

Some developers might also want to run their own space because it gives them more control of the look and feel of the workspace centre and to meet the needs of tenants directly, said Duncan White, Colliers International’s head of office services.

That appears to be the case for Mapletree, which in May this year opened its CoQoons Co-working space of close to 11,000 sq ft at Harbourfront Tower 2. It has since seen “good demand” from corporate tenants in the Harbourfront area with needs for flexible space and meeting facilities, and companies which want to be located in the area. It did not give specific numbers.

“The advantage of having our own brand and concept is that we can modify and customise to meet local needs and across different asset classes and locations: from offices to retail and serviced apartments,” said a Mapletree spokesman.

It also allows Mapletree to tie up with its existing retail and F&B tenants to encourage retail spend for CoQoons members, while “cutting out the arbitrage game” to offer better pricing for customers.

Mr White said having their own brands also allows developers with a regional and global portfolio to “leverage their greater tenant mix to translate into additional multi-market opportunities”.

Keppel Land opened its almost 18,000 sq ft KLOUD centre at Keppel Bay Tower, which includes exclusive office suites and hotdesks, in March last year, which is “almost fully leased,” said chief operating officer Louis Lim.

It has since opened a 20,000 sq ft space in its Saigon Centre Tower 2 in Ho Chi Minh City and another 20,000 sq ft space in its Junction City Tower Yangon in Myanmar.

“As both landlord and operator of KLOUD, Keppel Land is able to meet supplemental space requirements of existing building tenants as well as incubate new growth businesses before they take up permanent and possibly longer leases at its office towers,” Mr Lim said.

“Looking ahead, Keppel Land plans to operate a KLOUD centre in each of the markets where it operates. We are also exploring expanding our footprint for KLOUD in other commercial buildings.”

Mapletree said that for CoQoons, it will “assess the relevance and viability to adapt this concept to our group’s assets globally”.

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