Will the co-working space survive the infection?

By V Sanjugtha

ONCE touted as the future of the workspace, the co-working trend now faces an uncertain future. Boasting the typical designs that are all wrong for today’s social distancing, compounded by its clientele of individuals, who can operate from home anyway, the co-working space looks set for an uphill battle.

Knight Frank Malaysia executive director of corporate services Teh Young Khean notes that in the immediate term preceding the lifting of the movement control order (MCO), co-working or flexible space may be less popular as there will be reduced desire for clients or members to congregate and interact face to face in one location.

He deduces that revenue derived from membership fees and events may be affected during this period but foresees the continuity of e-events.

“However, once confidence level improves with businesses back to work as usual, co-working or flexible space may be a good option, especially for the new occupiers and those looking to expand to navigate in the near term before committing to a longer-term plan,” he notes.

In the last decade, the flexible office category has mushroomed 600%, encompassing nearly 71 million sq ft of space in 40 major cities. The hastened growth of this sector, however, prompted property consultants to speculate on the survivability of the smaller players in an increasingly crowded market.

Rahim & Co International CEO Siva Shanker opines that some of the co-working providers will lose 20-30% of their clients following the MCO, as social distancing continues to be practised. He points out that the oversupply of co-working spaces will see some having to close their doors due to loss of clientele.

“Many month-to-month leases will not be renewed and this will affect the providers’ ability to withstand a drop in revenue,” he notes.

CBRE WTW Johor Bahru branch director Tan Ka Leong, however, opines that the setback in this sector will be temporary. He sees the co-working business reinforced as the pandemic eases, further fuelled by the growth of flexible working options. — April 10, 2020

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