Co-working space outlook 'robust' but mixed across Asean markets: Maybank Kim Eng report

The outlook for co-working spaces in Asean seems "robust at the moment", Maybank Kim Eng analysts Lee Ju Ye and Chua Hak Bin wrote in a recent report, but the landscape varies across the region.

The report cited JLL estimates that co-working spaces could grow from less than 1 per cent of Asean office stock in 2015 to between 10 per cent and 15 per cent in 2030.

Meanwhile, Singapore, Manila and Jakarta have the highest central business district take-up rates for co-working spaces among South-east Asian hubs, according to Colliers.

"A growing gig economy and multinationals' preference for flexible leasing terms will support growth," the report said.

Ms Lee and Dr Chua noted that developers across Asia are teaming up with co-working space operators - such as the tie-up between China's Ucommune and CapitaLand in Singapore - or joining the fray with their own brands, such as Aurum Land's Collision 8 in Singapore and Clock In in the Philippines' Makati City, jointly launched by Ayala Land and Acceler8.

Mergers and acquisitions are also picking up, with equity financing in co-working startups hitting US$300 million in 2017. Deals over the past year include United States-based WeWork's acquisition of Singapore's Spacemob, as well as the merger of Indonesia's EV Hive and Clapham Collective.

Still, Ms Lee and Dr Chua cautioned: "While the outlook for co-working players look robust at the moment, a business downturn would mean that they would likely be the first option that firms would consider breaking lease with, as the cost would be lower than breaking a lease with a building owner."

They added that cyber security and intellectual property risks are also of greater concern, compared with the situation in traditional offices.

ASEANBUSINESS gives you Maybank Kim Eng's market-by-market observations: