Co-working and co-living: still making sense?

REMEMBER when Adam Neumann tried to “elevate the world’s consciousness” by building a “physical social network” of shared office spaces (WeWork), apartments (WeLive) and even a school (WeGrow)? Real memorable. Neumann’s vision has since imploded spectacularly and become a story for the history books.

But that didn’t spell the death of the co-working and co-living industries. Both are still very much alive, especially in Singapore. That said, business isn’t all hunky-dory in an age of rising interest rates and tight venture money. This past week, Garage’s Wu Xinyi (who just completed her internship) looked into how co-working and co-living operators in Singapore are keeping up with challenges.

On the co-working front, companies are facing a supply squeeze as newly completed office space in the Central Business District is limited. Meanwhile, office rents have continued rising this year, even as demand from the tech sector has cooled. As a result, the growth of the industry has been subdued. 

As we’ve previously reported, many co-working operators are reducing risk by opting for management contracts, under which they manage spaces for landlords for a fee instead of taking on conventional leases. But landlords have been slow to warm to such models, particularly for Grade A offices. 

One analyst thinks that operators will have to “be more creative”. Beyond the typical Grade A office locations in the CBD, operators have begun setting up workspaces in shopping malls, business parks and even MRT stations as far-flung as Woodlands. Perhaps we’ll see more creative concepts soon.

On the co-living front, operators are also looking at alternatives to conventional lease structures. The new Asia-Pacific CEO of Habyt (formerly known as Hmlet), is eyeing partnerships that could be a hybrid of master leases and management contracts. If he succeeds, it could finally mean a new trajectory for the company; Hmlet had lost both its founders, exited Australia with unpaid debts and backed out of Malaysia and Thailand after just six months.

Can co-working and co-living step out of their troubled past to become sustainable industries? Keep following us for more on these topics.

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