Southeast Asia’s 3 Coworking Giants Dominating Their Local Markets: JustCo, KMC, and EV Hive
The coworking space trend has evolved into a global industry that is estimated to boost 19,000 office spaces and 1.7 million members around the world by the end of 2018.
Coworking has transitioned from an eccentric office space alternative for hipsters and freelancers to an attractive business solution for companies of all sizes. The appeal is flexibility. Companies, whether start-ups or more established businesses, can scale easily and less expensively through shared office facilities in prime business locations with flexible lease arrangements that include event spaces, networking opportunities, and programs designed to encourage mentorship, collaboration, community, employee wellness, and entrepreneurship.
Coworking spaces are generally plug-and-play options with more affordable leases and convenient workstation setups. These collaborative spaces provide a more vibrant and dynamic atmosphere and are reshaping today’s modern workplace.
The global coworking industry has sustained momentum and growth in the past few years. Real estate developers are leasing office space to coworking operators, but recognizing demand, a number of them are developing their own coworking platforms. The trend extends to Southeast Asia, home to some of the fastest growing economies in the world.
The Coworking Trend in Southeast Asia
A combination of sustained high economic growth, government support, and financial incentives for new businesses, particularly in IT, has drawn investors and entrepreneurs to Asia and particularly, the Southeast Asian region. With these businesses comes a demand for office space. Unsurprisingly, coworking spaces are the primary option for businesses setting up new office locations in the region.
The convenience of a fully-furnished working area and flexible leasing arrangement in the early development of a business are indispensable. And the ability to scale is just one of the areas where coworking spaces distinguish themselves from traditional office spaces.
Southeast Asia’s Top Coworking Space Providers
As businesses grow, demand for flexible offices increases. Coworking and flexible office space providers in the SEA region are aggressively opening more sites, leasing larger spaces, and expanding their foothold. The coworking industry in Southeast Asia has leased more than 8.0 million square feet in the last two years, with local coworking space providers like JustCo, EV Hive, and KMC Solutions accounting for more than half of the space leased by coworking operators in 2017. KMC alone has more than 50% market share of the flexible workspace industry in the Philippines, while JustCo’s spaces are occupied by some of the region’s leading startups.
With sleek, visually appealing, and creative workspace design, the region’s top three flexible office providers seek to transform SEA’s workplace experience. These companies are geared towards expanding to more locations in SEA and introducing an atmosphere of innovation and collaboration in the region’s business landscape.
As the top coworking space provider of SEA’s tech hub and financial center, Singapore, JustCo leads the city-state’s vibrant free-market economy and startup ecosystem. It serves as a breeding ground for in-house innovation for some of Singapore’s startups, small businesses, and large companies.
In May 2018, JustCo collaborated with American multinational telecommunications company Verizon to launch Verizon Innovation Community – the company’s first community space program in Asia. It is a coworking platform that seeks to bind together promising startup companies from the emerging technology fields of cybersecurity, financial technology/blockchain, digital media, Internet of Things (IoT), and robotic process automation/artificial intelligence. The community space is managed by JustCo and boasts customized space designs that cater to the unique requirements of the tech community in Singapore.
Established in 2015, JustCo has grown its valuation to US$200 million in a short span of two years through a Series B funding round with Thailand’s leading property developer, Sansiri, in October 2017. Sansiri’s investment of US$12 million in JustCo is set to fuel its expansion projects in other Southeast Asian countries in the next few years.
Singapore’s sovereign wealth fund GIC and mainboard-listed real estate firm Frasers Property agreed on a US$177m million partnership with JustCo in May 2018 in an attempt to develop a coworking platform across Asia. According to Panote Sirivadhanabhakdi, Chief Executive Officer of Frasers Property Group, the partnership will leverage the international scale of GIC and Frasers Property to accelerate the expansion of JustCo’s network, customer connection, and technological services.
Image courtesy of KMC
A pioneer in the region’s coworking industry, KMC began operating private offices and flexible coworking spaces in the Philippines in 2010. The company has established a solid brand and massive office space portfolio in the region over the next couple of years – accommodating some of Silicon Valley’s tech giants, Australia’s largest bank and insurance companies, and Japan’s largest electronic brands on their market entry plans in the Philippines.
KMC has the largest network of flexible private offices and coworking spaces in the Philippines, and it is currently commanding more than 41,000 square meters of office space across 28 managed workfloors in 16 buildings in the country. The company is set to extend its flexible workspace network to 53,000 square meters with approximately 10,000 seats by the end of 2018. As the provider of choice of many startup companies and small businesses, it supports and elevates innovation in the Philippine startup scene by launching incubation programs and business development workshops.
In collaboration with Impact Hub Manila, KMC launched its latest campaign, Space for Ingenious in May 2018 – a 6-month intensive incubation program that offers free occupancy, mentorship, and complimentary use of facilities to six startups and entrepreneurs with unique business concepts in the fields of financial technology (fintech), medical technology (medtech), Software-as-a-Service (SaaS), health/wellness technology, e-commerce, and mobile. The campaign was a success and the company is planning to have its second launch of the program in the fourth quarter of 2018.
KMC also provides Staff Leasing and HR Consulting services on top of its flexible office space models. The company has uniquely positioned itself as a top provider of value-added services to foreign businesses that intend to set up offshore teams that provide technical, administrative, and customer service support to their company headquarters from abroad. Through KMC’s consultancy and strong familiarity with the local business setting, many small-and-medium enterprises (SMEs) and multinational companies are able to gain all-around business support on their operations in the Philippines.
A coworking space operator based in Jakarta, Indonesia, EV Hive provides community hubs to startups and entrepreneurs in three of Indonesia’s top-tier cities – Jakarta, Tangerang, and Medan. Operating in the largest archipelago in the world, the company is committed to redefining the office space experience in the country and making available to potential clients networking opportunities that help them gain access to partnerships and collaborations with larger companies.
Backed by venture capital firms East Ventures, Sinar Mas Digital Ventures, Insignia Ventures, Intudo Ventures, and real-estate developer Sinar Mas Land, EV Hive has exponentially expanded its reach in a short span of three years since it started operating in 2015. With fresh funds from its venture capital investors, the company is seeking to expand its geographic reach in Southeast Asia by operating flexible office spaces in more than 100 prime locations in the region.
At present, EV Hive manages more than 30,000 square meters of workspace in 21 locations across Indonesia, with a broad suite of supporting services and a strong community network within its coworking spaces.
Redefining SEA’s Business Landscape
While coworking spaces are not expected to completely displace traditional office spaces in the near future, the consumer preference and strong market demand for them secure their propagation and growth within the region. As large coworking providers like JustCo, EV Hive, and KMC continue to provide companies with invaluable business elements not readily accessible through conventional means, the coworking industry will undoubtedly maintain its vital role in redefining SEA’s business landscape.