PHOTO: The Great Room
Co-working spaces are opening up around Bangkok and providing a more flexible framework for businesses to grow. Advances in technology, a more mobile workforce, and unpredictable economic growth are reshaping the business environment.
In the Bangkok office market, a traditional three-year lease with options to renew and the tenant fitting out the space remains the typical way of leasing office premises for most occupiers. CBRE reports that multinational firms, with offices in different countries, are increasingly looking for flexible lease terms as real estate costs continue to be one of their major concerns.
Companies are also looking at agile working where staff no longer have allocated desks and, in some cases, it is easier to get third parties to design, build, and operate this space rather than companies doing it themselves.
Some of the current pricing being offered by co-working space operators is very competitive and the cost combined with flexibility is making leasing from third parties more attractive than companies leasing space, fitting them out, and managing their own premises.
In Bangkok, co-working space has continued to be an emerging source of office demand and CBRE has leased over 44,000 sqm, accounting for around 25% of CBRE’s total new office letting volume in the last 2 years, to co-working space operators.
International operators like JustCo, WeWork, Spaces, and The Great Room have opened multiple centres over the recent year and more are scheduled to open this year. The aim of these operators is to revolutionise the way occupiers source office accommodation. They want to provide office space as a service rather than a traditional lease. Check out our list of the best 5 co-working spaces currently available in Bangkok.
CBRE believes that co-working space operators are not just targeting startups companies but also multinational firms especially those seeking to build more flexibility into their real estate portfolio. The use of co-working space can provide flexibility for companies to accommodate fluctuation in space requirements.
Accounting rules have changed and rent payable under leases must now go on the balance sheet, whereas it appears that sourcing office space as a service does not count as a lease and therefore need not be on the balance sheet.
This means occupiers do not need to commit to a traditional three-year lease term. Instead, they are paying their rental as a service fee on a per desk or membership basis rather than per square metre. Co-working space operators are also providing tailor-made solutions with companies enjoying exclusive use of the space and not sharing it with others, making this a viable alternative to a traditional lease for large local and multinational companies.
As millennials will become the largest generation within the workforce in the future, CBRE foresees that companies are forced to re-think their workplace quality to make it capable of encouraging collaboration and innovation as well as promoting employee wellbeing. More companies will transform their offices into agile workplaces either doing it themselves or relying on a coworking space operator to provide the solution.
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