Rising demand amid shift in business cultures – New Straits Times

Co-working space allows independent and mobile professionals to work alongside one another but on their own projects. COMMON GROUND PIC

DEMAND for co-working space continues to soar in Malaysia.

Co-working space offers fully serviced and virtual offices located mostly in prime locations, especially near public transportation systems.

The built-up is usually 12,000 to 30,000 sq ft (some may expand depending on demand) and allows independent and mobile professionals to work alongside one another but on their own projects, encouraging social interaction.

This business culture has led to the rapid growth of co-working space operators in major cities across Malaysia.

Interestingly, there are now over 70 operators and 100 outlets across the Klang Valley, with 53 per cent of them operating from office buildings. They also operate at shoplots, retail podiums and shopping centres in strategic locations.

Notable industry players which operate more than ten outlets are Common Ground and Regus Malaysia.

Flexible workspace is set to accelerate as over two thirds of global corporates plan to increase their use of flexible co-working and collaborative space over the next three years, according to (Y)OUR SPACE — a new report on workspace occupier solutions by Knight Frank.

“Innovation and collaboration have led to a significant increase of co-working across key Asia-Pacific office markets. Flexible workspace is on the rise, supplied not only by co-working operators but also by landlords and developers who are increasingly moving into the market directly themselves,” said Nicholas Holt, Knight Frank Asia-Pacific head of research.

Regus is actively seeking to expand its presence in Penang. REGUS MALAYSIA PIC

Holt said in this disruptive digital age, the global business structure and culture are undergoing constant revision and in Malaysia, there is no exception.

He said growth of co-working space is mainly fuelled by strong demand from freelancers as well as capital expenditure by landlords.

“Prominent co-working space operators, such as Regus and ADA, have made inroads into Penang and are still actively seeking to expand their presence in the state. Local operators are also starting to emerge, especially in established urban areas such as Georgetown and Seberang Perai, supported by the availability of amenities and good connectivity cum accessibility.”

In Johor, the co-working space arena is mainly dominated by diminutive local operators, operating in shop-offices with start-ups being their main target market, said Holt.


Regus is currently the only notable operator which has a presence in the state.

Holt said strong latent demand for co-working space, as a result of a shift in business cultures and structures, is expected to fuel growth of the industry.

“As major occupiers of co-working space in Johor comprise startups, price sensitivity remains high. Henceforth, operators must strive to provide reasonably priced packages in order to gain market share,” he said.

As in Kota Kinabalu, Holt said Regus is also the only full-fledged co-working space operator there, with the rest being small-scale local operators.

“In the local context, the concept of flexible workspace is still relatively new and traditional office space is still the preferred choice among homegrown small and medium enterprises. However, the trend of co-working space is expected to grow, albeit at a gradual pace, as the concept gains traction among startups, freelancers, independent contractors and multinational companies (MNCs) that need a temporary base of operation for quick market entry.

“For example, we are given to understand that Regus is performing favourably in the city and is now seeking to expand into other localities,” he said.

Alexel Chen, executive director at Knight Frank Sabah, said despite the growing trend of co-working space, the underlying key to success for industry stakeholders depends on the knowledge of the consumer’s needs and financial capabilities.


Major cities beyond the Klang Valley, such as Penang, Johor and Kota Kinabalu, will continue to experience a surge in co-working space.

Holt said this trend is primarily fuelled by strong demand from startups and freelancers alike.

“It is worth mentioning that while occupants in these cities still do not highly value the collaborative environment and favourable ergonomics offered by co-working spaces, this element is expected to become increasingly relevant in determining the performance of co-working space beyond the Klang Valley as more millennials, who value experiences more than their older counterparts, start to enter the workforce in these cities.”

Teh Young Khean, executive director of corporate services at Knight Frank Malaysia, said: “Local and international flexible office providers are continuing to grow in Kuala Lumpur and Selangor. We are witnessing more landlords or developers willing to partner with operators to set up flexible workplace in their buildings. As of today, notable co-working and serviced office operators occupy in excess of about 1.1 million sq ft of commercial space across Kuala Lumpur and Selangor.

Tay Tam, executive director at Knight Frank Penang said with flexibility and speed being key to many modern enterprises, co-working space is set to be a major trend in the future.

“Space requirements generally come from both local and MNCs (multinational corporations) with a mixed trade — IT and related industries, logistics, insurance, recruitment etc,” he said.

Ricky Lee, Knight Frank Johor executive director, said developers have become more innovative and showcased new possibilities to end-users.

He said younger generations are looking at the added value of new space and in tandem, operators of co-working space in Johor Baru need to jump into the bandwagon to introduce space that attracts young talent.

“It is still a hurdle to match the cost of providing new funky spaces and the bottom line of businesses,” Lee said.

Originally Published on December 12, 2018 at 04:34PM

Article published originally via “”flexible office”” – Google News https://www.nst.com.my/property/2018/12/440082/rising-demand-amid-shift-business-cultures