With its low cost of living, its young tech savvy workforce and digital infrastructure Southeast Asia is fast becoming a hotspot for start-ups and digital nomads.
From one co-working space in 2009, Singapore now has more than 30 offices. In Vietnam, more than 40 spaces have sprung up following Start, one of the first coworking spaces that was set up 2012.
In fact all over Southeast Asia, coworking spaces are gaining in popularity with over 10,000 forecast to be open for business by the end of 2016.
Global chains, such as WeWork, are starting to make inroads into the rapidly expanding Asian market. However, home-grown chains are also fighting hard to increase their foothold. The Hive recently added Singapore to its growing list of locations while Vietnam’s Dreamplex, already plans to expand in Hanoi and Da Nang after launching its first site in Ho Chi Minh City. Australia’s WOTSO recently opened its first Asian space in Singapore.
Regina Lim, National Director, Advisory & Research, Capital Markets at JLL suggests that “by 2030, co-working spaces could make up 10 to 15 percent of office stock in Southeast Asia, compared to only 1 to 5 percent today.”
Work space with a view
While many of Southeast Asia’s coworking spaces are located in the region’s bustling cities, a growing number are setting up in more exotic locations to cater for the digital nomads who have the flexibility to work wherever there’s wifi. BeacHub in Thailand’s Koh Phangan offers beach front working while Bali’s first coworking space Hubud gives entrepreneurs sweeping views over rice paddy fields as they develop their business ideas.
In urban areas, as competition between coworking spaces increases, it’s no longer enough to woo locally based entrepreneurs with creative interiors and good coffee. Some spaces distinguish their offer by providing Asia-specific mentorship and business resources, like The Outpost in Singapore. Other spaces lure new clients with unique design, such as Refinery’s part restaurant, part coworking space designed specifically for craftsmen. Facilities such as childcare are becoming a valuable selling point with Trehaus in Singapore — one of the first to offer the service in Southeast Asia.
And for the entrepreneurs who live and breathe developing their new business idea into the next big billion dollar business Livit Spaces in Indonesia take the idea of coworking one step further into co-living.
It’s not just Southeast Asia’s entrepreneurs that are benefiting from coworking – the buildings in many of its cities are too, as freelancers and start-ups fill space which could otherwise be left empty. In Singapore, “co-working spaces aren’t allowed in residential areas in Singapore, so most of them are in commercial office spaces, although this accounts for less than 5 percent of the overall office stock” says Dr Chua Yang Liang, JLL Head of Research for South East Asia.
Over in Indonesia, Ke:Kini, an Indonesian co-working space, is located in an old building because its founders wanted to help preserve historical buildings in Jakarta and “bring the cultural life back into Cikini.”
Government support for entrepreneurs
Many Southeast Asian countries are increasingly seeing coworking as a way to encourage entrepreneurship among their local populations. Global Entrepreneurship Program Indonesia (GEPI), part of U.S. backed initiative to promote entrepreneurship worldwide, offers a co-working space for select start-ups while Jakarta’s local government has also revealed plans to build two co-working spaces to aid young entrepreneurs in the region.
In Singapore, the government has taken a pro-active stance in nurturing technological capabilities in various sectors, says Dr Chua. “The focus of the government to creative an innovative ecosystem could lift demand for non-traditional workspace such as co-working space. The recent development of a second incubator hub suggests the government’s confidence in the underlying demand for space going forwards.”
These spaces are also attracting the attention of investors. In March 2015, Vietnam’s first co-working chain Toong received a seven-digit funding from undisclosed investors while The Hub Singapore raised SG$1.5 million from an anonymous angel investor.
And larger corporates are also starting to experiment with the coworking idea. “Companies such as DBS, Visa, OCBC and Standard Chartered have set aside a coworking environment in their premises to stimulate and harness ideas between their employees and targeted entrepreneurs such as fin-tech start-ups,” says Dr Chua.
For now coworking might be in its infancy but with a growing number of expat and local entrepreneurs fueling the region’s start-up scene, it has significant potential to contribute to Southeast Asia’s future growth story.