Coworking Takes Off

Asia market update

By Yardi Blog Staff on Oct 22, 2018 in Technology

The global wholesale leasing model is under pressure, as technology-enabled coworking gains both momentum and market share, says Neal Gemassmer, vice president of international sales for Yardi.

Shared workspace is not new – but advancing technology, the growing gig economy and cost-cutting strategies are driving the coworking trend into the mainstream.

Increasingly, corporations are turning to coworking to accommodate remote employees, attract talent, promote work satisfaction and reduce leasing costs.

“Technology-enabled coworking is undoubtedly putting pressure on traditional leasing models,” Gemassmer says.

“Developers of A Grade office buildings have traditionally acted as wholesalers of whole or half floors of space to occupiers who must make long-term leasing commitments, and then fit out their own offices.

“But technology-enabled coworking operators are using online marketing and leasing systems to efficiently offer office space to tenants at competitive rates. This is beginning to encroach on the territory of office developers.

“Changes to technology does more than change behaviour. It changes the environment itself.”

Gemassmer points to a recent report from Asian market intelligence source Mingtiandi, developed in partnership with Yardi, which found the growth rate of coworking in Asia had hit 40 percent in 2017.

Starting as a single coworking space in New York in 2010, WeWork is one lease away from being the biggest landlord in the Big Apple. With 280-plus locations in 20 countries, WeWork is rolling out roughly 185,000 sqm of new office space every month.

Around a quarter of WeWork’s clients are enterprises with more than 1,000 employees. WeWork only launched the enterprise service in 2016, and has since amassed an impressive list of clients including Facebook, Airbnb, Microsoft, Adidas, Amazon, Starbucks and LinkedIn.

WeWork is just one of several coworking companies taking the region by storm, but it is the biggest. In April, WeWork purchased China’s largest coworking network, naked Hub, for $400 million.

But other companies are not far behind. Chinese company Woo Space, the largest coworking chain in Asia, was recently acquired by Ucommune and is now valued at more than $1 billion. And IWG, formerly Regus, operates more than 2,300 business centers in 106 countries, making it the world’s largest provider of flexible workspace

Gemassmer says Yardi is responding to the coworking juggernaut by expanding its investments in leading technology.

In April, Yardi acquired Phoenix Broadband Ltd, a Scottish-based technology company that specialises in infrastructure and hardware solutions for shared workspaces and operates the Medusa brand.

This was Yardi’s second recent acquisition in coworking technology. Last year, Yardi acquired Florida-based WUN Systems and its Kube platform for coworking spaces. Many coworking spaces use both WUN’s platform and Medusa.

“When multiple companies share a common office space, access to secure, easy-to-manage technology is important. By centralising access to cloud-based business networks, Internet, Wi-Fi, voice services and more, Yardi provides seamless IT for coworking spaces,” Gemassmer concludes.

Yardi develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Learn more: yardi.com.au