WeWork, the famed co-working space provider from United States continues with its expansion in Singapore.
As per media reports the company is already at an advanced stage of negotiation with its plans to lease at MYP Centre located at 9 Battery Road.
The said lease negotiations are for an area of 100,000 sq ft which if materialized will be its biggest workspace in Singapore for the moment
Law firm Rajah & Tann are the current lease holders for most of the space that WeWork plans to lease in the 28-storey building which was known by the name of Straits Trading Building in the past.
The law firm currently has about 90,000 sq ft of space leased in the building occupying 11 floors. It is already known that the law firm is planning to relocate to their new location Marina One a mixed development site.
M+S Pte Ltd has developed Marine One which is a joint venture between Temasek Holdings of Singapore and Khazanah Nasional from Malaysia in a 40:60 partnership.
MYP Centre which is located in the traditional financial district of Raffles Place is a 999-year leasehold site.
It is owned by MYP Ltd a company that is controlled by Tahir and his family Indonesia’s leading business tycoon and philanthropist.
They own the Mayapada Group in Indonesia and Tahir’s son Jonathan is the Executive Chairman at MYP in Singapore.
The group has acquired this property for S$560 million in 2016 at a rate of S$3,524 psf based on the net lettable area.
They have acquired it from Sun Venture Group who had bought this commercial property for S$450 million from The Straits Trading Company
Established in 2010 in New York, WeWork is operating in 100 cities around the world and has 425 locations already.
It has started operating in Singapore in December 2017. Prior to its entry in Singapore the company had acquired Spacemob, a home grown co-working startup which gave them access to two properties 2 Science Park Drive’s Ascent and 8 Claymore Hill.
At present the company also owns six other locations in Singapore that include Suntec Tower 5, 71 Robinson Road, City House, China Square Central, 8 Cross Street and Mapletree Anson.
The company is also expected to add two more locations in Singapore by the second quarter which include North Bridge Road’s Funan and Jalan Besar’s Arc 380
The company boasts of having more than 400,000 members worldwide. 30% of its clientele consists if Enterprises which include companies that have 1000 plus employees.
The other 70% is made up of startups, SMEs and freelancers. The company went through a rebranding exercise only last month where it renamed itself as “The We Company”, to keep in line with its future expansion plans where it is expecting to grow horizontally.
The company currently has two other arms besides WeWork. It also runs WeLive which offers co-living spaces and WeGrow an entrepreneurship school that offers support to budding entrepreneurs.
Research Head at Savills Singapore, Alan Cheong said that the demand is growing for co-working spaces and these operators along with others who have flexible office-spaces are having good time over the last two years.
They have taken up several vacant offices in Central Business District, once older tenants started moving into Marina One, UIC Building and Guoco Tower. Apart from WeWork other players in Singapore’s flexible office space market include JustCo and IWG.
Cushman & Wakefield Singapore’s Head of Leasing June Chua sees co-working brining in lot of value in the current market.
The biggest advantage according to her is the fact that businesses that decide to move into these facilities don’t incur expenditure in fitting their office space as is the case when a business leases an office under the traditional model.
She further adds that co-working spaces are great place for networking among small business and it also saves businesses from having to take capex approvals.
Leasing agents on the other hand say as flexible office-space operators grow their presence in the market, they have also become more demanding while negotiating with landlords.
Apart from the deal structure they are also negotiating on rental rates. Some agents say that these companies aren’t willing to lease a building in the traditional way and are getting into profit-sharing agreements with the landlords.
While some landlords agree to such profit-sharing agreements, others aren’t too keen to accept this new model of renting out their properties.
Many of Singapore’s traditional office landlords are becoming part of this flexible space market.
CapitaLand acquired 50% stake in The Work Project last year and has these spaces in locations including Asia Square Tower 2 and Capital Tower.
Similarly, City Developments Ltd also acquired stake in Distrii which is run by a Chinese co-working space operator which is offering space in Republic Plaza