Co-working comes to ChinaApril 6, 2016 / By
The co-working trend is taking off in China. Starting in the second half of last year, more than one hundred operators have been seeking either office or retail space to set-up co-working spaces in China’s Tier 1 and Tier 1.5 cities. Even some traditional corporate occupiers are beginning to embrace the co-working trend by changing their workplace strategies. What is fuelling this growing popularity of co-working in China?
Four fundamental changes have led to the co-working boom:
- The millennial generation will soon become the majority in China’s workforce, who desires a more interactive and tech-enabled working environment (see Figure 1).
- The pool of co-working’s target tenants, small-scale start-ups and freelancers, is growing under the central government’s support for entrepreneurship.
- Co-working concepts align well with China’s undergoing shift towards the sharing economy.
- Advanced technology enables co-working spaces to offer various added values.
Figure 1: Characteristics of the millennial generation
In addition to allowing more flexibility in terms of size and duration of space commitments – which is similar to the more traditional business centres – the key benefit of the new co-working brands is their value-added. Co-working spaces focus on creating social, interactive, and open working environments. Their standard features usually include social apps for members to easily interact with each other, a large common space to mingle, and social activities such as outings. Such added-values differentiate co-working spaces from the more traditional business centres.
The potential for co-working spaces to generate value through more interaction between people and to save costs by sharing resources have inspired corporate tenants to start thinking about how to incorporate co-working elements into their workplace strategies. In addition to first-mover high-tech and creative industries, even some professional services firms are making co-working solutions a priority in new office space. For example, a large multinational consulting firm relocated to new office space in Shanghai’s core CBD area early this year, adding a “work café & open corner” of around 700 sqm (15% of its total leased area). This area employs a typical co-working space design with exposed ceilings along with cate-style tables and benches and no dedicated seating arrangements.
What does this new trend mean for landlords and developers? Pro-entrepreneurship government policy and market forces combined with changing workforce demographics will allow the co-working industry to take root in China, particularly in Tier 1 cities. Co-working operators that provide well-thought-out co-working features that add greatest value for tenants are likely to be successful. Landlords could position co-working space as an amenity for office tenants, or even build up their own co-working brands (SOHO China created a new co-working brand “3Q”) to meet this emerging demand. Finally, due to changes in workplace strategy for many corporate tenants, developers should reconsider their standard handover conditions.
More on 'Office' in 'China'
- Industrial growth burgeoning in NanjingApril 26, 2022
- Beijing real estate market in 2021 & 2022 outlookFebruary 4, 2022
- Qianhai to see more Grade-A office demand after expansionDecember 3, 2021
- Beijing office market attracts more foreign firmsSeptember 24, 2021
- The TMT sector is reshaping office markets in West ChinaAugust 10, 2021