Over a decade ago, Bangkok’s serviced offices provided fully-furnished rental workplaces with comprehensive amenities. However, the rise of co-working spaces gradually overshadowed the popularity of services offices, by offering greater flexibility and open layouts, as well as the concept of “hot desking”.

Post-pandemic, the adoption of remote work has been driving demand for both serviced offices and co-working spaces in Bangkok. This shift in preferences revitalised the popularity of flexible space options, which accommodates evolving work patterns and emerges as the sought-after solution for hybrid occupiers. Consequently, co-working spaces have transitioned from a pure co-working model to an enterprise bespoke model, meeting the specific needs of diverse occupiers.

Bangkok’s flex space market has expanded significantly, reaching approximately 171,000 sqm as of 1Q23, with around 65% of existing stocks located within the Central Business Areas (CBA). This year, the market expects approximately 29,000 sqm of new space, with over 50% coming from partnerships between flex operators and landlords. Notably, three major global operators: IWG, JustCo, and WeWork, which collectively hold majority market shares, dominate the market. These key players have resumed their expansion plans after a temporary pause during the pandemic. JustCo, for instance, has announced the opening of a new 5,200 sqm centre at One City Centre, solidifying its position as one of Thailand’s largest flexible spaces.

Figure 1: Bangkok’s cumulative flexible office stock, 2013-2023

Source: JLL Research and Consulting, Thailand, 1Q23

Bangkok’s flexible workspaces have grown remarkably, surging 80% in recent years. Traditional office tenants, including SMEs and large corporations, have embraced flexible space formats due to the appeal of shorter lease terms, right-sizing options, cost reduction, and access to creative shared spaces. The professional service sector spearheads this trend, accounting for 35% of the occupier movement. Interestingly, there is a growing demand for private offices for individuals, surpassing the declining interest in hot desking. However, this preference is primarily observed among larger operators with ample space to provide small-sized office rooms, while local operators tend to focus on larger rooms.

Figure 2: Bangkok office tenants shifting from traditional office to flexible space

Source: JLL Research and Consulting, Thailand, 1Q23

An interesting shift in operating models among landlords has been observed. They are now adopting self-performing space management structures instead of traditional sublease models. This approach allows investors to capitalise on an additional revenue stream by leveraging pre-built flexible spaces and existing tenants. It effectively meets tenants’ demand for flexible spaces while generating immediate and long-term asset value. Also, the profit-share lease model, with a minimum guarantee from flex operators to landlords, mitigates the risks involved.

The growth of flexible workspaces will be driven by managed and bespoke operators, which will indirectly pressure landlords to adapt to flexible demands and hybrid operations. Traditional Grade-A offices remain relevant as they adjust to tenant needs and create future-ready workspaces. Both traditional and flexible spaces coexist; however, flexible spaces are no longer a short-term plan but a sustainable solution shaping the future of commercial real estate.

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