Developer partners Collective Works under a 50-50 joint venture to turn Capital Tower's 12th floor into co-working space
THE concept of co-working space is gaining traction with office landlords here, with CapitaLand being the latest to introduce this in its headquarters building.
CapitaLand is partnering co-working space operator Collective Works under a 50-50 joint venture to turn the entire 12th floor at Capital Tower into co-working space. Spanning some 22,000 square feet, this can potentially house up to 250 companies.
Collective Works will manage the co-working space on behalf of the JV.
When asked about the rent, a CapitaLand spokeswoman said the JV leases the space at Capital Tower from the landlord CapitaLand Commercial Trust (CCT) at "market rent".
Estimates of Grade-A office rents in Tanjong Pagar by property consultants range from S$8 to S$8.50 per square foot (psf) per month. The average rent of remaining leases expiring at Capital Tower disclosed by CCT was S$9.15 psf per month in the fourth quarter of 2015.
The 12th floor of Capital Tower was previously occupied by Japan's Mizuho Bank, which vacated three floors from level 11 to 13 late last year, when it moved to Asia Square Tower 2 where it took up 120,000 sq ft of space. The 11th and 13th floors at Capital Tower have been subdivided and largely leased out to new tenants.
CapitaLand Singapore CEO Wen Khai Meng said the group is confident the co-working space at Capital Tower "will appeal to a range of fast-growing businesses, entrepreneurs and freelancers seeking to rent fully functional, fitted-out office spaces under flexible lease terms" given its central location, connectivity to public transport, Grade-A specifications and amenities. "We foresee demand coming from sectors such as fin-tech, social media, technology, insurance, corporate training and venture capital investment," he added.
Collective Works, the brainchild of entrepreneur Jonathan O'Byrne, launched its first co-working space in the Central Business District (CBD) back in December 2012 at 100 Cecil Street. "We have received pre-registration for more than 40 per cent of the space at Collective Works Capital Tower, prior to our announcement of the new location to press and clients," Mr O'Byrne said.
Unlike serviced offices that rent out private rooms, co-working space operators charge a monthly membership fee for the use of hot-desking, designated work stations and shared facilities. According to Collective Works' website, a hot-desking workspace starts from S$240 per month.
The co-working phenomenon which began in the United States has swept across other gateway cities such as London, Berlin and Paris, followed by South-east Asian countries such as Indonesia, Philippines, Malaysia, Thailand and Singapore.
CapitaLand said research on the office market has revealed there is emerging interest among operators and customers for quality co-working spaces in the CBD.
Mr O'Byrne also noted that co-working currently represents just 10 per cent of the serviced office space in Singapore. "But with 30 per cent of the workforce predicted to work in small businesses by 2020, co-working could easily equal if not surpass the serviced office market in scale."
In Singapore, co-working is at a fairly nascent stage. Of the nearly 40 co-working offices islandwide, 80 per cent are located outside the CBD. With over 3.5 million sq ft of total known CBD office supply coming onstream this year, operators are expanding into more centralised locations.
Global workspace provider Regus is taking up half of the 14th floor in the upcoming Guoco Tower in Tanjong Pagar, which will have both co-working space and serviced offices. Homegrown company JustGroup now operates co-working spaces at two locations - 120 Robinson Road and 6 Raffles Quay - totalling 50,000 sq ft and serviced offices spanning 150,000 sq ft in five locations.
OUE had said it plans to set aside some 15 per cent of retail net lettable space in its upcoming mall Downtown Gallery for co-working space. Keppel Land also carved out some 6,400 sq ft on the fourth level of Keppel Towers offering both serviced office and co-working spaces under its business venture Workspace.
Talk in the market is that Lend Lease might introduce co-working space at its upcoming mixed-use project Paya Lebar Central, which is jointly developed with the Abu Dhabi Investment Authority.
A recent Bloomberg report said American firm WeWork is preparing to form a global venture with Australian property group Lendlease to lease office space and apartments to companies in Europe, North America and the Asia-Pacific.