Lock, Stock & Barrel: The Rise of Co-working Space

Do not index

Publication Status

Done

This article first appeared in The New Straits Times on 14 December, 2017.

I attended an event the other day about this new phenomenon called “co-working space”. Several experts and consultants spent the afternoon telling us what it was all about and how it was taking the commercial real estate world by storm.

I actually don’t consider this as a new phenomenon. It is basically the same as the “serviced offices” of the old days. The only difference seems to be more availability of common space and some form of community connection. From as far back as 20 years ago, I had done work with large international serviced office providers who were looking to either establish a presence in Malaysia or grow their existing businesses here. I had offered them office spaces in many commercial buildings which I felt suitable for them.

Of course, there were also some homegrown local outfits that had ventured into this game successfully.

For a long time, the structure of this business remained the same. They provided a good class office space on short- or long-term rents. They freed you from the trouble of having to fit out your own office. They also allowed you the benefit of flexible terms. You could rent space for a day, a week, a month, or even a year.

It was the perfect platform for small businesses or startups. It was also highly popular with foreign companies looking to set up business in Malaysia. They could take up space in one of the serviced offices for as long as it took them to set up and establish their business here.

Over the last few years, this concept has seen disruption, like many other businesses have. New players have entered the market and turned the old tried-and-tested business model upside down. What was acceptable in the past 20 years has now become unacceptable as potential tenants look for more than just pure office space.

The word “community” has become the new buzzword in the world of serviced offices. The new serviced offices are now no longer just offering space. They are offering experience and business opportunities. They are offering friendships and networking opportunities.

These new co-working spaces offer a business model that appeals to the new generation of entrepreneurs. When I was at the event, which was held at the premises of a co-working outfit, I saw many young people all over the place, their heads buried in their laptops. I struck up a conversation with a young man who told me that he had just started his company which was a one-man show and didn’t really need an office space. He could well work from home. But he preferred the co-working office because he wanted to be around people to have a sense of belonging.

I thought it was a fantastic idea. If I was younger and had just started my business, this was exactly the kind of environment I would have been looking for. It would have been ideal for me. A nice funky office, lots of like-minded people around me, and a sense of community.

Will these co-working spaces make traditional office space completely irrelevant? I don’t think so. I think they both have a role to play in the grand scheme of things. I think they both fulfill separate wants and needs. The idea would be to find a balance where both the traditional space and the new co-working space could exist in cordial harmony. When this will happen is anybody’s guess. Until then, this new business model would be considered disruptive to the old way of doing things.

But I suppose these are the times we live in. We will need to get used to new ideas and innovative schemes disrupting the old, traditional ways. We better get used to this fast, or else we will become irrelevant and go the way of the dinosaurs. Let’s adapt and embrace these changes with open arms, hearts, and minds.