WeWork targets Vietnam office market: JLL
WeWork is scheduled to launch its first co-working space center with area of over 5,000 square meters in Ho Chi Minh City in December, making it the largest in Vietnam to date.
US-based WeWork, one of the biggest global co-working chains, is likely to enter Vietnam's office market and grow in a number of locations in Ho Chi Minh City within the coming 12 months, stated a reported by real estate and investment management firm Jones Lang LaSalle (JLL).In early 2018, WeWork acquired a large co-working space unit of China NakedHub for US$400 million, paving the way to enter Asia, including Vietnam, where nakedHUB currently has two centers under its name in Ho Chi Minh City and Hanoi.
According to JLL, WeWork is scheduled to launch its first co-working space center with area of over 5,000 square meters in Ho Chi Minh City in December, making it the largest in Vietnam to date.
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Co-working space has been a new concept in Vietnam in the last few years, for which only a few companies operate in this kind of business model, such as Regus, Toong, Up, Dreamplex and CoGo, among others, according to CafeF.
With an average annual growth rate of 58% in the last two years, the co-working space market in Vietnam will increase strongly in both quantity and size, reaching over 90,000 square meters by the end of the year, real estate service company CBRE has said in its reported.
The market, however, is relatively small compared to that of traditional office, as Hanoi and Ho Chi Minh City currently have over 1 million square meters each of typical office.
In Southeast Asia, flexible work spaces have grown by circa 40% compound annual growth rate (CAGR) in the last three years and how take up 2% of the office stock, from 0.5-1.0% in 2015, according to JLL.
The growth of flexible work spaces in Southeast Asia is in line with the rapid growth in Asia Pacific, where flexible space stock recorded a CARG of 35.7% in 2014-2017, much higher than in the US (25.7%) and Europe (21.6%) over the same period.
JLL predicted that as much as 30% of corporate portfolios could be flexible space by 2030. What initially began as a platform for freelancers and startups, flexible space providers are now tailoring their offering to accommodate corporate users.
These corporate users are experimenting with coworking via pilot schemes. Key drivers behind corporate demand for flexible spaces include (1) flexibility to accommodate headcount changes; (2) convenience with plugand-play one-stop service; (3) fostering collaboration and innovation; (4) sense of community from activities and events and (5) cost effectiveness.
Following that trend, co-working space has started booming in Vietnam. CoGo, a local co-working space operator, was launched in early June 2018 but has already had two large centers with a total floor area of over 5,500 square meters.
In early August, the third center of CoGo in Ho Guom Plaza in Ha Dong district, Hanoi, was put into operation, increasing the total area to over 7,000 square meters. Under the plan, CoGo will have five centers with total area of over 12,000 square meters by the end of 2018.
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