Co-working offers companies flexibility in an increasingly uncertain world. But in the midst of a global pandemic it also poses a potential health risk. We ask two experts to weigh in on the future of co-working in Southeast Asia
In late 2019, WeWork’s IPO unravelled and the future of co-working startups worldwide looked bleak. For a while, it seemed the industry was doomed to be yet another sharing economy bubble, like shared bikes before it. Then Covid hit, and everything started to change—for better and for worse.
A global health crisis meant that people were less inclined to share office spaces. But on the other hand, economic uncertainty made the flexibility offered by co-working spaces more desireable. Not to mention, leaders in even the most traditional of companies were getting used to staff working remotely. All of which adds up to an uncertain future for co-working: will it thrive post-pandemic or revert to the pre-Covid trend?
We asked two leaders in the space to weigh in. Carmen Booth is managing partner of Arch Offices; Mario Berta is chairman of FlySpaces. Here's how they see the future of co-working in their native Philippines and the wider region.
What has happened to co-working spaces in the Philippines during the pandemic?
Carmen Booth Co-working has taken a big hit during the pandemic. With the [Philippine] government restrictions on operating capacity, there is a push for co-working spaces and serviced office providers to find solutions to be able to operate at a 50 percent capacity, while continuing to pay full rent for its buildings. The capacity restrictions significantly reduced demand and limited rental relief from landlords has made for a very challenging environment for operators.
Mario Berta A number of small operators across the region went out of business, or have merged to be able to survive, so this crisis has led to a consolidation among operators. In the Philippines, in line with other countries in Southeast Asia, we have what we call “local champions”, meaning homegrown brands that have a very strong presence in the market. Think of KMC in the Philippines or The Great Room in Singapore, for instance—each country has at least one. These players have been impacted but have survived because of strong financial backing and a strong tenant profile. I think they will come out as winners.