Boosted by rising office demand in the central business district (CBD), co-working space operator Hubba Co is tapping owners' unused space to turn assets into income, aiming to have 50 locations by year-end.
Amarit Charoenphan, the company's co-chief executive, said Grade A and Grade B office space in the city near mass transit has grown scarce with occupancy rates exceeding 90%.
"There is demand for co-working spaces near mass transit lines," he said. "These people are entrepreneurs, start-up business owners, new-generation people and foreigners who come to work and travel in Thailand."
They do not want to rent space at prime office buildings for the current rates of 950-1,000 baht per square metre a month, and one-year leasing contracts are seen as too long.
Instead they seek co-working spaces where rents are lower with more flexible terms. However, the supply of co-working spaces is limited, particularly in prime locations.
Four years ago Hubba started co-working spaces for rent at a single house on a 170-sq-wah plot on Ekamai Soi 4 with a usable area of 300 sq m which 50 people could use at the same time. The fee was 299 baht per day.
In 2013, it expanded to Chiang Mai with two locations sized 200 and 500 sq m. Next month it plans to have new ones in On Nut at Habito with 800 sq m for 150 people and in Siam Square with 200 sq m. There will be three more sites in Bangkok and Phuket within the year.
To create more co-working spaces, the company developed the idea of co-working space in a smaller area sized from 10 sq m as a node, focusing on locations near the mass transit lines, said Mr Amarit.
"Many people have unused spaces in prime locations like CBD or near mass transit lines, for example, their own single house, townhouse or shophouse. We will turn them into an income source by making these co-working spaces," he said.
Space owners can spend around 10,000 baht per sq m to renovate and turn their unused spaces into attractive office areas. Hubba will not collect any fee until there is booking on the owner's space at its website, at a rate of 20% of the booking fee.
According to property consultant Knight Frank Thailand, office supply in 2015 totalled 4.67 million sq m, an increase of 2.11% from 2014. Demand totalled 4.33 million sq m, representing 92.8%, up 1.3%.
Marcus Burtenshaw, Knight Frank's executive director and head of the commercial agency department, said the office market will face a shortage within the next two years which would result in a continuing rise in rental rate.
"There will be an expansion or a relocation of businesses into non-CBD areas," he said. "Tenants are facing a soft economy while office rents are likely to continue to rise and they need to consider cost control strategies in their workplace."