Contrary to popular opinion, IWG says there is no oversupply in Bangkok's co-working space market, prompting the company to open its second Spaces location in the capital in May.
The global market for flexible workplaces is growing worldwide, and more than 1.2 million people have used co-working spaces at one time or another. Supply in Bangkok has been rising by at least 200% annually, said Amarit Charoenphan, co-founder of Hubba, the oldest co-working space in Thailand.
The industry has been saturated not only by independent players, but also by mobile companies Advanced Info Service, Total Access Communication and True Move, which offer low-cost spaces (about half the price of Hubba and Spaces) and have special benefits for big telecom service spenders.
Mr Amarit said demand has yet to catch up with supply, which is part of the reason why Hubba is diversifying away from co-working and into venture capital. Moving forward, co-working space could be offered as a free benefit for firms working with Hubba, the company said.
But Noelle Coak, Spaces country head for Thailand, Taiwan and South Korea, said demand is still strong in the Thai market.
Spaces launched a 1,260-square-metre complex at the Summer Hill community mall in the Phra Khanong area on March 22. It's also set to open a 2,169 sq m location on the 24th floor of Chamchuri Square in May. Three or four more Spaces are planned in Thailand by year-end, Ms Coak said.
But the company's strategy is not to be the largest player in the market, she said.
London-listed IWG, the parent company of Spaces, made a name for itself by providing upscale serviced offices in locations like Bhiraj Tower, All Seasons Place and Exchange Tower. Spaces represents a downmarket expansion that is affordable for startups and corporations looking to avoid large capital expenditures in permanent offices.
At Summer Hill, staff traded two-piece suits and Gucci belts for polos and stone-washed pants, in line with the casual vibe of the brand. Despite appearances, however, serviced offices will remain the bread and butter of the business. Some 25% of the complex is occupied by co-working and community spaces, while the rest is still dominated by individual offices.
"About 30 companies have set up shop in Summer Hill. They range from cryptocurrency startups and designers to law firms and large corporations," said Frederik Dhooge, area manager of Spaces. Based on the current deal rate (three or four spaces per day), the company should lease most of its remaining 66 offices in the next two months.
Prices range from 7,000 baht a month for a single-seat room, to close to 200,000 for a 20-employee corner office, Mr Dhooge said.
Renting out an office at Spaces is 80% cheaper than moving into an equivalent site in a traditional building, according to the company. Price, however, is negotiable and depends on the level of customisation a company chooses, and on the length of the lease. Companies can enlist their own designers, install hardwood floors and build offices in the inside of the leased space, among other things, Ms Coak said.
"Can you choose to have hardwood floors and an individual office for executives? Absolutely. Can you do it for one month? Absolutely," she said.
The first Spaces opened in Amsterdam in 2008, and the brand's first outlet in Southeast Asia opened in Singapore three years ago.
"The concept of co-working is not new," Ms Coak said. "I have been in this business since 1989."
But the industry is changing radically. IWG rival WeWork achieved a valuation of US$20 billion (624 billion baht) after Softbank invested $4.4 billion in the company last year. WeWork only operates 6% of the number of locations IWG does, making its value per location 75 times higher.
WeWork's stratospheric value is in part based on its promise to convert offices into communities, enabling the company to boost real estate prices in off-the-beaten track locations and sell customers additional services.
The company recently acquired Meetup, a website that lets users organise events and join communities. The company also branched out into the residential sector with its WeLive brand, which offers large common spaces and apartment-organised events, coupled with small rooms, most of which don't even have individual bathrooms.
IWG is also promoting community as an integral part of work.
A typical co-working environment at Spaces.