Vietnam set for co-working office boom
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With both local and international operators strongly expanding into co-working in Vietnam, the industry is expected to develop rapidly, experts have said.
An office building for lease in Ha Noi. Co-working offices are in great demand thanks to the flexibility, creativity and amenities tenants get. It also offers a far more cost-effective solution for tenants compared to traditional leased office space.
They said the development of this new segment in the property market is being driven by start-ups, freelancers and increasingly by small companies.
Vu Cam Giang, co-founder of Moonwork co-working space in Ha Noi, told that initially co-working had attracted students, employees allowed to work from home, start-ups, freelancers and artists who were curious about the new experience.
But now only start-ups and freelancers hire co-working space, with many of them needing a place where they can bounce things of each other or explore co-operation opportunities, she said.
Since it was launched more than a year ago her co-working space has been always full, indicating the high demand, she said.
A recent report from property consultant CBRE Vietnam said the co-working segment has grown rapidly in Ha Noi and HCM City since it was first introduced in 2012 and started to gain traction in 2015 with the entry of local operators Toong and Dreamplex.
The report said there are now 17 co-working space operators with 22 venues, all but one local, but the situation is set to change with the entry of regional operators later this year and in 2018.
“Talking about the growth, the report said the global co-working industry has been growing at 53 per cent a year for the last five years.”
Talking about the growth, the report said the global co-working industry has been growing at 53 per cent a year for the last five years. In Vietnam the rate has been 58 per cent.
But with the concept still being relatively new in the country, and major regional and international operators yet to enter, the rate is set to accelerate, it said.
Co-working offices are in great demand thanks to the flexibility, creativity and amenities tenants get. It also offers a far more cost-effective solution for tenants compared to traditional leased office space.
Office rents now range between $1,100 and $1,400 per month.
Besides, co-working tenants do not have to shell out money for furnishing or even buying computers and other office equipment.
CBRE said the cost of co-working space varies across cities, and is less in Ha Noi and HCM City than most other cities in the Asia Pacific.
But the offices are generally not located in prime buildings or areas since operators seek to keep rental costs low. They are often situated in underutilised buildings in non-central locations, it said.
The entry of larger operators would likely usher in a period of consolidation and M&A activity within the industry, forcing poorly managed or unsuitable co-working spaces out of the market and improving the quality of existing operators, it said.
“With the development of start-ups and freelancers and people’s changing perception in choosing working space, the co-working segment will continue to expand in Vietnam,” Giang said.
Questions & Answers
Q.What is driving the rapid development of the co-working segment in Vietnam?
What is driving the rapid development of the co-working segment in Vietnam?
Start-ups, freelancers, and small companies are primarily driving this new segment. Initially, it also attracted students, home workers, and artists curious about the experience.
Q.How has the growth of co-working spaces in Vietnam compared to global trends?
How has the growth of co-working spaces in Vietnam compared to global trends?
The co-working industry in Vietnam has grown at 58% annually, slightly higher than the global rate of 53% over the last five years. This rate is expected to accelerate further.
Q.What are the typical characteristics of co-working office locations in Vietnam?
What are the typical characteristics of co-working office locations in Vietnam?
Co-working offices are generally not in prime buildings or central areas. Operators aim to keep rental costs low by often locating them in underutilised buildings in non-central locations.