Wednesday, October 4, 2023

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Home Manufacturing And Construction The supply in China flexible workspace market has been growing at a...

The supply in China flexible workspace market has been growing at a CAGR of about 35% in 2019- Which Factors can make the industry more lucrative in the future? Ken Research

Listing flexible workspace brand on broker and aggregator portals can ensure targeting the right individuals, says a report by Ken Research

1. Emerging trend of flexible workspace in China- Leading factors.

China Flexible Workspace Industry

Preferred Space of Working in Other Countries

  • Start-ups are unsure about the sustainability of business which leads to requirement of office spaces on a flexible basis.
  • In Q1 2019, 5 out of the 20 most expensive office markets in the world were located in China.
  • Increasing number of freelancers and self employed individuals demand small office spaces and community to build business connections.
  • Enterprises are changing into ‘Hub and Spoke’ model; with corporate head office acting as a hub and flexible workspace act as spoke for employees to work remotely.

2. What are the existing gaps in China flexible workspace market?

China Co-Working Space Market

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  • Tier 1 city such as Shanghai and Beijing are facing the situation of oversupply. The number of start-ups, enterprises and MSME’s are continuously growing in China, which means that flexible workspace operators should provide value added services in order to attract growing workforce.
  • Currently, finance, banking and IT sector are the major occupiers of flexible workspace. In order to attract companies from other industries flexible workspace operators can develop co-working spaces for a particular target audience by developing the sector specific infrastructure.

3. Emerging flexible workspace business models in China to meet the gaps in market.China Co Working office Space Market

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Flexible Workspace operator signs a lease contract (10-20 years) with the landowner, and makes contractual payments following the terms written out in the lease.

Examples: WeWork, Regus, Ucommune, MyDreamPlus, etc.

Revenue sharing partnership between landowner and flexible workspace operator, where in majority of investment is made by the landowner and the management is completely taken care by the operator. The landowner gets the preferred returns as majority of investment is made by them.

Examples: Ucommune, Distrii, Atlas Workspace, Compass Office, etc.

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