AS flexible working arrangements become more entrenched in today’s workplace, coworking space firms are seeing an opportunity for them to be the real estate solution provider for companies.

       Coming out of the pandemic, businesses are generally looking to reconfigure their workforce and work space needs and some may opt to leverage coworking spaces rather than manage their own offices.

       Coworking space providers are already experiencing an uptick in business and are looking to expand their footprint.

       Just this week, it was reported that Colony Space Asia Sdn Bhd had signed a six-year co-working space deal with Malaysia’s first tech unicorn Carsome, involving 41,860sq ft of office space across four floors of KYM Tower in Mutiara Damansara.

       And last month, Johor-based Infinity8 expanded into the Klang Valley with an 11,000sq ft outlet in MyTOWN, Kuala Lumpur to seize the growing demand here.

       Although it is a new entrant to the central region, Infinity8 co-founder and chief executive officer Lee Sheah Liang says the company has built up its own capabilities to help it establish its footing in the Klang Valley.

       “The Klang Valley is a very different market in terms of size and dynamic compared to Johor. It’s not as heavily influenced by the Singaporean market and the market here is also much larger in size and volume.

       “Our competitive advantage would be to continue building different offerings to cater to different clientele as we have been doing since we started a few years ago in Johor. For example, our reserve series flexible workspaces were designed to cater for multinational corporations (MNCs) and bigger enterprises while the coworking series flexible workspaces caters for small and micro enterprises as well as startups.

       “We see that the flexible workspace industry will be growing steadily out of this pandemic as companies put a lot of prioritisation on flexibility,” he shares.

       Lee’s optimism is matched by Worq’s co-founder and CEO, Stephanie Ping.

       Ping points out that the work trend now no longer just differentiates between working from home and working from an office. Instead, it calls for more flexibility and many are opting for hybrid work arrangements.

       “Hence, there are definitely still demands for flexible workspace or coworking space in Malaysia.

       “With the flexible nature of coworking, companies are also seeing this as an option for business continuity and business sustainability. This gives advantages to the players in the market as it is still a fairly large untapped market for coworking space in Malaysia,” she says.

       For sure, this is a different scenario from two years ago when the lockdowns were first imposed to contain the spread of Covid-19.

       Lee notes that the take-up rate at its outlets was affected during the first movement control order in March 2020 and continued to fluctuate with the different reimposition of movement restrictions.

       However, demand has started to stabilise as more companies become adept at navigating through the pandemic. In fact, take-up rate has grown in comparison to pre-pandemic times as flexible space becomes more sought after.

       To date, most of Infinity8’s branches are enjoying about 85%-95% occupancy.

       “We foresee this high occupancy rate will sustain in the coming years, driven by the increasing demand of companies’ approach to separate work force and the switch to hybrid work mode, which is highly likely to be a permanent norm,” says Lee.

       Infinity8 has sealed several deals following its expansion into the Klang Valley, which brings its combined space under management to over 100,000 sq ft. It is also looking to acquire more spaces in the months to come.

       While space expansion took a backseat for Worq during the pandemic, it ventured into the digital community space through the launch of its SPARQ app, which enabled people to connect, meet and collaborate virtually – a key appeal that coworking spaces offered entrepreneurs and start-ups prior to the lockdowns.

       Ping says Worq achieved a 45% growth in both internal and the wider community last year through a series of virtual events, collaborations and outreach activities where businesses can leverage and support one another.

       But with physical space coming back into vogue, she says the company’s cautious approach over the past year will enable it to grow further.

       “We are very fortunate to have made calculated moves throughout the pandemic that have placed us in a healthy financial situation and are allowing us to make aggressive moves in the coming years to increase our market share and overall presence.

       “We have definitely learned a few things from the pandemic through trials and errors, to pivot and refocus to grow trajectory. The growth may have slowed down temporarily as what we had experienced from the pandemic was unprecedented.

       “However, on the bright side, the pandemic has also created a new demand due to the tremendous shift in the way we work. With organisations rethinking the definition of ‘office space’ and are seriously considering pivoting to a more flexible working environment, we are already seeing a steady increase of active inquiries and interest in engaging coworking space as their real estate provider,” she adds.

       Because there is so much potential in the flexi-space market, Ping says property developers are also increasingly integrating coworking spaces into their township planning – some may dedicate common areas in high-rise projects as “workspace” for residents and market it as part of the available facilities.

       Given the growing prospects, coworking operators – both international and local – are mushrooming in Malaysia. While this may mean added competition in the market, Ping says each player has its unique selling point and appeals to various target audiences.

       However, she notes that the industry has also seen quite a few players let go of some of their spaces in the face of occupancy challenges over the last two years. Following that, the industry is currently going through some consolidation as weaker tier-two local players are being forced to downsize.

       “Despite this, Worq’s approach of having a stable business strategy has allowed us to expand and grow our enterprise pipeline. Worq is more than a coworking space whereby our enterprise team also provides consulting services for organisations on how to manage their real estates.

       “As for our coworking space, the flexibility of our products and ability to assist businesses to move in with a short turnaround time positions Worq as a business continuity solution. We have also launched Flexi Team Solutions where businesses are able to reduce cost on infrequent use of office space and optimise spending to only pay for what they use when they use it.”

       With demand for coworking spaces increasing in prominence, operators are seeing a good mix of startups, SMEs, MNCs and gig workers in their customer base.

       This will mean better diversification strategies for operators and, perhaps, enable better sustainability moving forward.

       “The lessons that we have learned through this pandemic is that the only thing that’s certain is that the market will constantly evolve, and in a speedier manner due to the push brought about by the pandemic. What used to be relevant months ago might very well be obsolete now.

       “So we have been guided by the principle of business diversification, but ensuring that it still revolves around our core competency. This is what has guided us to sail through this pandemic,” says Lee.