Why are Coworking Spaces Experiencing High Occupancy Amidst the Weak Office Market? | Coworking Space Jakarta
/One of the interesting property market phenomenon in 2019 is the rapid growth of Coworking Space and Serviced Offices in Jakarta despite the weak office rental market. Coworking spaces are also the major players that have contributed to the new office space absorption in 2019. Not only that, Coworking Spaces have filled up every sector of the commercial office market in Jakarta --- from brand new Grade A buildings in the heart of Jakarta CBD, old office buildings, commercial shophouses, to repurposed historical buildings. Here are some reasons why the shared office market in Jakarta remains resilient despite the tough property market in 2019:
1. Growth of Startups in Indonesia
With the high rate of mobile phone penetration in Indonesia, Indonesia have experienced a rapid growth in the number of startups in the last few years. With Jakarta being the capital and the center of business of Indonesia, the growth of startups have largely been centered in Jakarta. Since startups, SMEs, and overseas companies are the main target markets for coworking spaces and serviced offices in Jakarta, the growth of startups have contributed positively to the growth of coworking spaces in Jakarta.
2. Startups Unwilling to Commit to Long Term Leases
With the amount of time money and energy spent on office fitting out and maintenance, companies typically need to commit to a longer lease term (3-5 years) to make the investment worth it. With the volatile nature of the startup business, it is not wise for startups to commit to long term office leases. The gives rise to the demand for shared office spaces like coworking space and serviced office in this growing startup scene.
3. Companies Want to Move In to Offices Fast
It typically takes a minimum of 6 months to lease, design, build and move into an office space. At a time when startups should be focusing on growing their business, the opportunity cost of spending time on office fitouts is too high. Serviced Office and Coworking Spaces in Jakarta are fully furnished and already equipped with all the basic infrastructure a company need to run (internet, pantry, meeting room, etc); companies only need to bring a laptop and they are ready to work. Hence, a lot of companies, especially startups and new businesses, are more willing to rent coworking spaces or serviced office as opposed to renting their own office.
4. Coworking Spaces Provide Better Value-for-Many Compared to Bare Office Leases
Coworking Space and Serviced Office leases typically already include a fully furnished office space space, daily cleaning, unlimited wifi, free flow refreshments, office manager, and more. Renting from coworking space and serviced office would also reduce the need to hire an office manager, receptionist, and cleaning service. Some serviced office and coworking space like Avenue8 even provide Concierge Service to help all of their members with the little things in life so that they can focus on their work. It can be said that Coworking Spaces and Serviced Office have done all the heavy lifting not only in building out the space, but also in managing the day to day operations of the office.
To provide even more value-for-money for its members, Avenue8 Offices provide a full Concierge Service to help members with little task so members can fully focus on their work. (Source: Avenue8 Offices)
5. Coworking Spaces Make Leasing Offices in CBD and Other Prime Areas Very Affordable
Sharing an office space with other companies means sharing the cost of the lease and office operations together. You would only be renting the exact space you need, nothing more and nothing less --- this makes it a lot more affordable for smaller companies to earn that CBD address!
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