FLEXIBLE workspace operators should consider expansion in shopping malls, as well as partnerships with hotel operators and worker dormitories to address the growing demand, according to Colliers International.
In its report “Let’s Get Flexible,” Colliers said flexible working space operators are mostly in Fort Bonifacio, Ortigas, and Makati central business districts (CBD) mainly due to accessibility.
The report showed Fort Bonifacio has the highest ratio of total leasable space to flexible workspace with 123,000 sq.m., followed by Ortigas CBD with 51,000 sq.m. and Makati CBD with 39,000 sq.m.
Monthly leasing rates at flexible workspaces range from P10,000 per seat to P23,000 per seat, depending on the location.
“As flexible workspace operators compete with traditional office tenants for available space in the CBDs, flexible workspace providers have started to take up space along the fringes of the more established CBDs,” Colliers said.
But future flexible workspaces will still be located in Makati, Ortigas and Fort Bonifacio, as Colliers noted that these areas are scheduled to account for a combined 51% of the new office space in the next two to three years.
PARTNERSHIPS
To keep up with rising demand, Colliers said flexible workspace operators should look at leasing spaces in malls like Ayala Land, Inc.’s (ALI) Arca South mall at Taguig City; Aseana Mall (a joint venture of ALI and D.M. Wenceslao and Associate, Inc. (DMWAI); and the expansion of SM Mall of Asia (MoA).
“Flexible workspace and mall operators should partner and provide discounted rates to in-mall retail shops,” it said.
The Manila Bay Area, where Aseana Mall and MoA are located, is poised to become a major flexible workspace hub within the next two years, “given the tight office vacancy and continuous absorption from outsourcing and traditional office occupiers; as well as the aggressive completion of new condominium units,” Colliers said.
Flexible workspace operators are also urged to team up with hotels and worker dormitories to provide temporary workspaces for travellers and dorm residents.
For instance, Savoy Hotel and Lubd currently offer co-working spaces for guests.
“We encourage flexible workspace operators to tie up with developers of worker dormitories as this kind of service will likely be appealing to millennials that require temporary workspaces from their offices, especially those that can work from home,” Colliers said.
Also, Colliers noted major property developers should allocate space for flexible workspace operators in their developments, following the example of Rockwell Land Corp.
“Rockwell Land’s decision to accommodate Common Ground in the penthouse of its 8 Rockwell building indicates strong demand for flexible workspaces in an integrated community such as Rockwell Center. This is also an opportunity for Rockwell to house multinational firms and other high-profile tenants looking for flexible workspace in the fringes of Makati CBD,” it said.
Common Ground, Malaysia’s largest co-working operator, is set to open its facility in Rockwell by the end of January.
Flexible workspace providers should also to work with local governments of second-tier cities like Cebu, Bacolod, Iloilo, Clark, Pampanga, Laguna, and Davao, Colliers said.
“The project teams of outsourcing firms could start operating in co-working facilities in these cities where they could train college students that the BPOs could tap in the future,” it noted. — V.M.P. Galang

FLEXIBLE WORKING spaces seem to be popping up all over the metropolis, but how can they distinguish themselves in an increasingly competitive market?
Commercial real estate services company Cushman & Wakefield Philippines Inc. said flexible workspace operators for serviced offices and co-working spaces can differentiate themselves in terms of niche, space and value-added services.
“With a growing number of operators, both homegrown and foreign, serving the Philippines, differentiation strategies are vital,” Cushman & Wakefield said in its study “Standing out: Differentiation Strategies of Flexible Workspace Operators in Manila.”
Flexible workspace operators should first determine their target market.
“Operators have also realized that despite selecting a niche, their target market do not always end up being their only regular clients — they come from all sorts of industries. Although, identifying the target market is still essential as this provides basis on how to craft the service offerings that the operator will provide, including aspects such as location, visual appeal, and cost,” the commercial real estate services firm said.
While many focus on serviced offices, some new foreign entrants are offering a hybrid model with both private offices and hot desks that allow them to attract individual and corporate clients.
Location is also important, and will depend on the target market. The report showed serviced offices and hybrid flexible workspaces targeting corporate clients are mostly in business districts, such as Makati, Bonifacio Global City, and Ortigas Center.
On the other hand, co-working spaces targeting freelancers, start-ups, small businesses and students are usually found near residential areas in Metro Manila.
Rates of flexible workspaces would also depend on the target market and the location. For instance, a seat at a flexible workplace in Manila will range from P35-P50 per hour, while in Makati, the rates will range from P100 to P700 per hour.
SPACE
Flexible workspace operators can also differentiate themselves with ambience of the office, either professional, creative, or relaxed.
Serviced offices in business districts usually adopt a professional look, as they mainly target corporate clients.
To gain an edge over competitors, Cushman & Wakefield said operators can also offer value-added services such as food and beverage, 24-hour service, accommodation, support services, and events, on top of the usual amenities.
“Particularly applicable to flexible workspaces with 24-hour operations is the need for providing sleeping quarters for its users,” the commercial real estate services firm said.
Food and beverage services also play an important factor in attracting clients. Aside from the usual free coffee, some have in-house food stalls, while some allow food deliveries and even offer alcoholic beverages to their clients.
Some flexible workspace operators have also become “one-stop-shops” for business registration, provide information and technology, administrative, human resource, accounting, legal, and marketing services to their clients.
Cushman & Wakefield expect flexible workspaces to continue its growth in the Philippines, with many operators adopting a hybrid model since it can cater to both individual and corporate clients.
“Flexible workspaces are here to stay, and a lot of improvements are anticipated. As this sector develops, more operators are predicted to enter the scene. As this happens, operators who fail to stabilize their businesses would find themselves losing the game,” Cushman & Wakefield said.
“In the end, differentiation is the key to achieve sustainability.” — V.M.P. Galang