UK-based Workthere, a website listing platform and brokerage services, has entered the Vietnamese market to help businesses find flexible, co-working and serviced office spaces in a country where co-working has expanded rapidly.
Like many others, Workthere sees the potential of the market. Last year, there were about 60 co-working spaces in Vietnam. Between 2018 and 2019, realty firm Savills reported that the supply of co-working space increased by 64 per cent.
The rise in the number of co-working locations across Vietnam has been driven by the growth of start-ups. As more than 30 per cent of the population are under 34 years old in Vietnam, co-working spaces that offer a unique work environment can help attract talent to join organisations.
CBRE Vietnam Consultancy Services director Nguyen Hoai An told Viet Nam News that as millenials account for 91 per cent of clients in local co-working spaces – much higher than the global average of 67 per cent – more firms are bound to join the market to meet demand.
It also meets the need for cost-effective spaces of small and medium-sized enterprises, which account for more than 90 per cent of local enterprises.
According to the National Agency for Business Registration, in the first nine months of this year, more than 100,000 new businesses were registered in Vietnam, a 5.9 per cent year-on-year increase.
Co-working will undoubtedly continue to evolve to match the economic and business cycle and respond to changes in the way millennials work, said Savills Hanoi Commercial Leasing associate director Bui Trung Kien.
Workthere Asia-Pacific head Yann Deschamps told Viet Nam News: “Demand for flexible office space in Vietnam will continue to be driven by freelancers, local and international start-ups, and small corporates. International start-ups, digital nomads and freelancers seeking affordable workplaces could also consider relocating to Vietnam to grow their businesses.”
The growing market includes local names like Toong, Up, and Dreamplex, CoGo as well as foreign operators like Regus (UK), Hive (Hong Kong), CEO Suite (South Korea), Klouds (Singapore) and WeWork (US).
Expanding to Asia, WeWork – as the hottest name in the co-working market – last year opened its first facilities in Ho Chi Minh City with plans to open 10 nationwide. A WeWork insider declined to respond to further Viet Nam News inquiries about the current expansion.
However, she posted an image on her Facebook page of an ongoing construction with the WeWork logo and a caption “new kid on the block”.
Local firms branching out
With more foreign footprints in the Vietnamese industry, local start-ups have been eyeing opportunities in the region.
Aside from its facilities in Hanoi, Ho Chi Minh City and Nha Trang, Indochina Capital-backed Toong has operated a co-working space in Vientiane, Laos since June and plans another for Cambodia.
Toong marketing director Hoai Pham told Viet Nam News that the region has huge potential – the firm received booking orders for its Vientiane facility even as construction was ongoing.
Hoai said that Laos and Cambodia have a smaller start-up community than in other markets, with most customers there being foreign companies.
Local co-working space company UPGen, with the backing of Singapore-based Northstar Group, expanded in the region with new locations in Bangkok, Thailand and Kuala Lumpur, said the company’s marketing head Dang Phuong Linh, adding that the firm is prepared to enter Hong Kong and Singapore “soon”.
UPGen currently operates 80,000sqm of spaces in 21 facilities, of which 18 are in Vietnam. Its tenants include top Vietnamese tech companies like Tiki, BE Group and Yeah1, as well as Standard Chartered Bank (Vietnam) Ltd.
Linh told Viet Nam News: “We see opportunity in fast developing markets like Jakarta, Manila and Myanmar.”
The company is also a strategic partner of commercial lender Vietnam Prosperity Joint Stock Commercial Bank.
VIET NAM NEWS/ASIA NEWS NETWORK