Co-working office spaces are the latest hot commodity in town, with a number of existing ones in Phnom Penh already planning for expansion only a year or two into operations.
Although belated in jumping onto the shared office bandwagon, compared to Europe and North America, Asia Pacific is now rapidly catching up and surging ahead, with survey data showing 78 percent of co-working space operators in the region plan to expand this year compared to 62 percent worldwide. That's according to CBRE’s recent report on the rise of co-working space in APAC.
The report, titled ‘The Rise of Co-working Space in Asia Pacific: Boon or bane?’, noted that in China alone, industry heavyweight Wework launched an aggressive worldwide growth strategy last year, developing and utilising over 90 of its existing locations across the globe, said James Padden, manager for office services at CBRE Cambodia.
On home ground, CBRE has tracked 10 co-working spaces in Phnom Penh, Siem Reap, Sihanoukville and Battambang.
“Most co-working spaces have a ‘community manager’ focused on encouraging collaboration and engagement between users. This is one of the strengths of co-working space as it may be very easy to meet businesses or people who can support your enterprise,” Padden explained.
He estimated the daily rates in Phnom Penh to be between $5 and $10, while monthly rates range from $60 to $120.
While many of these spaces are just that – areas set up with tables and chairs, and some stations outfitted with desktop computers – a couple of co-working spaces in the capital go beyond the standard setup.
Since these shared offices are mostly inhabited by startups and digital nomads who look for alternative and affordable workspace options, operators are keen to make these spaces as unsterile as possible.
Networking is cited as the biggest advantage to being part of a co-working office space. “Everyone gets to know each other; sometimes people have the same ideas but different functions, so through knowing each other here they can team up to create something fully functional,” Chantra Be, co-founder and managing partner of interactive co-working space Emerald Hub, told Post Property.
Meanwhile, Laura Smitheman, co-founder and programs director of Impact Hub – another such interactive co-working space – also emphasised the point of networking: “[Our members] are paying to be part of a community which can help support their work and also become a source of new friends.”
Emerald Hub began operating in January 2016. In the space of one year, Be said plans are in the pipeline to open a second Emerald Hub at Boeung Keng Kang by March, in addition to a branch in a French colonial house in Kampot province this year.
“Currently we have 80-90 per cent capacity, and more members are demanding for team desks now,” said Be, adding that their Kampot branch will incorporate the partnership of a nearby boutique hotel that members can stay at when they finish working at the office.
This marketing strategy corresponds to a point highlighted in the CBRE report, which noted: “Co-working space operators should focus on building their brand to recruit new users, and improve their provision of amenities, creative shared spaces and value-added services and events.”
The 300-square metre Emerald Hub counts 25 local start-ups and two international fully functioning businesses among its members, private desks notwithstanding for solo workers. Besides monthly office parties, Be said he and his two co-founders also invite overseas speakers delving into topics spanning business, finance, digital and entrepreneurship.
Further, he added, “If any of the companies [here] want to pitch something, we will invite angel investors to come to a meeting and listen in.”
Be believes the co-working office space culture will only continue to proliferate “because there are a lot of young Cambodians who are really keen to put their ideas into action and follow their entrepreneurial dreams”, and there is no better place to kick-start than at co-working spaces. According to Padden, “Co-working can relieve a lot of the early financial pressures on startups during a stage when revenue may be inconsistent or even nonexistent.”
In a more global context, Impact Hub exists in 73 cities around the world, with Phnom Penh added to the list in 2015. Smitheman also views the market bullishly, and has observed a growing interest in the startup as well as co-working culture in Cambodia.
“In just under two years, we have had to move to a bigger location, expanded to another floor, and now we’re looking at a further expansion,” she said of the Hub’s current 280-square metre, two-storey space. It plays host to more than 200 members and, at any given time, 30 people utilise the space.
Operating a similar modus operandi as Emerald Hub, Impact’s co-founders and management team spend a large amount of time getting to know their members in order to connect them with relevant networks, as well as offering them added value like top-notch business coaches and networking events.
While Emerald has a more local-centric startup clientele, Impact caters to a wider audience. “56 percent of our community are aspiring entrepreneurs or startups, 24 percent are social enterprises and NGOs, and 16 percent are freelancers or researchers, all ranging from education and tech to fashion, investment and media,” Smitheman elaborated. Approximately 60 percent of the Hub’s community are Cambodian.
The rise in popularity of co-working spaces in Cambodia, particularly Phnom Penh, has raised questions on whether conventional, singular office space would be adversely impacted. However, CBRE’s Padden assured that, “Ultimately, co-working is a new segment offering a solution for modern working practices and startup companies. It will not compete directly with existing office stock as the occupiers are very different in nature with different business needs.”
Emerald’s Be agreed, saying, “Other office spaces and occupancy would actually increase because all these startups, when they become successful, will move on to bigger and better offices of their own.”
According to the CBRE report, the world’s current figure of 13,000 co-working spaces is forecast to rise to 37,000 by 2018.
“There is likely to be increased competitive pressure as more operators continue to enter the co-working field [in Cambodia], and potentially landlords with vacant space may develop their own brand to utilise this vacancy,” concluded Padden.