The Malaysian office market is undergoing a rapid transformation, driven by the increasing popularity of coworking spaces. The aftermath of the pandemic has led to an oversupply of office space in Kuala Lumpur, with the total office space at 139.4 million square feet, surpassing the pre-pandemic levels of 132.1 million square feet. With the increasing cost of office space, more and more companies are exploring cheaper alternatives, such as working from home or using coworking spaces. This trend has resulted in a decline in office occupancy rates due to the significant increase in supply without a matching increase in demand.
Nevertheless, as the country gradually regains its economic momentum, many rental rates are returning to normal, and office tenants are slowly returning as well. As the corporate landscape shifts, office spaces are redefining their purpose. However, the demand for flexible workspace arrangements remains strong. Amid these changes, coworking spaces are made available for everyone, and one name has consistently risen to the forefront in the Malaysian coworking scene – WORQ.
Capitalising on current real estate trends and reimagining vacant spaces
Prior to the pandemic, office spaces were said to be hubs for productivity, culture, and collaboration. But now, almost 3 years after the pandemic and continuous lockdowns, ideas and trends are shifting. According to a report, the Malaysian office market has grappled with an office space glut due to vacant office spaces, particularly in Kuala Lumpur and the Klang Valley area, with approximately 33 million square feet of unoccupied office space.
How unicorns and startups in Southeast Asia are harnessing cloud technology for growth
But now, there is a significant shift. According to survey data from property consultants Knight Frank, there is a trend toward reduced office space over the next three years, offering cost-saving advantages. The reason for this? The evolving nature of post-pandemic work dynamics has prompted companies, regardless of their size, to shift to more flexible and affordable spaces and international employers to reconsider their office space strategies.
This shift in trends has raised concerns about the amount of office space that may become obsolete in cities around the world. While there remains a demand for cutting-edge office structures that entice employees to return, individuals now, especially smaller companies or startups, seek workspaces that prioritise flexibility, a conducive environment, affordable rental rates, and the opportunity to freely collaborate and network with various companies, rather than being confined to a single workspace.
Every coworking space provider needs to know that coworking spaces are more than simply offices. It is a place where businesses gather to exchange knowledge, work together, and create. It is an ecosystem where startups and entrepreneurs may find the help and resources they require to thrive.
Analysing trends and achieving high occupancy rates
As the demand for coworking spaces increases, staying ahead of the curve and meticulously analysing trends are the cornerstones of success. Optimising user experiences and enhancing service offerings is rooted in a data-driven philosophy. Understanding customers’ evolving needs is paramount to providing tailored solutions that maximise their workspace investments.
Likewise, the ability to foresee and develop a deep understanding of market trends is equally essential for developing creative solutions to meet changing market conditions and remain competitive over time. All touchpoints, such as space design, pricing range, community, location, and facilities, must operate smoothly together for a thriving coworking environment.
There is a growing commitment to developing flexible, business-ready environments to ensure coworking spaces remain relevant and indispensable to their users. These facilities go beyond simple workstations by providing a wide range of business support and technology solutions suited for startups and entrepreneurs. Users seeking more than simply a workplace naturally go towards coworking spaces that value collaboration and innovation.
Malaysia has seen an influx of firms, especially global corporations, choosing the country as their preferred commercial base as a result of these activities. This strategic move has not only attracted multinational corporations but has also created new job prospects for the local workforce. Malaysians, in turn, have earned excellent opportunities for upskilling and advancement throughout the value chain as they become more active participants in global marketplaces. This trend towards a more inventive and entrepreneurial environment is consistent with Malaysia’s ambitions to become a major global centre for corporate innovation and excellence.
The future of coworking spaces
Coworking spaces are changing to meet the requirements of individuals and communities. They are now tailored to their clients’ working styles, cultures, and consumer patterns. Local management ensures a better grasp of the context of the community, resulting in hyperlocal solutions influenced by diverse backgrounds. These environments are developed from the ground-up approach and are frequently user-built and managed, allowing for an emphasis on crucial details and user-centric design. Continuous innovation is prioritised to provide value to all stakeholders, including users, owners, and the community.
It is undeniable that the nature of employment is changing. Work looks different now than ever, thanks to the advancement of technology, the booming gig economy, asynchronous collaboration tools, hybrid work structures, the popularity of coworking spaces, and the change to a job seeker’s market. This change has already started and will only become apparent over the next few years.
The number of coworking spaces has also increased with the growth of remote work. Although the current market penetration for coworking spaces in Kuala Lumpur is at just 1%, JLL Research reports that it is expected to reach a 30% penetration rate by 2030. This shows that coworking spaces are popular for good reason; they offer many advantages ideal for today’s modern workforce.
This article titled “The rise of coworking spaces in Malaysia: A trend driven by flexibility, affordability, and community” was contributed by Stephanie Ping, CEO and co-founder of WORQ
About the author
Stephanie Ping is the co-founder & CEO of WORQ, a hyper-localized community workspace founded in March 2017 with a vision of helping individuals achieve greater results by working together. WORQ aims to bring new opportunities to businesses and entrepreneurs by fostering meaningful connections for its members and the surrounding community. She graduated from Stanford University with a B.A. in Economics and M.S. in Management Science & Engineering, where her experience with Stanford’s entrepreneurship community played a significant role in shaping her vision for WORQ’s entrepreneurial community. Stephanie is the award recipient of the Malaysian Venture Capital Association’s Outstanding Female Entrepreneur of 2019. Till date, WORQ has bagged 5 prestigious awards, including the coworker member’s choice awards for two consecutive years.