People work at a co-work space in Liaocheng,Shandong province,Oct 28, 2016. (Photo/China Daily)
Popularity of the co-work space business spreads like wildfire among entrepreneurs, stoking a new culture
These days, "Shanghai 189 Lane", Citic Capital's colorfully decorated and brightly illumined seven-story shopping complex in downtown Shanghai, sees an endless stream of young people entering and exiting, morning till late night. The year-end winter chill is no bar for them－but Christmas shopping isn't what they are here for.
They are the city's entrepreneurs and self-employed professionals, out to view the floor plans of the top two stories of the complex.
That's where lots of co-work spaces have been installed of late. Shanghai 189 Lane is one of the 200-odd co-work space sites that have mushroomed across the city.
Zhang Yueqiang, a startup co-founder who is expecting to launch a visual reality content design outfit soon, said: "I've visited 18 sites in Shanghai in the last one week, and I'm thinking of moving into one of them at the beginning of 2017. Some are offering discounted rates at the year-end. But my co-founder said we should visit some more as there are plenty of choices now.
"We need to choose the most cost-effective one, taking rental, location and services into consideration."
Convenient, flexible, and affordable, co-work spaces have become the first choice of many startups, freelancers, independent players and self-employed professionals on the lookout for offices in Beijing and Shanghai.
According to a research note by JLL, a real estate services provider, the number of co-work spaces in Beijing and Shanghai has jumped to over 500 from no more than 10 just five years ago.
A research note from Shanghai-based Ruiyi Consultancy Ltd said the co-work space market by floor space grew 71 precent annually on average from 2007 to 2015, and is projected to grow 68 percent annually from 2016 to 2018.
Companies from different fields such as real estate (UR Work, Soho 3Q), hospitality (Naked Hub which owns several resorts and hotel sites), and media (KrSpace) have entered the co-work space market and expanded quickly.
That's not all. Foreign brands in this segment like WeWork from the US are trying to meet China's rising demand for co-work spaces.
WeWork received $430 million in funding from China's Legend Holdings. The latter's private equity arm Hony Capital valued WeWork at more than $15 billion.
WeWork has opened two co-work sites in Shanghai. It is preparing to launch a third one now, and is also expanding to Beijing.