HCMC embraces coworking space concept

By Vu Le, Dat Nguyen   October 1, 2018 | 08:46 pm PT
HCMC embraces coworking space concept
Coworking space is becoming more popular to entrepreneurs in Vietnam. Photo courtesy of Toong
With the supply of traditional office space struggling to meet demand in HCMC, coworking spaces are becoming increasingly popular.

VnExpress' survey showed that a seat in a coworking space in Districts 1 and 3 costs $150-300 per month.

On Nguyen Dinh Chieu Street in District 3 the cost is $150-200, while in De Tham Street, which is popular with foreigners, it goes up to $200-300.

Rentals in Vietnam are lower than in most other cities in the Asia Pacific: they average over $400 a month in Shanghai, over $600 in Singapore and $1,500 in Hong Kong, according to real estate consultancy CBRE.

Operators of coworking spaces said their customers are mostly freelancers, entrepreneurs and market researchers from other countries.

They work for a short time in the city and only need a seat where they can work with their laptop, they said.

Coworking spaces are especially popular with Japanese market researchers since they have a minimalist working style and usually travel alone, they revealed.

As of April there were 23 coworking operators in Vietnam managing a total of 34 spaces, said CBRE.

Growth has averaged 55 percent a year over the last five years, and the number of spaces is likely to reach 45 by the end of this year, it noted.

Drawing attention

The growth in Vietnam is attracting increasing attention from international firms.

Real estate service firm Jones Lang LaSalle said last month that WeWork, the third largest startup in the U.S., plans to open a coworking space in HCMC later this year.

It will be the largest in Vietnam at 5,000 square meters.

WeWork acquired Chinese coworking space firm Naked Hub for $400 million last April, expanding its reach into the Asian market.

The Hive, a Hong Kong-based operator, is planning to open a new facility by the end of this year in HCMC, according to CBRE.

The company already has one office on Xuan Thuy Street in the city’s District 2.

Major local operators like Toong, UP, Circo, and Dreamplex have all stepped up their rate of expansion, and the number of smaller operators with just one venue is also increasing.

Nguyen Hong Hai, CEO of office rental service Pax Sky, said coworking spaces are now popular because the supply of office space in HCMC’s central districts is not meeting demand because of a rising wave of entrepreneurs coming there.

He told VnExpress that grade A office space in the city costs $50-60 per square meter plus tax a month, and grade B office space, $22-30.

But occupancy rates of over 95 percent mean customers have to wait for a long time to find a good place, he said.

There is still a lot of untapped potential in the coworking industry in HCMC because of its very vibrant entrepreneurship scene, he added.

In Vietnam, 91 percent of people using coworking space are below 35 years of age, according to a CBRE study last year.

This proportion is a lot higher than the global average of 67 percent and reflects the nation’s young demographics, creating robust demand, it said.

Around 54 percent of coworking space users in Hanoi and Ho Chi Minh City are either founders or employees of start-ups, and approximately 14 percent are self-employed freelancers, it added.

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