Surviving The Pandemic

Kuala Lumpur, Nov 24: How did co-working spaces survived the pandemic? By pivoting their business offering of course! Malaysian-owned WORQ, a co-working space was one such company that has been able to withstand the impact of the coronavirus pandemic and they did that by pivoting their offerings. With all of its locations still active, WORQ is one of the very few co-working brands in the world that has come out of the pandemic relatively – unscathed. This was no accident as the business has always thrived on innovation with their quick adoption of the hybrid model and enterprise solution, helping them maintain their business even at the height of the pandemic when there were multiple lockdowns. Since the start of this year, WORQ has already achieved an average occupancy rate of 70 per cent with even more enquiries being generated per month for its co-working spaces.

As more sectors re-open after the MCO (movement control order), WORQ is now looking to restart on its growth and expansion plans. On that note, we recently spoke with Stephanie Ping, the CEO and co-founder of WORQ on a myriad of things including its expansion plans. Read the full and exclusive interview below.

In a nutshell please explain the idea behind WORQ and the reason behind the unique spelling of the brand name?

WORQ Coworking Space wants to change the way people work together – for the better. We aim to create the largest and most productive coworking community by taking care of all your workplace needs and facilitating deeper connections. At the same time, we want to make work fun and the memories of working together memorable. Thus, we name our coworking space – WORQ, sharing the same pronunciation of “work.” What better way to celebrate a mission to innovate the future of work with this!
Even though the idea of renting and re-renting spaces has been done by service offices and landlords such as REITs for a long time, we decided to do something unprecedented in the world of the real estate provider – to make the success of our space renters our life’s mission.  As part of our goal to disrupt the real estate market, we set out on a novel action plan to establish WORQ as a hyper-localised community creation business. By thinking on behalf of entrepreneurs and building a rich ecosystem, we were able to power a custom-built community that services specific localised communities all throughout Malaysia. As our societies transform towards the future digital economy, the impact of what we bring to the market is huge. We strongly believe that providing people with supercharged work life is extremely important to anyone who needs to make a living. 

Who are some of WORQ’s clientele?

You will be surprised by the people you meet in our space and community! We service not only start-ups and freelancers but also SMEs and corporates due to the way we nurture and build the brand. Because WORQ is a hyper-localised business community, freelancers, entrepreneurs, SMEs and corporates are able to converge and collaborate under one roof. Our members are able to enjoy stress-free real estate and opportunities to leverage on a community, to supercharge each and every co-worker in its space and across its networks. These are the benefits that one may not be able to get by working at a cafe.  Additionally, WORQ offers Enterprise Solutions to assist corporates in creating their ideal office solution, tailored and customised to their needs. Our flexibility in operation and cost optimisation, allowing them to be agile in this fast-changing environment. Moreover, ever since the pandemic where most people are working remotely from home (WFH), we see the trends of businesses reviewing their real estate and opting to use co-working spaces to support their employees with alternate sites for collaborative works and meetings.

What are the membership fees like?

WORQ provides monthly membership for your workspace needs. You can choose to sign up for a Hotdesk, Dedicated Desk, Private Suite or Virtual Office to suit your budget and needs. Of course, we do also provide non-subscription products such as Day Pass, meeting room an event space rental. These are products that the public may access without a monthly membership fee. WORQ members will be able to enjoy member discounts when they require meeting rooms and event space. We would like to extend our current promotion to DailyStraits readers to experience WORQ! All you need to do is include the promo code WORQDAILYST21 in the remark column of the enquiry form here and our team will contact you via phone to confirm your complimentary weekly pass.

There are quite a number of co-working spaces in KL now so how does WORQ stand out from the crowd?

Our tight-knit community would be our selling point. We’re all about community and we intend to create a self-sustaining business community in the long run. When members sign up with us, the first thing they have access to is our resource list and all the other businesses and partnerships we have. This itself is so valuable for a startup, gig workers, SME businesses.  WORQ’s heart is for the community in our space, and that is that. Everything else is tailored to enhance that experience from our design of the space, facilities (think sleeping pods), locations and the events planned. It goes beyond the aesthetics and mundane, but really, what is functional and optimal for a business and person to thrive in today’s fast-paced environment. We truly believe in the power of networking while embracing diversity, and ultimately, the impact of a genuine and lasting human connection. 

What are the pros and cons of utilizing co-working spaces?

The pandemic has caused a tremendous shift in the way we work. Companies are rethinking the definition of ‘office space’ and are seriously considering pivoting to a more flexible working environment. With the increasing awareness of opting for a coworking space as an option, we present you with the pros and cons of this choice. By opting for a coworking space, you get to enjoy affordable on-demand real estate for your business. No more being tied down with two to three years long tenure as we allow tenure as short as one month for our Hot Desk members! As we are an on-demand solution, you can pay as you use it. Companies are allowed to expand and downsize according to business needs.  Companies are able to save costs in the long run and optimise their spending for business sustainability. It is an estimated saving of 30-40 percent of CAPEX. Companies are able to move into a fully furnished office with business amenities minus the cost of renovation, furnishing and reinstating it if they wish to move to another office. Coworking spaces are often known for their modern interior, large windows with lots of sunlight with workspace and common areas designed to encourage productivity and collaboration. The environment provides a conducive working environment and helps with attracting talents for its members. Not forgetting also to say goodbye to the hassle of maintaining and managing your office. Coworking spaces have a team of professionals to handle all the operational matters from manning the reception, mail handling, cleaning and sanitising, stocking up the pantry, fixing the toilet, etc. You can now focus on running your business instead. Most importantly, by joining a coworking space such as WORQ, you will be a part of a vibrant and supportive community. Every community event and partnership curated aims to foster deeper connections. Curated events can be found organised by the coworking space’s community team to share knowledge, break the ice and meet new people. Up to date, WORQ has two flagship events – NetWORQ Party and Entrepreneur Quriousity Series (also known as EQ Series). NetWORQ Party is an assisted business matchmaking event where we invite not only our community members but the wider community and the public as well. EQ Series on the other hand runs on an Ask-Me-Anything format where we invited industry or subject matter experts as panellists to answer the questions from the audiences. Besides that, being part of the coworking space community means that you will also be getting access to the rich business resource, network and ecosystem. Tap into partnerships that WORQ has with various government agencies like MDEC, Cradle, MaGIC, SIDEC for learning resources, funding alerts and programmes available. This especially benefits gig workers, entrepreneurs and even employees of the companies. There is nothing much for the downside of going with a coworking space except that the amenities and common areas are on a sharing basis. There may be times where resources such as meeting rooms, phone booths are not available whenever you need them. Some may also argue that getting a private office space in a coworking space may be expensive compared to a conventional office shop lot, however back to the previous point about saving CAPEX; renting a coworking space does save more in the long run where you can use the savings to expand your business.

People now prefer to work from home as compared to the office and has this new wave of thinking put a dent on your business in any way?

For the past year, both organisations and individuals have been impacted by the pandemic. Companies responded to the disruption with Work From Home (WFH), however as the duration prolongs, many find it counterproductive and exhausting, especially those staying with families and little children, or even businesses that were not equipped to work virtually. During the lockdown period, WORQ often receives enquiries from the public about whether they can get a Day Pass to work in our space. This proves that many are looking to break away from home and cafes because they are in need of a conducive environment to work. This is further supported by a report published by SEEK Asia – Decoding Global Ways Of Working, where we find 68 per cent of the Malaysia workforce prefers to work with a combination of remote and on-site working. Instead of putting a dent in our business, WORQ sees it as an opportunity to pivot and grow our audience base and come back stronger. Furthermore, the work trend now no longer talks about working from home or working from an office. It calls for more flexibility and many opt for hybrid work arrangements. WORQ’s flexible workspace solution, business nature and workspace designs provide organisations and individuals answers to a third space that provides a conducive working environment where they can do face-to-face collaborative working such as brainstorming, discussions with their colleagues. 

WORQ is co-founded by yourself and Andrew Yeow. How did the two of you meet and what drove the both of you to want to start this business together?

I am a believer in serendipitous encounters. In 2016, I was catching up with Andrew (my future co-founder) at a coffee shop in Empire Mall, Subang, when he said to me, “I want to disrupt the real estate market, but I want to do it profitably.” My heart raced. I knew that Andrew knows what he is talking about based on his work experience. Graduated from the University of Michigan with a degree in Financial Engineering, Andrew was previously a Fund Manager at CIMB-Principal. He rose from an Associate to Fund Manager within three years and was tasked to manage a fund worth RM30mil. As a banking analyst, 70 percent of his stock calls were ahead of market consensus, which helped optimise capital allocation for his clients. It was clear we shared a vision. Whilst the idea of renting and re-renting spaces has been done by service offices and landlords such as REITs for a long time, we decided to do something unprecedented in the world of the real estate provider – to make the success of our space renters our life’s mission. We set out on a novel action plan to establish WORQ, one of the first co-working spaces in Malaysia. Geared to be a hyper-localised community creation business,  we took the task of thinking on behalf of entrepreneurs and building a rich ecosystem, one that services specific localised communities all throughout Malaysia. I sincerely believe that people can prosper by working together. We want to help businesses in Malaysia grow and thrive by building a supportive community within an energetic workspace.

Who are your competitors?

Real Estate is a fairly localised competitive environment. The traditional serviced office players such as Regus and Servcorp form part of the competitive pool. It is, however, necessary to highlight that these incumbents are taking a longer time to transform themselves. Coworking is part of the answer to what the future of work looks like. In the coworking space, our competitors would be Common Ground and Colony. There are also key regional players like Wework and Justco. But their presence in Malaysia is fairly muted currently due to the emphasis on core developed markets.

What is your market share?

As of 2020, WORQ’s 100,000 sqft managed space is 10 per cent of the market share for Flexi space in Malaysia. Coming to 2021, our market share will have increased due to the recent outlet closures made by competitors as a result of the tough Covid trading environment. 

What are some of your expansion plans ?

As a company that aims to revolutionise the co-working environment, our mission is to stay true to our core values of having a stable business strategy while championing growth and change. The pandemic has slowed down our risk-taking in the shorter term, but we are gearing to accelerate this towards the first quarter of next year as we seek to materialise our expansion plans to achieve one million sqft of physical space under management within five years. Below is a chart to illustrate the state of the industry for coworking.

This is why we were able to secure seven follow-on investors, as well as loan offers from six banks, despite being in the middle of the COVID-19 pandemic. Investors view our business not just as one that is able to grow, but one with very limited downside. We are quickly reaching the inflection point as reflected on the diagram above where the weaker players are squeezed out of the market and the key players seek to quickly consolidate. Communities also exist within the digital realm, and while physical space expansion took a backseat during the pandemic, we at WORQ ventured into the digital community space through the launching of our SPARQ App. SPARQ powers the digital community allowing people to connect, meet and collaborate virtually. This is in line with our vision, to prosper by working together.

How many people are utilising your co-working space to date?

As of today, WORQ has approximately 1,000 members working across our four outlets – WORQ Subang, WORQ TTDI, WORQ KL Gateway, and WORQ Mutiara Damansara. Not forgetting also our wider community network with the estimation of 10,000 members consisting of our collaboration partners, newsletter subscribers, and business group members. 

The benefits of working in a co-working space as opposed to working from home?

After going through the largest scale of the working-from-home experiment, people have been asking the question of “what is the future of work and how can we stay productive.” Working from home no doubt may present some benefits such as the flexibility of arranging their work and personal schedule, saving time from the commutes to work, spending more time with the family, etc. But many find it a luxury to be able to have a suitable environment at home to get work done. There are many benefits if one would deep-dive into this, however, the ultimate benefits would be the community and support system that a co-working space would provide. For instance, coworking spaces are designed to help people work productively. In WORQ, every inch of space we design, and every community event curated has this in mind. There are areas designated for quiet focus work as well as areas that encourage collaborative work. Working from a coworking space allows you to meet new people and grow your business in a supportive community. Co-working spaces force a seemingly unnatural environment for the traditional company – in here, various companies, start-ups, freelancers, entrepreneurs, and the likes of them, are put together in a collective space. While the space ranges from the hot-desking to private suites layout, it is almost inevitable to meet someone or something new every other day. Our members have testified that their businesses have grown through the relationships built with other members in the space, and this even involves team growth from a two-man to six-man team within a year! It does not stop there because with all these new connections, also comes the diversity of each individual and their expertise. This is where the space provides the avenue for members to leverage and collaborate with each other based on shared insights, creativity and even wild ideas. And as such, the space really does bring a myriad of people together, forming a diverse community that eventually grows into a support system. After all, everyone is out to make a mark in this world through what they’re good at. And what better way to do this than at the co-working space where it truly fosters relationships and allows for collaboration and growth as a person, company, and community. Working from home, especially when one does not have the luxury of a home office, often find themselves being distracted to attend to the needs of others or simply being distracted by your bed. Many also reported that they are suffering from burnout as the lines between home and office are blurring. Heading out to work in a coworking space helps to draw a line between work and rest. With that being said, it’s time to consider working from co-working spaces for the many benefits it has! 

How did you mitigate the challenges brought about by the pandemic?

The global pandemic has accelerated the adoption of flexible working and innovations related to the future of work. In 2020 and 2021, authorities have advised most professionals to work from home. To mitigate the challenges brought about by the pandemic, we have taken several approaches. Firstly, we Innovate and develop our products based on market demands – e.g Flexi Team Solutions – to help businesses reduce cost on infrequent use of office space and optimise spending to only pay for what they use when they use it.  Secondly, we take this opportunity to establish our WORQ Enterprise team to provide consulting services to organisations on how to manage their real estate. Thirdly, we extend our physical community to the digital space with SPARQ App. SPARQ App acts as a digital community manager that works 24/7 to connect people with opportunities to collaborate. Last but not least, we continue to build our business community where businesses can leverage and support one another. One example is that we curate a resource list as well as a weekly list of free webinars to share and benefit our community.

What is next for hybrid offices in Malaysia and how do you see co-working space fit into this sphere?

In the past, renters and tenants dealt with much hardship by accepting a “bare-bones” product and dealing with long leases just to rent a space. But nowadays, tenants want a higher level of service and lesser burden, with on-demand movement.  Demand for a hybrid work environment has reached new heights due to the convenience factor it brings organizations and the ability to meet the changing needs of workers post Covid. Spaces built on providing flexibility and fostering collaboration will be the future of the workforce. The chart below explains the value of the current coworking market by square footage.

As indicated in the chart above, the red slice is currently the “served market” in Kuala Lumpur, which is at one per cent, with an estimation of one million s.f., valued at approximately RM200 million.  The remaining two per cent of the unserved market to catch up to the Asia average of three per cent, has an immediate untapped potential of two million s.f. or RM600 million in value. As the office market shifts towards thirty per cent flexible demand in the long run (based on JLL research), we estimate that the Kuala Lumpur market will reach fifteen per cent in the next decade, which translates into 15 million s.f. or RM3 billion in value. These numbers give us a realistic sense of the total market value and acquisition opportunities that we have ahead of us, which will position us as long-term partners for real estate solutions. Space-as-a-service is clearly here to stay. 

Editors’ Note: Don’t forget to try out WORQ for free! All you need to do is include the promo code WORQDAILYST21 in the remark column of the enquiry form here and their team will contact you via phone to confirm your complimentary weekly pass.