Why more companies share office space with others?
Seen are office workers working at a WeWork co-working space in southern Seoul. / Courtesy of WeWork
_ Prime location, luxury amenities, networking cited as reasons for office sharing _
By Baek Byung-yeul
Office sharing has emerged as an effective workplace for a growing number of startups here as firms can locate their employees in highly competitive locations in Seoul with lower monthly rent, and benefit from various programs such as networking events and educational programs, company officials said Monday.
Bike-share startup Maas Asia chose to move to a shared workplace Zag Pot Co-working Space in Samseong-dong, southern Seoul. Jin Min-soo, chief marketing officer of the firm, said the biggest strength of the shared office is workers are able to focus only on working.
“We only need to bring our laptops to launch this business in the shared office. Once we pay monthly rent, we don't need to take care of non-business related activities such as cleaning and maintenance of the office,” Jin said.
He said having offices in a shared workplace is also a great choice for startups because it is possible to launch their businesses in the prosperous Gangnam area for a relatively small monthly rent.
“For firms like us, having an office in a good location is crucial for recruitment. We cannot afford to rent space in a traditional office building in this area. Thanks to the shared office, however, we were able to locate our employees in the Gangnam area,” Jin said.
Korea's shared office market was born in 2015 when local shared office service firm FastFive launched its service. The market expanded rapidly after global shared office provider WeWork entered the market the following year.
The market is emerging as a new model in the real estate industry, growing to 40.6 billion won ($36 million) in 2017 from 600 million won ($534,000) in 2015. According to market tracker Genstar, the market is expected to grow to 300 billion won ($267 million) by 2020.
It is also competitive with FastFive and global firms WeWork and Spaces vying with companies operated by conglomerates.
Seeing it as a new business opportunity, companies such as Lotte Group, Hyundai Card and Aju Group have been offering shared workspace services through subsidiaries Workflex, Studio Black and Sparkplus.
The monthly rent using shared offices was about 518,000 won per person in the October-to-December period in 2018, according to data from Chestertons Korea. Offices located near Gangnam Station in southern Seoul have the highest rent at 536,000 won per person on average.
Though the rent increases if firms continue to hire more employees, a growing number of people choose to work in a shared office because they can build networking relationships in related industries, said Lee Cheol-won, CEO of local fintech startup Balance Hero.
“As a fintech startup, we are planning to expand our business globally and so decided to open our office in a shared workspace as we could easily build up human networks in the industry,” Lee said. His firm is based at WeWork's Seolleung office in southern Seoul.
Utilizing a broad community of users in the shared office is another reason, Lee said. “It is not easy for a fintech startup to interact with software developers. So we chose the shared office to communicate with talented individuals working there.”
In addition to networking, firms using shared office services can receive various kinds of learning programs ranging from traditional workshops to peer-to-peer exchange programs.