Primed For Growth

CO-WORKING SPACE
IN VIETNAM
2017 | CBRE Research
 CONTENTS
Executive Summary 5
Co-Working Space

7 12
In Vietnam: How
What Is They Operate And
Co-Working Space ? Compete

Background 8 User Profiles 18 Implications

To Landlords 26
Expansion And
Growth Trends 9 User Concerns
And Preferences 20 Outlook 29
 EXECUTIVE
SUMMARY
• Co-working space operators have expanded rapidly • The need to adopt co-working space by landlords
in the two main cities of Hanoi and Ho Chi Minh City has emerged as occupiers’ requirements continue
since the concept was first introduced to Vietnam in to evolve. Such a decision will require landlords to
2012. consider the factors of profitability and ‘fit’.
• Most users of major co-working spaces in Hanoi and • Co-working is primed for further rapid growth in
Ho Chi Minh City are millennials (i.e. under 35 years Vietnam in the coming years amid strong expansion
old) and working for local or overseas start-ups. by both local and international operators.
• The growth of co-working space has been driven by • The presence of larger operators will likely usher in a
the start-up boom. However, as shared and flexible period of consolidation and M&A activity within the
working environments become more popular, co- industry, forcing poorly managed or unsuitable co-
working space is emerging as a viable option for working spaces out of the market and improving the
corporate occupiers. quality of existing operators.
• Co-working space provides flexibility, creativity and • Demand will continue to be driven by local start-
a wide range of amenities for office tenants. It also ups and freelancers, international start-ups and
offers a far more cost-effective solution for tenants freelancers, and increasingly by small corporates.
compared to traditional leased office space.

4 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 5

 WHAT IS
• Co-working is an emerging model which • Co-working space shares some similarities
provides many of the amenities of traditional with traditional serviced offices but differs in
serviced offices but places a much greater its product offering and target clientele. Some

CO -WORKING
emphasis on space that creates a community traditional serviced office operators have recently
and an experience for consumers.1 tapped into the co-working space industry by
acquiring co-working space operators.

SPACE?

Average size Key features

• Worldwide: 739 sq.m.
• Asia: 857 sq.m.
Interaction Knowledge Sharing
• Vietnam: 700 sq.m.

Creativity Workstations
Main users Open Space

• Start-ups
• Freelancers Networking Reception

Community
Amenities
• Entrepreneurs
CO-WORKING
• Corporate employees SPACE

Wifi Innovation
Number of venues (2016)
Flexibitity
• Worldwide: 11,3002
• Asia: ~3,0003
Contacts Pantry
• Vietnam: 17

Meeting room

1
CBRE, U.S. Shared Workplaces,
Part 3: A Landlord Perspective: Opportunity or Threat?, 2016
2
Deskmag Survey Result, 2016
3
Estimation only, CBRE Vietnam Research, 2017

6 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 7

CO -WORKING SPACE CO -WORKING SPACE
BACKGROUND IN VIETNAM
• The first co-working space, Citizen Space, was
opened in San Francisco in August 20051. Since
• The co-working space industry in Asia has grown
rapidly since the first centre was opened in Mumbai,
ACCELERATING EXPANSION
then, the concept has spread from the Americas India2. It started to gain prominence in 2012 and as
to Europe, Asia, and Africa. According to a recent of 2016, more than half of co-working spaces in Asia • The co-working sector in Vietnam began to gain • Investors are upbeat about the prospects for
survey by Deskmag, the number of co-working spaces were less than 12 months old3. Nearly 80% of these traction in 2015 with the launch of local operators co-working space in Vietnam, with a number of funds
globally is forecast to reach around 13,800 in 2017, spaces have expansion plans, of which 56% intend Dreamplex and Toong. confirming their investment in existing operators as
translating to compound annual growth (CAGR) of to broaden their network by adding more locations, well as new-to-market groups. Examples include
46% since 2012. Meanwhile, the number of while the rest intend to expand within their current • Prior to this, there were already a few co-working
Openasia’s investment in Toong (2016) 1, and Gaw
co-working space members is set to reach more than premises3. spaces in Ho Chi Minh City and Hanoi, but these
Capital’s investment in Naked Hub (2016) 2.
1 million by the end of 2017, representing CAGR of were confined to smaller spaces of less than 300 sq.m.
72% since 2011. (Figure 1) • As of June 2017, there are 22 co-working venues in
• Total supply has surged over the past three years
Vietnam, providing a total of 14,500 sq. m. of space.
(Figure 2). Four new co-working spaces will be added
to the market by the end of H1 2017 and this figure is
expected to increase further by year end.
Figure 1: Number of co-working space and members worldwide

15,000 1,400,000
Figure 2: Total supply (sq. m.) of Figure 3: Number of co-working venues
Number of coworking space worldwide

co-working space in Vietnam by year by year in Vietnam

1,200,000

Number of members
1,000,000
10,000 15,000 25 350%
800,000

Number of co-working venues

300%
20
600,000

Supply by year, Sqm

250%

Growth rate (%)

5,000 10,000
400,000 15 200%
200,000
10 150%
0 0 5,000 100%
2011 2012 2013 2014 2015 2016 2017F
5
50%
Number of coworking space worldwide Number of members
0 0%
0
2012 2013 2014 2015 2016 Q1 2012 2013 2014 2015 2016 Q1
2017 2017

Hanoi HCMC Hanoi HCMC Growth rate

Source: Deskmag, 2017 Source: CBRE Vietnam, 2017

1
Schuermann, M. (2014). Coworking Space - A Potent Business Model for Plug’n Play and Indie Workers. Rocket Publishing, 1
Deal Street Asia, Toong join hands with Capitaland Vietnam to open new co-working space, retrieved May 2017
Lucerne & epubli GmbH. 2
Deal Street Asia, Vietnam: naked Hub plans foray; Uber gets nod under government transport scheme, retrieved May 2017
2
Goenka, A. (2016, December 27). How is the Co-Working Sharing Industry Growing and What Will be the Future in India?.
Retrieved from BW Business World: http://bwdisrupt.businessworld.in/
3
Deskmag Survey Result, 2016

8 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 9

GROWTH TRENDS CO -WORKING SPACE
VIETNAM AND WORLDWIDE IN VIETNAM EXPANSION
• The co-working space industry grew at a rate of 83%
in 2012, but then slowed to 30% in 2016. Growth is
• With four new venues already launched this year,
2017 is expected to be a busy year for co-working
HAS JUST BEGUN
expected to be around 22% in 2017, translating to space in Vietnam. A further ten co-working spaces are
average growth of 53% per annum over the past five expected to enter the market before the end of the NUMBER OF
years. year, of which four will be in Hanoi and the remainder CO-WORKING
SPACES
1 4 6 11 17 22
in Ho Chi Minh City.
• The supply of co-working space in Vietnam has
grown at a rate of 58% over the past few years. With • As of June 2017, there are a total of 17 co-working

HCMC
co-working space still so new to the market, and space operators in 22 venues. All but one of the
major regional and international operators yet to operators are local. However, this situation is set
enter, growth is set to accelerate further in the coming to change as co-working spaces run by regional
years. operators are set to open later this year and in 2018.
2012 2013 2014 2015 2016 H1
2017

Figure 4: Growth rate of co-working Figure 5: Number of venues of large

HANOI
space worldwide and in Vietnam by year co-working operators – Global vs Asia

450%

400%
Spaces (Regus)
350%
Figure 6: Market share – Number of venues by operators (H1 2017 and 2017 Forecast)
300%
Impact Hub
250%
Growth rate

200% 25 25

%
% %

30
35
150% Naked Hub

100% H1 YE
2017 2017
(forecast)
50% Wework

14%
0% 16% 18 12%

%
24
2013 2014 2015 2016 2017F 0 50 100 150 200 %
Number of Venues

Worldwide Vietnam Outside of Asia Asia

Toong co-working space Dreamplex Up Naked Hub Others

As of H1 2017 the three largest operators controlled 63% of co-working spaces. This is expected to decline to around 51% by the
end of 2017 due to the entrance of new operators.

Source: Deskmag, 2017 & CBRE Vietnam, 2017 Source: CBRE Vietnam, 2017 Source: CBRE Vietnam, 2017

10 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 11

CO-WORKING SPACE
IN VIETNAM,
HOW THEY OPERATE
AND COMPETE

12 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 13

PRICING STRATEGIES LOCATIONAL STRATEGIES

• Co-working spaces usually charge on a per person, • On a sq.m. basis, the rental rates for co-working • Co-working spaces in Vietnam are generally not Co-working space in Hanoi and Ho Chi Minh City
per seat, or per desk basis rather than on a per sq. spaces are typically higher than traditional offices due located in prime buildings or areas as operators need tends to be concentrated in CBD-fringe districts.
m. basis. The main options include flexible desks, to their provision of added services and amenities. For to keep rental costs at a manageable level. They In Hanoi, a few co-working spaces have located
fixed desks and private offices. For flexible desks, corporate users of co-working space, this means they are more usually found in underutilised buildings in themselves in Cau Giay district, an emerging office
rent is charged on a daily or monthly basis, while do not need to invest CAPEX upfront. It also provides decentralised locations. Both Toong and Up, major cluster.
for the other two options, a monthly rate is applied. them with greater flexibility in terms of size and lease co-working space operators in Vietnam, operate their
• Co-working space operators often seek branding
Some co-working spaces offer hourly rates for non- terms compared to leasing a traditional office. centres from Grade B or lower buildings.
opportunities when leasing space. Toong marked
members.
• The cost of renting co-working space varies across • The typical age of a co-working space user is quite its entrance to Ho Chi Minh City by partnering
• A fixed desk is usually charged at a higher price than different cities. Co-working spaces in Hanoi and Ho young, meaning that co-working spaces should with CapitaLand, a major international developer,
a flexible desk. The cost can be as much as 55% Chi Minh City are currently priced lower than most ideally be located in emerging or developing to promote its co-working space brand and the
higher as the seat is guaranteed for the user. Private other cities in Asia Pacific, which reflects the cheaper locations, or areas popular among students. shopping mall it is located in.
offices are priced the highest compared to the other office rental costs available in Vietnam.
options due to them being able to provide greater
privacy in an environment similar to the serviced office
model.
Map of existing co-working spaces in Hanoi Map of existing co-working spaces in Ho Chi Minh City
Figure 7: Type and cost of co-working space in Vietnam and Asia Pacific 20171
TAY HO

PHU NHUAN BINH THANH

TU LIEM
Monthly - Private Office
WESTLAKE

DISTRICT 3 DISTRICT 2

Monthly - Fixed desk BA DINH

HOAN KIEM
CAU GIAY

Monthly - Flexible desk

DISTRICT 4
DONG DA
HAI BA TRUNG

DISTRICT 7
Daily pass
Co-working space venue

0 200 400 600 800 1000 1200 1400 1600

US$ per person

Hanoi HCMC Bangkok Shanghai Singapore Hong Kong (core area)

Source: CBRE Vietnam, 2017

1
CBRE Vietnam. Asking rents in Q1 2017; estimates only and should be viewed as indicative.

14 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 15

FACILITIES ACTIVITIES

• Typical features of a co-working space include a games room, beds and auditoriums as a point of • Events, networking and community are the backbone • Other activities target a broad cross section of groups
shared workspace with a shared reception, meeting difference. These communal spaces enhance the of co-working space and are the key characteristics and include social events such as breakfast, happy
rooms, access to high-speed Internet, printing and concept of flexibility, collaboration and diversity. that differentiate co-working space from other hours, movie & games nights and sporting events.
copy machines and cafeterias. Most of these facilities workplace models such as serviced offices and They encourage members to share their experiences
• Most of the facilities listed in this section are
(such as Wi-Fi, a receptionist with a phone answering traditional offices. The aim of these features is to and interact with each other, thereby creating a sense
commonly found in co-working spaces worldwide.
service and a pantry with complimentary beverages foster collaboration, encourage knowledge sharing of community. There are also meet-ups or organised
Some co-working spaces have targeted specific
such as coffee, tea, and water) are usually included and facilitate business opportunities to support the classes aimed at attracting prospective members to
groups of members by providing facilities such as
in the rental rate. Members are given a monthly growth of users. co-working spaces.
food courts which can provide meals for members
allowance for meeting rooms and printing machines
and opportunities for food entrepreneurs, in-house • Activities in co-working spaces usually centre around • These events are usually sponsored by interested
and are charged extra if they exceed this amount.
recording or shooting studios for members belonging start-ups and aim to connect them with each other parties such as companies, venture capital firms and
Extra amenities include F&B, which can also be
to the fashion or new media sectors, and virtual and and with venture capitalists. Examples include service providers but can also be arranged by co-
an extra source of revenue for co-working space
augmented reality platforms for IT members. Other hackathons; events that gather a large number of working operators themselves. They are usually free of
operators. Some choose to operate F&B themselves
operators are seeking to provide an extra layer of participants in software development and related charge or offer large discounts for members.
or outsource these components to other providers.
convenience for members through the provision of fields for work, educational or social purposes; panel
• Selected co-working space operators provide other services such as child care and shower rooms. discussions with experienced entrepreneurs; and lunch
amenities and special services such as art galleries, & learns. The quality and frequency of these activities
can influence the growth and success of start-ups in a
local market.

Table 1. Selected events held at co-working spaces in Hanoi and Ho Chi Minh City
BAR
Citihub July 2016 How to raise fund for early state – start ups

SLEEPING March 2017 Vietnam Online Business Forum 2017

ROOMS Dreamplex

CO-WORKING May 2016

Discussion with the President
of the United States, Barack Obama

SPACE LIBRARY December 2015 Tech talk with Google CEO Sundar Pichai

Toong March 2016 Founder Fairytale #1 - Crowdfunding

April 2016 Startup x U.S Entrepreneurs Meetup

GREEN SPACE
GARDEN Circo April 2017 Career Advice for Junior Developers

Up April 2017 Talk @Up: Silicon Valleys: How it does works

ENTERTAINMENT
POOL ROOM

16 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 17

CO -WORKING USERS
WHO ARE THEY?
• A study by CBRE Research Vietnam found that 91% • A Deskmag survey in 2012 found that more
of co-working space members are millennials, i.e. than 50% of co-working members worldwide are
under the age of 35 (Figure 8). This proportion is freelancers. CBRE Research Vietnam has found that
higher than the global average of 67% and reflects 54% of users in Hanoi and Ho Chi Minh City are
Vietnam’s young demographics. either the founders or employees of start-ups, while
approximately 14% are freelancers and self-employed
• The study also found that more than 55% of co-
(Figure 9). These start-ups include both local and
working space users work in the IT industry, with the
overseas firms.
remainder spread across various sectors including
tourism, F&B, education, marketing and real estate. • The main reasons for using co-working spaces
Globally, the IT industry accounts for 27% of users in Vietnam are convenience (40%) and flexibility
followed by consulting, with 15%. These two sectors (21%). A Deskmag global survey in 20161 found
typically operate with a high degree of flexibility, that the sense of community and interaction with
mobility and independence. other members were the key draw for around 70% of
respondents, followed by convenience.

Figure 8: Age distribution of co-working Figure 9: Occupation of co-working

space users in Vietnam space users in Vietnam

2% 10%
6%
%
13

54%
58%
34%

%
23

Staff of a start-up Others

21-29 30-35 36-42 43-50 Freelancer / Founder of

Self-employed a start-up

Source: CBRE Vietnam survey of 110 co-working space users in Hanoi and Ho Chi Minh City

1
Deskmag GCUC Global Survey 2016

18 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 19

USER CONCERNS AND
PREFERENCES
A number of factors are shaping decisions around the use if tenants require a smaller workplace for five staff Table 2. Comparison of rental costs for a company of five employees in Hanoi and
of co-working spaces. These include: or less, which is the typical size of start-ups or micro
companies. A standard private office at a co-working Ho Chi Minh City
Cost space in Hanoi and Ho Chi Minh City ranges from
• Cost is a key driver for co-working space users as 15 sq. m. to 25 sq. m, making it ideal for such users.
Tenants also do not need to spend CAPEX on office Office-tel Traditional office Co-working space
most of them are start-ups which often lack the capital
or stability to commit to leasing a traditional office fit-out costs when joining a co-working space.
space on a long term lease. • Co-working space is not the cheapest option for
Specifications 1BR – Office-tel Grade B Private office
• Rents for co-working space, on a sq. m basis, are start-ups or small enterprises, especially those at
Size: 35 – 40 sq. m. Size: 50 sq. m. Size: 15 – 25 sq. m.
typically not cheaper than that for traditional office an early stage. If cost alone is considered, office-
space (Grade B and above). However, co-working tels, a new offering in the local office market that
spaces enable users to optimise their use of space features working and living facilities, provide a more Indicative Monthly Cost US$500 - $750 US$1,100 - $1,400 US$750 - $1,080
and take advantage of shared areas such as meeting affordable option. This model is suitable for staff of
rooms, pantries and reception areas, meaning that small and micro enterprises who would like to live
Fit-out cost – Y1 N/A US$7,500 N/A
the total rental costs of a co-working space can be and work in the same place.
lower than a standard office. This is especially true
Min. leasing term 6 months 2 years 6 months

Deposit: 3 months Deposit: 2 - 3 months Deposit: 1 month

Payment term Advance payment: Advance payment: Advance payment:
Compared to traditional offices, co-working space is a 3 – 6 months 2-3 months 1 – 3 months
more affordable option for tenants such as start-ups
and small enterprises. However, it may not be the Assumptions
cheapest format just yet.
Office-tel Traditional office Co-working space

Monthly cost includes Rents: US$22 - $28 per sq. m. per month Rents: Average fee for a
Specifications Specifications
utilities, serviced charge (including taxes and service charge). private office in a
and taxes. This is the average rent of Grade B office buildings in co-working space in
Rents are those recorded Hanoi and Ho Chi Minh City. Rents can vary across Hanoi and Ho Chi Minh
in major completed different locations in the city. CIty (including taxes)
projects in Ho Chi Minh Fit-out cost year 1: US$150 per sq. m.
City in Q1 2017

Source: CBRE Research, 2017

CO-WORKING

35%+ COST SAVING VS

TRADITIONAL OFFICE SPACE > 40% HIGHER COST VS OFFICE-TEL
BUT PROVIDE
SPACE

• No fit-out cost • Shared facilities, amenities + intangible values

• Shared facilities, amenities + intangible values • Increased collaboration and networking
• Flexible leasing terms

20 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 21

Figure 10. Indicative leasing cost Figure 11. Indicative leasing cost As previously mentioned, co-working space is not the Payment terms for co-working space are also more flexible
cheapest office solution for start-ups in Vietnam. The compared to traditional offices and usually involve lower
comparison index - Grade A office comparison index - Co-working space2 survey found that cost saving is not the most important deposits.
building1 factors for co-working space users. 43% of respondents
Working hours
rated this factor as neutral while only 20% rated it as the
most important reason why they chose to join co-working CBRE Research Vietnam found that 71% of respondents
Hong Kong Hong Kong spaces. spend less than 40 hours per week at a co-working space,
(Central)
while typical white-collar workers spend at least 40 hours
Singapore Singapore Main reasons why users opt for co-working space include:
at their workplace.
Flexibility Flexible working hours were selected by 32% of
Shanghai Shanghai
Leasing Terms respondents as the most important factor why they opt to
HCMC Bangkok use co-working spaces. Most co-working spaces operate
Co-working space offers highly flexible leasing terms on a 24/7 basis while traditional offices do not.
(starting from one month) compared to traditional
Bangkok HCMC
offices’ usual minimum term of two years. This flexibility is
especially valuable to start-ups due to the often uncertain
Hanoi Hanoi
and unstable nature of their business.
0 2 0 1 2 3 4 5 6 7 8 9 10

Note: The leasing cost in Hanoi was used as a basis for Grade A offices and co-working space (index = 1).
The indexes should be used to compare rental costs across the studied markets and should not be used to Figure 12. Number of hours per week spent at a co-working space
compare leasing costs between co-working spaces and Grade A offices within the same city.
Source:
40%
1
2016 CBRE Asia Pacific Fit-out Cost Guide and CBRE Research. The index was calculated based on the
leasing cost per sq. ft.
2
CBRE surveyed major operators in selected cities in April 2017 on a per seat basis. Figures may not 30%
represent the whole market.

Hong Kong is one of the world’s most expensive office The range in the cost of co-working space across 20%
markets and bears the highest leasing costs for both different markets reflects the overall rental cost in
Grade A office and co-working space. The leasing individual markets and also the type of clientele they
cost of Grade A buildings in Hong Kong is two and attract and whether they lean more towards start-ups, 10%
a half to three times higher than that in Hanoi (3.1x), freelancers or multinationals. As co-working space is
Ho Chi Minh City (2.5x) and Bangkok (3.3x) still a relatively new business model, supply–demand
(Figure 10), while the leasing cost of co-working dynamics and pricing is subject to adjustment across
space is around nine times higher. Grade A office different markets. 0%
< 5hrs 5-10hrs 11-20hrs 21-30hrs 31-40hrs > 40hrs
rents in Shanghai and Singapore are relatively similar
but the cost of co-working space in Singapore is
higher.
Source: CBRE Research, 2017, survey of co-working space users in Vietnam

22 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 23

 FACILITIES
AND
AMENITIES
More than 50% of surveyed users described
facilities and amenities as important
features of co-working space. Cafeterias,
meeting rooms and reception areas are
among the most desirable facilities. Tenants
also place a high value on shared spaces
such as relaxation rooms or games rooms.
These facilities distinguish co-working
spaces from traditional offices, office-tels
and informal workplaces such as coffee
shops or home residences.

CREATIVE
WORKING
ENVIRONMENT
46% of surveyed users identified a creative
working environment as important. The
modern, dynamic and vibrant design and
layout of co-working spaces, together
with their broad mix of companies and
individuals, can foster creativity and
productivity.
Figure 13: Co-working space features by
level of importance to users

Cost saving BUSINESS

Networking events ADDRESS
Business address Many start-ups are based out of apartments
at their early stages. However, once they
NETWORKING
Creative working environment
are formally incorporated as a business, EVENTS
Flexible working hours they can no longer work at home as a
residential address cannot be used for It is important for start-ups to have a
Desirable facilities/amenities business registration. Co-working space platform to exchange ideas, receive
provides an easy solution. mentoring and seek investment. Events such
0% 10% 20% 30% 40% 50% as competitions and seminars can be very
useful for such tenants.
Less important More important

Source: CBRE Research survey of co-working space users in Vietnam, 2017

Note: This question asked respondents to rank the importance level of each factor in the scale of 1 to 5. The above chart shows
the percentage of respondents who ranked each factor as 1. Most important and 2. Second most important.

24 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 25

LANDLORDS AND
CO -WORKING SPACE
The rapid expansion of co-working space operators in • The typical co-working space offering of workplace, CBRE Research advises landlords to consider several
Hanoi and Ho Chi Minh City has prompted landlords to amenity, service, culture and community can add factors when including co-working spaces in their office
evaluate the merits of leasing space to these occupiers. value to the office building it is located in and also leasing and management strategy:
benefit other tenants within the same building who
Although landlords’ exposure to the sector remains • Co-working spaces customarily lease large spaces
may require the use of amenities and services such
limited, the surge in new openings cannot be ignored, and for long periods of time. Landlords may need to offer
as meeting rooms or cafeterias that they do not have
could potentially have a number of benefits, including: them low rents, a revenue sharing model and other
space for in their own offices.
incentives, which would involve a certain level of risk.
• Co-working spaces are large occupiers capable to
• Co-working spaces provide landlords with access to
generating stable revenue over a long period of time. • Co-working space is a new operating model that has
a pool of potential tenants. Start-ups may grow into
A co-working space typically requires a large floor not yet been proven to be sustainable. It remains to
larger companies and leave co-working space, but
plate of at least 1,000 sq. m. Since CAPEX to fit out be seen whether co-working space operators can
may wish to stay in the same building or area.
a new co-working space is comparable as that of maintain the same rate of growth and whether they
conventional offices if not higher (US$150 - $300 per can fulfill the obligations of their long term lease
sq. m)1, co-working space operators commit to agreements.
long-term leases of between five and ten years.
• The combination of traditional large multinational
tenants with young dynamic entrepreneurs and start-
ups may not align with the formal and corporate
image of a traditional office building.
Figure 14. Intention to move from co-working space to a larger office
The coming years will see the entry and expansion of
international co-working space operators to Vietnam.
35% The presence of larger operators will likely bring about a
period of consolidation and merger & acquisition (M&A)
activity within the industry.
As of June 2017, co-working space occupies just 0.5% of
23.4% traditional Grade A and B office space in Hanoi and Ho
Chi Minh City. Even if the current growth rate of 50% per
20.6% annum were to be maintained, co-working space would
occupy just 2% of traditional Grade A and B office space
in the two cities by 2020.
14%
However, the emergence and expansion of co-working

30%
of respondents indicated their
space could reshape landlords’ thinking around
6.5% intention to move to a traditional
workplace strategy and shared offices as larger occupiers’
office within the next five years.
YES, YES, requirements further evolve.
WITHIN YES,
35% of respondents said they were
WITHIN
NEXT UNSURE uncertain. The corresponding figures
NEXT
NOT 12 NO OF FIVE
in the U.S. are 22.2% and 32%2
SURE MONTHS PLAN TIME YEARS respectively.

Source: CBRE Research survey of co-working space users in Vietnam, 2017

1
CBRE Research survey of selected co-working spaces in in Hanoi and Ho Chi Minh City.
2
CBRE, U.S, Shared Workplaces, 2016

26 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 27

 OUTLOOK

• Co-working space in Vietnam will • Local government support and growing

continue to experience rapid growth in interest among investors will support the
the coming years. steady growth of start-ups, although the
• Existing co-working providers such start-up ecosystem in Vietnam requires
as Toong, Dreamplex and Up are set further time to develop and mature.
to open more venues as they seek to • International start-ups, digital nomads
achieve economies of scale, establish and freelancers seeking affordable
their networks and gain market share. workplaces will consider relocating to
• The entry of international operators Vietnam to grow their businesses.
will usher in a period of consolidation Start-ups in the IT sector will likely opt
partnership agreements and M&A, a for Ho Chi Minh City and Hanoi due
trend that is already occurring in other to lower rental costs and living costs,
markets in Asia Pacific. besides the availability of skilled labour
such as software developers.
• The growth of the number of operators
and more competitive environment will • While the third main group of
force poorly managed or unsuitable co-working space users, small
co-working spaces out of the market corporates, may appear to be the least
and improve the quality of existing active at present, they will comprise an
operators. important new source of demand as
corporate occupiers increasingly seek
• Demand will continue to be driven more flexible workplaces and
by local start-ups and freelancers, cost-effective solutions that optimise
international start-ups and freelancers, space usage and foster productivity.
and small corporates.

28 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH | 29

REFE RENCES
For more information about this special report, please contact:

RESEARCH

Desmond Sim Dung Duong, MRICS An Nguyen, MRICS

Head of Research, Southeast Asia Head of Vietnam Research Director, Vietnam Research
+65 6326 1638 +848 3824 6125 +844 2220 0220
1. CBRE, Asia Pacific ViewPoint. The Rise of Co-working 7. Goenka, A. How is the Co-Working Sharing Industry
Space in Asia Pacific: Boon or bane?, 2016 Growing and What Will be the Future in India?, 2016 [email protected] [email protected] [email protected]

2. CBRE, U.S. Shared Workplaces, Part 3: A Landlord 8. Deal Street Asia, Toong join hands with Capitaland
Perspective: Opportunity or Threat?, 2016 Vietnam to open new cowroking space, retrieved May With support from
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3. CBRE, Asia Pacific, Fit-out cost Guide, 2016 Toong DreamPlex
9. Deal Street Asia, Vietnam: naked Hub plans foray;
Operations Team Operations Team
4. Deskmag, The 3rd Global Coworking Survey, 2012 Uber gets nod under government transport scheme,
retrieved May 2017
5. Deskmag, Global Coworking Survey 2016
10. Deskmag, Global Coworking Survey 2017 For more information regarding global research and activity, please contact:
6. Schuermann, M. Coworking Space - A Potent
Business Model for Plug’n Play and Indie Workers. 11. Deskmag, GCUC Global Survey 2016 Nick Axford, Ph.D. Richard Barkham, Ph.D., MRICS Spencer Levy
Rocket Publishing, Lucerne & epubli GmbH, 2014 Global Head of Research Global Chief Economist Head of Research, Americas
[email protected] [email protected] [email protected]

Henry Chin, Ph.D. Jos Tromp

Head of Research, Asia Pacific Head of Research, EMEA
[email protected] [email protected]

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30 | Primed For Growth Co-Working Space In Vietnam CBRE RESEARCH 31