Rental rates for traditional offices are constantly escalating YoY with long rental tenure, says CEO
By IZZAT RATNA / Pic By ISMAIL CHE RUS
ENTERPRISES and businesses are moving away from the traditional workplaces as they opt for co-sharing spaces as part of the strategy to mitigate rising operational costs, as well as reduce employment and capital expenditures.
UEM Sunrise Bhd MD and CEO Anwar Syahrin Abdul Ajib (picture) said rental rates for traditional offices are constantly escalating year-on-year (YoY) with long rental tenure, while there’s no real guarantee in the tenants’ business sustainability.
“Technology has resulted in lower needs for human resources. So, as a company grows bigger, they may not need that many workforce because technology is there to drive productivity level better,” he told The Malaysian Reserve (TMR) on the sidelines of UEM Sunrise and WOTSO signing ceremony in Kuala Lumpur (KL) yesterday.
He said the changing elements and new developments in working trend are among the significant factors that have influenced many organisations to choose co-working spaces.
“Companies are being very careful with money nowadays. They will lean towards any opportunities that can provide the most reduction in unit cost,” he said.
Technological advancement that is replacing human labour has reduced the need for large space among small to medium-sized businesses.
Anwar Syahrin said the trend and changing landscape in doing business should be part of any property developers’ consideration in conceptualising new products that could meet the market demands.
“Normally, for communal working spaces, the leasing tenure is shorter — between six months and one year, at an average of RM300 per month for each workstation,” he added.
At present, majority property developers are more cautious in rolling out commercial spaces, particularly in the office segment due to the less than flattering take-up rates compared to the golden era before the global and economic crisis that had prevailed since 2014.
Anwar Syahrin said some of the overhang spaces or supplies are expected to be converted into co-working spaces to match the next trend among businesses and enterprises.
He added that the target market for communal spaces is mainly small and medium enterprises, startups, as well as freelancers.
Meanwhile, UEM Sunrise’s agreement with Australia’s collaborative workplace provider — WOTSO, a subsidiary of BlackWall Ltd — would be the impetus in the two parties to jointly create and operate sustainable co-working spaces in Malaysia and Singapore.
The joint-venture company, that saw the two parties taking up equal stakes, will facilitate the implementation of coworking spaces in UEM Sunrise’s current and future projects, starting with the 13,000 sq ft Mercu Summer Suites, KL, that would begin in the second quarter of 2018.