INFINITY8 CEO and Co-Founder Lee Sheah Liang
Post-pandemic, the definition of co-working space has changed, and so have their objectives. An uncertain economic situation has further made the concept more acceptable. From startups to MNCs, companies are now increasingly relying on such facilities to reduce their capex.
INFINITY8 is a company with eight branches in Malaysia and one new branch due in June 2023, with a total size of 117,564 sq ft. The company has seen the demand for its co-working facilities going up post-pandemic.
e27 spoke to its Co-Founder and CEO Lee Sheah Liang to learn about how the industry has been growing post-pandemic and how the current economic situation is affecting its growth.
Here are the edited excerpts:
How has the demand for co-working spaces changed since the start of the pandemic? Have you seen an increase or decrease in occupancy levels?
I will divide the pandemic into three phases.
In phase I, when the government introduced the movement control order (MCO) between March and June 2020, the businesses started reconsidering their real estate portfolios. Our occupancy rates dropped to 60-70 per cent on average during this period.
In phase II (throughout the pandemic between July 2020 and September 2021), we received more corporate enquiries that wanted to set up alternative spaces for business continuity plans (BCP), hence the occupancy rates shot up to 80 per cent on average.
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In phase III (post-pandemic and recovery from September 2021 to present), six of our branches see a 100 per cent occupancy rate, one branch has 80 per cent occupancy and another new branch (3-month-old) is at 71 per cent.
What changes have you made to your co-working space design to adapt to the new normal?
The meaning of ‘workspace’ has been redefined as more co-workers need the space for physical and collaborative sessions and individual booths for video-conferencing purposes. The hybrid working mode has also been popular.
To adapt to the new situation
- We changed some of our interfaces to become contactless; we replaced entry access and exit buttons with facial recognition and motion sensors.
- Built more individual booths for video-conferencing and collaborative spaces;
- Changed our sales strategy.
How is the current economic climate affecting the industry?
The current economic downturn has resulted in more corporates cutting jobs, reconsidering and downsizing their real estate portfolios and strategising to employ an asset-light business model to keep their companies agile and afloat.
Companies are now putting more premium on flexibility, which has benefited the industry. Co-working spaces are also able to ride on sharing economy to deliver more cost-effective options when it comes to workspaces.
Have you noticed any specific trends in terms of the types of companies or individuals using your co-working space?
Co-working spaces, which once used to be identified as ‘startup-friendly and freelancers-friendly’, now have transformed into ‘business-friendly’. More corporates and businesses are open to the concept of co-working spaces now as the pandemic has fundamentally changed their mindset and mentality when it comes to their real estate portfolios.
With many companies now adopting a hybrid work strategy, how do you see this impacting the co-working industry in the future?
Hybrid working is here to stay but there is also an increasing number of companies switching back to 100 per cent working mode. This trend is impacting the co-working industry in a positive way, as many companies have cut down their office space and strategised their real estate portfolios.
Are there any new services or amenities that you plan to introduce to cater to the changing needs of co-working members in the post-pandemic era?
We are introducing more technology-focused, smart and dynamic operating systems into our co-working spaces and creating more services, such as virtual assistants and app-based interactive systems, to suit the needs of a post-pandemic world.
What types of companies or individuals are currently using your co-working space, and how have their needs and preferences changed over time?
The composition of our co-workers is as follows:
MNCs/listed companies: 35 per cent, SMEs: 50 per cent, micro-enterprises: 10 per cent, and freelancers/individuals: 5 per cent.
For the first category, we have seen increasing demands from them as they are generally receptive to the ideas of co-working space to turn their capex into opex and keep their companies lean flexibly. Their demands have also changed as hybrid work is prevalent in this category, so more often than not they will request more access than the number of work desks they will occupy.
For the second category, there are more SMEs looking for business opportunities within a co-working space post-pandemic. Companies are also looking at outsourcing opportunities (such as HR, payroll, recruitment and digital marketing), so we see a pent-up demand for SMEs to work more efficiently.
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For categories 3 and 4, there are more remote talents now compared to pre-pandemic, and work-from-home is not for everyone. Hence, a co-working space is their best alternative to focus on work.
How do you balance the need for a collaborative and social atmosphere with the need for privacy and focus in your co-working space?
We have common areas built for collaborative purposes, leveraging some tools and writing boards etc. We also have areas built for privacy and focus, such as individual virtual conference rooms, phone booths, and charging stations.
What are some of the challenges and opportunities you see for the co-working industry in Malaysia in the coming years?
Challenges: As the global supply chain continues to be disrupted, the fit-out cost of a workspace has skyrocketed. This acts as a double-edged sword as our cost of doing business has hiked up but it also means resistance for normal companies to spend huge sums of money on fit-out, thereby benefiting our business.
Opportunities: We see co-working spaces and flexible workspaces to continue disrupting the traditional office market based on the following reasons:
- Demand for flexibility continues to be important for every company’s BCP
- Post-pandemic, competition and challenges between businesses become more drastic, resulting in companies putting more budget into talent recruitment and acquisition of new customers. Hence, spending on capex to build offices has ceased to become a priority and co-working space is built to be conducive to talent retention
- All companies have experienced MCO, forcing them to relook into their real estate portfolios, decentralising operations and therefore discouraging longer tenure of tenancy agreements with the landlords
- Post-pandemic, sharing common values and being connected to a greater community has become more important than ever as we go through this biggest shared struggle in centuries
- Generally, the office market in Malaysia has more supply than demand, hence co-working spaces play an important role to consume this over-supply scenario.
What are some of the unique benefits of co-working spaces that you believe will continue to attract individuals and companies in the future?
I believe that co-working spaces should focus more on technologically advanced products to cater to hybrid/remote working teams. Apart from that, we should also curate more collaborative/decision-making spaces as offices are now largely seen as team building, high-level decision-making spaces and a space to be connected with colleagues and co-workers.
The days when offices were only considered as desks and chairs and one single workspace have gone.
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