• Startups give flexible workspace sector impetus

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    Traffic, millenials not the only drivers

    ASIDE from the beastly road traffic, one welcome factor is driving the emergence of the flexible workspace industry in the Philippines—the micro, small, and medium scale enterprises (MSMEs), or simply, the startups.

    “Flexible workspace facilities are becoming a trend due to the growing number of small and medium-scale enterprises and businesses [in the Philippines],” Claro Cordero Jr., head of research and consultancy at global real estate monitor Jones Lang Lasalle (JLL), shared with The Manila Times on Friday.

    In 2015 alone, a number of global flexible workspace providers have either entered or expanded in the country.

    Among the new entrants were the Hong Kong-based Compass Offices, which opened its first Philippine center in the Makati City in November, and Flyspaces.com, which started operations earlier last year.

    Serviced office provider Regus Philippines, which has been operating in the country for more than a decade, opened eight new office centers in 2015.

    Using the net as a platform, these firms target mobile professionals, entrepreneurs, SMEs, and startups, which need short-term work and meeting space solutions.

    At the same time, these firms also serve as online listing portals for venue owners looking to earn from their spaces by tapping office occupiers through the net.

    Data from the Department of Trade and Industry (DTI) show that 940,886 business enterprises operating in the Philippines as of 2012 were classified under micro, small and medium enterprises (MSMEs), representing 99.58 percent of a total of 944,897 enterprises. Only 0.42 percent or 4,011 were large enterprises.

    According to Cordero, flexible workspaces allow MSMEs or startups to focus on operating their businesses instead of worrying about occupancy requirements.

    “These SMEs need incubation spaces for them to concentrate on the essential aspect (or their respective core competencies) of their business and not be worried about managing their occupancy requirements, until they are able to manage themselves, when they grow in scale,” Cordero said.

    Property listing website Lamudi Philippines echoed Cordero’s opinion, saying serviced offices help SMEs reduce cost on rent.

    “Often SMEs cannot afford to splurge on a swanky office complete with expensive furniture, fast internet connections and other business equipment, kitchen facilities, and even front-desk officers, but these are things that serviced offices can offer,” Lamudi said.

    Lamudi also noted that these serviced offices help cut some operational costs, as they offer SMEs traditional office services, such receptionists, information technology (IT) administrative support, IT infrastructure, courier services, full-time security, and other facilities like conference and meeting rooms.

    “This way, SMEs can allocate their resources on growing their business, rather than having to think about the costs of setting up and maintaining these services and facilities,” Lamudi said.

    But as for Regus Philippines Country Manager Lars Wittig, the millennial market and the infrastructure woes are what is driving the demand for flexible workspaces in the country.

    Wittig said the challenges caused by the country’s infrastructure are robbing people of productivity, as productive time is lost during the time they spend being stuck in traffic.

    Wittig added the millennial market is also driving the demand for more flexible workspaces, as these individuals want to maximize their productivity.

    “We have a lot more millennials here [Philippines]. They don’t know any other way to work than with their devices,” Wittig said.

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