The next unicorn: JustCo set to be billion-dollar start-up

By Timothy Tay & Cecilia Chow
/ EdgeProp |
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Kong Wan Sing, CEO of the home-grown co-working space provider, outlines an ambitious plan to roll out new spaces that will see the company double in size and have a presence in almost every major Asian city by end-2019
Kong: Around Asia, JustCo is opening a new co-working space every three weeks (Pictures: Samuel Isaac Chua/The Edge Singapore)
JustCo, one of the biggest co-working space providers in Singapore, has 13 co-working spaces already in operation locally. Two more are set to open next year: at 20 Collyer Quay in 1Q and China Square Central in 4Q. Yet, the company’s appetite for growth is unabated.
“In the last four months, we have more than doubled our footprint in Singapore and around Asia,” says Kong Wan Sing, founder and CEO of JustCo. “Next year, we will double in size every six months. Around Asia, Just- Co is opening a new co-working space every three weeks.”
Apart from Singapore, the company already has a presence in Sydney and Melbourne in Australia; Beijing and Shanghai in China; Bangkok, Thailand; Jakarta, Indonesia; Seoul, South Korea; and Taipei, Taiwan. In the pipeline to open next year are spaces in Kuala Lumpur, Malaysia; Manila, the Philippines; Tokyo, Japan; and Hong Kong. “By 2019, we will be the only space provider with a presence in all these key cities in Asia,” notes Kong.
Scaling up
“Co-working is not a fad like bubble tea; [it] is here to stay,” Kong says. “And in this business, you need to have scale. There’s a lot of consolidation in the market right now, with some of the smaller players going out of business because they lack scale.”
According to CBRE Research, at least 10 boutique co-working locations of under 10,000 sq ft each have ceased operations over the last 12 to 18 months. “The wave of intense competition in the co-working segment has edged out the smaller players,” says Desmond Sim, CBRE head of research for Singapore and Southeast Asia.
Earlier this month, JustCo opened a new 20,990 sq ft co-working space at The Plaza Tower in central Jakarta (Picture: JustCo)
JustCo’s relentless growth around the region can be attributed to the US$177 million ($242.3 million) investment by GIC Real Estate and Singapore-listed property group Frasers Property in the firm in May this year. “We have ramped up the expansion of our overseas presence in the last six months, and today, the overseas portfolio is larger than our Singapore portfolio in terms of square footage,” says Kong.
In its Series B funding in October 2017, JustCo raised US$12 million from Thai-listed developer Sansiri. Kong is looking at another round of fundraising next year. “We want strategic investors,” he says. To Kong, “strategic investors” are reputable real estate owners and developers who can help JustCo open doors as it expands around the region.
Change in perception
Kong sees co-working changing the commercial real estate sector, in both the retail and office space. Two years ago, building owners, especially mall owners, did not understand the space requirement of a co-working operator. Initially, JustCo was offered just 5,000 sq ft at Marina Square, relates Kong. After some discussion with the mall manager, the space offered increased to 30,000 sq ft. “But when I looked at the floor plan, I told them: ‘Why not extend the space all the way to the end?’ And they agreed.”
That was how JustCo ended up with the largest co-working space within a mall in July this year: a total of 60,000 sq ft on the third level of Marina Square. It has workspaces for more than 1,000 members. “Almost all the suites are fully taken up,” says Kong. “We have a lot of enterprises buying bulk membership for the hot desks.” Within JustCo’s Marina Square premises is a start-up corporate innovation lab called Trive Labs.
JustCo is an anchor tenant at Marina Square and the first co-working centre to open in a mall in the Marina Centre area (Picture: EdgeProp SG)
Kong sees more opportunities to open co-working spaces in malls, especially in the “shadow spaces on the top floors”. “Many malls are not doing well — not just in Singapore, but elsewhere too. We have people flying in from Malaysia, the Philippines, South Korea to check out the space.”
The perception of co-working or flexible space (flex-space) operators within a building has changed “quite dramatically”, says Chris Archibold, JLL head of leasing. “Three years ago, most developers would consider co-working or serviced offices a ‘nice-to-have’ amenity and not a deal they would announce to market a new building,” he notes. “Today, developers are much keener to do a deal early so they can tell potential occupiers they have a co-working or flex-space operator within the building.”
Rapid growth to continue
The co-working sector has been growing rapidly over the past 12 to 18 months. “Both small scale and larger co-working operators have plans to expand,” says Archibold. He expects the pace of expansion to last at least until the end of next year, as occupancy rates at flexible workspaces are very strong.
By end-2018, CBRE Research estimates that the co-working segment will account for 1.48 million sq ft of office space in Singapore, nearly double the previous year’s total. “There is still considerable interest in the co-working sector and this should help to support growth over the next couple of years,” says CBRE’s Sim.
However, CBRE Research is expecting the pace of growth in the co-working segment to moderate in 2019, to about two million sq ft.
The launch party of JustCo at Marina Square on Dec 6
Operators remain aggressive in acquiring market share and competition continues to escalate, notes Sim. “New and in-the-pipeline co-working facilities are growing ever larger as operators seek to differentiate themselves,” he adds. “At the same time, there is keen interest from co-working players in China and Malaysia, among others, looking to set up their first locations in Singapore, albeit at the right pricing.”
Hong Kong-based operator Campfire announced in November that it would be taking up an entire 11-storey building on Cecil Street with a total space of 85,000 sq ft for its operations. The place is scheduled to open in 3Q2019.
Even CBRE has entered the flex-space market with the launch of its own brand, Hana. JustCo’s Kong welcomes the move. “That means there is real demand if even CBRE wants to come in,” he says.
Apart from third-party co-working operators such as JustCo, occupiers of premises, such as MNCs, incorporate flex-space within their premises, says JLL’s Archibold. Such spaces make up “the vast majority” of flex-spaces and together with co-working spaces by third-party operators, will eventually account for 30% of the office market in Singapore, he reckons.
‘Powered by JustCo’
JustCo’s Kong is not content with taking up 50,000 to 60,000 sq ft of space within a building. “I don’t want us to be seen as just a tenant in a building,” he says. “I want to take up a whole building of about 100,000 to 200,000 sq ft where we can add value to the building. I want the building owner to see us as a must have, not just another tenant.”
JustCo’s co-working space on the third level of Marina Square mall
Beyond that, Kong’s goal is to have the building “powered by JustCo” — from the security at the main entrance to lift access. “We’re developing our technology and app,” he says. “We’re currently in talks with a few building owners, and we should be rolling out this platform in 1Q2019.”
With low vacancy in Grade-A buildings in the Central area, Kong is open to Grade-B buildings too. “After all, our first location was in a Grade-B building on Robinson Road,” he says. That was three years ago. Since then, JustCo’s operations include 80,000 sq ft at Marina One, which is a Grade-A office space in a mixed-use development in the CBD.
Flex-space for growth
Even if there is volatility in the global market, companies will still need to expand, says Kong. “But in the face of uncertainty, many office tenants are cautious about taking up more space. That is what makes flexible workspace attractive,” he points out.
According to Kong, about 60% of JustCo’s members are business enterprises of varying sizes. They include interior design firm Wilson Associates, which was one of the first tenants of JustCo at Marina Square, occupying about 10,000 sq ft of space. Another company is Singapore sovereign wealth fund Temasek Holdings, which occupies an entire floor at Just- Co’s co-working space at MacDonald House.
Meanwhile, China-based internet company ByteDance, the creator of TikTok — a video app popular with teenagers — and currently valued at over US$75 billion, opened at the JustCo space in Bangkok. It is now expanding into one of JustCo’s new spaces in Jakarta.
JustCo at Marina One has a total of 80,000 sq ft of space
JustCo has also outgrown its own office space. The firm currently occupies about 8,000 sq ft at Marina One. “We now need at least 20,000 sq ft of space for our office,” says Kong. “Singapore is our headquarters, and our design and IT teams are housed here.” JustCo has more than 200 staff today, and about 70% of them are located in Singapore.
Soaring valuation
“By next year, we should do Singapore proud by becoming the next home-grown unicorn,” says Kong. To be considered a unicorn, a startup has to have a valuation of at least $1 billion. Other Singapore-based start-ups that are considered unicorns currently include ride-hailing giant Grab, online shopping platform Lazada and software firm Razer Inc.
Kong continues to see opportunities for growth in the CBDs of all the major cities in Asia. “At least 60% of big local and multinational companies are located in the CBD area,” he says. “And we want to dominate the CBD.”

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