Coworking & Flexible Workspace in 2020-2021 A Market Insight Report by Acclime Vietnam, supported by Cushman & Wakefield CONTENTS.

Flexible workspace in Vietnam. Where opportunity meets growth. pg. 3 1

The outlook. pg. 9 2

Marketplace analysis and the underpinning for the future of work. 3 pg. 14

Insights into operators and market entry ramifications. 4 pg. 19

The power of users. Value and perception of occupiers. 5 pg. 31

Future of work and the key role of 6 flexible workspace. pg. 34

References & Engagement team. pg. 36

2 1 Flexible workspace in Vietnam. Where opportunity meets growth.

3 a world where human productivity In Vietnam, due to continued economic has a significant correlation with the expansion, the increase in startups INworkspace environment and culture, and SMEs, and changes to traditional and where the office location becomes more and office models, it has become more more important in regards to business operations difficult for businesses to find and efficiency models, it is critical for international appropriate office space in central investors and businesses to have a clear understanding of the flexible office and coworking areas such as Hanoi, Danang, and Ho space market in the region they operate in. Chi Minh City.

The rise of the coworking space culture has its roots in the aftermath of previous recessions, which led to an increase in the number of small and medium enterprises and start-ups alike. This represents one of the key premises for the fast development of the coworking space model globally, which now Hanoi has become a mainstream organizational tool used to increase productivity and efficiency, generating fundamental changes in organizations’ structure.

The country’s focus to attract international Hue investors and open its doors to foreign trade has generated a demand for office space in a relatively Danang short amount of time, thus also creating the Hoi An opportunity for the rise of the flexible workspace, as a perfect alternative for businesses to enter the market and have access to areas and locations otherwise untouchable from a traditional workspace perspective. Nha Trang Dalat Ho Chi Minh City Vung Tau

NUMBER OF COMMERCIAL WORKING SPACES IN VIETNAM, 2020

4 A trend becoming mainstream?

The Vietnamese coworking market is growing Whilst initially it was a business culture exponentially as more and more people become differentiation trend in Vietnam, flexible workspace aware of the benefits this niche brings from a is now a valuable opportunity for developers and business and productivity point of view. operators who are seeking to enter the sector, as it opens up their reach not just to startups and SMEs occupiers, but also to multinational companies In a study by Cushman & Wakefield, which now are choosing coworking spaces over the cumulative supply of coworking more traditional locations. space was more than 4 times higher in 2018 compared with 2017, and the Most coworking spaces and serviced offices in new supply was more than double in Vietnam are located in central areas such as the same period. 2021 is expected to Hanoi with ca. 60 locations, Danang with over 20 bring a significant growth compared locations and Ho Chi Minh city with close to 100 with 2020, with the cumulative locations. supply being at least double year on year. Apart from the large, global players such as Regus who has operated in this sector in Vietnam for over 15 years, Wework and The Executive Center COWORKINGCoworking SPACE space IN VIETNAM in Vietnam BY YEAR by (m 2) year who have entered the Vietnamese market in the 180,000 last 3 years, smaller but popular and reliable local 160,000 coworking brands are becoming a strong force in 140,000 the sector, competing with well-established brands 120,000 100,000 by taking advantage of a better understanding 80,000 of the local market needs, community building 60,000 40,000 opportunities, lower prices and convenient locations. 20,000 - 2013 2014 2015 2016 2017 2018 2019 2020 This presents a significant opportunity for investors to enter the market in Vietnam by taking advantage Cumulative Supply New Supply of the chance to consolidate and strengthen local brands in order to better compete with the well- established providers.

(Source: Cushman & Wakefield - Research)

5 Vietnam Overview. Continent: Asia Area: 331,200km2 Region: Southeast Asia Coastline: 3,260km Capital: Hanoi Population: 97,757,118 (31 December 2020) The biggest city: Ho Chi Minh City Currency: Dong (VND)

GPIGDP Growth GROWTH rate RATE & CPI, & CPI 2016 2016-2020-2020 In the context of the COVID-19 pandemic in 2020, Vietnam’s GDP CPI economy still achieved a growth 8% rate of 2.91%, which was a 6% remarkable achievement.

4% VIETNAM, 35 YEARS OF REFORM 2%

0% 2016 2017 2018 2019 2020

NUMBER OF NEWLY ESTABLISHED ENTERPRISES, 2020 Number of new established enterprises 1986 2000 Number of enterprises Released Doi Moi Launched stock market, & Signed US- Total investment (Billion USD) (Reforms) Policy Vietnam Bilateral Trade 150,000 120 Agreement 100 100,000 80 60 50,000 40 20 - - 2009 2007 Enterprises 2016 2017 2018 2019 2020 Investment Overcame 2008 Issued the first Vietnam export and import 2016- global economic resolution on private VIETNAM IMPORT & EXPORT 2016-2020 (BILLION USD) 2020 crisis economy

Import Export

400 300 200 100 2011 2016 0 Reviewed, Launched “start-up 0 20161 20172 20183 20194 20205 6 restructured the country” initiative economy TOP EXPORT SECTORS, 2020

Others Types of phones 27.6% and accessories 18.1%

2018-20 2017 Computer, Signed free trade Issued the first electronic products Iron & steel 1.9 % agreements: CPTPP, resolution on private & accessories EVFTA, RCEF economy Sea food 3.0% 15.8% Means of transport and spare parts 3.2% Wood & wooden Textile and products 4.4% sewing Footware Other products Telephones and accessories 5.9% machinery,Computer 10.5% electronic products & components equipment, and spare 2020 Textiles partsMachinery, equipment, tools and spare parts Succeeded in containing 9.6% Footware Wood & wooden products Covid-19, maintaining growth Means of transport and equipment Sea food 6 Iron & steel Others In 2019, Vietnam’s GDP grew by 7.02%. At the same time, imports and exports of goods and services increased with 13% and 14.3% compared with previous year. The top export destinations in 2019 were South Korea, Japan, ASEAN, , EU and United States. The US was the biggest export destination with circa 58 billion USD, and in 2020 the export destinations maintained their positioning.

Vietnam’s Resilient Strategy - According to World Bank analysts, Vietnam’s Prospects and Reform growth is explained by three main factors: Trade Liberalisation, Domestic Reforms combined with lowering the cost of doing business, and Under Covid-19, Vietnam earned a valuable market Investments in Education and Human Capital position in 2020 by being among one of the few development. economies across the globe that managed to maintain a positive economic growth, cumulated Vietnam has continued its commitment to with attracting foreign investments and keeping the internationalise its economy by being a part of number of virus infections to a minimum. multiple Trade Agreements which offer investors commercial incentives and tariff reductions. Over the last decade, Vietnam has experienced Vietnam joined the ASEAN free trade area in 1995 significant development, due to economic and and signed a free trade agreement with the US in political reforms that drove the country’s growth to 2000. new heights, transforming it into a medium-income country with exceptional prospects. In January 2007, it participated in the World Trade Organisation (WTO) and is concluding several Recent changes and economic reforms, combined free trade agreements in 2015-2019 such as EU with political stability and the government’s drive to – Vietnam Free Trade Agreement (EVFTA) and engage Vietnam in multiple favourable agreements the Comprehensive and Progressive Agreement and treaties, have created an extraordinary for Trans-Pacific Partnership (CPTPP), and more opportunity for international investors to take recently the Vietnam-UK Free Trade Agreement. advantage of the regional growth prospective and focus their attention on Vietnam.

In 2020, due to the Covid-19 pandemic, the country’s economy expanded only 2.91%, and from October to December 2020 the economy grew with 4.48%, signaling a strong recovery supported by continuous investments in the private sector, in conjunction with the successful actions of the local authorities to mitigate and contain the health crises.

7 Internationalisation and Trade Openness is Key.

The country has signed a historical treaty with Within this complex, country-wide development European Union on the 30th of June 2019, boosting mechanism, enabled by sustained foreign direct trade and investment on both sides, and helping investment in most of the major business sectors Vietnam to further integrate into the global in Vietnam, flexible office spaces present an economy and the international community. attractive segment, not just from the operators’ vantage point, but also considering the standpoint of In the EVFTA, Vietnam has increased its offered developers entering the sector and creating a healthy benefits compared with the WTO in terms of competition with the traditional office models. market access granted to EU service providers, Top 10 Foreign Investors by Country, Lifetime, 2020 where additional sectors will be opened up for TOP 10 FOREIGN INVESTORS BY COUNTRY, LIFETIME, 2020 EU investors. The EU has described the free trade TotalTotal registered registered capital capital (USD (billion billion) USD) deal as “the most ambitious free trade deal ever 70.6 concluded with a developing country.” 60.3 56.6

33.7 25.7 Foreign direct investment into Vietnam rose 6.7% 22.3 18.5 percent in 2019 from USD 19.1 billion in 2018. 12.9 12.9 10.4

Korea Japan Hong British China. Malaysia Thailand Netherlands Rep. of Kong Virgin PR The manufacturing and processing industry to SAR Islands receive the largest amount of investment (64.6% (China) of total pledges) followed by real estate (10.2%). Based on the projected growth of the real estate sector, opportunities for developers to take advantage of the momentum become more and more attractive.

VietnamVIETNAM foreign FOREIGN direct DIRECT investment INVESTMENT (Billion 2016-2020USD) (BILLION USD)

Registered Disbursed 38.0 40 35.9 35.5 35 28.5 30 25 19.1 20.4 20.0 17.5 20 15.2 15.8 15 10 5 0 2016 2017 2018 2019 2020

Data released by the General Statistics Office in Vietnam shows that FDI disbursement dropped only 3.2% yoy in September 2020, compared with the previous year and Foreign Direct Investments dropped 18.9% compared with previous year. In perspective, compared with the region and the EU, US economies, Vietnam has overall managed to maintain a positive economic growth and enabled investors to take advantage of the market’s opportunities, even in the Covid-19 conditions.

8 2 The outlook.

9 lexible workspace has turned into a global industry, enabling a fundamental shift in Fthe way companies interact and do business around the world. According to Statista’s coworking space worldwide data, there are currently over 18,700 coworking spaces around the globe.

A research publication by Cushman & Wakefield found that coworking spaces are rapidly expanding in Southeast Asia due to the region’s fast-growing economies and tech-savvy population. The high internet penetration in Southeast Asia along with the rapid development of e-commerce are key drivers which explain the exponential and sustained rise of flexible workspace.

Globally, the Asia Pacific region accounted for 35% of all coworking spaces.

Based on an analysis from Statista, Singapore is currently home to the largest start-up ecosystem in the ASEAN region, followed by Malaysia, , Thailand, Vietnam and Indonesia.

With a continuous flow of direct foreign investments and mergers & acquisitions – Southeast Asia region aggregates cutting-edge technological innovation with infrastructure development and state driven digital initiatives, thus laying the underpinning for the rise of flexible workspace demand.

10 Flexible vs Traditional. Understanding Growth and Leveraging Cross-functional competition? Opportunities.

Ho Chi Minh City, Vietnam is one of the most Coworking Resources states, following the regional attractive destination for investors due to its fast- growth, that Vietnam is in the top 50 countries growing economy. The city is also considered the worldwide by coworking growth per capita. The biggest market of flexible workspace in Vietnam. country secured 0.1 new spaces annually for every Along with CBRE’s report in July of 2019, as of 1,000,000 inhabitants. Q2 2019, the total market supply reached 46,266 Compared with Singapore, which has almost 5 new sq. m. GFA, increased by 101% from the same spaces per million inhabitants, Vietnam has a long period last year. This figure is projected to have a way ahead. This is actually good news for investors twofold increase in 2020, lifting the rate of flexible entering the market, as sustained development and workspace from total available office locations up internationalisation are the underlying foundation from 2% to 5%. for the sector’s growth.

Due to the China-US trade war, the manufacturing COWORKINGCOWORKING GROWTH PER PER CAPITA CAPITA and logistics industries were a key driver for industrial and traditional office space market in 6.0% Ho Chi Minh City, with major companies exploring 5.0% opportunities laid out by the shift in production 4.0% from China to Vietnam. 3.0%

2.0% Under the current global situation of the Covid-19 1.0% pandemic, where both traditional and flexible office space markets are going through a temporary 0.0% downturn, it is a high probability that in the coming aftermath, the move towards flexible workspaces will be reinvented by a sustained drive of the digital economy and a more agile approach from Furthermore, Ho Chi Minh City ranked 41 of top 50 international enterprises. cities worldwide in 2019/2020, where every 47.5 days a new coworking space was established.

The entry of international operators in the Vietnamese market is expected to further the scalability of the industry, by engaging providers in competitive strategies, partnership agreements or business consolidation models.

From the user’s perspective, these are all beneficial outcomes as market diversity and healthy rivalry creates more added value and flexibility, bringing down the overall office prices as well.

11 Which trends stand out?

Increase in foreign operators entering the market their occupiers’ working condition, we will see more large enterprises turning towards flexible The flexible workspace market in Vietnam has workspace operators, solving this way one of their experienced significant expansion, especially in major problems: the relatively high price and limited central hubs such as Ho Chi Minh City and Hanoi. availability in the traditional workspace sector. This development has made the sector highly attractive to international providers across the Innovation & Value-add world, which view Vietnam as a fecund business market, expecting high returns with relatively low Enabled by technology, flexible office spaces are risk. now being built in premium buildings, using unique architectural design models created to facilitate Between 2019 and 2021, large flexible workspace engagement, using modern communication brands such as WeWork, The Executive Center, and facilities. Regus have been expanding their coverage in Ho Chi Minh City and Hanoi, challenging local providers Operators are re-thinking coworking spaces using in active, consistent competition. However, due agile and lean working methodologies, thus to Covid-19 and its impact on the market, some empowering down the line the tenants to further of the providers have paused their expansion or expand on this communication transformation downsized, adopting a more risk-averse strategy. and start using the same innovative technologies themselves. This trend is seen to increase further in 2021 due to the high market growth rate, demand drivers and Transformation in facilities such as interior gardens also because of the structural mindset shift started and modern studios bring a high satisfaction by the covid-19 pandemic, which pushed companies to customers seeking something different than not just towards swift digital transformation traditional offices. Other operators are adding adoption, but also made them view employee extra amenities including food and beverage engagement and flexible work communication as outlets(F&B), art galleries, game rooms, and bed & key productivity assets. breakfast to stand out from the crowd.

Large enterprises are key demand driver The biggest value-adds for both large and small companies consider flexible workspace lies in In 2021, aside from freelancers and SMEs who the flexibility to scale up and down, not having to already represent a considerable percentage invest significant Capex, and having their of the occupiers in flexible workspace locations offices in a more vibrant environment that aligns across Vietnam, the demand of large enterprises more with the mindset and needs of young are growing as they push towards digital employees. It also gives companies access to the transformation and adopt a lean approach towards communities that operators build and employee engagement and work benefits. maintain, connecting everyone together through As vacancy rates drop annually and coworking business matching, events, workshops and operators continue to develop their signature social engagements. product sets and scale new solutions to improve

12 The Value In Numbers Key Operators and Scalable Locations

According to Cushman & Wakefield, flexible As market growth rate of flexible workspace Vietnamese office space industry in 2020 occupies develops sustainably, numerous providers have approximately 160,000m2 of space in A and B emerged in the sector and have expanded rapidly. grade buildings across the two office hub cities, less Alongside well established local providers such as than 4% of total A and B grade inventory. Dreamplex and Toong whom already managed to aggregate their brand with local communities, foreign brands Regus, The Executive Center, Wework, UPGen, and Circo account for an HO CHI MINH CITY TOTAL FLEXIBLE increasing proportion in the market, with several FLEXIBLE MARKET MARKET SUPPLY locations in central areas like Ho Chi Minh City and 75,000sq.m 160,000sq.m Hanoi and future expansion plans on the table. of space in 2020 grade A&B buildings COWORKING SPACE TOP MEMBERS

developing5 91% market under 35

In 2020 and 2021, the number of coworking and In addition, global providers The Hive, and Compass serviced offices in Vietnam is set to break through offices are believed to expand their locations in the 160,000 square meters (m2). Vietnam during the next few years, seeking valuable consolidation opportunities and partnerships. According to the CBRE Global Research on Flexible Workspace, HCMC market is ranking in top 5 developing markets with the CAGR of more than 80% per year, where 91% of coworking space members are under the age of 35.

These market movements make the Vietnamese flexible workspace sector become extremely competitive, but also innovative, thus facilitating new technological adoptions and high-quality customer service delivery.

13 3 Marketplace analysis and the underpinning for the future of work.

14 14 Demographics and Habits Users and Work Efficiency

Flexible workspace occupiers are represented by Based on these different user segments, coworking freelancers and entrepreneurs, SMEs and small space members approach their commitments regional business groups, and MNCs – international in regard to length of stay in distinct but firms with high expectations and an affinity complementary models. towards flexibility and lean work environment. Freelancers and digital nomads tend to move from place to place more often, therefore they prefer E ntr short-term packages that allow them to work in ep s re various locations across Vietnam, putting more E n e M u emphasis on flexibility. S r s

COWORKING

On the other hand, SMEs and MNCs still have a

SPACE s

e corporate mindset as a background and prefer

F s s r MEMBERS e e in more standardised packages and longer term e s l u a B n l contracts, of at least 1 or 2 years, with fixed ce na rs gio /Re workspace zones that allow their employees to MNCs focus, work in teams and increase their productivity level. This need to balance the best of both worlds - With the latter users gaining more and more power traditional office and engaging coworking over the former, we see an ongoing shift in changing spaces – is reflected in for example WeWork’s the nature and structure of the establishment. enterprise floors in both of their eTown and LIM Tower 3 locations, and Dreamplex’ focus on fully Productivity in flexible workspaces is one of the private, unbranded, customizable enterprises main drivers for the demand, along with facilities HQ’s in their upcoming District 2 and District 4 and price. Occupiers discover that their employees projects. interact and communicate more effectively, thus improving productivity and lowering stress levels. Market segmentation

The interaction between different departments Flexible workspace is becoming a highly competitive from the same firm within a specially designed industry in Asia, with hundreds of thousands of open space nurtures the opportunity for employees locations competing for a limited consumer market. to learn new sets of skills from their colleagues, by Under significant pressure from the growing being in contact with their peers and feeling part of demand from the consumers for quality and a community, not just a work area. innovative services, and from the competitors alike, the operators have to take into consideration the Flexible offices are not simply a place of work, but specifics of the local market segmentation. a community focussed hub, where occupiers can interact with each other in an organic way, forming new social and professional habits, as they discover new ways of communication.

Coworking spaces enable occupiers to create these new habits within organisations, by providing platforms for events, business and social and activities which strengthen their communities and improve the occupiers’ personal and professional knowledge.

1515 As the demand curve elevates, the market will see The young workforce - Generation Z and millennials competition heating up, challenging operators to are eager to work in creative environments, provide an even more innovative workplace to get surrounded by like-minded change-makers, enabling ahead of their competitors and win market share. them to leverage opportunities to discover, connect, A large percentage of the flexible workspace user collaborate in new ways. market share is represented by small businesses With the smaller businesses catered to, operators with relatively young workforce, who are seeking focus extensively on supporting the MNCs growing access to a new type of workspace. A new expansion. community spirit connects them together under a similar growth culture and set of values, where The old ‘status-quo’, where coworking spaces were entrepreneurs and young businesses can compete dedicated and created to serve freelancers, part togethear and thrive together, in a modern, open time workers and small businesses that cannot work environment. afford a traditional office, is not just challenged, but completely overhauled from the ground up. COWORKING SPACE MEMBERS Large are moving their traditional workspace to take advantage of the robust market 9% which holds record low vacancy rates across A & B grade stock. Regional and global flexible workspace operators have an opportunity to enter the market, fuelled by increased demand from multinational companies and supported as well by low vacancy rates in traditional workspace. 91% In 2020 Vietnam achieved a 2.91% growth, and has become one of the most sought out investment Under age 35 Others locations in Asia and throughout the world. Though undertaking foreign investment in Vietnam, MNCs continue to grow aggressively and face difficulties A study by CBRE Research Vietnam found that 91% in finding space for their workforce and projecting of co-working space members are millennials, i.e. an accurate employee growth count. under the age of 35. Under these structural and social market preconditions, coworking spaces become the natural, immediate and most flexible solution for many large investor groups, allowing them to expand their business and workforce count with much more elasticity compared with traditional office space.

16 Availability and Supply in Prime City Hubs

Relatively new in the office supply market, coworking Along with Ho Chi Minh city, coworking space supply spaces gradually became a mainstream alternative in A & B buildings in Hanoi has also grown from 27,896 to traditional offices and developed rapidly due to the to 75,686 square meters in the period of 2017 to 2020. high demand from enterprises and supported by the In 2021, Hanoi coworking supply is predicted to rise Vietnamese economic growth. to 82,686 square meters in total area due to the continuing high demands.

COWORKING MARKET - A&B SUPPLY (TOTAL M2 AREA) Coworking Market, A&B Supply (sqm) Major Openings and Key Operators 180,000 160,000 140,000 The coworking space market in Vietnam has expanded 120,000 100,000 consistently in recent years and not only major local 80,000 operators like Toong, UPGen, Circo, and Dreamplex, 60,000 but the number of small operators with just only one 40,000 20,000 venue like Leopalace21, Vuong Tron Giac, Spiced are also 0 increasing considerably. 2017 2018 2019 2020 2021(F) HCMC Hanoi Wework is one of the dominant global providers in the market and they are consistently increasing their Following the global trend, more and more flexible footprint in Southeast Asian countries like Vietnam, office spaces are opened in Vietnam, especially in Singapore, Malaysia and Thailand. In 2020 however, the two central hubs Ho Chi Minh City and Hanoi. Wework took a more careful approach in their The graphs illustrating the coworking space market expansion in Ho Chi Minh City with opening at Lim A & B supply from Cushman & Wakefield express the Tower and closing Sonatus. remarkable development of flexible workspace market in the two biggest cities in Vietnam: Ho Chi Minh City Due to the Covid-19 outbreak, several flexible office and Hanoi. operators are deferring their new location opening and are waiting for stabilisation around the region. Along In the end of 2020, Ho Chi Minh City had 74,961 total with challenges, opportunities arise as well, enabling square meters area supply of coworking spaces in the well-established providers to take advantage of grade A & B building. The city supply has experienced the market slowdown and seek to acquire smaller a significant increase since 2017 and is forecasted to coworking spaces that are under pressure. keep on expanding to 81,961 square meters area in 2021 – more than 6 times the supply in 2017. However, some operators have focused on growth as their key strategy based on large amounts of customer demand. Dreamplex continues to reinforce their position in the market with a new location in Thao Dien, District 2, Ho Chi Minh City opened at the beginning of 2021. It is expected to open another 3 further locations in late 2021 across District 1, 2, and 4.

17 17 Locations and Market Share

Ho Chi Minh City is one of the main coworking space markets in Vietnam. The city accounts for more than 50% of coworking space locations in Vietnam, with most coworking spaces in the city being located in central areas (i.e. District 1 and District 2), and just a few venues operated in other areas such as District 4, 5 or 10.

According to research from Cushman & Wakefield in 2019, Wework was the largest supplier of flexible office in Ho Chi Minh City with the total area of 19,180 square meters.

However, in 2020 they have closed their Sonatus location and other operators such as UPGen, Regus and Toong are seen to grow their market share extensively in the upcoming years. Hanoi is the second largest economic centre in Vietnam, where the percentage of coworking space Moving forward to 2021, with WeWork having supply in the city is 0.06% from the total office closed an 6,800m2 location, it is estimated that space supply. the consistent expansion strategy will put Dreamplex in the challenger position for the top, Most coworking spaces are located in grade A & B as it will increase its total footprint to almost buildings which provide occupiers elite workspaces 18,000m2 with its three new locations. and a highly professional atmosphere. UPGen, Cogo and Regus are some of the most prominent spaces However, the overall coworking space supply in Ho in the city, where UPGen has 14,479 square meters Chi Minh City accounts for only 0.07% of the total in total area compared with Cogo with 12,200 office space market, which makes the sector highly square meters and Regus with 5,674 square meters, attractive to potential investors who are seeking and Dreamplex with 3,432 square meters. to leverage on the projected future growth and the development of the market. Danang the central business hub of Vietnam, with its economy developing steadily in recent years NUMBER OF COWORKING SPACE LOCATIONS due to a significant growth of foreign investments and infrastructure development, which makes Danang one of the most interesting entry points for the flexible workspace sector, after big cities 52% 35% 10% 3% like Ho Chi Minh City and Hanoi. Local operators as DNES, Enouvo and IoT Space leverage their potential by maintaining close relationships with Ho Chi Minh City Hanoi Danang Others the local community, supporting them with business events and start-up incubators, attractive areas for coworking space operators to participate in.

18 4 Insights into operators and market entry ramifications.

1919 a market where the competition between traditional and flexible workspace is INbecoming more and more severe, it is paramount to understand and further differentiate the core attributes that define coworking spaces.

Where are the strengths in contrast with traditional offices?

Cheaper Rent and Lower maintenance fees When their team will grow, they can expand seamlessly withing the coworking space and take One of the essential factors that make coworking over additional area according to their exact spaces an ideal choice for many enterprises is the needs. In addition, for freelancers or long-distance lower price compared with traditional workspaces. employees who don’t work in one permanent place, The coworking space operators negotiate long coworking spaces with a wide regional coverage term deals with landlords and design their space have created packages to allow their member using advanced analytics and fit-out planning to access all of their locations under the same to optimize the square meter rental yield to the contract. maximum. Collaborative environment and community Furthermore, enterprises and individuals working engagement in flexible offices do not have to deal with setting up amenities, furniture and office supplies such Within the highly innovative and growing as printers and lunch areas. Operators undertake shared-space work model, members can easily these for their occupiers as an added value and find new collaboration opportunities or build offer additional services such as mail services, new relationships with their peers. Most of the administrative tasks, office accessories supplies, coworking spaces in Vietnam are highly active and internet fees and sometimes business processing organize various community activities and events support. such as panel discussions, seminars and workshops, leveraging on industry experts and their extensive Demand customization network to share valuable insights for their occupiers. One of the key benefits of flexible workspaces is the ability to allow a wide range of space customization Wework was globally one of the forefront models, relating directly to the needs of their promoters of more causal activities which are slowly occupiers. For instance, start-ups and freelance becoming a norm, such as Friday after work meet- project teams will be satisfied with just small office ups, weekly happy hours, community as they may need more privacy to focus on their lunches and networking activities. Over the past work. year, these activities have been halted per global WeWork guidelines and events are no longer permitted in the WeWork spaces.

20 Identify potential weaknesses and Window of opportunity. Challenging evaluate their impact the status quo

Inconsistent or lower brand identity Vietnam is one of the most attractive coworking space market in the region due to its fast-growing Coworking space occupiers might not always economic development and a sustained foreign have the possibility to personalize and brand investment inflow from key partners such as United their workspace according to their identity, when States, Europe and Asia. Vietnam has made foreign choosing their exact desired furniture, walls investment a cornerstone of its economy, and has decoration or display of their brand name across looked to provide a foundation for domestic growth the interior and exterior of the office. and stability on the back of the foreign investment.

Sharing facilities In order to grasp these opportunities, several major providers like Wework, Kafnu and Compass have Flexible workspaces provide common amenities entered the Vietnamese flexible office market and for all the occupiers, thus sharing these facilities rival with local coworking spaces and traditional may sometimes be cumbersome and inconvenient, workspaces as well. where resources such as meeting rooms, printers, parking, and others are not readily available when Vietnam has the advantage of a young workforce, needed. where people under the age of 35 account for over 50% of the total population. In combination with Distractions and lack of privacy the fact that the country is one of the fast-growing startup and SME environment in Southeast Asia, Even though community events and networking operators active in the coworking space industry activities provide a significant advantage to the and new entrants in the sector can leverage on coworking space members, for certain companies these market attributes, creating and building active in specific fields (i.e. customer service, innovative spaces for a thriving and creative consulting) these may also pose a high level of business community. distraction, especially when they require a high level of privacy for the staff. The country has also signed a historical treaty with European Union on the 30th of June 2019, boosting trade and investment on both sides, and helping Vietnam to further integrate into the global economy and the international community. Since 1995, Vietnam joined the ASEAN free trade area and in 2000 it signed a free trade agreement with the US. Vietnam has then joined the World Trade Organisation (WTO) in 2007 and is currently participating in multiple free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It is also a member of the United Nations, the ASEAN Regional Forum and the Asia-Pacific Economic Cooperation Forum, among other international organisations. These agreements make Vietnam a highly attractive market as foreign investors can benefit from the international regulations and best practices that are implemented by the participating members.

21 KEY AGREEMENTS / ORGANISATIONS THAT VIETNAM HAS SIGNED / JOINED TO FACILITATE FOREIGN INVESTMENT signed to world’s largest commercial treaty: RCEP 2020 Macro Implications and Barriers signed a treaty with to Entry European Union 2019 Alongside opportunities, investors should be aware of the macro-economic and socio-cultural signed the CPTPP (Comprehensive and Progressive challenges that govern the business environment in Agreement for Trans-Pacific Partnership) Vietnam and the flexible workspace sector. 2018

joined the World Trade Investment and legal challenges Organisation (WTO) 2007 Apart from the commercial aspect, operators and signed a free trade especially foreign investors, should be aware of the agreement with the US compliance and regulatory conditions specific to 2000 the real estate sector, and make sure they are in line with the authorities expectations in respect to joined the ASEAN licensing requirements and corporate governance. free trade area 1995 • The process to establish a foreign enterprise in Vietnam can be somewhat different to other jurisdictions, with the terms used and specific requirements often confusing or difficult to interpret. The relative political and economic stability, • Prior to the end of 2020, operators were required together with legislative processes to encourage to commit a minimum charter capital of VND20 foreign investment (whilst still protecting domestic billion (equivalent to USD 805,702) which needed and state enterprises), have enabled foreign to be identified based on the contributed capital investment to grow across a broad range of on the Investment Registration Certificate, and sectors and locations. Vietnam has also benefited charter capital on the Enterprise Registration from political and economic instability of other Certificate; However, under the provisions of economies in Asia in recent years, with Vietnam the new Law of Investment, investors in real continuing to provide a credible investment estate are not restricted by this minimum capital destination. requirements, which has been removed to further promote market growth; Vietnam is in top 50 countries worldwide by • Operators must implement a project plan and ‘coworking space growth per capita’, however submit it with the authorities for approval. the number of coworking spaces in the market This condition may be more lenient for local is still considerably lower compared with top investors, however foreign investor are required countries like Singapore, , Malaysia. to undertake a project assessment plan at the This situation means that Vietnamese coworking initial stage of the incorporation and market entry space market still has plentiful spaces to grow process; and Under these preconditions, the are obvious business • Requirements in terms of premises and location considerations for investors to look into and conditions consider the coworking space market in Vietnam, where there are clear signs for rising demand, low At the end of this chapter we will delineate supply and growth opportunities. and emphasize the provisions and regulatory requirements for foreign investors seeking to enter the coworking space sector in Vietnam.

22 Economic environment and sectorial limitations HANOI OFFICE MARKET (thousand m2) Hanoi Office Market (USD/m2) In the current Vietnamese real estate market environment, the vacancy rate in central hubs like 2500 40 Ho Chi Minh City and Hanoi is limited, which makes 2000 32 it difficult for coworking space operators to find 1500 24 appropriate, available locations when deciding to 1000 16 enter the market. 500 8

HO CHI MINH CITY OFFICE MARKET 0 0 2016 2017 2018 2019 2020 2 (thousand m ) HCMC Office Market (USD/m2)

2500 40 Leased Vacant Gross rent

2000 32 The above charts with data on occupancy illustrate 1500 24 the small percentage of available space compared 1000 16 with leased space in Ho Chi Minh City and Hanoi, 500 8 thus consequentially finding a suitable location is

0 0 one of the substantive challenges for operators 2016 2017 2018 2019 2020 setting up coworking spaces in Vietnam.

Leased Vacant Gross rent In addition, the Covid-19 epidemic has affected the Vietnamese economy and the coworking space sector, which had a setback when the authorities advised businesses to adopt the work from home model and social distancing provisions in April 2020.

With many employees working from home, coworking space operators faced a dilemma: continue their expansion and focus on growth, to meet the projected demand of the market in the upcoming years, or take a moment to rethink their strategy, pause the growth cycle and focus on improving the interior and design areas, to make the more attractive to the current customers.

Social and cultural environment

As the coworking space industry is viewed as a new, growing trend in Vietnam, even though the demand is increasing consistently, the number of spaces per capita in the country is still significantly lower compared with regional peers Singapore, Hong Kong, Malaysia etc. Consequently, the consumer awareness of the concept is still moderate, as the majority of young Vietnamese citizens are culturally habitual to use coffee shops as their work and study venues, which makes it difficult for coworking spaces to attract new occupiers in the short term.

23 Competing Against Each Other or Thriving Together?

Direct and indirect competition

Global operators such as Kafnu and Compass have increased competition in Vietnam, with massive investments in grade A locations in Ho Chi Minh City and Hanoi, and with expansion plans ready to take off as soon as the pandemic signs of recovery are in sight. Due to the limited availability in major hubs, flexible workspace owners have to find solutions that will enable them to continue their expansion and development, and in the same time create an efficient market strategy to compete for the available locations.

Vietnamese coworking space market is one of the most dynamic and innovative industries, with a significant growth potential and profitability. To leverage on this growing trend, coworking space operators have to find and express their unique value proposition, ensuring they stand out from the norm and are ahead of their competitors.

The vast majority of the Vietnamese working class are used to work in traditional corporate offices, coffee shops, universities and public libraries. The cultural and historical characteristics of the labour capital in Vietnam echoes in the flexible workspace For Dreamplex, market, where operators have to compete not just with traditional offices but also with a variety of indirect, unconventional providers.

Where authenticity and innovation play a There’s a reason why companies like cornerstone role in today’s extremely dynamic traditional offices. They provide a market, operators have to create their own specific professional look, give full privacy, and are competitive strategies to set themselves and their a place to bring the company brand and occupiers apart from apart from other types of culture to life. What we are doing with our workspaces. new locations is to combine those qualities with the attractiveness of a coworking space: a vibrant environment, well-designed spaces, lots of choice to fit every personality and working style, and a rich program of employee experience activities. Your private office then just happens to be within this lively, exciting campus that your employees love going to.

Dreamplex believes they will compete with traditional office spaces by bringing them into “a better office building”.

24 (i) “Private, Branded Offices: starting in 2021, Dreamplex locations are very lightly branded. Instead, the occupier’s logo and brand are central. For guests visiting those companies, there are little cues the company is housed in a flexible office – other than from the vibrant ground floor that oozes energy and excitement. Gone too are the long corridors of glass walls that provide no privacy. Instead, offices are as private as in traditional office buildings, while they’re designed for each company’s specifications, needs, and culture.

(ii) Hospitality-Level Care: as ‘serviced offices’ have become a commodity, Dreamplex Different is better? elevated its offerings to 5-star care. Their dedicated Member Experience team is trained Mirroring their client’s personas, needs and in hospitality and understands that now more values, coworking spaces in Vietnam shape their than ever, it’s the human touch which makes the environment, culture and services to match their biggest difference. Companies can bring their direct audience. (large) teams, and leave the daily care to these hospitality experts. This is especially attractive The layout and decoration is one of the essential for international companies who don’t have elements, however it is not the benchmark for strong local leadership or HR teams present. constructing a successful market positioning and brand. Most operators agree that the coworking (iii) Employee Experience: the office and the great space is beyond the workspace itself, which only care are just the starting points. Dreamplex has provides for its members a physical location, coffee built an Employee Experience team that works and Wi-Fi. What is more important is the specific directly with large customers like Tiki, Topica, culture of the environment, which becomes the and others to deliver a world-class Employee cornerstone of each unique value proposition. Experience without any additional HR resources, budget, or time. This includes social events for As a result, operators leverage on their own, team-building, creative workshops, training & particular competitive advantage to attract development, wellbeing programs, and more. occupiers in their physical space and community network. Their focus is not only to increase the number of occupiers but also to enhance the service quality and the additional benefits for the members, so that the client retention value is consistent, based on genuine loyalty.

“The biggest reason why companies still pay for an office is because when done right, it can be a strategy tool to attract, engage, and retain the best talent. We design and deliver engaging workplaces that create ‘a Better Day at Work’ for the employees of medium and large companies in Vietnam.” explains Dreamplex. They differentiate their “outsourced workplace experience” service through 3 core pillars:

25 Market-Share and Expansion Pricing and Forecast Prospects. Timing is critical

Covid-19 outbreak impacted the real estate In Vietnam, flexible workspaces rental fees are market in a significant way, and coworking spaces overall much lower when compared with Asia are seeing the aftereffects of the crisis in their Pacific neighboring countries. occupancy rates and demand. Many operators’ expansion plans have been put on hold for the Location is one of the key pricing drivers in the moment, as they are concentrating on customer market, where flexible offices located in grade A retention, support for affected businesses and buildings have higher fees than those in grade B, improvements in their service offerings. grade C, and obviously the customer segmentation plays a big role as well. However, flexible workspaces are considered a cornerstone trend in the real estate industry Furthermore, the fees are higher in the main city and the demand will have a consistent growth hubs, with Ho Chi Minh City leading the trend with trajectory, in line with the systemic changes in the highest rental fees in Vietnam. The price varies the way companies and their employees embrace from VND 1.8million to 9.3million monthly for a digitalization, innovative work models and a more desk, with the average price at ca. VND 3million lean, versatile approach to labour. per month for a desk located in a coworking space. Second in line is Hanoi, where the average rental In the aftermath of the outbreak, it is expected fees per month fluctuates around VND 2million. that many global coworking spaces will enter the Vietnamese market, expand or consolidate their COWORKING RENTAL FEES FOR A DESK current operations, especially in key locations like Ho Coworking(million VND/month) rental fees Chi Minh City and Hanoi. In the same time, prime 10 local coworking spaces like Toong and Dreamplex 9.3 will grow their brand with new locations and new 8 services to meet their occupiers’ demands and 6.5 6 establish an efficient strategy in line with the growing competition. 4 3 2.4 As SMEs and multinational companies will continue 2 2 2 1.8 to shift their attention towards flexible offices, 1.2 1.2 to improve their culture and enhance their staff’s 0 Danang Hanoi HCMC working conditions, operators have to prepare in advance and ready their resources to be able to Lowest fee Average fee Highest fee leverage the demand boost post-Covid-19 and align themselves with the occupiers needs in a timely In comparison with the two largest cities in way. Vietnam, the price of flexible workspaces in Danang is more affordable, creating a valuable opportunity for freelancers, start-ups and small entrepreneurs to set up their operations in the coastal city, which has become one of the most sought out hubs for technology related start-ups and digital nomads. A typical high-end price for a desk in a coworking space is VND 2.4million per month and in most cases, the average rental fees are under VND 2million per month.

25 26 Future Growth and Innovation

The new work culture has lead enterprises to look Given the volatility in the economy and uncertainty for new solutions to enhance their staff efficiency regarding business and headcount projections, this and coworking spaces is one of the primary is where we see opportunities for enterprises to solutions for this approach. The industry has be more proactive about reassessing their long- offered several services, customization options and term real estate needs. The co-working sector will cheaper costs that helps the enterprises to improve continue as a relevant partner to the more real their business performance and save their time and estate industry, and such spaces will continue to be money. They have successfully transformed a fixed in demand as companies rethink their flexible real workplace hierarchy to a more flexibility workspace. estate portfolio. It is no denying that coworking space will have a lucrative growth in the workspace industry in the As such, co-working spaces will continue to be an next few years despite the hindrance of the industry additional resource for companies as we foresee due to Covid-19 in 2020. them taking into consideration factors such as resource efficiency, lease flexibility, and mobilization As Wework explains, “The situation is calling for a of their workforce in preparation for future refresh in how we rethink and reimagine spaces unprecedented scenarios.” amidst a changing future of work landscape, and companies need to think about having a holistic Furthermore, Wework states: approach towards their real estate portfolio. As we navigate the future of the workplace, there is no doubt that the re-entry back to the workplace will require offerings that make us prepared for a As the economic confidence and interest post COVID-19 environment. Along with greater continues to grow in Vietnam, co-working emphasis and pressure for professional distancing space needs will also evolve to reflect more post COVID-19 and given our presence and close of what large enterprises want as well. Apart proximity, we have the ability to create a dispersed from the agility and flexibility when it comes workspace campus for enterprises and are able to to leases and operations, they will also focus provide alternative and business ready space for on cultivating an environment to keep their business continuity. employees engaged and interested. The physical workspace will be a key element in this and the coworking industry in Vietnam will see a stronger emphasis in design and experiences to support employee engagements and interactions.

27 In Dreamplex’s vision,

The industry will develop more and more into Workplace Experience as a Service, where companies get more than just the bare office basics. At its heart, this really is a service industry and any offering needs to provide real, differentiated value. Similar to consumers having the choice to end their Netflix or Spotify membership when they repeatedly feel there isn’t much use in it due to lack of new content, in WXaaS customer will come to expect us to deliver them true, continuous, value beyond just the flexible office space. It will therefore be not only a question of scale and price, but a true understanding of SMBs and Enterprise needs – especially in how to use their office as a strategic tool to recruit, engage, and retain talent.

Coworking spaces will also integrate their technology systems to keep up with the demand of the modern working trends and bring the most flexible environment to their members. The technology in coworking spaces will go beyond performant computers and traditional office utilities like printers, copiers, embracing digital transformation at all levels.

28 Regulatory Requirements and How to Open a Coworking Space in Vietnam

From a legal and compliance perspective, to enter the Vietnamese flexible workspace market, investors need to be aware of certain provisions and requirements. Although there are various restrictions that need to be carefully considered, if the processes are followed through in a compliant manner, operators are able to leverage on the market’s opportunities, start and develop their business successfully.

Under the WTO Commitments, Vietnam did not commit to open the market for foreign investors in What are the conditions? real estate trading. However, as stated in Article 3.1 of Law on Real Estate, although the law does Apart from the commercial aspect, prior to the end not specify leasing flexible office/coworking space of 2020 investors should also meet certain legal as a real estate trading activity, upon the official conditions, which may present some entry barriers definition of real estate trading, it is commonly for new market entrants. understood that leasing or subleasing coworking space is a type of real estate trading activity. Aside from the requirement to have a formal commercial entity in Vietnam, as described in In addition, Article 11 of Law on Real Estate Trading Article 10.1 of Law on Real Estate Trading, and state the scope of real estate trading conducted Article 3.1 and Article 4 of Decree 76/2015/ND-CP, by Vietnamese organizations, individuals, overseas prior to 1 January 2021, investors were required Vietnamese or foreign-invested enterprises as to have a minimum charter capital of VND20 below: billion, equivalent to USD805,702, which has A Vietnamese organization or individual may to be identified in the Investment Registration conduct real estate trading under following forms: Certificate(“IRC”) and the Enterprise Registration a) Purchase of buildings for sale, for lease, or for Certificate (“ERC”). However, under the new Law of lease purchase. Investment, from 2021 the VND20 billion minimum b) Rent buildings for sublease. capital requirement is removed, enabling investors to take advantage of the market’s opportunities Based on these prerequisites, the Vietnamese with much more ease and less restrictions. law allows local and foreign investors to invest in real estate trading sectors, however the scope of Foreign investors are also required to present for permitted real estate trading activities differ case approval a “project” at the initial stage of the by case. establishment process, as the licensing authority usually requires the project documentation as a key Business lines first step.

According Decision 27/2018/QD-TTg dated 6 Jul Lastly, there are specific provisions regarding the 2018, the appropriate business line for the activity premise of the real estate project. As per Article 9.1 of leasing coworking space/service offices is: of Law on Real Estate Trading, a building part of the real estate trading market should satisfy the Business lines VSIC CPC following requirements: Trading of own or rented 6810 • The ownership of the building on land must be property and land use registered in the Certificate of land use right, rights referred to as Certificate of land.

29 30 Registration Certificate permits the foreign investor to commence the establishment of their company in Vietnam. The IRC is akin to the concept of “Foreign Investment Approval” in other jurisdictions.

The second step refers to the application for the Enterprise Registration Certificate, which shows the business registration information of a company established in Vietnam. This document is akin to the • There is no dispute about the land and ownership “Certificate of Incorporation” in other jurisdictions. of the building on land. • The building is not distrained. After receiving the ERC, foreign investors must remit the registered charter capital within 90 days Steps to Register a Foreign Owned Real Estate from the date of the ERC issuance. Trading Company in Vietnam Each foreign owned company in Vietnam must Assuming the preceding conditions are met, foreign appoint at least 1 Legal Representative. A Legal investors are required to conduct two steps in order Representative of an enterprise is an individual who to obtain their real estate trading business license can exercise the rights and obligations for and on for renting/subleasing a serviced office space or behalf of that enterprise. Generally, only a Legal coworking space in Vietnam. Representative can sign contracts for the company The first step is to register an “investment project”, with other parties, although Power of Attorney’s with this project becoming the initial purpose of the can be issued to delegate certain powers to others foreign investor’s company. The resulting Investment in the organisation.

IRC ERC

Step 1 Step 2 Application for an Application for an Investment Registration Enterprise Registration Certificate (the “IRC”) Certificate (the “ERC”)

30 5 Power of users. Value and perception of occupiers.

3131 oworking spaces have become an instrument • COVID-19’s impact on the economy also that businesses leverage on to improve indicates the need for organizations to take on Cproductivity, grow their corporate culture a more conservative approach when it comes to and create a more inclusive environment for their operational needs such as lease flexibility and employees. The concept of being part of a business saving as well as being able to outsource services community, aligning oneself to a common work to drive cost impact and resource efficiency. culture has enabled the workspace transformation to take off, reaching out through a horizontal Long-term: Shifts in perceptions of a new occupier growth model most of the core, strategic future management departments in a business. • As companies recognize the growing importance of having flexible workplace Coworking spaces are now suitable not just arrangements, conversations have also elevated for freelancers and digital nomads, but due to to the discussion of a longer-term and more limitations in office space availability and the comprehensive future-proofing business strategy competitive real estate market, the demand as opposed to reactive measures to the current has shifted to enterprises, especially SMEs and situation. multinationals. • More than ever, there will be a greater emphasis on operational and resource efficiency. Flexible In Wework’s view, the notable trends that play a workspaces are proving to be crucial for larger significant role in the occupier’s decision-making enterprises, given the ability to scale the amount process are: of space needed. • For many companies, it will be about having “Near-term: Business continuity for occupiers the space to scale and mobilise their workforce • The emphasis on business continuity brought in situations as such - it is about the ease and about by COVID-19 has generated interest from convenience for their employees to plug and work. members and non-members on how space-as- • As such, large enterprises future-proof a-service plays into their business continuity operational efficiencies by innovating their strategy. global real estate strategy and forging strong • For occupiers, it’s all about having the scalability partnerships with flexible workspaces”. and flexibility to address their needs – both operational and regulatory in a timely fashion • Conversations have also elevated to the discussion of a longer-term and more comprehensive future-proofing business strategy as opposed to just a one-off reaction to the COVID-19 situation

3232 Power of occupiers User segmentation

The occupiers play an essential role along with Toong demonstrates the growing trend of developers and operators in the flexible workspace enterprises shifting towards flexible workspace: industry, where their user personas generate “More and more SMEs and MNCs establish their different demands and expectations that end up presence in Toong’s spaces; if in the past the shaping the market as a whole. number of start-ups used to account for 50% of the premises, today this number is around 30%, The coworking occupiers are divided into two main while the rest of the occupiers are multinational groups: individuals (i.e. freelancers, digital nomads) companies 30%, 10% representative offices, SMEs and enterprises (i.e. startups, SMEs, and MNCs). 20% and 10% freelancers”. The individual occupiers have high price sensitivity and seek to work in a dynamic and collaborate In addition, a new business model emerges environment so that they can connect and build according to Toong, where corporations are their relationships with other potential partners or considering to expand only a part of their office to clients. Toong as an emergency office or complementary space. On the other hand, the enterprise occupiers mostly focus on their privacy and professional environment The above metrics are in line with the overall in which they can boost their staff’s work efficiency industry movements. Within the sector, we can see and improve their public image. Therefore, although a moving trend that clearly shows the multinational shared - workspace is a trend developing around companies competing for space with startups and the world, to adapt and shift from the traditional SMEs. workspace to a flexible one, most of the enterprises choose serviced offices as the first step. The startups and multinational companies recently accounted for more than a half of flexible This approach is confirmed by Toong as well: workspace occupiers in Vietnam, with 30% for each segment and it is expected that the trend will continue to move upwards, fueled by the continuous rise of foreign investments in Vietnam. Serviced office space rental is still the most The data further solidifies the optimistic prospects profitable service for Toong. The demand in the of the coworking space industry in Vietnam and its market is still high, and as our spaces are well potential for growth in the future. designed for customer to establish or expand their business, we are receiving consistent inquiries for serviced studios. FLEXIBLE WORK SPACE OCCUPIERS

According to Dreamplex:

SMEs 20% Startups Multinational 30% companies 30% The demand for a different kind of workplace is now undeniable for SMEs and Enterprises. Representative Offices Millennials and especially Gen Z workers don’t 20% settle any more for the old style of hierarchical, cookie-cutter workplaces. They want a place *based on data from Cushman & Wakefield and specific that offers tons of flexibility. A workplace that info from WeWork, Dreamplex, Toong, and Compass. they can either spend a morning working from a lounge over a fresh cup of coffee or spend time deeply focusing on their work in their own office. This, alongside phone booths, cozy nooks in sunny spots, bookable meeting rooms, and a range of regular desks, moveable desks and standing desks. There always needs to be something new, which is why having a dynamic environment in which no day is the same is exactly what a new generation of workers’ demands. 33 34 6 Future of work and Marketplacethe key Analysis and the Underpinningrole for the Future of Work. of flexible workspace.

34 34 ver the next years, the digitalization and Vietnam’s Market Positioning automatization of work will continue to Oexpand, becoming a key part in changing the status quo of work models, culture and Supported by a consistent foreign investment flow, workplaces alike. a young, agile workforce and a booming economic It is expected that not only the demand for development, Vietnam is one of the most attractive technological skills will grow, but the need for markets in the region for international investors emotional, cultural, social intelligence skills will and operators looking at the flexible office space flourish, bridging the gap between technology and sector. social interaction. The growth potential is further confirmed by Within this framework, the flexible workspace the relatively low market penetration of the and coworking industry plays a cornerstone part, coworking spaces versus traditional offices, enabling technology, digitalisation and social enabling international providers to consolidate their engagement to coexist and complement each other positions and solidify their presence in Vietnam. in a common, efficient multi-functional space. Under the impact of Covid-19 on the market, Traditional workspaces are in a process of according to Wework, “given the volatility in the redefining their identity, where the main change economy and uncertainty regarding business drivers are digital transformation, remote and lean and headcount projections, this is where we see work models. Employees demand flexibility, social opportunities for enterprises to be more proactive engagement and community benefits, and years about reassessing their long-term real estate from now flexible workspaces will become the needs. The co-working sector will continue as norm. a relevant partner to the real estate industry, and such spaces will continue to be in demand as companies rethink their flexible real estate portfolio”.

Post Covid-19, the real estate market in Vietnam is expected to speed up its transformation and create the underpinning for the flexible workspace to become an industry standard alongside traditional offices, with a significant pivot on wellness, mobility and community engagement.

35 Research Reference & Engagement Team.

36 Research References

Data and metrics were corroborated in partnership In addition, Wework, Dreamplex and Toong also with Cushman & Wakefield, a global real estate have provided valuable information and specifics. company focused on guiding our clients with strategic insights and innovative solutions. Additional research references below: • The World Bank • Coworking Resources • Statista • General Statistics Office of Vietnam • Vietnam Investment Review

37 Engagement Team

If you have any questions regarding this study, please don’t hesitate to contact us

VLAD SAVIN MATTHEW LOUREY Head of Business Development | Acclime Vietnam Managing Partner | Acclime Vietnam

Vlad is a business development and marketing professional, Matthew is a qualified accountant who has resided in who has resided in South East Asia for the last 7 years. Vietnam for over 16 years. He has extensive experience He has wide experience in personal finance and corporate working in for Big 4 accounting firms and servicing, working with investment firms in Malaysia and investment funds, and since Matthew relocated to Vietnam Vietnam, while having a strong background in marketing, he has spent much of his time advising foreign investors client service and events with international exposure. on successfully undertaking business in Vietnam, corporate Vlad has been developing Acclime’s business strategy and investment transactions, market entry and corporate growth, organizing and creating seminars and workshops finance. He also currently sits on a number of boards in for the foreign and local investor community in Vietnam, Vietnam, advising as an independent non-executive director. while assisting with client relationships and the overall Matthew graduated from Monash University in 1994 with brand positioning of the firm. Vlad graduated from Spiru a Bachelor of Commerce and qualified as a Chartered Haret University in 2006 with a Bachelor of Marketing and Accountant in Australia in 1997. International Relationships. Email: [email protected] Email: [email protected]

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