Partnerships between landlords, flexible office providers will kill off traditional lease business model, says Singaporean co-working space operator TWP

More office landlords and flexible work space operators are likely to form partnerships that will do away with the traditional lease business that has been “catastrophic” for the industry, according to the founder of The Work Project, a Singapore-based co-working space provider backed by CapitaLand Development.

TWP, which has one location in Hong Kong, has secured the backing of Dexus, an Australian real estate company that has an office portfolio of 17.2 million square feet there, and is aiming to be the country’s largest co-working office operator, said Junny Lee, its founder and CEO.

“I believe the days of independent co-working companies taking tonnes and tonnes of leases are basically over, those days are gone,” said Lee.

“Instead, we envision a future in which landlords and operators both have skin in the game. And, you know, one might ask why should landlords even think about having skin in the game? Why wouldn’t they just want to continue leasing to co- working operators? Well, first of all that business model just hasn’t worked and it’s led to mass failure of many co-working companies.

In November, New York-headquartered WeWork filed for bankruptcy protection in the US, seeking to shield assets as it struggled to make a profit and renegotiate expensive leases it had taken on. Once the most recognisable co-working company in the world, the start-up has become a cautionary tale about the rapid and risky expansion in the segment in the early days.