Co-working giant WeWork has agreed to lease an entire building of approximately 290,000 sqf (gross floor area) in the newly built China Overseas International Center in Huangpu District, Shanghai.
Real estate consultancy JLL acted on behalf of WeWork in this transaction, which is also the largest single Grade A office leasing deal in Shanghai's core CBD this year.*
"The fact that a co-working operator signed on Shanghai's biggest single premium office this year is not surprising, considering the rising demand for flexible workspace in the region, and the appeal of these innovative office strategies to a growing number of large corporations," says Eddie Ng, Managing Director of Shanghai & East China, JLL.
"In the past year, our team has assisted co-working operators in leasing a total gross floor area of more than 753,000 sqf in the city, and we are confident that this trend will continue across Asia in the coming year, with the number of coworking members expected to grow to over 3.8 million in 2020 worldwide."
According to Anny Zhang, Head of Markets, Shanghai, JLL: "This deal is a perfect example of how organisations are turning to flexible workplace arrangements in an increasingly competitive market. Chinese markets alone account for five of the world's ten most expensive locations for premium office rents. Coupled with a talent crunch, companies have to adopt innovative workplace solutions to stay relevant in this disruptive environment."
Developers looking beyond the traditional value of office buildings
According to JLL's Future of Work research, building owners and developers must now consider providing their tenants with an environment that supports collaboration, innovation and provides an engaging employee experience.
"Millennials' expectations, job automation and other developments are all changing business operations and workspace requirements," comments Lu Fengcun, General Manager of China Overseas Commercial Properties Company (Shanghai). "Going forward, we have to look beyond the traditional value of office buildings to deliver more comprehensive, agile and flexible services to our tenants."
