Naked Hub joins with JustCo to create Asia’s No 1 co-working space
Shanghai-based co-working space operator Naked Hub on Tuesday announced its merger with Singapore’s JustCo, creating the largest premium co-working space operator in Asia to compete with industry leader WeWork.
Naked Hub, the co-working arm of hospitality brand Naked Group, currently has 21 co-working locations across China, Hong Kong and Vietnam, whereas WeWork currently operates 14 co-working locations across North Asia.
Following the merger with JustCo, Naked aims to have 41 spaces up and running by the end of the year, including new locations in Southeast Asia such as Jakarta, Bangkok and Kuala Lumpur. Naked estimates that it will bring in US$100 million in revenue from its co-working spaces this year.
By 2020, it aims to have 194 co-working spaces, according to Grant Horsfield, founder and chief executive of Naked Group.
“JustCo is the best operator in Southeast Asia and we see ourselves as the best in North Asia, so it was a natural partnership to create the biggest in Asia of premium co-working space,” Horsfield said.
“We need to grow quickly to keep up with the growth of the industry.”
JustCo and Naked will operate under separate brands for now, he added, although there will be a migration in time of the JustCo brand to Naked Hub.
The company raised US$33 million in a series B funding from Hong Kong real estate investment firm Gaw Capital Partners, and is seeking to fund raise for its series C with a valuation of US$1 billion.
“Across the globe, the demand for flexible office space is increasing,” said Humbert Pang, head of China for Gaw Capital Partners. “Penetration rate of flexible office space in tier one cities in China like Beijing and Shanghai is only 1 per cent, [compared to] 7 per cent in London and New York ... there is huge potential for tier 1 cities in Asia to reach that.”
In Hong Kong, Naked Hub operates 16 floors of space in Bonham Circus in Sheung Wan, with a capacity of about 850 seats. Hot desks cost HK$2,500 per person and office space cost upwards of HK$6,000 per month per person.
The Bonham Circus location is currently still under renovation, although five floors are already complete and in operation. Its first phase has an occupancy rate of over 90 per cent, with 150 occupants.
Naked Hub will open a second location in Sai Ying Pun in August in a four-storey building that seats about 400.
“Hong Kong ... has very expensive real estate. We believe very strongly that Hong Kong will be one of our largest locations worldwide – we’re actively looking to grow in Hong Kong,” Horsfield said.