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M’sian coworking space Common Ground merges with APAC flexi-workspaces, group aims for IPO

Malaysian coworking space Common Ground merges with Australia's The Cluster and Hong Kong's the Hive under The Flexi Group.

08/16/2022
Category:
Lifestyle

Established in 2017, Common Groundis arguably a mainstay in Malaysia’s coworking scene with 14 office locations across the country, including a new one that just soft launched at Taylor’s Lakeside.

The coworking brand was founded by Juhn Teo and Erman Akinci and has even expanded to Thailand and the Philippines, with two locations in the former country and three in the latter.

Five years after its launch, Common Ground will be merging with Hong Kong-based the Hiveand Australian brand The Cluster, both of which are coworking brands as well.

Under The Flexi Group, the three brands will come under one umbrella to boast 45 locations in 12 cities and nine countries in the Asia-Pacific region.

According to a press release on August 16, the Group is expected to be headquartered in Kuala Lumpur, Malaysia.

Despite the merger, The Flexi Group will be keeping the three brands separate, so Common Ground will continue its operations in Malaysia.

The merger is supported by investment from Malaysia-based Emissary Capitalas well as Singapore-based Catcha Group.

Both Juhn and Erman are managing partners at Emissary Capital, with Erman also being the founder of the boutique investment firm.

Juhn on the left, Erman on the right / Image Credit: Juhn Teo / Erman Akinci

“It is also a step in the direction of an IPO that will enable The Flexi Group to consolidate the region’s flexible workspace industry through M&A and to lead the future of work in Asia Pacific and beyond,†the press release stated.

Chris Edwards, formerly the COO of the Hive, has been appointed as the CEO of The Flexi Group.

A plan for rapid expansion

Despite having just been launched, The Flexi Group describes itself as a “rapidly expanding collection of leading flexible workspace operations in Asiaâ€.

This merger is said to be the first in a series of planned consolidation activities. The Flexi Group aims to grow by partnering with landlords on joint ventures, as opposed to taking on “large and unwieldy†rental agreements, according to the press release.

The Group’s landlord partners include Petronas in Malaysia, among other names in Asia.

“We work with some of the leading landlords in the region who see flexible workspaces as a natural evolution of their businesses,†Chris stated.

In the press release, The Flexi Group shared that it will continue to expand its three unique brands (Common Ground, the Hive, and The Cluster) across the Asia Pacific region.

Image Credit: The Flexi Group

It said multiple new locations are set to open in Malaysia, Australia, Thailand, the Philippines, and Singapore over the next 12 months.

According to Chris, the company’s multi-brand structure will allow for a multi-demographic approach. This strategy will allow the umbrella company to partner with landlords across a variety of asset classes.

“With our multiple brands targeting a different market segment across a variety of industries, we will see exponential growth and are forecasting to grow by up to 100 locations in the next three years,†Chris shared.

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Other than Common Ground, Malaysia is also home to many other coworking brands such as Colony, WORQ, and more.

If The Flexi Group does set up its headquarters in Malaysia, that may further develop our already robust coworking scene.

However, if the Group plans to launch the Hive and The Cluster in Malaysia, I’m not sure if they offer distinctive enough services for it to be differentiated from other local brands.

According to the descriptions in the press release, Common Ground, the Hive, and The Cluster all seem to offer premium or flexible workspaces, though the Hive does seem to be a bit more of a boutique space.

With that said, I am intrigued to see how this may affect Common Ground’s operations locally. I’m also curious as to how the coworking space in Malaysia will change, especially as The Flexi Group seems keen to add more brands to its portfolio.

Back in 2020, Benjamin Teo, the director of another Malaysian coworking player Co-labs Coworking, had shared to The Edgethat given the pandemic, the coworking market will be “softâ€, and that larger industry players with stronger cash flow and liquidity will be able to ride out the storm better.

As such, he predicted that more mergers and acquisitions will occur, something which has come true two years later.

  • Learn more about The Flexi Group here.
  • Read other articles we’ve written about hybrid work here.

Featured Image Credit: Common Ground