CapitaLand invests in Work Project as it moves to combine traditional and co-working office spaces

Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.Top of the CapitaLand building in Singapore’s central business district (CBD); taken September 2018.

CapitaLand said on Tuesday it took a 50 percent stake in coworking operator The Work Project  for an aggregate S$27 million as it launched an effort to combine an office building’s “core” conventional space with flexible space which includes co-working areas.

“Under CapitaLand’s core-flex model, conventional office tenants will have any new, flexible requirements met while small and medium enterprises in coworking spaces could choose to lease conventional workspaces as they grow,” the company said in a filing to SGX on Tuesday before the market open.

“Capital Tower and Asia Square Tower 2 will be the first two office buildings in Singapore to embrace CapitaLand’s core-flex offerings,” it added.

The combined flexible spaces at Capital Tower and Asia Square Tower 2 as well as The Work Project’s spaces in Singapore and Hong Kong are a total area of around 177,000 square feet of flexible space initially, it said.

Lynette Leong, CEO of CapitaLand Commercial, noted that CapitaLand was working to expand its “tenant-centric” services.

In addition to the co-working spaces at the two office buildings, Capital Tower will offer a members-only club, collaboration spaces for project teams and the first movie theater in Singapore’s central business district, the filing said. CapitaLand’s Singapore office portfolio is mainly property owned by CapitaLand Commercial, it said.

“To build our ‘office of the future’ ecosystem, CapitaLand is going beyond traditional property management to providing more value-add services and community experiences for our office tenants. We believe this strategy will serve as a key differentiator from other office landlords,” Lucas Loh, president of China and investment management at CapitaLand, said in the statement. Loh also has oversight responsibility for the company’s commercial operating platform, it said.

In a separate filing, CapitaLand explained that via wholly owned subsidiary CL Kingdom Investment (CKI), it subscribed for a 50 percent stake in The Work Project Kingdom, or TWPK, for S$13.5 million. The remaining 50 percent is held by an unrelated party, it said.

TWPK provides flexible workspace services and it seeks business opportunities under The Work Project brand, it said.

CapitaLand was issued 13.5 million TWPK shares at S$1 each, making it an associated company, it said.

CapitaLand plans to extend shareholder loans through CKI to TWPK, making the aggregate amount invested in The Work Project come to around S$27 million, it said.

In another filing, CapitaLand Commercial noted it engaged in an “interested person” transaction with TWPC for a lease agreement for the 10th and 11th levels of Asia Square Tower 2 and levels 20 and 24 of Capital Tower.

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