Pan Shiyi, chairman of property developer SOHO China, says he spent most of last year visiting internet firms instead of potential building sites. “Every month I set a goal for myself to visit 10 internet companies. I have finally accomplished that goal in the past few months,” he told Time Weekly.
The reason Pan has been spending time with the online community is not because SOHO China is diversifying out of real estate. Rather it’s because the developer has launched an office-sharing programme in which it hopes internet start-ups will rent its office space in top-tier cities.
The new project, called SOHO 3Q, offers short rentals lasting from a few days up to three months – a major departure from the traditional practice of longer leases. The move is part of SOHO China’s strategy to expand its online-to-offline business. Tenants get to choose offices and make all related payments online while SOHO China provides a full-service office offline.
Take the SOHO 3Q project in Beijing. It occupies 6,000 square metres and divides into a maximum of 600 sublet units, be they a room, a desk or even a single chair.
Internet connection including Wi-Fi is obviously part of the offering. There are conference rooms and pantries too. The space also includes a large sitting room with rows of sofas as well as two refreshment areas in which waiters offer free coffee.
China Daily says that for those tenants who are health-conscious, there is a workout area with yoga mats and exercise bikes as well. Artwork and inspirational quotes from global icons adorn the walls. And different companies can be seated together in the same area, offering opportunities for interaction and inspiration. Such utopian office life, of course, doesn’t come cheap: renting a desk here alone can cost Rmb1,000 ($160) a week, though Pan claims that after opening for two days SOHO 3Q has leased out about half of the Beijing space.
This isn’t an original SOHO idea. WeWork, a co-working space provider, began in Manhattan in 2010 and has now grown into a $5 billion business in 29 locations. But Pan says he first came up with his own vision for SOHO 3Q during his visits to internet start-ups.
“I saw young people working in the same office but doing completely different things. Some were working on a programme. Some were designing clothes. Some were playing indoor basketball. This mix of people from completely different backgrounds is very stimulating for developing new ideas,” he says.
At the moment, SOHO China is running two pilot programmes using the office-sharing model in Beijing and Shanghai. The company plans to roll out 10 more – 8,000 units – this year.
Meanwhile, SOHO China says it is not too worried about turning a profit from the new project. “Many of the internet companies I have talked to are now making little profit and even losing money. Yet they are much sought after by venture capitalists anyway because they are the future,” says Pan. “Current profits from the SOHO 3Q offices are minimal compared to what we usually make from selling office space and apartments.”
However, analysts say SOHO China could struggle to find enough tenants. The Beijing Morning Post reports that commercial buildings around SOHO 3Q’s Beijing co-working space rent for about Rmb1,700 per week for 30 square metres. In comparison, SOHO 3Q costs Rmb6,500 for the same floor area.
Time Weekly reporters also query Pan’s estimate that half of the space has already been leased. Its own recent tour of the building suggests that the space remains largely vacant.
Meanwhile, Pan is not the only developer eager to tap young start-ups.
Mao Daqing, a former vice president of China Vanke, says he wants to launch a firm aimed at serving young entrepreneurs. Mao will offer a one-stop package of office rentals, financial consulting and investment, says Sina Finance.
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