Singapore: GIC, JustCo, Frasers Property pool in $177m for Asia co-working platform

Photo: JustCo website

Singapore’s sovereign wealth fund GIC, co-working space provider JustCo, and listed real estate firm Frasers Property are jointly investing up to $177 million in Asia’s rapidly growing co-working space industry, the three firms said in a joint statement on Wednesday.

The statement, which was also disclosed on the Singapore stock exchange, said the three companies will develop a co-working space platform across Asia and support JustCo’s continued focus on expanding its technology and enhancing its service offerings.

In a separate announcement on Wednesday, Frasers Property said it had entered into a subscription agreement with JustGroup Holdings to subscribe for up to 13.2 per cent of the issued and paid-up capital in it.

Frasers Property also said that its wholly-owned subsidiary, Frasers Property Ventures II Pte., will subscribe for ordinary and preference shares representing up to 15.3 per cent of the issued and paid-up share capital in a new JV with a wholly-owned subsidiary of GIC and JustGroup.

JustCo, founded in 2015, has a presence in Singapore, Indonesia, and Thailand. It is Singapore’s largest premium co-working space provider.

“The three partners’ joint investment of U$177 million will enable JustCo to build on its presence in Southeast Asia and expand into other Asian markets such as Greater China, Korea, Japan, Vietnam, Malaysia, the Philippines, Australia, and India,” the statement said.

Lee Kok Sun, chief investment officer at GIC Real Estate, said the sovereign wealth fund has been attracted by the co-working sector’s growth potential in the long run and that the fragmented nature of the sector presents opportunities for consolidation.

“The co-working movement embraces the flexibility of the sharing economy and is fast changing the way office space is designed, leased, used and operated. As a long-term value investor, we are attracted by the sector’s growth potential,” he said.

GIC’s investment in JustCo will support the latter in its next phase of growth outside of Singapore, as it continues to engage with entrepreneurs and enterprises across Asia, Lee added.

Frasers Property also expressed optimism on the potential of the region’s co-working sector as it looks forward to further advancing its partnership with GIC and JustCo in this space.

“We view real estate as a service offering that goes beyond brick and mortar. The combination of thoughtful design, curated service offerings, and smart-office technology, can transform office buildings into inspiring, collaborative workspaces that enhance our workplace communities,” said Panote Sirivadhanabhakdi, group CEO of Frasers Property.

Kong Wan Sing, founder and CEO at JustCo, said the latest investment will help the startup “enhance and redefine the flexible workspace experience through multi-geographical footprints”.

This portal had reported in October 2017 that JustCo had raised $12 million in a Series B round from Thailand’s listed property developer Sansiri Plc to fuel its expansion in Southeast Asia, where it was valued at just under $200 million.

In July 2017, JustCo had announced that it was joining forces with Shanghai-based co-working space firm Naked Hub, to compete with American co-working space giant WeWork. But the proposed merger, which would have created the largest premium co-working space operator in Asia, was called off earlier this year.

JustCo and other co-working space operators in the region are facing increased competition from US-based co-working giant WeWork, which is also pushing aggressively into Asia. Last year, the company raised $4.4 billion from SoftBank Group Corp. for its global operations and Asia subsidiaries. The funding valued WeWork at about $20 billion.

After launching in Singapore in January, the company announced its recent entry into Indonesia, with plans to expand further into the Philippines, Thailand, and Malaysia before the end of this year.

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