Colony secures its largest co-working tenant to date worth RM5.6m

KUALA LUMPUR (May 30): Luxury co-working and serviced office provider Colony has signed on its largest tenant to date, worth RM5.6 million, Colony Space Asia founder Timothy Tiah told EdgeProp.my today.

Tiah explained that the deal will see the regional importer and distributor in the food industry, which he declined to identify, move its regional headquarters to become the anchor tenant of Colony’s soon-to-be-opened KL Eco City location.

The deal comprises more than RM4 million in rental and another RM1.6 million for future expansion space that Colony is committed to provide.

Tiah added that they are not able to reveal the tenant as of now, but will be able to share their identity with the public once they are ready.

“People often say that our competitors are other co-working spaces. That can’t be further from the truth. Most of the deals we lose, we don’t lose them to other co-working spaces or serviced offices. We lose them to traditional office space,” he noted.

He observed that this potentially marks the beginning of a shift in the co-working space industry in Malaysia, which was traditionally dominated by digital nomads, freelancers and start-ups.

“In recent years, we see a surge in usage among corporates. This is expected to grow with a CBRE Enterprises Survey revealing that 65% of enterprise companies plan to incorporate co-working into their portfolio offerings by 2020.

Large deals like this from Colony seem to indicate that the wave of corporates using co-working spaces has hit Malaysian shores,” Tiah explained.

Meanwhile, Colony’s general manager Nitaya Pirinyuang claimed they secured the deal not because they were the cheapest, but because they have a very differentiated product and a compelling offering, which made more sense for a large company such as their tenant compared with a traditional office lease.

Moving forward, Tiah said Colony expected the facilities and services of its luxury co-working spaces to grow and correspond with its increasing prices.

“The company aims to introduce more services and facilities not found in traditional office spaces and that also distinguish itself from the typical co-working spaces,” he said.

Along with other pre-launch deals, Colony @ Eco City — that is only due to open at the end of June — already has more than 50% of its space booked.

This deal follows 10-month-old Colony recently securing an investment from Cornerstone Partners Group at a US$15 million US$20 million valuation.