GIC backs $117m Asia co-working platform
Singapore’s GIC Private has joined co-working space provider JustCo and local developer Frasers Property to establish a $117 million platform that will focus on co-working space investments across Asia Pacific.
The platform aims to further develop JustCo’s existing presence in Southeast Asia as well as expand its operations into Greater China, North Asia, South Asia and Australia.
Financial details regarding contributions and ownership stakes have not been disclosed. The plan is to leverage the operational experience of JustCo and Frasers to advance a portfolio of technology-enabled collaborative workspaces.
“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,” Lee Kok Sun, CIO for GIC Real Estate, said in a statement. “As a long-term value investor, we are attracted by the sector’s growth potential in the long run and believe that the fragmented nature of the sector presents opportunities for consolidation.”
Founded in 2015, JustCo has a presence in Singapore, Indonesia, and Thailand. The company’s main competitor is WeWork, a US-based sector leader now encroaching on the Asian market that received $4.4 billion last year from Japan’s SoftBank Group and its SoftBank Vision Fund.
JustCo attempted to fend off WeWork’s advance by proposing a merger last year with Naked Hub, a Chinese counterpart backed by Gaw Capital Partners. The merger was called off, however, and Naked Hub was acquired by WeWork last month in a deal said to be worth about $400 million. WeWork and Naked Hub area also expected to target growth in China and Southeast Asia.
A surge in investor interest in co-working spaces has led to substantial new supply coming online and a price war, while there is skepticism about the valuations attached to these companies. Segment growth has been driven by demand for more flexible real estate arrangements among both start-ups and large corporations. Customer retention and community sustainability have been the main development challenges.
Other Asian operators in this space include UrWork, which received a $45 million Series C round late last year led by Qianhai Wutong Mergers and Acquisitions Funds, a vehicle backed by Qianhai Equity Exchange. This came four months after a $178 million pre-Series C round from a number of strategic investors.
More on Southeast Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.