Colony @ KL Sentral announced at the end of August it would close and cease operations in September 2021.
The post thanked customers for their support over the years and mentioned that those who still wish to use their coworking services can do so at the other 4 Colony offices on Star Boulevard, KLCC, KL Eco City and Mutiara Damansara.
At the time of writing, Colony @ KL Sentral is now permanently closed on Google Maps. Because it was a central center for travelers, it was aimed at the global crowd of expats and internationally focused startups. With travel restrictions, there is no doubt that the branch would have been a great success.
Reducing costs never meant undermining quality
“Approximately one third of Colony’s basic income comes from renting our spaces for events and until February  we received cancellations of our events citing fears of the virus, “said Timothy Tiah, CEO of Colony (Tim) he wrote last year.
In the same article, Tim also said that Colony’s plan for the pandemic would be to never reduce costs in a way that undermines the quality of the brand. Seeing that Colony is a luxury coworking space, is a high order.
My classmates do I experienced first hand the hospitality of Colony several times, and they have said that their services are really on a different level. In terms of its aesthetics, you will get a service of a quality that matches what you would expect from a 5-star hotel.
Even on a pre-pandemic basis, there is no doubt that it was not a small cost to pay the rent for their spaces, maintain the maintenance of the environment and ensure that their employees are well paid. Prior to the pandemic, in July 2019, Tim had included an initial salary of RM3K for all employees, regardless of their experience.
We’re not sure if this remained unchanged throughout the pandemic, but it was a clear indication that Colony attaches great importance to making sure his own team is taken care of.
By closing Colony @ KL Sentral, you can now channel your resources to other branches, instead of slowing down the quality of services or downsizing team members.
The coworking industry in Malaysia would have been hard hit by the worsening pandemic in 2021 and Tim shared more of his experience in a LinkedIn post where he said:
“One of our locations went from making a significant profit each month to losing a material amount in a matter of months. We knew that while we could bear the loss in the short term, it was not sustainable for events to continue to be banned indefinitely. ”
While it is not known if he was specifically referring to Colony @ KL Sentral on the site, it is likely that most of Malaysia’s coworking spaces would have experienced something similar.
Uncertainty is the key word in the industry
Coworking spaces lost their main revenue streams during the first MCO, as events were banned and most companies started WFH. However, there was a small glimmer of hope sometime in 2020, as the economy began to recover, helped by the fall in daily COVID-19 positive cases.
Analysts were optimistic that coworking spaces would be the future of office spaces, as they predicted that long-term WFH would not be sustainable. People also preferred greater flexibility in their workplaces, and coworking spaces could meet that demand. It looked like it was the answer for employees who wanted the best of both worlds.
For businesses, coworking spaces offer flexible subscription options that can be cheaper than renovating and renting a dedicated office. Coworking spaces also provided better social distancing skills, which was a factor that led to their adoption forecast in 2020.
“In addition, many have offered promotional rates to attract new members and deter existing members from canceling their members,” real estate consultant Teh Young Khean told The Edge in October 2020.
Then came 2021, when COVID-19 cases went out of control and things got worse. The nation suffered a stricter closure and most people were forced to return to WFH, accepting it as the new long-term rule. But people don’t seem to be content with staying WFH forever, and the demand for coworking spaces hasn’t exactly diminished either.
Propeller of MyOffice Coworking Space Puchong He told Vulcan Post that during the times they were given the green light to operate, members were eager to return, as they felt WFH was less efficient.
Coworking co-laboratories he also reported that he has been seeing a steady stream of inquiries and reservations for his remote temporary offices, workspaces for a hybrid workforce, as well as flexible and affordable office subscriptions even in 2021.
These point to the likelihood that people will keep looking and willing to work in coworking spaces once it is safe to do so again. There will always be demand, but for some coworking spaces, other factors can affect your business continuity.
For a creative coworking space A SPACE FOR _ in Damansara Uptown, decided to focus on a more lucrative business: its design services. So he has completely closed the first and re-focused on the second, which was his main source of income even pre-pandemic.
Of course, these answers are a very small sample size of how the local coworking industry is doing and no definitive data can be obtained from them. However, it would be safe to conclude that companies and firms want to return to working life, although they may take a while and improve the situation before committing to do so.
Which coworking spaces will remain depend simply on who can hold out until Malaysia has the pandemic under control, and which ones even think it’s worth staying in the end.
How COVID-19 is predicted to become one the endemic pandemic in Malaysia in October 2021, as the nation continues its vaccination program, only time will tell what the future of work really will be.
- You can learn more about Colony’s coworking space here.
- You can read more of what we wrote in Colony here, and on coworking spaces here.
Featured Image Credit: Colony