Singapore, 19 January 2017 – City Developments Limited (CDL) has signed an agreement to invest RMB 72 million (approximately S$14.8 million1) for a 24% stake in Distrii, a leading operator of co-working spaces in China. Founded in January 2016, Distrii already has capacity for more than 2,200 members across nine locations in Shanghai, with 80% of this capacity being taken up already. With the rising popularity of co-working facilities in many urban centres, Distrii will be opening a new facility in Beijing in the first half of 2017 and plans to further expand in this city as well as in Guangzhou, Shenzhen and other global gateway cities.
Marking its first international foray, Distrii will lease more than 60,000 square feet of space at CDL-owned Republic Plaza Tower 1, a prime Grade A office building connected to the Raffles Place MRT Station in the heart of Singapore’s Central Business District. Expected to be one of the largest co-working facilities in Singapore, it will integrate food and beverage, entertainment, recreational and office facilities, leading a new trend in the co-working industry. Distrii’s co-working facility at Republic Plaza is expected to open in 1H 2018 as the space is still currently leased out.
In 2016, prior to embarking on a joint venture with CDL, Distrii secured an angel investment from an investment arm of Huazhu Hotels Group (Huazhu). Nasdaq-listed Huazhu currently owns and operates over 3,000 hotels across 350 cities in China. Huazhu is founded by Mr Ji Qi, who within a span of 11 years also founded and listed Ctrip and Homeinns on the Nasdaq stock exchange.
According to a 2016 global survey by Deskmag, a leading co-working publication, the number of co-working spaces worldwide surged from just 75 in 2007 to more than 7,800 in 2015, representing a compound annual growth rate of 71%. Deskmag forecasts that there will be more than 37,000 co-working spaces by 20182.
Users of Distrii’s co-working spaces include start-ups, small businesses, freelancers, independent contractors and frequent business travellers seeking to rent furnished and equipped spaces under flexible and cost-effective terms. These users are also attracted to the smart IT infrastructure, social and collaborative environment that co-working spaces provide. In addition to working alongside industry professionals and counterparts, users are invited to networking events organised by the operator.
Mr Sherman Kwek, CDL Deputy Chief Executive Officer, said, “In line with CDL’s strategic diversification, we have been actively looking for innovative offerings and new growth platforms that are complementary to our core businesses of real estate and hospitality. With the burgeoning sharing economy, an increasingly mobile workforce and a greater requirement for flexibility, we see strong potential in co-working spaces and the demand for them has been rapidly growing. Our investment in Distrii enables us to immediately gain entry into the sector and will contribute to CDL’s long-term recurring income streams. Through this strategic partnership, CDL will contribute not only capital but also provide our international market expertise to support Distrii’s expansion both in China and on the global scene.”
Dr Hu Jing, Distrii CEO, said, “The strong growth of the co-working spaces sector is expected to continue as companies and employees require more flexibility for their workspaces. In particular, for major cities in China and Asia, the start-up boom is a key factor for the rapid growth of co-working spaces. Distrii is in a strong position to cater to this demand. We have a leading technology platform that allows seamless collaboration and connectivity for our members throughout our network of locations. CDL’s extensive international experience and network will give our joint venture a strategic advantage as we push forward with Distrii’s expansion. We are excited to debut Distrii in Singapore, leveraging on our membership base and providing new-to-market offerings that will further elevate this new economy sector.”
Earlier, in September 2016, CDL’s wholly-owned subsidiary CDL China Limited announced it would invest RMB 100 million for a 20% stake in mamahome, a fast-growing Chinese online apartment rental platform. As a one-stop solution for both apartment owners and rental customers, mamahome provides an online booking website, online management software and other value-added services including housekeeping, renovation, 24-hour concierge and call centre. In addition, mamahome provides management for its own brands of serviced apartments, namely Suisse Place, Locca and Login.
