SOHO China, a commercial real estate company, has launched a short-term online leasing program for some of its office space in top-tier cities.
The move offering online-to-offline office resources marks the latest in how the Internet is changing the conventional way of doing business in real estate.
The SOHO China project, called 3Q, offers commercial rentals lasting from a few days to up to three months, breaking the traditional practice of annual rentals.
A work desk or an office room can be rented for a week or a month and beyond, with services including Wi-Fi, copying and printing already in place — flexibility that benefits young entrepreneurs and small startups.
Pan Shiyi, chairman of SOHO China, hit upon the idea of the mobile office when he was overseas.
“I saw young people working in the same office but doing completely different things. Some were working on a program. Some were designing clothes. Some were playing indoor basketball. This mix of people from completely different backgrounds is very stimulating for developing new ideas,” Pan said at a press briefing for their 3Q pilot program at the SOHO office complex in Beijing on Feb 4.
SOHO’s 3Q office space in Beijing occupies 6,000 square meters at the futuristic SOHO complex in the northeastern Wangjing district. Each of the three floors features a large sitting room with rows of sofas and two refreshment areas served by waiters offering free coffee. Along the side of the sitting room are small studios divided by transparent glass panels and equipped with desks and chairs. Each seat is rented at 1,000 yuan ($160) per week.
Further into the office space are quieter rooms priced at 1,300 yuan per seat per week. There is also a workout area with yoga mats and exercise bikes. Artwork and framed inspirational quotes from world icons adorn the walls.
Rental per square meter per day at the 3Q office is around 30 yuan, twice that charged at the third Guomao tower, a landmark office building in Beijing’s central business district. However, Pan believes that entrepreneurship is a pyramid, and that a higher rental threshold like at SOHO 3Q will attract a higher level of companies.
According to Pan, half the 3Q offices in Wangjing SOHO have already been rented out.
At the moment, SOHO China is running two test programs for its mobile offices — one in Beijing and the other in Shanghai. It is planning to implement 10 such test runs within the year.
Mathew Wang, CEO of Sanyuki, a technology company developing smart home appliance systems, is one of the first tenants of the SOHO 3Q office in Beijing.
“Our company has been running for several years,” Wang says. “We have our own office elsewhere. We came here because we want to congregate with people doing similar things, exhibit our products and find possible collaboration opportunities.”
According to Feng Lun, chairman of property firm Vantone Group, the Internet is changing the property business in four ways.
“First, the Internet is connecting apartments directly with consumers through information classification websites. Second, it has started to permeate into community services. Third, furniture is being connected to the Internet. Lastly, customization, such as crowd sourcing, will be a popular manner for (funding and designing) apartments,” says Feng.
CNCrowd, the first property company on the Chinese mainland to use crowd sourcing, was founded in 2014 and offers a threshold of just 100 yuan for investment in residential, commercial and other property development.
“The Internet has dealt a heavy blow to (commercial) real estate in the past few years,” says Pan. “In the thriving world of e-commerce, rents at department stores have dropped significantly below office rent, which was unimaginable three years ago.”
As a real estate icon born in the 1960s, Pan now wants to learn from the younger generation.
“I have given myself an assignment of visiting at least 10 Internet companies every month. Many of the Internet companies I have talked to are now making little profit and even losing money. Yet they are much sought after by venture capitalists anyway because they are the future,” he says.
“Current profits from the SOHO 3Q office are minimal compared to what we usually make from selling office space and apartments. But I’m not too worried about it because it will be our future working environment as cloud computing and mobile services develop further.”