HO CHI MINH CITY -- Toong, the leading Vietnamese startup in co-working spaces, will expand into Laos and Cambodia this year by partnering with property developers and service suppliers in the region.
The company begins its overseas expansion when Toong Royal Square, the first co-working site in the Laotian capital of Vientiane, opens in the second half of 2018. The Royal Square complex in the city already consists of a Crowne Plaza hotel, class A office space and a high-end trade center under Vietnamese real estate developer BIM Group.
Toong also intends to open a location near the Phnom Penh railway station in the Cambodian capital during the fourth quarter.
"Nine locations will be available in three Indochina countries with a total area of 13,000 sq. meters by the end of this year," Toong founder and CEO Duong Do told the Nikkei Asian Review.
The 35-year-old CEO founded Toong in Hanoi in 2015, two years after co-working spaces were introduced in Vietnam's real estate market. Toong, meaning "beehive" in Vietnamese, provides a modern working environment for individuals as well as small and midsized enterprises.
Toong's first location was greeted with arguments that co-working spaces were unlikely to succeed. But the concept has developed strongly in Vietnam, and the startup leader expects to grow the same way in Laos and Cambodia.
"As the pioneers we will not follow, but lead the markets," Duong said.
Toong opens its second Ho Chi Minh City location Wednesday, the chain's sixth site among the Vietnamese cities of Hanoi, Danang and Ho Chi Minh. The co-working spaces average 1,000 sq. meters on a typical $300,000 investment, with capital recovery at each site projected between two-and-a-half and three-and-a-half years. The operator's annual expansion targets 20,000 sq. meters after 2018.
The startup signed a partnership last month with Indochina Vanguard, a hospitality joint venture involving Indochina Capital and Vanguard Hotels, to open co-working spaces in new Wink Hotels, a brand that plans to launch 20 hotels over the next 10 years in Vietnam and neighboring countries. The arrangement aims to reform the traditional business center by creating a dynamic, inspirational and collaborative working-space service, meeting the growing demands of new entrepreneurs and a business traveler generation, said Hanh Pham, the marketing manager of Indochina Capital.
Toong targets other Southeast Asian countries, searching for additional partners in the region. The modern co-working space increasingly attracts a young and dynamic generation by providing a comfortable, economical workplace as well as a creative working culture for clients, Duong said.
Toong's strategy attracted investors and partners including Open Asia Group, Indochina Capital, CapitaLand Vietnam, United Overseas Bank, International Enterprise Singapore and Indochina Vanguard. This support in values and capital helped Toong grow during the past three years and will benefit expansion as well.
Co-working spaces are a newer segment in the property market. Startups, freelancers and small companies have lifted the segment in Vietnam to 14,500 sq. meters as of last year. More than a dozen operators have joined the market such as Dreamplex, Up, Circo and the foreign-invested operator of The Hive, which already boasts locations in Hong Kong, Singapore and Bangkok. Property consultancy Savills Vietnam expects the segment to continue growing, as it matches the evolution of how millennials work.