- Asia Pacific coworking brand, JustCo, is expanding into Japan.
- The move is backed by Daito Trust, a Japanese construction and real estate company.
- Daito Trust has invested $74 million into the joint venture.
JustCo, a coworking brand headquartered in Singapore, has entered into a joint venture with Daito Trust Construction Co, a listed construction and real estate company in Japan, to drive its expansion in Japan.
The Joint Venture, JustCo DK (Japan) Co., Ltd., will be 51% owned by Daito Trust and 49% owned by JustCo.
Daito Trust will invest US$50 million in JustCo and up to an additional US$24 million (JPY 2.65 billion) to form a new Japan joint venture with JustCo to build and operate flexible workspace business in Japan.
This Joint Venture will be an integral part of Daito Trust’s strategy to develop a comprehensive leasing and lifestyle business, whilst enabling JustCo to expand its network into Japan in response to the needs of JustCo’s regional members and to support its future growth.
JustCo on a Sustained Growth Path
Since the US$177 million joint investment in JustCo from Singapore’s sovereign wealth fund GIC, and multi-national real estate company Frasers Property Limited in May 2018, JustCo has expanded its network from 14 co-working centres in two cities, to close to 40 centres across eight cities today.
Being one of the leading flexible workspace providers with a large multi-city presence in Asia Pacific, JustCo is enjoying buoyant demand for flexible workspace from existing members and a large number of new clients, ranging from start-ups to large enterprises including Fortune 500 companies. Such demand has enabled JustCo to enjoy strong occupancy rates throughout its centres, contributing to faster than expected revenue growth.
The additional US$74 million funding provided by Daito Trust to JustCo and the Joint Venture, combined with positive cash flow from JustCo’s mature centres and its cash reserves, will enable JustCo to continue to fund its growth plan and benefit from the ongoing consolidation in the flexible workspace market.
Japan, as the second largest economy in Asia by GDP, is an important market for a large number of JustCo’s existing members. Demand for flexible workspace in key Japanese cities such as Tokyo is fast-growing. Expansion into Japan will further enhance JustCo’s network advantage to better serve the needs of its members.
This extends JustCo’s presence in Asia Pacific to eight key markets, including Australia, China, Indonesia, Singapore, South Korea, Taiwan and Thailand, allowing JustCo to better respond to new demands for flexible workspace, further fueling its growth.
Mr. Katsuma Kobayashi, President and Representative Director (CEO), Daito Trust, said, “Our Group achieved accelerated growth as a company specialized in rental housing, and is now implementing the New Five-Year Plan from the fiscal year 2019. The flexible workspace business is one of the key elements in our comprehensive leasing business, and we believe the collaboration with JustCo marks a significant step forward.”
Mr. Kong Wan Sing, Founder and Chief Executive Officer, JustCo, said, “The investment from Daito Trust is testament to the long-term growth potential of the flexible workspace industry and JustCo’s sustainable growth and leadership in the region. The scale of the Japanese market opportunity will contribute significantly to the growth of JustCo.
“JustCo aims to cement its position as the leader in Asia Pacific, and has set a new target to operate more than 3 million square feet of co-working spaces by 2021.”