Virtual offices are here for real

Virtual offices are here for real

Virtual and serviced offices are still relatively new in the
country, but there is a growing demand for the service. The
Jakarta Post's contributor Rudy Madanir takes a close look at the
trend.

JAKARTA (JP): Be a guest of Michael Sinjorgo. This means that
you will be warmly welcomed by two beautiful, smiling
receptionists as soon as you step into the reception area. In a
minute, you are seated in the spacious hall with a cup of tea or
coffee, enjoying the comfort and luxurious atmosphere of an
office located in the Jakarta Stock Exchange building on Jl.
Sudirman, a prestigious business address in town.

"Wow, you have a huge office," said Sinjorgo mimicking the
frequent comments made by his guests. "They think I am the big
boss for the whole place," he said, laughing.

To the guest's surprise, Sinjorgo explains that the office is
not his, it is only partly rented for the purpose of meeting with
his guests.

The white-haired Sinjorgo, 59, a Canadian national, is the
president director of an insurance risk management consulting
company, PT Usaha Tepat Guna. He runs his business with only five
local staff and his company practically has no need of permanent
office space throughout the year. Because of the nature of his
company's work, it is more practical for Sinjorgo, who works with
large companies, to have office space within his clients'
offices. "Our staff are very mobile, they can spend four hours in
one company and then move to another for another three hours.
This means we don't necessarily need our own office space," he
said.

Sinjorgo is a client of a serviced office center that applies
a concept of virtual office - "an office when one does not have a
physical office."

By paying approximately Rp 1 million a month, Sinjorgo has a
basic virtual office service, including a dedicated telephone
line, a receptionist answering the telephone under his company
name, an hour a day of using the office, and most importantly,
the use of the serviced office center as his business address.

The number of companies sharing the same address with Sinjorgo
could reach 140 as the center does not only cater to virtual
office clients but also serves 40 in-house clients.

There are currently eight main operators with international
affiliation in the market, spread throughout the city from the
Ascot building, BNI Tower, Menara Kadin, Menara Mandiri to
Bapindo Plaza. If small operators are included, the number of
serviced office centers could reach 20, according to property
expert Panangian Simanungkalit.

Occupying a half or a whole floor at some of the newest
buildings along Jakarta's main thoroughfares, the centers are now
waking to the needs of the business community, providing
corporate image and cost efficiency among other services.

Coincident with the recovery of the Indonesian economy, more
and more companies are now flocking to centers seeking help,
either to start a new business or to keep an existing one alive.

No matter what the size or industry, the centers try to
provide the general and specific needs of each client.

Clients could include a new foreign investor who just arrived,
seeking a business opportunity, or it could be another downsizing
company that has been forced by the economic crisis to move from
the prestigious business district.

A newly arrived multinational corporation can rent a small
furnished office within a center with shared secretaries,
receptionists and boardroom, before setting up its own office or
factory. That way it can focus on its start-up operations without
being bothered by the hassle of establishing its own office and
recruiting employees. After several months, the company can leave
its temporary office to set up of its own, or it may set up a
representative office and remain with the center, or if it has
not been successful, leave the country.

A downsizing company can still maintain its business image by
becoming a client in one of the virtual office centers. Being a
client does not mean that the company must rent an office in the
center. The company can rent the address of the center including
a personalized telephone answering service in its company name.
As a result, the company saves the cost of renting office space
in the expensive area. And more importantly, it can save its
image by not showing its ruko (shophouse) address in Tangerang or
Bekasi as its representative office.

Be it real (in house) or virtual, the demand for serviced
offices is growing.

CEO, one of the main serviced office operators, has reached
its full capacity both for in house and virtual office clients at
its center in the Jakarta Stock Exchange building. Consequently,
the operator has opened its second center at the GKBI building,
by the Semanggi cloverleaf.

"Since our grand opening in January, our new center has
already reached 45 percent occupancy," said CEO president Mee
Kim.

Another operator, The Executive Center, has more than 90
percent occupancy of its 37 serviced offices available for in-
house clients.

"There are very few rooms available here, so we are looking
for a second location at this moment," said Stephen Chatam, an
executive consultant of the center which uses the whole 19th
floor at Aetna Danamon Building on Sudirman.

In addition, Chatam said that his center recently made five to
six virtual office sales in a week, a record that has never
happened before.

Unlike traditional offices, the centers provide some
flexibility to their in-house clients in terms of rent payment,
from monthly to hourly, if necessary.

The room sizes in the two centers varies from as small as 12
square meters to 70 square meters. Some rooms are designed for
expansion or downsizing with just a connecting door and
partition, as requirements change overnight.

As the centers compete to offer one stop service, every need
of a modern office is available within the centers. They offer
support facilities such as various sized meeting rooms and
boardrooms combined with top of the line offices and high
technology equipment (only the latest models and best brands).
Services vary from web site design, translation, payroll,
bookkeeping down to hotel and airline reservations. These
functions are supported by well trained staff from secretaries
and receptionists to office boys. And if needed, accountants and
IT specialists are available.

Young

Chatam, who has been with the Executive Center since 1997,
said that the serviced office industry is quite young for
Indonesia as well as for some other countries in the region. Even
though many people still do not fully understand the concept, the
business is developing well.

Simanungkalit said that the high demand for serviced offices
has nothing to do with the economic crisis. Because the demand
for the service existed before the crisis hit the country.

However, he admitted that people became more aware of the
service after the crisis because of the drive to be efficient in
running a business.

He predicted that in the long run there will be more buildings
with floors divided into smaller rooms run by many serviced
office operators.

This positive trend is triggered by the drive to pursue
efficiency, he said, "the risk will be more distributed, since it
is shared by the operators and the users."

When the Indonesian economy is no longer dominated by big
business players, he added, there will be more small and medium
companies needing less than 100 square meters of office space
because of support from Internet and high technology.

"At that time, serviced offices will be at its peak demand.
And it need not necessarily be in prime business areas anymore,"
he concluded.