The Central Jakarta District Court delivered its verdict approving the bankruptcy of PT Evi Asia Tenggara, which manages the CoHive brand, filed by its creditors after the company failed to conclude arrangements on its liabilities during the debt suspension period.

Evi Asia Tenggara wrote on its website that the prolonged pandemic, an unfavorable office supply situation and challenging fundraising environment as factors contributing to its filing for bankruptcy.

CoHive was once deemed as the largest coworking space firm by occupying around 29 percent offices located in Jakarta's central business district, according to 2019 data from property consultancy JLL Indonesia cited by Kompas.com. JLL’s 2022 first quarter data shows CoHive was only in the top five of coworking space players.

Felencia, secretary-general of the Indonesian Coworking Space Association (ACI), told The Jakarta Post on Tuesday that industry players were still trying to bring their businesses back to pre-pandemic levels.

But many coworking businesses were in survival mode today, as the industry “suffered quite a lot” during the pandemic “and many were shut down”, she said.

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CoHive’s bankruptcy is significant, as the company is considered one of many dominant players in the industry. During its heyday in 2020, CoHive operated 30 facilities across Jakarta, Medan, Jogjakarta and Surabaya, as well as the 18-story CoHive 101 building in Mega Kuningan, South Jakarta.

Prior to filing for bankruptcy, the company had managed to raise more than US$37 million in funding over four rounds, according to business data website Crunchbase.

CoHive’s shift in fortune played out in the second half of 2022, when it was forced to close down 80 percent of the coworking spaces it managed due to sluggish occupancy while dealing with financial and internal issues, according to a report from the Katadata Insight Center.

The report also said the company’s steep downturn could have correlated with the collapse of many seed and early-stage start-ups, the main tenants of coworking spaces.

Ali Tranghanda, CEO of real estate consultancy Indonesia Property Watch (IPW), said CoHive had probably expanded overaggressively, resulting in unwise location choices.

“The coworking space market needs proper consideration of location and community, because many of these businesses went out of business without any clear targets,” Ali told the Post on Tuesday.

The burden had been greater, given that the overall property technology (proptech) industry was also slowing down like other tech sectors, Ali said, though this also included impacts from a sluggish property market.

“Proptech is not going well today, the valuation is too high while business-wise, they have yet to earn profit,” he added.

Roshan Raj Behera, the Southeast Asia partner of Indian management consulting firm Redseer, said on Wednesday that regardless of how 2023 played out, proptech players should make sure that investments and expansions were done with “a conservative view on unit economics”.

He went on to say that any strategy proptech businesses planned to undertake must be based on structural opportunities as opposed to one-off trends that might unfold this year, meaning that they needed to focus on medium to longer-term plans and not just try to capitalize on short-term field days.

“If the overall market is stagnant, then the players should focus on specific pockets of growth. These could be in the form of region or customer base in terms of retail or enterprise, or short and medium enterprise-focused opportunities,” said Behera.

“Furthermore, the players should focus more on retention as opposed to acquisition. Accordingly, more-for-more packaged offerings could be launched to cover end-to-end needs of customers.”

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Despite the gloomy outlook, ACI’s Felencia remained adamant the industry would survive.

This was partly because work cultures had shifted since the pandemic, prompting certain companies and professions to “keep an open mind” toward the permanent adoption of work from home (WFH).

"We are seeing shifts in work culture that will affect the positioning of coworking spaces," she said.

A 2020 IPW survey revealed that 28.5 percent of employers were considering retaining WFH and remote work, as they were seen as more effective.

Global consultancy EY found in its 2021 Southeast Asia survey that only 15 percent of employees preferred to work full-time at the office, while the share of people preferring full-time WFH or remote work had doubled since an earlier survey.