Hong Kong’s real estate developers are going into the coworking marketplace in the midst of a declining demand for office space, even as some big operators have given up their offices or left the city.
The office branch is still evolving since property managers are now in direct rivalry with established names. This is due to the fact that small businesses will carry on considering serviced office spaces as an opportunity to keep resiliency and steer clear of capital expenditure in advance.
There are less operators now in the town – the numbers have fallen marginally from about fifteen during the mid-2018 marketplace boom to thirteen, while the volume of centers has fallen from thirty-nine in 2018 to thirty-four at the moment.
An operator from the States, WeWork, gave up some offices at areas like the Harbor City complex in Tsim Sha Tsui, and others, while Chinese operator KrSpace left the city altogether and gave up its place in Times Square.
All major corporations are now thinking of new ways to use of space, with the aim of also lowering expenses. These businesses are implementing an approach where their core employees based in offices across Hong Kong’s Central District and the rest are working from flexible places, a more flexible solution that assists in minimizing capex.
The new economic climate is suited to the versatile workspace industry. Lots of landlords are considering the idea to expand into the coworking space. It’s possible they will open hubs on their own, since this approach works and demand will jump.
Eaton Club provided the information that the occupancy in its coworking areas was 70-80 percent over the last 2 years. This year it opened a 4th coworking space to capture interest from businesses that have been downsized or are pursuing a more versatile property method. Its 4 centers occupy 70K sq. ft., 3 of which are found in the Champion Tower in Central and Langham Place in Mong Kok. The newest space, at the Great Eagle Center in Wan Chai, has 1,7K square feet and can hold over 200 people. Center spaces start at around HK$3K (11,6K baht) monthly.
The coworking area at the Great Eagle Center wasn’t opened to benefit Eaton Club’s parent firm, and renting and leasing conditions are negotiated at marketplace level.
Eaton Club posted a y-o-y rise of 20-25 percent in sales and yields in the initial 6 months of 2020.
After some restorations, the state-held corporation China Resources opened CRB in a coworking area formerly held by Regus. Near the end of 2019, Regus left the space.
According to industry sources, the Hong Kong Land asset developer will also be opening a coworking center.
Other developers who have done this are Swire Properties, which presented the Blueprint co-working area in 2014. The holder of the V Point building in Causeway Bay also runs V-Co, a coworking area. Kerry Hotel in Hung Hom has partnered with theDesk operator to operate a coworking room abandoned by its former owner. Henderson Land has turned the area abandoned by WeWork in H Code, Central into CodeWorks, a coworking area.
In the meantime, coworking operators, like Metro Workshop, are providing offices for as little as $2,5K monthly for a space in Wan Chai. Campfire also offers to match every lower eligible cost that users may find.