Exactly what and where is the ‘next big thing’ in the global serviced office market? That’s the question on the minds of many forward-thinking operators within the flexible workspace industry.
Recently on OfficingToday, we highlighted Instant’s report on key emerging markets around the world and how these hot locations were set to double the serviced office industry within just a few years. We also spoke to Jon Posener from SOS to get his take on Asia, which is one expanding market that’s worth watching. So much so that SOS have launched a regional HQ there.
So what does Asia have to offer?
Within such a vast continent, there are plenty of big and growing workspace markets grabbing headlines. It’s home to the dominant economies of China and the world’s most expensive office space location – Hong Kong. In 2011, CFO Innovation Asia reported that 4 out of the top 5 global office locations with in Asia, namely Hong Kong, Singapore, Tokyo, Seoul and Shanghai.
According to Instant, the emerging markets of Asia have seen the highest increase of serviced office space with a net increase of 64 centres added over the past 12 months. China is the largest in this region, with 136 centres in 12 cities, and this market has grown by 25% in the past 12 months, buoyed by the strong performance and high rental values of Beijing.
In particular, one emerging market in Asia that’s attracting plenty of attention is India.
According to Regus India CEO Sahil Verma, there are huge growth prospects on the cards. In a recent report from the Press Trust of India, Verma said:
“We expect this market to grow by 21-25% every year. At present, this market is at a very nascent stage, but it works best in times of turnover pressure. It offers saving to the clients, as they do not have to spend on renting a property and setting up office infrastructure.”
India is one of the world’s fastest-growing economies. While this carries many positives for specific markets, it naturally comes with certain ‘unknowns’ backed by a country that is considered “newly industrialised”.
Of course, another challenge is that emerging markets have a lot of work to do in order to educate local businesses and raise the profile of the sector. Add to that, there is the impact of cultural differences both socially and in business. In their Emerging Markets report, Instant warned that workspace operators in India “must struggle to overcome negative perceptions from local users of the overall suitability of this type of office solution”. In established markets like the UK, particularly London, much of this work has already been accomplished.
However, with high profile brands like Regus, The Executive Centre and Servcorp based in India, backed by their wealth of resources and commitment to ongoing investment and public relations, this emerging market has a strong foothold. What does this mean for workspace operators? Global corporations looking to increase their market share in such fast-growing economies as India will need a quality location to set up shop. Most likely, multi-national or high-growth businesses will turn to prime serviced offices as a platform from which they can establish a local and national presence.
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The upshot? India’s market is one worth watching. Whether or not it’s the ‘next big thing’ remains to be seen, but with a fast-paced economy and forecasts of 20-25% growth in the flexible workspace sector alone, it makes sense that India’s serviced office market could be gearing up for big things. Check out the report from Instant for further details – it’s an interesting read.Share this article