By Lisa Creffield
Flexible workspaces in Hong Kong are flourishing thanks to the city’s focus on innovation, according to a new report from Instant Offices.
It records 50% market growth over the past two years, with 174 flexible workspaces now available.
Hong Kong’s rapidly expanding Technology, Media and Telecomms (TMT) sector is fuelling demand for non-conventional services offices, co-working and other flexible workspaces.
The government has just announced HKD $15 billion in investment for the technology sector, including funding for local startups, smart production and research. HK$4.4 billion will be given to the Hong Kong Science Park to incubate startups in co-working spaces.
Instant Offices MD Sean Lynch says the innovation-focused budget will fuel growth for years to come.
“We fully expect the TMT sector to continue to flourish. To accommodate this growth we anticipate the flexible office market to grow at a similar rate to the 50% increase it has experienced in the previous two years,” Mr Lynch says.
The growth is also attracting international interest. Shared workspace startup WeWork has Hong Kong firmly in its sights after raising $430 million in a new round of financing. The company views Asia, and particularly China – listed as “Coming Soon” on its website – as key markets for communal office spaces.
Hony Capital, one of WeWork’s investors, describes the shared office business as an “unparallelled” fit for the Chinese market and culture. Hong Kong and Beijing are top targets for expansion.
Flexible office growth in Hong Kong was initially concentrated in the Cyberport tech hub but is now spreading across the city. Currently, over two thirds of spaces are located on Hong Kong Island.
While office operators are acquiring more space, supply is still tight which is keeping prices higher.
“Supply remains relatively constrained however, which means that prices are high in comparison to other cities in the world – although this is symptomatic of the conventional office market in Hong Kong,” the Instant Office report notes.
Hong Kong still compared favourably to London and New York, with average monthly desk rates costing USD $684 against $1,055 for London and $1,047 for New York.
There’s also a wide range of pricing, with rent in the prestigious Admiralty location nearly four times the rate in Mong Kok.
Sean Lynch says flexible workspaces offer a range of benefits to start ups that go beyond mere cost saving.
“The focus in Hong Kong is very much on nurturing start-up and growing companies. As such we continue to see high demand for flexible office solutions, particularly co-working environments that help to promote networking and collaboration.”