Contribution from Compass Offices
A new report from Compass Offices has identified three key trends in the shared office industry in the leading Asia Pacific markets – Hong Kong, China, Australia and Singapore.
These trends are emerging against a backdrop of continuing economic development in the region. Despite the current economic uncertainty, the Asia Pacific region is set to become the largest contributor to the global economy by 2020, with a projected rise of inward investment in several key markets.
This growth presents myriad opportunities for the shared office space sector, as we provide the flexibility that businesses will increasingly demand. The trends that companies in the space should watch out for are as follows:
Misperceptions about shared working space
There is a widespread perception that the use of a shared working space is an option primarily for start-ups or SMEs. But this is actually misleading. Office rents are soaring in most Asian cities and the ongoing uncertainty in the global economy means that many companies are reluctant to take on long term and costly lease agreements.
Both of these factors have resulted in an increasing number of businesses looking to take advantage of the flexibility, lower costs and diminished risk of a shared office space. Consulting and IT firms stand out as two kinds of businesses following this trend, with 44 per cent of companies in these sectors in APAC using shared working spaces.
Opportunities for developers and landlords
Our data shows that businesses prioritise locations in central business districts. But many existing buildings are not built with shared office spaces in mind. This can be good news for office developers and landlords who have suitable space available.
Landlords, for example, can consider using vacant space for offices. Or even better, they can allocate space to be used as shared office space for qualified anchor tenants. However, it should be noted that businesses demand more than just Grade A space. They also want offices with smarter technology and flexible floor plans that can be adjusted to their needs.
Attracting the right kind of client
Research indicates that the three main reasons why businesses choose shared office spaces over conventional space are: availability of high quality services; flexible leases; and minimum business risks. But it takes more than just a cool hang out area or free drinks to build a lasting business in this industry. Deskmag recently reported that 4.5 coworking spaces open every work day but 15% of them fail.
As a serviced office provider, if your strength is working with professional services companies, like accounting or law firms, and not so much targeting young startups, you should amplify your strength and provide the kind of office space that offers the most professional service and image for your client.