Although China’s office space sector suffered greatly last year, Hong Kong-based operator theDesk has went ahead with plans to open a new space in Shanghai.
About 40 flexible workspace operators disappeared from January to October of 2018 and according to the China Real Estate Chamber of Commerce, about 40% of current coworking spaces are over half empty.
Despite this, Thomas Hui, CEO of theDesk, said that the competitive environment is not off-putting to the company and believes that China’s market will open up further.
Other companies have halted expansion plans due to lack of investments and funding from venture capitalists, including China’s largest operator Kr Space.
“However, there is always room in any market or sector for quality product and if there is a discernible difference in product and concept, the market should be receptive,” said Jonathan Wright, director of flexible workspace services, Asia, Colliers International. “Securing the right asset on the right commercial terms will be key to success.”
Founded in 2016, theDesk currently has three locations in Hong Kong and its new 22,000 square foot Shanghai location will include dedicated desks, private offices, and more.
Thanks to the company’s low-key design, Hui said that it is able to have positive cash flow.