Flexible workspace operators continue to set their footprints in Hong Kong
The market continues to see demand in new openings from flexible workspace operators. We calculate these operators have secured 252,000 sq ft of space in Hong Kong over the first five months of 2016 alone. As the concept of flexible workspace has moved steadily into the commercial mainstream, larger companies including multinational corporations (MNCs) have become more willing to accept it. This is partly because flexible working space offers large companies an alternative to committing themselves to long leases – an option which is especially attractive in times of economic difficulty. Another reason is that a number of MNCs are moving “Innovation” Teams to be closer to start ups to tap into the talent pool and technology.
Flexible working operators will take up 475,000 sq ft of office space under new leases in Hong Kong in 2016 by our estimates, then this year they will occupy space equivalent to 1.3% of the total office stock in the core and fringe CBD areas of Hong Kong. While this may not sound like a high proportion, at the margin it should be sufficient to ensure that demand for office space remains very firm. In turn, this factor should ensure that vacancy levels remain low and ultimately underpin rent levels.
Published: August 2016
By: Colliers Research