Edition:
HIGHLIGHTS
Donald Trump’s China policy
NEW
US-China relationsHong Kong economy
News
Hong KongChinaEconomyAsiaWorldSportThis Week in AsiaUS Elections
Business & Tech
BusinessTech
Opinion
Latest
Lifestyle
LifestylePeople & CultureStylePostMagK-popOutdoorCooking
More +
VideoTalking PostSCMP FilmsInfographicsPicturesPodcastsSCMP SeriesExplainedSCMP SpotlightNewslettersSpecial Reports
Topics
Donald Trump’s China policyUS-China relationsHong Kong’s Article 23 national security lawChina’s militaryChina's economic recoveryTrending in ChinaTaiwanChina’s Communist PartyUkraine warWellness
Focus
Greater Bay Area
avatar image
Advertisement
Business
Dane Moodie
Dane Moodie

Concrete Analysis | What is the future of co-working spaces in Hong Kong?

  • The sector witnessed high levels of growth in Hong Kong between 2016 and 2018, but this has decreased over the past 24 months
  • There are opportunities for both operators and tenants to take advantage of the current business environment

Reading Time:3 minutes
Why you can trust SCMP
0
Strong demand for flex space is anticipated, particularly from large MNCs, which view it as an attractive option for entering new markets, reducing capital expenditure and testing out alternative occupancy models. Photo: Reuters
Dane Moodie

The co-working sector, also known as the flexible space sector, has enjoyed tremendous growth in recent years, supported by the start-up boom, demand for greater flexibility among both employees and companies, and its appeal as a cost-effective alternative to traditional offices.

However, with Hong Kong entering its longest recession since 2009, and companies widely adopting work from home policies and social distancing measures, what does the future hold for this sector?

Co-working space is defined as a shared work environment providing a wide range of workspaces to occupiers. Tenants in co-working spaces pay a fixed operating cost. They, however, do not take out long leases or make a large capital outlay for fit-outs. By simply subscribing to a membership, they receive the right to use the co-working space and access shared facilities. Also, co-working operators have increased allocations for customised space exclusive to corporate members, whose subscription could be hundreds of seats in Asia-Pacific.

In Hong Kong, the flexible space sector witnessed high levels of growth between 2016 and 2018, which has now decreased due to the pandemic and other sociopolitical factors in the past 24 months, which led to a 20 per cent reduction of flex space in Hong Kong in 2020. A fall in flex sector operations such as events, conferences and meeting room subscriptions have put great pressure on co-working operators’ income across the region.

Membership subscriptions in multiple flex sites and full directory boards in Hong Kong are still active despite the reduction in office occupancy due to work from home measures. While small and medium enterprises (SMEs) and multinational corporations (MNCs) favour flexible workspaces, many occupiers have deferred any long-term decisions in the last twelve months to understand more about the pandemic. In 2020, there was activity geared towards short-term solutions, in line with previous years.

In future, we anticipate strong demand for flex space, particularly from large MNC occupiers, who view it as an attractive option for entering new markets, reducing capital expenditure and testing out alternative occupancy models.

Advertisement