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Cheryl Arcibal

The trend of companies offering flexible working arrangements to retain their top talent, far from a pandemic-era fad, is now a permanent fixture of the office property market, according to International Workplace Group (IWG).
In addition, global economic uncertainty was shaping office-space demand, driving companies away from being tied to traditional office leases, said Marc Descrozaille, CEO for Middle East, Africa and Asia-Pacific with the Switzerland-headquartered flex-desk service provider.
Descrozaille credited these trends with boosting system-wide revenue for the group by 2 per cent to a record US$4.2 billion in 2024. Operating profit grew 185 per cent to US$510 million.
IWG, which operates brands such as Regus, Signature and Spaces, has more than 4,000 locations across 120 countries, and expanded by a record 899 last year, with 115 of them in Asia-Pacific. With 21 centres in Hong Kong, the group is the city’s largest flexible office provider.
“Offices aren’t going anywhere, but their role is changing,” Descrozaille said. “Headquarters, for example, are becoming more like creative hubs – places designed specifically for collaboration and connection, with purpose-built spaces and activities.”
“Hybrid work is definitely here to stay and is the future. Flexibility isn’t just a perk any more, it’s essential. Companies will increasingly focus on giving their teams the power to choose where and how they work to keep productivity high.”

Clients for IWG’s spaces in Hong Kong spanned from large multinational corporations to individuals in creative sectors, Descrozaille said.
He added that this demand should encourage landlords and asset managers with empty offices to partner with the group.
“Over the coming years, this growth will continue to accelerate as more and more long-term leases come up for renewal,” he said. “For landlords in Hong Kong, the Greater Bay Area, mainland China and Asia-Pacific with vacant properties, partnering with International Workplace Group makes a lot of sense to tap into this growing demand for hybrid working.”
IWG and Hysan Development, the largest commercial landlord in Hong Kong’s Causeway Bay, formed a joint venture in 2021, which acquired IWG’s existing locations and brands across the bay area.
“The Hong Kong office property segment is undergoing transformation, driven by changing workplace needs and market dynamics,” Descrozaille said. “Up until the pandemic, Hong Kong’s office market had been predominantly traditional. The pandemic has revealed the benefits of a distributed workforce and the advantages of hybrid work arrangements, prompting companies to rethink traditional office spaces.”
Remote or flexible working schemes are among the top factors that Hong Kong professionals consider when looking for job opportunities, according to a study released on Wednesday by Robert Walters.
“Companies that foster flexibility, psychological safety and a well-being-focused workplace gain a competitive edge in employee engagement and retention,” the study said.
Vacancy rates for office space vary around the world, but the average rate increased by 10 basis points to 16.8 per cent in the fourth quarter of 2024, according to JLL.
In Hong Kong, grade A vacancy rates in March increased to 13.7 per cent from 13.3 per cent in February, JLL said.
The city has a glut of commercial space that may take between seven and 15 years to digest, according to experts. The city has 15 million sq ft of excess office space, more than all the current space in the main business district.

Furthermore, despite the recent gains in the benchmark Hang Seng Index, which is up by 12 per cent so far this year, the office leasing market “has seen limited benefits”, according to Savills.
“Of the 68 companies that listed on the [Hong Kong stock exchange] in 2024, only 14 of them, or 20 per cent, established physical offices in Hong Kong,” Savills said in a report released last month. “The majority opted for cost-efficient alternatives such as serviced offices or maintained mainland China-based operations, reflecting a disconnect between capital market activities and physical office demand.”
“Hybrid or flexible working arrangements do not necessarily mean downsizing of office demand,” said Martin Wong, senior director and head of research and consultancy for Greater China at Knight Frank. “The current challenge for the occupier market is mainly due to economic uncertainty.”
The escalating trade war between the US and mainland China has prompted the International Monetary Fund to cut its global growth forecast this year to 2.8 per cent from its 3.3 per cent estimate in January. Likewise, the higher tariffs initiated by US President Donald Trump are also likely to lower global expansion to 3 per cent in 2026, the multilateral lender said, lower than the previous 3.3 per cent forecast.


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Hong Kong property

Hong Kong’s largest flex-office provider seeks deals with vacant-office landlords

Skyscrapers in Hong Kong’s Central district. Photo: Shutterstock

Marc Descrozaille, CEO for Middle East, Africa and Asia-Pacific at International Workplace Group. Photo: Handout

People cross a road in Hong Kong’s Central district on April 11, 2023. Photo: Jelly Tse

Hong Kong may need 7 to 15 years to digest city’s glut of commercial space, experts say

Hong Kong landlords need to look for tenants outside the city’s traditional industries to fill their vacant offices, experts say. Photo: Eugene Lee

Corrections in office rents have made it affordable for office tenants to upgrade, says Alex Barnes, managing director at JLL Hong Kong. Photo: Handout 

Hong Kong’s office segment to see faster turnaround than retail sector: Morgan Stanley

Morgan Stanley expects improved office space demand in Central and at super grade A commercial buildings in Hong Kong. Photo: Shutterstock 

Praveen Choudhary, head of Hong Kong and India real estate research at Morgan Stanley. Photo: Handout

Improved trading performance at the Hong Kong stock exchange is expected to stimulate demand for office space in the city. Photo: Jelly Tse

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Partnering with International Workplace Group ‘makes a lot of sense to tap into growing demand for hybrid working’, CEO says


Partnering with International Workplace Group ‘makes a lot of sense to tap into growing demand for hybrid working’, CEO says.


Hong Kong’s largest flex-office provider seeks deals with vacant-office landlords

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Partnering with International Workplace Group ‘makes a lot of sense to tap into growing demand for hybrid working’, CEO says

Partnering with International Workplace Group ‘makes a lot of sense to tap into growing demand for hybrid working’, CEO says