Costs drive Hong Kong firms to seek smaller office spaces

Cost optimisation, shrinking business demand named as top reasons.

Office occupiers seeking smaller workspaces grew to 27% from 21% in 2023, according to a survey by Colliers.

Only 19% of the 385 survey respondents said that they plan to expand their office space– compared to 26% a year ago,

Over 6 in 10 (67%) of respondents named cost optimisation as the major reason for downsizing, followed by shrinking business demand in Hong Kong (60%). 

Work-from-home policies were less crucial for occupiers as only 1 in 10 (18%) said it was a major reason for downsizing.        

Plans to relocate out of the region is another factor. Relocators are most likely to go to Singapore (7%), mainland China (6%), and other regions (7%). 

Over a half (54%) expect no change in their office situation. 

The insurance sector (50%) is more likely to expand, a contrast to the 43% of the shipping and logistics sector seeking  to downsize.

Mainland Chinese (27%) and Hong Kong (21%) firms are keener to expand, whilst European and Asian firms have higher downsizing rates (31% and 38% respectively). 

Two in ten large-size occupiers (22%) whose office size is below 8,000 sq. ft. are eyeing bigger office spaces, but the ratio drops as low as 13% for firms with an office footprint of 8,000 sq. ft. or above.

Amongst the occupiers opting for expansion, 6 in 10 (60%) cited increasing business opportunities as the major reason, whilst almost the same number (59%) cited inadequate space for their current operations.