,Hong Kong

Demand for co-working office space in Hong Kong on the rise

Larger companies are maximising the flexibility of these spaces.

Returning stock arising from expiring leases led to a net withdrawal of 16,000 sq ft in the Grade A office market in June, according to JLL’s latest Monthly Market Monitor released today. Yet despite the contraction of the occupier market, the leasing activity remained robust, led by demand from co-working and serviced office operators seeking out expansion opportunities.

The last few months has seen an unprecedented amount of take-up from the co-working sector with both new entrants and traditional occupiers. “In a market where net demand growth has been thin, the arrival of co-working space operators represents a welcome source of new demand for the leasing market,” says Paul Yien, regional director of HK Markets at JLL.

Last year, JLL helped WeWork secure a flagship location along Jaffe Road in Causeway, leasing 93,000 sq ft over nine floors at Tower 535. Since then, the market has seen a number of other operators, including some of the city’s incumbent serviced office operators establishing and announcing plans to set up new locations in the city. Regus, for example, has reportedly just pre-committed 26,800 sq ft at Lee Garden Three in Causeway Bay. naked Hub, a Shanghai-based operator, has planned to expand in Hong Kong and has leased sixteen floors with 55,000 sq ft at EIB Centre (will be renamed to Bonham Circus) in Sheung Wan.

The growing popularity of co-working offices in Hong Kong is not only being driven by start-ups but also increasingly by larger corporate occupiers looking to better utilise their real estate within the city; taking advantage of the greater flexibility, convenience and savings that can be provided by operators.

“As most Grade A offices in Central may be beyond the reach of the business models adopted by co-working space operators, the impact of these new market entrants will be felt more in Grade B offices and office markets outside of Central. Landlords may also consider bringing in co-sharing office operators into their portfolios to help broaden their tenant base,” Denis Ma, head of research at JLL, points out.

Beyond co-working space operators, PRC banking and finance firms continued to be the key drivers of leasing activity in Central, accounting for about 46% of all new lettings in terms of floor area. China RE Asset Management relocated and expanded in-house by 11,200 sq ft at Three Exchange Square while a mainland China investment company leased 10,800 sq ft at 181 Queen's Road Central.

Rents in Central advanced 0.3% m-o-m, surpassing the record highs set in 2008. Rents in all other major office markets remained broadly stable against tight vacancy rates. 

Join Hong Kong Business community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Total employment in the private sector decreased by 0.4%.
Tollerort port terminal is located in the Port of Hamburg, Germany.
The inflation rate is at 1.2%.
It highlights the importance of SAF as it works towards net-zero by 2050.
This is 95.3% lower than pre-pandemic levels in August 2019.
This is an 8% increase from the first quarter of 2021.
Payment card usage increased by 18.8% QoQ in Q2 2021.
Compared with the end of Q2 2020, SVF accounts in use were up by 0.6% in 2021.
41% of Hong Kong consumers support local businesses.
Home prices are expected to rise by a maximum of 3% in Q4.
Bond Connect will expand mutual access between Hong Kong and China markets.
The move aims to promote the development of the bond markets in Mainland China and Hong Kong.
Credit cards recorded a year-on-year increase in outstanding balances, the first since Q4 2019.
Hong Kong has gained the top rank since the report's inception in 1996, especially in the assessment areas of international free trade and regulation.