COMMERCIAL PROPERTY | Staff Reporter, Hong Kong

Flexible workspace take-up hits 350,000 sq ft in 2017 despite stiff landlord stance

Operators had trouble accessing Grade A buildings and instead redeveloped Grade B properties.

Despite a stiff office market and tight vacancy rates, total flexible workspace take up hits 350,000 sq ft in 2017 with figures poised to ride on an upward trajectory for the year ahead, according to Colliers Flexible Workspace APAC report. 

Difficult deal terms in stock owned by portfolio landlords posed a growing problem to access Grade A buildings thus prompting flexible workspace operators to look for other alternatives.

Operators found the answer to their supply woes by repurposing Grade-B commercial properties into new office spaces for the mobile workforce. 

“The two major deals of the year, Spaces at Sun House and naked Hub at Bonham Circus, are examples of operators taking up Grade B buildings and helping to breathe new life in to the assets,” said Colliers analyst Philip Pang. 

Pang also forecasts a healthy growth trajectory of at least 400,000 sq ft in net take-up for the first quarter of 2018 as landlord stance is poised to soften soon with owners beginning to appreciate the value of flexible workspaces in their portfolios. 

“With a number of deals under active negotiation, we forecast an increase in year-on-year take-up of upwards of 40% over 2018, spread geographically across the market. We expect there to be more deals in Grade A buildings, underpinned by increased demand from multinational corporations,” he added, forecasting that naked Hub and WeWork are poised to challenge IWG’s dominance of the co-working scene this year.

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