Small workspace demand up 29% in 2021 due to hybrid setup

The supply for flexible workspace is expected to grow by 15% in 2023.

More firms in Hong Kong, especially start-up companies, started enforcing hybrid setups, in 2021, which led to an increase in smaller office spaces. 

Instant Group, in its annual Hong Kong Flexible Market Review, found that demand for desk spaces for three to nine people went up by 29% last year compared to pre-pandemic levels.

In contrast, demand for larger space requirements, or those with more than 25 desk spaces, fell by 46% in 2021 compared to 2019.

“Businesses are continuing to rethink their real estate strategies in response to the dynamic nature of the market, especially hybrid working,” said The Instant Group.

READ MORE: 2 in 5 Hong Kongers are more productive at home: report

As this happened, supply of flexible workspace went up in Hong Kong by 6% year-on-year in 2021, and is seen to grow by 15% in 2023.

Prices of workspaces also dropped “marginally” amidst a 10% decrease in demand between 2020 and 2021 on the back of the new wave of infections in late 2021.

In 2021, rates dropped in key business districts Wan Chai, Tsim Sha Tsui, and Causeway Bay, posting a decrease of 5%, 3% and 2%, respectively.

Average yearly rate in Wan Chai was at $5,218, Tsim Sha Tsui at $6,435 and Causeway Bay at $6,527.

Across the Asian Pacific region, Hong Kong is also one of the more stable flexible space markets as its workstation rates went down by only 1% in 2021 compared to 2020.

Compared to its nearby markets at Singapore with rates declining by 20%, Tokyo, Japan by 15%, Seoul, Korea by 12% and Sydney, Australia by 11%.