The Hive Adds Eighth Hong Kong Location in HSBC AM-Owned Podium in Sheung Wan

Hong Kong-based co-working operator The Flexi Group has expanded its Hive brand in the Asian financial centre, with the company having opened its latest location in the city’s Sheung Wan area after taking over a former WeWork site owned by HSBC Asset Management.

Named after the Po Hing Fong neighbourhood in which it is located, the Hive PoHo opened last month and marks the operator’s eighth location in Hong Kong. The Flexi Group division is operating the centre in the retail podium of the Universal Building at 5-13 New Street through a partnership with an institutional fund, the group said in its release.

Flexi Group and Hive typically operate their facilities through partnerships with building owners, with the Universal Building’s four-storey podium owned by a former SilkRoad Property Partners fund now managed by HSBC Asset Management, according to sources familiar with the property who spoke with Mingtiandi. HSBC Asset Management had not responded to Mingtiandi inquiries by the time of publication.

“We are thrilled to bring the Hive to the artistic PoHo area”, Chris Edwards, group CEO of The Flexi Group said in a release on Monday. “This neighborhood’s unique blend of old-world charm and a modern vibe perfectly aligns with our brand’s focus on cultivating collaborative and inspiring environments in creative districts across Hong Kong”.

Asset Light Model

Located a five-minute walk from the Sai Ying Pun MTR station, The Hive PoHo occupies around 15,000 square feet (1,394 square metres) of floor area in the retail podium of the Universal Building, which has 64 residential units situated above the building’s first four levels.

The property has over 250 members and features communal workstations and private offices for up to 20 persons and meeting and event spaces for up to 60 persons. Originally occupied by Shanghai-based Naked Hub in 2017, the property became part of WeWork’s portfolio following its acquisition of the rival co-working operator in 2018.

Flexi Group was founded in 2022 through the merger of three APAC-focused co-working operators – The Hive, Common Ground and The Cluster – with the company now overseeing a collection of 45 locations spread across 11 cities in 8 jurisdictions, which include Australia, Taiwan, Singapore, Vietnam, Malaysia, and the Philippines in addition to Hong Kong.

The company touts an asset-light approach to its operating model, opting to engage with landlords through partnerships or management agreements with a variable rent or profit share element instead of a traditional lease.

Under its business model, Flexi Group is typically responsible for designing, building, and operating the space in return for a percentage of the gross revenue and profits, while the landlord provides capital for the venue’s fit-out as well as for operations during the renovation period.

The group’s landlord partners in Asia include developer Chinachem in Hong Kong, state energy firm Petronas in Malaysia, and mall operator Central in Thailand.

Aborted Listing

In February, Flexi Group terminated its agreement to merge with TG Venture Acquisition Corp, a SPAC sponsored by Hong Kong-based family office Tsangs Group, providing an obituary for a deal first struck in December 2022 which would have seen the co-working operator listed on the Nasdaq with an implied pro forma enterprise value of $205 million.

Flexi cited the deal’s failure to close by 5 May 2023 as reason for the termination, with TG Venture weighing legal measures as a response. TG Venture’s shares were subsequently de-listed from the Nasdaq in April.

Tsangs Group had listed the San Francisco-based SPAC in November 2021 with a goal of targeting tech-related businesses in the US and other developed countries.

Normalised Growth

Flexi Group’s latest opening comes after the flexible office market in Asia Pacific reached 89 million square feet of space in June, representing an increase of 3.9 percent from December, according to a report this month from CBRE. That volume constituted 3.9 percent of total office stock and 3.2 percent of total grade A office stock in the 20 major Asia Pacific markets tracked by the consultancy.

With remote and hybrid working on the rise, Asia Pacific’s flexible office sector has grown more slowly post-pandemic, notching an annualised growth rate of 4 percent from 2020 through the first half of 2024, after expanding at a 51 percent annualised pace from 2015 through 2019, according to the consultancy.

Co-working operators in the region are increasingly adopting alternative deal structures, such as management agreements and capex contributions by landlords, in order to create more sustainable business models, CBRE said.

“Asia Pacific’s flexible office market has entered a period of maturity,” said Sidharth Dhawan, senior director and head of Asia Pacific alternatives for CBRE. “Flexible space operators have adapted their strategies to the post-pandemic era, shifting their focus to brand differentiation, sustainable deal economics and in-fill M&A.”