Hong Kong’s prime business districts continue to welcome expansion by the world’s largest full-service flexible workspace provider, as IWG is set to scoop up more spoils from the near collapse of former co-working giant WeWork.
The Switzerland-based office operator will open its Signature at Gateway, in Wharf Holdings’ The Gateway commercial complex, on 1 December in a 50,000 square foot (4,645 square metre) space surrendered by WeWork early this year.
Located near the Star Ferry terminal in the Tsim Sha Tsui commercial district, the two-storey workspace will mark IWG’s introduction of its Signature by Regus flexible office brand in Hong Kong, with the company targeting the new offering at middle and senior level managers.
“IWG is actively looking to increase its footprint in Hong Kong, at a time when a number of our competitors are retrenching,” Paul MacAndrew, country manager for IWG in Hong Kong, said in an 11 November statement. “Harbour City is home to a multitude of world leading companies from different sectors, including banking and finance, retail, telecommunications and technology, and with its cutting edge facilities, Signature at Gateway is a fitting addition to the IWG portfolio in the region.”
Expanding in the Face of the Pandemic
Signature at Gateway’s December opening will represent IWC’s 16th location in the SAR overall, and comes just over a year after the company introduced the upper-end offering in Singapore.
IWG’s stable of brands includes Regus and Spaces, which operate in Hong Kong, as well as No18, Basepoint and Open Office among others.
The new Tsim Sha Tsui address in the 30-storey Tower 5 — also called Sun Life Tower — is one of 10 Grade A office towers on Canton Road built by Wharf Holdings in the mid-1990s, and sits atop Harbour City, Hong Kong’s largest shopping centre. IWG would not comment on the lease terms; but according to JLL, rates in Tower 5 were sitting between HK$49 and HK$70 ($6.32 and $9.03) per square foot per month as of 5 November.
IWG expects the Tsim Sha Tsui location to perform as well as its first foray into abandoned WeWork space in Hong Kong. After its 2019 IPO flameout, WeWork early this year backed out of two Kowloon locations and a third in Causeway Bay, with IWG taking over a 30,000 square foot space in Hysan Place.
In August, IWG said that the Causeway Bay centre was exceeding targeted occupancy rates, despite the district posting average vacancy of 7.2 percent during the third quarter, the city’s second-highest level of empty offices, behind only supply-rich Kowloon East, according to Savills.
IWG said that in the wake of COVID-19 it was seeing record demand as corporations rethink real estate strategies and turn to flex space during economically challenging conditions.
Currently, the serviced office specialist boasts 3,300 office locations in 1,100 cities spanning more than 100 countries, and it serves 2.5 million workers.
Uncertainty Creates Demand
Between February and September 2020 IWG opened 104 new locations across nine brands, and in its interim report dated 4 August it said open centre revenue grew 10.2 percent in the first half of 2020, despite the pandemic.
IWG’s MacAndrew sees the uncertainty created by the pandemic as helping to create fresh demand for serviced office options..
“The future is bright for the flexible workspace industry,” he said. “COVID-19 will accelerate the demand for flexible workspace as companies look to become far more agile, limit operating expenses and address how their employees will work in the future. We are seeing clear evidence of increasing interest for flexible working across all business sectors, and this shows flexible working will have a key role in economic recovery post-COVID.”