A new player has jumped into Hong Kong’s rapidly growing co-working sector, with Amsterdam-based Spaces leasing out an entire building in a prime area of the city’s Sheung Wan area to serve as a shared office venue. The deal marks the largest single office lease in this downtown area just west of Central this year and will create the biggest co-working space in the district.
Spaces, which is a subsidiary of serviced office giant IWG (formerly known as Regus), is renting out the 77,000 square foot (7,154 square metre) Sun House building at 90 Connaught Road Central, according to a statement by CBRE, which brokered the deal. The international real estate agency noted that the office building, owned by The Sun Group Limited, is undergoing renovations and will sport a modernist design upon completion in mid-2018.
Spaces joins an expanding roster of international co-working brands that are moving into the Hong Kong market, including WeWork and naked Hub, adding to the nearly 1 million square feet of flexible office space in the city.
Putting Up Hong Kong’s Biggest Shared Office Centre
“We see a lot of opportunities in this sector as an increasing number of both local firms and MNCs are tapping into co-working spaces to build flexibility in their corporate real estate portfolios,” commented Tom Gaffney, managing director of CBRE for Hong Kong, Macau and Taiwan in a statement.
Spaces, which signed the lease agreement last Friday, has also committed to occupying 40,000 square feet (3,716 square metres) of space in Lee Garden Three, an office tower being developed in Causeway Bay by Hysan, for a co-working centre slated to launch in the second quarter of 2018.
Sun House is a 20-storey, single-owner office building that was acquired by its current owner in 1982. The property is located about 200 metres east of the Sheung Wan MTR station. Renovations have been ongoing for two months and the former tenants, mainly professional services and financial firms, have already relocated.
“Spaces at Sun House will be a focal point for co-workers and flexible workspace needs in Central,” said Nigel Barnes, vice president of development for Spaces Asia Pacific.
Spaces Joins the Co-Working Fray in Asia
Spaces specialises in flexible workspaces with a community focus, catering to entrepreneurs, freelancers and corporate employees, according to its website. The brand was acquired by Luxembourg-based Regus in 2014.
The flexible office provider currently has 46 co-working centres open in 15 countries around the world, according to its corporate website. Elsewhere in Asia, the brand has opened a centre each in Singapore; Tokyo and Nagoya in Japan; and Chennai and Gurgaon in India.
Spaces also plans to launch in Bangkok, Taiwan, Seoul, and Shanghai. The new venue “coming soon” to mainland China will occupy 1,360 square metres on the 29th floor of the super-tall Shanghai Tower in the Lujiazui financial district.
Hong Kong Goes Co-Working Crazy
The co-working arm of Regus is the latest international brand to test its model in the competitive Hong Kong market. New York-based shared office giant WeWork opened its first local centre at the Tower 535 commercial complex in Causeway Bay last September, and another location in Wanchai’s Asia Orient Tower, Town Place in December.
The $20 billion New York-based firm was reported last month to have leased out a full floor, spanning nearly 36,000 square feet (3,345 square metres), at Mapletree Bay Point in Kowloon East, shortly after it announced $4.4 billion of new investment for an Asian growth drive. WeWork is also said to be leasing space in the former Hotel LKF in the city’s Lan Kwai Fong nightlife district in Central.
Shanghai-based rival naked Hub, which has a network of ten mainland centres in Beijing and Shanghai, has also opened a venue at Bonham Strand in Sheung Wan, with another centre in the Sai Ying Pung area on the way. naked is said to be considering leasing nearly 100,000 square feet (9,290 square metres) of space at the Cheung Fai Industrial Building in Kwun Tong, East Kowloon.
According to CBRE, co-working operators along with serviced offices that have co-working elements currently occupy 930,000 square feet (86,400 square metres) of space in Hong Kong. These operators took up about 335,000 square feet (31,123 square metres) of space, 44 percent of it in grade A offices, in the first half of 2017.
The agency forecasts that the city’s total co-working footprint will grow to more than 1.27 million square feet (117,987 square metres) by the end of the year, up from just 500,000 square feet (46,452 square metres) in 2013.
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