The race to open new co-working centres in Hong Kong reached another milestone last week when IWG-owned Spaces debuted its second new venue in the city within the last month.
The 37,500 square foot (3,483 square metre) Spaces Wai Yip in Kowloon East is the Dutch brand’s third location in the city, as part of a plan for Spaces to have five locations open in the city by the end of this year.
This latest centre adds to a total of 621,175 square feet of flexible office space leased in the city so far this year, according to data from Colliers International, as international brands including WeWork fight with local players for dominance of the flexible office segment of the world’s most expensive office market.
Third Centre Carries Spaces into Kowloon East
Spaces’ new centre on Wai Yip street in Kwun Tong occupies three floors including a rooftop terrace on the 13th floor of Gaw Capital Partners’ 133 Wai Yip Street, which the Hong Kong private equity shop acquired as the Cheung Fai Industrial Building and later converted for office use.
The Hong Kong Economic Times reported earlier this year that Regus, which is Spaces’ sister brand at IWG, had leased multiple floors in the building. Spaces Wai Yip has around 20,000 square feet of office space, three meeting rooms, and a 9,200 square foot business club, which is set up to accommodate meetings and collaborative work.
Gaw Capital reportedly sold a 50 percent stake in 133 Wai Yip Street to SilkRoad Property Partners last year for HK$930 million.
Expanding Their HK Footprint
Spaces, a subsidiary of serviced office giant IWG (formerly known as Regus) entered Hong Kong in September 2017 with its 77,000 square foot (7,154 square metre) lease of the entire Sun House building in Sheung Wan, one metro stop west of Central. The company’s move into the former industrial area of Kwun Tong marked the third expansion the co-working space operator made in Asia’s financial hub in one year.
The Wai Yip Street site is the Amsterdam-based flexible office provider’s first venue in Kowloon, where it hopes to meet the growing demand for offices in the Kwun Tong area. With a number of international banks and financial institutions, such as HSBC, Citibank, and DBS having moved into the former industrial area in the past two to three years, Kwun Tong has been marketed aggressively as an alternative to Central.
The Wai Yip Street Spaces, with 400 working desks and 100 individual working rooms, is the second site the Amsterdam company launched this summer after opening a three-storey co-working centre in Hysan Development’s Lee Garden 3 in Causeway Bay at the beginning of August.
Spaces’ Expansion in the City
By the end of the year, the company owned by Regus-parent IWG plans to open another two sites, its official website said, which would bring its portfolio of Hong Kong co-working spaces to five. The Spaces at 200 Hennessy Road in Wan Chai is scheduled for October, while Spaces AXA Southside, located at 38 Wong Chuk Hang Road in south Hong Kong Island is under preparation and is said to be set for launch before the end of the year.
Flexible Working Space Heats Up in Hong Kong
Hong Kong has become one of the most popular destinations for co-working space providers, with local co-working spaces companies competing with international and mainland operators to secure and lease out pieces of the world’s most expensive office market.
According to Colliers, in addition to the 16 new co-working leases totaling 621,175 square feet that have already been signed this year, the city is expecting another 200,000 square feet of co-working venues to be completed by the end of this year.
Investors and landlords have been quick to leverage the trend to boost their returns. Pamfleet, which earlier purchased the 29-storey Bonham Circus building in Sheung Wan on behalf of one of its funds, sold the 48,550 square foot building for HK$1.7 billion in January this year after it leased the lower 16 floors to Shanghai-based co-working space provider Naked Hub, earning an HK$700 million profit in less than two years.