WeWork has leased four floors in Swire Properties’ Taikoo Shing on Hong Kong island, the company has revealed to Mingtiandi, as the US co-working startup confirms an expansion plan first reported last November.
The 54,000 square foot space in Cityplaza Three will allow the $20 billion startup to add over 1,000 desks to its offering in the city, where it already has leased more than 105,000 square feet for its pair of existing centres in Phoenix Properties’ Tower 535 in Causeway Bay and in the Mass Mutual Tower in Wanchai.
“WeWork looks forward to growing our existing global partnership with Swire Properties in expanding our footprints in Hong Kong, in addition to China and the US,” said Christian Lee, Managing Director at WeWork Asia. “Together with WeWork’s strong global network in accelerating innovation and entrepreneurship, we are excited to continue strengthening our vibrant community that enables companies of all sizes to succeed further in the region.”
WeWork Continues Greater China Expansion
The news of the deal in Swire’s flagship Taikoo Shing commercial complex in Quarry Bay, on the east end of Hong Kong Island, comes just over one month after WeWork confirmed that it would be reopening the former Lan Kwai Fong hotel in Central as a co-working centre later this year.
Swire Properties indicated that the rent for the space in Taikoo Shing is at market level, which works out to be around HK$2.7 million ($344,194) per month for WeWork.
The 21-storey tower at 14 Taikoo Wan Road is connected to the Tai Koo MTR station and to the Cityplaza Mall, next to Swire’s Taikoo Shing residential development in the eastern Hong Kong Island commercial hub of Quarry Bay. Swire already operates its own flexible workspace called Blueprint in Taikoo Place that houses about 200 clients.
WeWork Ramps Up China Portfolio
In addition to its Taikoo Shing expansion, WeWork is set to open a few more venues on Hong Kong Island and Kowloon this year, Lee said at a press conference last month. Local media reports last year indicated that WeWork had leased nearly 36,000 square feet (3,345 square metres), at Mapletree Bay Point in the Kwun Tong area of Kowloon East.
With a combined ten centres in mainland China currently, WeWork said last month that it will expand into eight more Chinese cities this year, including Shenzhen, Suzhou, Hangzhou, Xiamen, Chengdu, Nanjing, Xi’an and Wuhan. WeWork Xintiandi in downtown Shanghai, set to open early this year, will be the shared office operator’s biggest centre in the world providing 4,500 workstations. The US startup finalised the lease on the 10-storey, 27,000 square office tower last December.
Hong Kong Landlords Learn to Love Co-Working
Jonathan Wright, Asia Pacific Head of Flexible Workspace Services at Colliers International, whose team represented WeWork in securing the space, told Mingtiandi that, “We are seeing more flexible workspace operators targeting Grade A buildings in key commercial districts, rather than Grade B buildings and that appetite from portfolio landlords for operators is increasing.” The brokerage executive sees WeWork’s deal with Swire as part of a growing enthusiasm for co-working among Hong Kong’s biggest landlords after naked Hub agreed in January to lease two floors in Sun Hung Kai Properties’ Two Harbour Square in Kowloon East for its third centre in Hong Kong.
Quarry Bay, on the east side of Hong Kong island, has grown in popularity as an office destination in recent months as tight vacancy and rising rents in Central have driven larger occupiers to seek corporate homes away from the city’s traditional commercial hub. As a result, rents in Hong Kong East recorded the strongest growth among the city’s major office submarkets in February, according to data from JLL.
Average grade A office rents in the east of Hong Kong Island climbed 0.3 percent to HK$49.9 per square foot in February, compared to the previous month, underpinned by the 0.5 percent month-on-month growth in Grade A1 office rents in Quarry Bay.