WeWork, the New York-based shared office brand, is expanding its footprint in Hong Kong, on the heels of announcing $4.4 billion of new investment for its Asian growth drive.
The $17 billion firm has leased a full floor, covering nearly 36,000 square feet (3,345 square metres), at Mapletree Bay Point in the city’s Kwun Tong area, according to a report in the Hong Kong Economic Times.
The move by WeWork comes as competition heats up in Hong Kong’s co-working sector in response to rising demand from occupiers and fresh infusions of investment capital.
WeWork Ramps Up in Hong Kong
The new location will mark WeWork’s first co-working centre in Kowloon, and adds to the company’s two existing Hong Kong venues in Causeway Bay and Wan Chai. Late last month, WeWork was reported to be in advanced talks to set up a space in the former Hotel LKF in Central, which has been closed for conversion into an office space.
Mapletree Bay Point at 348 Kwun Tong Road, developed by Singapore’s Mapletree Investments, is a 20-storey grade A office building complete with restaurants and shops. Located between the Kwun Tong waterfront and the Ngau Tau Kok MTR station, the tower topped out earlier this month and is scheduled for completion in the fourth quarter. WeWork has reportedly leased its floor at a rate of around HK$25 ($3.20) per square foot and may expand to another floor in the future.
WeWork’s two existing Hong Kong locations cover a total of 150,000 square feet (13,935 square metres). The US startup opened a centre in Causeway Bay, at the Tower 535 commercial complex on Jaffe Road last September, followed by a location in Wanchai’s Asia Orient Tower, Town Place in December.
The news comes as WeWork reveals a series of investments from Japanese tech giant SoftBank and its Vision Fund totalling $4.4 billion to fuel the company’s growth in Greater China, Korea, southeast Asia and Japan.
Emerging Kwun Tong Draws Co-Working Players
By moving into Kwun Tong, the former industrial area within Kowloon East, WeWork may be looking to tap demand from corporate clients in the emerging office hub. “Kowloon East is quickly gaining a critical mass of large corporations who are positioning middle and back office functions in the district,” commented Jonathan Wright, the Asia business line lead for Flexible Workspace Services at Colliers International.
“In light of this corporate take-up there are a lot of smaller start-up companies and SMEs that want to be in that environment servicing the corporates – therefore some of the flexible workspace demand will be from start-ups and SMEs. However, we see the main demand being from corporates who seek flexibility,” Wright noted. The agency executive added that Colliers was not able to comment directly regarding which operators are currently looking for space in the district.
One shared office provider that has moved into Kwun Tong is Chinese shared office startup naked Hub. The two-year-old company backed by Hong Kong’s Gaw Capital 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, just a block away from WeWork’s new address in Kwun Tong, according to the local media report. The 14-storey building is located one block south of Mapletree Bay Point and was acquired by Gaw Capital in 2013. Attempts by Mingtiandi to contact naked Hub directly went unanswered at the time of publication.
The Shanghai-based firm has a platform of ten centres in Beijing and Shanghai, along with its new venue at Bonham Strand in Sheung Wan, which it opened last month.
naked Hub, which last month merged with Singapore’s JustCo to create the largest high-end flexible office network in Asia, has said that it plans to grow to 21 locations in Greater China and Southeast Asia. The flexible office startup will also soon unveil a new Hong Kong location at New Street on the fringe of Sai Ying Pun and Sheung Wan, according to naked Hub’s website.