Competition intensifies in sector

PUBLISHED : Monday, 18 October, 2010, 12:00am
UPDATED : Monday, 18 October, 2010, 12:00am

Competition among international serviced office providers is heating up, as companies eye expansion in Asia and send executives here to build teams.

According to a survey by global business services provider Regus, many enterprises in Europe are looking beyond the recession and planning to increase headcount as they establish overseas offices to target new markets.

The recent expansion of The Executive Centre (TEC) has been noted by industry watchers. TEC's 32 locations across Asia-Pacific include 19 in Greater China and the group has increased its total capacity by 20 per cent in the past few months. Officing Today says this puts TEC on par with Regus' regional strength and suggests the company is challenging the dominance of its more seasoned global rival and that of other big players such as Servcorp.

The biannual Regus Business Tracker of 10,000 senior business people in 78 countries found that 36 per cent intended to increase headcount.

'Asia is playing an important part in the emergence of the world economies from recession. Therefore, it is natural that attention is being given to this part of the world and as a means to strengthen the books from perhaps weakened domestic home markets,' says James Lee, TEC's group director.

Despite the positive outlook, William Willems, vice-president for Regus Australia, New Zealand and Southeast Asia, says: 'Our research also highlights that 41 per cent of companies are still looking to reduce their overheads, through other means than reducing staff. This reveals a global attitude of cautious optimism.'

Expansion then is likely to come with prudent measures such as opting for business centres or virtual offices as opposed to leasing floors of offices. Serviced office providers are targeting cities favoured by multinationals that are seen as less of a 'hardship posting'. TEC's drive into key areas recently has seen its third serviced office open in Tokyo, at Sanno Park Tower, and a fourth centre in Beijing in Tower 1 of China World Trade Centre.

'China and India will likely play a strong role in the driving forces on demand in Asia going forward, but Asia as a whole is playing an important part in the emergence of the world economies from recession,' says Lee, who says most of TEC's client base is drawn from the United States and Europe. He says TEC is increasingly seen as the 'office solution of choice' by overseas companies and the number of occupied workstations across the group rose by 30 per cent year-on-year since the recession hit Asia in September 2008.