Business centres face challenges
Business centres in Hong Kong face substantial change in the coming months with mergers, expansion, openings and closures, according to the executive at the helm of one established serviced office provider.
With more foreign companies leaving tough business conditions at home to expand into the mainland market, they are looking to Hong Kong's growing band of serviced offices for a regional base.
August Lembong, managing director of Springboard, warns that the aggressive expansion seen last year cannot be sustained. 'Some will be acquired or go out of business; some are in the business to be acquired anyway by one of their competitors and were actually created in the hope of being sold,' Lembong says. 'These would be the ones that are lucky, or are medium-sized players looking to expand.'
Lembong was speaking as Springboard puts the finishing touches to its third serviced office location, with an opening due for the middle of this month put on hold in order to get each detail exactly right. The premises, at 8 Queen's Road Central, strengthens Springboard's presence in Hong Kong's finance and banking sector.
Lembong considers Springboard to be among the pioneers of serviced offices in Hong Kong. Rather than simply provide a desk and roof over the heads of incoming companies, Lembong says Springboard stays competitive by being a 'one-stop shop', with administration services such as accountancy and human resources in addition to a well-trained staff giving it an edge.
'There are opportunities, which is one reason why we're opening in Central, but there is also oversupply in the segment although the economy is growing,' he says. 'Too many have opened aggressively. The demand is not that strong - it's very competitive, clients differentiate.'
To Lembong, that distinction comes in the form of 'five-star' service from professionals who handle the 'technical side' - whether it be auditing or IT - so the serviced office tenant can concentrate on running a business.
Staff members are seeking to extend the exemplary client feedback they receive at the Lippo Centre in Admiralty, Luk Kwok Centre in Wan Chai, to 8 Queen's Road.
'The new offices are targeted at people who need to be in Central - financial services or related firms, hedge funds and industrial company clients are there. It's also close to Mid-Levels and The Peak for people who need to come to an office,' Lembong says.
'We always planned to open something in Central ... we were waiting for the right opportunity to come along and always, over 11 years, not going for volume, but quality with a grade A building that suits our style. We have worked with most of our clients for a long time and know they are looking for stability.'
The differences also come in the form of avoiding the aggressive sales and lack of value Lembong says prevails in the lower end of the market. Aeron chairs and other quality office furniture from Steelcase will be used throughout the premises, not just in the showcase conference rooms. Lembong says this attention to detail extends to the pantry areas, lift lobbies and entrance with clients able to have their corporate logo displayed on directories.