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Competition starting to intensify

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Executives in the serviced office sector agree that the coming months will see intense competition - but they may be wrong in assuming that big international business centres will dominate.

Regus, the world's largest workplace solutions provider with more than 1,100 centres globally, including 11 locations in Hong Kong, was once the city's largest. According to entrepreneur Andrew Chung, his operation has put Regus in second place in terms of square feet.

Chung co-founded Compass Offices in December 2009 with 10,000 sqft and the company now has 220,000 sqft of premium offices over 23 floors in Hong Kong, Singapore and Tokyo. He says 180,000 sqft of this is in Hong Kong. However, the race to be league leaders in terms of size may be closer as Regus will be opening its 12th Hong Kong location in May, with 18,000 sqft in Times Square, bringing its total amount locally to about 180,000 sqft.

'Established global players that have been in Hong Kong for over 15 years have been surprised at this rapid growth, which is unprecedented,' Chung says. 'Even one of the world's largest players took over three years to establish its first eight centres in Hong Kong.'

All this has seen competitors pondering whether a market bubble is developing in the serviced office sector with a high chance of some operators going to the wall or being acquired by larger players.

Chung is unswayed. After having raised HK$100 million for the Compass venture, he is now targeting an initial public offering for the company in two to three years and says property funds and international investment houses are eyeing progress.

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