Hatton took the 'if you can't beat them, join them' attitude when Compass Offices became neighbours in the same Central building by securing five floors at Silver Fortune Plaza.

'Demand for serviced offices [or] business centres in Hong Kong is growing steadily. However, the supply of serviced offices is growing faster,' says Benjamin Tse, a director of Hatton Offices. 'The market is very competitive.'

Airline entrepreneur Andrew Tse fired a broadside across the bows of Compass by opening Hatton Offices last month. He says one of his motivations is that Compass puts downward pressure on commercial rents.

Compass CEO and chairman Andrew Chung dismissed Andrew Tse's claims, saying serviced office costs have dropped, there is more supply and the sector 'needed a shake-up'.

By throwing down the gauntlet, Hatton may not deter Compass' relentless expansion, but the company says progress since entering the serviced office fray has been better than expected. Hatton has achieved 30 per cent occupancy so far at its single-floor premises and is targeting full occupancy by August, Benjamin Tse says.

'We do not have plans to expand the serviced office business at this moment, but we are constantly looking for investment opportunities in the commercial property market,' he says. 'If we can acquire another good piece of property which fits the nature of serviced offices, we may expand.'

Hatton is also confident that its rates and facilities, in addition to a prime location, can enable it to compete with more established operators.

Despite research and planning, Benjamin Tse says brand recognition and the specialist marketing that business centres require has been challenging. 'We will definitely learn more as time goes by,' he says. 'Facilities wise, we are in line with our segment of the market, which is the mid- to high-end. We are not as equipped as those centres in grade A offices like IFC and Exchange Square, but we are good for the segment we operate in.'

Transparency is one of the buzz words in the serviced office sector these days, particularly when it comes to pricing and the hidden charges, which Chung says has dogged the market for too long. Hatton has also latched onto the upfront pricing approach with zeal and says the reaction from tenants has been 'pretty positive'.

'Many say our communal areas, like the pantry, are spacious compared to others,' Benjamin Tse says. 'Besides, tenants and prospective tenants love the way we present our price. We put our price list, which includes prices of all our rooms, in our sales kit and people just love the transparency.'