Grounded and loving it
Andrew Tse, director of Hatton Offices, got into the serviced-office business as an afterthought. For 25 years he worked for several of tycoon Stanley Ho Hung-sun's companies, where he fulfilled his love of aviation by running Heli Express and Hong Kong Express.
Then he bought a floor in an office building in the heart of Central, in Wellington Street.
Tse knew that serviced-office space was in short supply at the time, and that the complete control of the floor and short leases gave him flexibility in case he ever wanted to sell.
However, Tse was not alone in noticing the short supply and, along with other market entrants, was forced to learn quickly as the rent per desk plummeted from the range of HK$7,000 to HK$8,000 down to HK$3,000, under pressure from the economy and oversupply.
Now, with a floor full and slowly closing in on the original rents, he has listened to the needs of his clients. 'When I renovated this office, I went for quality,' Tse says. 'I have always believed in quality, and my philosophy is 'do it right'. However, the market has changed. The sector slightly lower [than tenants in grade-A buildings] is not willing to pay for secretarial service and other extras. Now everything is included, with cleaning, two receptionists, the telephone and Wi-fi. It is a cheap alternative to an office of your own.'
Tse says the shared space and amenities reduce costs and allow small companies to have a fine office at a good address they could not otherwise afford. 'You can cut 15 coffee counters, and have just one relaxation area.'
The small independent supplier offers flexibility, in case someone wants to have their own dedicated internet connection or bring in furniture. The beautiful colours of the walls, and photos taken by Tse on his travels, make the boutique serviced office seem more like a home, and the higher quality helps to retain clients, he says.
He would like to expand the business if the opportunity arises, although he reveals that his first love was aviation. He started out working for Ho and took care of the helicopter business that nobody in the company was really interested in, at the time.
'I have a passion for airlines. I really turned [the helicopter business] around in the first year with 40 per cent growth,' Tse says.
Then he set up Hong Kong Express. 'I started because the Hong Kong government started opening up the sky. With hindsight, I wouldn't have done it,' admits Tse, who later sold the airline to Hainan Airlines.
Getting into the serviced office industry, he learned as he went. He has been supported by loyal staff who have followed him from one workplace to another. 'It is less exciting than an airline, but stable,' he says.