Possibilities of collaboration with start-ups bring big companies to co-working spaces in Hong Kong
Firms are leaving Central for the city’s outer areas in pursuit of digitalisation, millennial talent and cost benefits
An increasing number of companies in Hong Kong are moving into co-working spaces, drawn by opportunities for collaboration with start-ups.
Collaborating with start-ups as a way of keeping up with digitalisation, drawing in millennial talent and the cost benefits are all factors behind firms leaving Central for outer areas, with a growing number expected to follow suit.
“Corporates are absolutely adopting [co-working] and people are becoming more open about how they work, where they work and more demanding about different types of space,” said Sean Lynch, the Asia-Pacific managing director at Instant Group, which helps companies find office space. “They don’t necessarily want to work in a traditional environment – they want to have up-to-date facilities and agility.”
Cultural perceptions and a delayed rise of entrepreneurship have contributed to the slow uptake of this trend in Hong Kong. While the United States and the United Kingdom witnessed the rise of co-working in the noughties, Asia is catching up, with 30 per cent of real estate portfolios predicted to be flexible workspaces by 2030, according to commercial real estate agency Colliers’ Flexible Workspace Outlook Report 2017.
The sector has witnessed 29 per cent growth between 2015 and 2017 in Hong Kong, and the city is now home to 283 co-working spaces. International and local providers, such as New-York based WeWork and Hong Kong’s The Garage Society, have expanded their presence.
Such spaces are not just for start-ups looking for cheaper rents – multinational companies seeking greater collaboration and a workspace attractive to millennials are also keen. In 2016, HSBC moved more than 400 desks to WeWork’s Tower 535 in Causeway Bay. While they are not in a co-working space, Berwin Leighton Paisner were the first international law firm to relocate from Central to Quarry Bay, to adopt an open plan office. The move imitates their London office, and allows for collaboration with start-ups occupying nearby co-working spaces.
“The aim was to improve collaboration to make sure that our team members, who are often focused on one job and one area, can open their eyes a bit” and communicate more internally, said Bob Charlton, partner and head of Asia at Berwin. Being able to collaborate with start-ups who also occupy the space was another factor, he said.
Many multinational companies are making the change to be close to start-ups that are leading digitalisation. By building relationships at an early stage, they will know the companies of the future.
“A lot of the companies are the types of businesses who are flexing their muscles in digital lab areas, and want to be in and among start-ups,” said Michelle Buultjens, head of operations at Blueprint, real estate giant Swire Properties’ co-working hub.
They will use technologies the start-ups have built or helped find, and maybe even adopt them as a vendor, she said. At Blueprint, companies can also sign up to mentor start-ups, giving legal, taxation or accounting advice.
“A lot of companies want to be surrounded by people in the start-up and tech scene, to get innovation and ideas of how they can make their business younger,” said Elaine Tsung, founder of The Garage Society, which operates four spaces in the city.
Cultural perceptions have hindered take up of co-working in Hong Kong, said Buultjens and Tsung.
The prestige attached to more traditional career paths in Hong Kong has led to people staying in “roles that were a lot more credible and stable”, Buultjens said, delaying the rise of entrepreneurship.
“Entrepreneurship was ‘for the dreamers’ and ‘for the creators’. It hadn’t become mainstream, but that shifted a few years ago to suggest that starting and owning your own business can be extremely profitable and lucrative.”
Some would feel that their position was compromised if they were in a shared office, as people would think they could not afford their own, Tsung said.
But as entrepreneurship rose and co-working became more common, the stigma has disappeared, she said. Landlords have become receptive to change and providers have saturated the market, giving way for local start-ups and multinational companies to adopt the same space and collaborate.
“If you look at the profile of a lot of companies in offices like ours, we are talking about massive companies that are listed in the States, and start-ups from Hong Kong,” Tsung said. “People won’t think I am in a shared workspace, people think lower of me. I think the trend is being disrupted.”