Changing work dynamics inject new life into Hong Kong’s prime office sector
- Employees in Asia-Pacific prefer to spend three days a week in the office on average, according to a JLL survey, up from two days in a study a year earlier
- A shift in working practices has driven a flight to quality in Hong Kong’s grade A office market as demand for space revives
Companies are having to pay closer attention to employee health and well-being, reimagining their workspaces to create a strong sense of community and culture to attract and retain talent. The new work environment needs to offer an impactful variety, with different spaces for quiet work, collaboration and reflection, as well as access to areas for rounded wellness.
This has driven a flight to quality in Hong Kong’s grade A office market. After a subdued 2020, during which companies focused on managing the short-term challenges created by Covid-19, pent up demand has started coming through in 2021.
Organisations moving premises are typically looking for larger floor plates that can be used as a blank canvas to create spaces that reflect their corporate ethos. This trend is particularly noticeable among large multinational corporations that may have occupied their current premises for multiple years and have layouts that are increasingly redundant against evolving worker preferences.
Landlords are responding to this with new sustainably-focused developments catering towards community productisation that brings greater amenity flexibility and facilities for talent that companies can leverage outside their own space.
For example, Swire Properties’s Two Taikoo Place, will create a building community that integrates wellness facilities, communal multifunctional working spaces, new food-and-beverage multi-concept offerings and events among others, alongside portfolio offerings.
Covid-19 accelerated changes in working practices and increased competition have motivated the market to move to the needs of its occupants in greater scale than recent history. This is a significant benefit for companies and the ultimate individuals who occupy the spaces.
This should only accelerate in the face of compelling new supply that includes Two Taikoo Place, The Henderson and Airside in Kai Tak. Sun Hung Kai Properties’ development above the High-Speed Rail Link terminus in West Kowloon, and Henderson Land’s development of site 3 on the Central harbourfront, are some of the medium-term opportunities that will continue to add to the dynamic evolution of Hong Kong’s office districts.
Coupled with significant demand from China in 2022 as borders reopen, supply will again come under pressure in a market that has a history of strong take-up of new buildings. All of which will be required to sustain the growth of one of the region’s powerhouse cities.
For now, occupiers have an opportunity to use the changes in Hong Kong’s real estate landscape and the infrastructure being created to leverage the physical space to help shape and endorse their culture and ensure talent has the right workspaces to thrive. It will not be too long before space is once again, at a premium.
Alex Barnes is the head of agency leasing at JLL in Hong Kong.