Chinese co-working space operator Kr Space moves into Hong Kong
The company, a spin-off of technology platform 36Kr, will rent seven floors in the One Hennessy building in Wan Chai for HK$6.6 million a month
Kr Space, one of China’s biggest co-working space operators, is entering the Hong Kong market as it takes the first step in its overseas expansion.
The Beijing-based company, a spin-off of technology platform 36Kr.com, has rented seven floors – between the 11th and 19th – of the One Hennessy building in Wan Chai, which is scheduled to open next year. It will pay about HK$6.6 million per month for an area of 83,000 square feet, over HK$80 per square foot.
“Hong Kong is a stepping stone for us to become an international co-working operator. We hope to be on the same level as WeWork in two to three years,” said Sean Qian, vice-president of Kr Space. “We are hoping to attract top-notch companies in finance, technology and other sectors to become our tenants.”
Qian said the firm is looking for other potential spaces in Hong Kong while it waits for One Hennessy to open and hopes to launch its first co-working space in the city this year.
Kr Space hopes its close relationship with 36Kr, an online platform offering news about technology and start-ups, means technology companies will be particularly interested in moving into its new office space. 36Kr is often likened to TechCrunch in the US.
One of the many industries to emerge from the so-called sharing economy, co-working spaces are office environments where people from different companies, projects or industries can work collaboratively in a shared area.
Kr Space originally launched in 2014 in Beijing as the incubator arm of 36Kr and has provided space for more than 200 start-ups. In 2016, 36Kr said that the co-working space operator was worth 10.5 billion yuan. It has been run independently since 2016, and in January this year completed a 600 million yuan financing found, its third in six months.
“We have our own resources, and tech start-ups have confidence in us,” said Qian. “When we land in one city, we always try to interact with local businesses and government to create an ecosystem for our tenants. Kr Space does not just provide tenants with space where you can have a beer with other companies working here, we want companies to actually achieve growth here.”
The company is in discussion with several government organisations in Hong Kong, which has pledged to become an innovation hub.
Kr Space is the first office tenant to ink a deal with Chinachem’s 21-storey One Hennessy, situated halfway between the Admiralty and Wan Chai districts, signing a 10-year contract for a total area of 83,000 square feet.
Qian said that an average workstation in One Hennessy would cost about HK$10,000 per month.
The company wasted no time in launching its overseas expansion plan after its first field tour in Hong Kong towards the end of last year.
One Hennessy is scheduled to be completed early in 2019, and Kr Space is actively seeking other premises on both Hong Kong Island and Kowloon.
“We hope to launch the first [co-working] space centre in the city this year,” said Qian. “Money-making space and tenants are what a co-working operator wants. Clearly, Hong Kong meets both criteria. The vacancy rate is low in Hong Kong and there is room for rental increases.”
According to Colliers International, by the end of April the vacancy rate in Central and Admiralty was just 1.9 per cent.
Kr Space runs co-working space centres in 11 cities, including Beijing, Shanghai and Guangzhou. By the end of August, it hopes to run more than 40 centres providing 36,000 work stations, aiming to become the biggest co-working operator in mainland.