Shared office space giant IWG takes up rival WeWork’s vacated space at Harbour City, TST, as competitors withdraw from Hong Kong
- It is the second time this year the Swiss flexible workspace giant has swooped on a space vacated by its American rival as it bets on Hong Kong
- IWG’s expansion is in preparation for a time when the pandemic is over but businesses remain cautious of allocating more capital for office space, say analysts
Swiss flexible workspace giant IWG has taken over rival WeWork’s 50,000 square feet of office space in Tsim Sha Tsui, the second time this year it has swooped on one of the American provider’s vacated premises in Hong Kong.
The space, to be rebranded as Signature at Gateway, is located in Gateway Tower 5, one of 10 commercial buildings that sit on top of the Harbour City mall. The new space will open in December, and will bring the number of IWG’s locations in the city to 16, the most among operators of shared office space.
While IWG, the world’s largest operator of serviced offices, has always had the most locations in Hong Kong, WeWork used to occupy a larger footprint, according to Paul MacAndrew, country manager for IWG in Hong Kong.
“IWG is actively looking to increase its footprint in Hong Kong, at a time when a number of our competitors are retrenching,” said MacAndrew. “Harbour City is home to a multitude of world-leading companies from different sectors, including banking and finance, retail, telecommunications and technology and with its cutting edge facilities, Signature at Gateway is a fitting addition to the IWG portfolio in the region.”
IWG’s expansion is in preparation for a time when the pandemic is over but businesses remain cautious of allocating more capital for office space, according to JLL.
“We expect the demand for flex space will continue increasing once we emerge from the pandemic as [companies] shift into a new way of working and IWG is preparing for this,” said Carol Mui, senior manager - flex lead of Hong Kong markets at JLL. “Flex space operators are perfectly positioned here as most offer licence terms as short as one to three months for turnkey spaces that don’t require upfront [capital expenditure].”
Although rental declines for office space narrowed in the third quarter, leasing activities and demand for premium office buildings remained weak, according to Knight Frank. Overall, office rents in premium spaces in Central fell 22 per cent in September from a year ago, the consultancy said.
Still, there are new cases of take-up in the segment.
A local co-working space provider, Sky Business Centre, took over an entire 15,000 square foot floor in Times Square, which had been surrendered by Kr Space in late 2019, according to Lucia Leung, associate director, research and consultancy, Greater China, Knight Frank.
“Despite the downbeat market, there are new take-ups by some co-working space operators in the market, reflecting their confidence in the long term,” she said.
In June, IWG took over the 32,000 square foot space left by WeWork at Hysan Place in Causeway Bay. The space was formally opened to members in August, and currently has an occupancy rate of 92 per cent, which is “already exceeding target occupancy levels.”
