The Executive Centre bought by KKR and Tiga Investments as pandemic spurs consolidation of Hong Kong’s flexible workspace sector

Deal marks the latest consolidation in an industry that has been restructuring amid the global downturn triggered by Covid-19

TEC has more than 150 centres in 32 cities and 14 markets, including China, Japan, South Korea, Southeast Asia, Australia and the Middle East

Reading Time:2 minutes

A shared workspace operated by The Executive Centre in Hong Kong, in April, 2020. Photo: Bloomberg

Published: 12:00pm, 2 Jun 2021Updated: 9:46pm, 2 Jun 2021

Hong Kong-based flexible workspace provider The Executive Centre has been acquired by private-equity firm KKR and Tiga Investments for an undisclosed amount, the company announced on Tuesday.

It marks the latest consolidation in an industry that has been restructuring amid the global downturn triggered by Covid-19.

“We are pleased to welcome KKR and Tiga Investments to The Executive Centre as our new investors,” said Paul Salnikow, founder and chief executive officer of TEC. “It’s a powerful partnership, well matched to drive the continued performance and growth of TEC.”

The acquisition indicates the confidence of investors in the flexible office space segment, according to analysts, even as the likes of US-based WeWork have been giving up space in Hong Kong. WeWork has reduced its footprint by more than half since the coronavirus pandemic triggered widespread work-from-home arrangements last year.

Paul Salnikow, founder and CEO of The Executive Centre. Photo: SCMP

The consortium of KKR and Singapore-based Tiga acquired its stake from funds advised by HPEF Capital Partners and CVC Capital Partners, which owned 70 and 20 per cent of TEC respectively. HPEF was an investor in TEC since 2005, and CVC since 2014.

TEC declined to discuss the acquisition terms but in 2019, amid the social unrest that brought Hong Kong to a standstill, the company paused its decision to go public and sell shares for US$750 million, which would have allowed HPEF and CVC to dispose of their stake in the company.