Hong Kong property

Three ways Hong Kong business property participants can profit from fintech expansion

Hong Kong is well-placed to cater for a wide range of such firms.

PUBLISHED : Tuesday, 31 May, 2016, 4:24pm
UPDATED : Tuesday, 31 May, 2016, 4:24pm

Colliers Radar recommended three strategies for participants on Hong Kong’s business-property market to profit from Asian exposure to fintech — shorthand for financial technology, an industry that includes companies such as Finserv, Infosys and SunGard.

Overall, Hong Kong is well-placed to cater for a wide range of such firms, spanning those planning to serve clients in the city to firms that intend to enter the growing Asian fintech market, Yasas Wickramasinghe, an analyst at Colliers Radar said.

Traditional financial institutions should consider retaining their surplus workspace, seek new office facilities or build partnerships with other renters to accommodate fintech-related activities, Wickramasinghe said in his report.

If traditional financial institutions are looking for extra space to develop incubator programmes or other fintech-related activities, decentralised office locations such as Island East, Kwun Tong and Wong Chuk Hang ought to offer great value for money due to lower rents and a wider choice of office space, he said.

For Fintech companies with local operations, Wickramasinghe expected them to look for office space in the core or on the fringes of the central business district (CBD), while companies with more regional operations could benefit from more decentralised locations.

“Serviced offices primarily located in the core and fringe CBD are also suitable locations for these tenants,” Wickramasinghe said.

He said start-ups and other small fintech operators may benefit by considering the sharing of office space or renting in lower-grade buildings.

A number of shared spaces have sprung up during the last several years which provide a wide variety of choices in terms of location, space type, pricing, and infrastructure.

“Start-ups should look into co-working spaces and lower grade office spaces in the core and on the fringe CBD to benefit from the agglomeration of talent, seed capital and mentors in the CBD,” he said in his report.

James Julian, senior manager, advisory and transaction services, Office, CBRE Hong Kong, said he did not see fintech development having a direct impact on Hong Kong office property market so far.

However, he agreed with Wickramasinghe, and said he expected some Hong Kong property owners may benefit from sharing office space in Hong Kong. The strong demand for such space is mainly being driven by start-ups including those in the fintech industry, he said.

Ivy Tai, associate director, advisory and transaction services, Office, CBRE Hong Kong said the city’s office market will stabilise in the coming two to three years.

Supply of office space will increase in Hong Kong, Tai said.

As for future demand, she expected it to be steady but not as strong as a year ago.

In the last 18 months, demand on the Hong Kong office market has been sustained by selling and leasing demand from Chinese mainland corporations, Tai said.