Hong Kong developer Swire jumps on to co-working space bandwagon

Swire, the biggest landlord in Quarry Bay, turns its 30,000 sq ft technology start-up accelerator at Taikoo Place into a shared working hub

PUBLISHED : Wednesday, 18 October, 2017, 7:02am
UPDATED : Wednesday, 18 October, 2017, 7:01am

Hong Kong’s real estate giant Swire Properties launched a co-working space on Tuesday, aiming to use its expansive network of corporate tenants to tap the red-hot shared office market.

Swire, the city’s fifth-largest developer by market capitalisation, has turned “blueprint,” a technology start-up accelerator providing free working space founded in 2014, into a full-fledged co-working hub occupying 30,000 sq ft at Taikoo Place in east Hong Kong Island. The co-working hub was expanded from 20,000 sq ft to the current area.

The launch came amid rapid proliferation of co-working space properties in the city, which were likely to occupy more than 1.2 million sq ft total floor area by the end of 2017, soaring 70 per cent from last year, according to CBRE.

Swire, the first traditional developer jumping on the bandwagon, aims to differentiate itself from the other 30 shared office operators in Hong Kong by connecting blueprint members to tenants of its 18 office buildings in the city, that are mostly big companies including insurer Prudential and luxury goods conglomerate LVMH.

“We have a diverse tenant base, and a number of them serve as mentors to start-ups,” said Don Taylor, a director at Swire Properties. “It also gives them the opportunity to see what’s happening in the digital sphere.”

A number of corporate mentors from various sectors have offered time and advice for free to start-ups, Taylor said.

Financial firms the latest to embrace co-working spaces in search for new ideas

Competition in the shared office market has heated up over the past two years, as major players have aggressively expanded into Hong Kong, such as New York-based WeWork, the world’s largest shared office operator, and Shanghai-based Naked Hub, Asia’s top operator.

Several other developers are currently in the process of setting up co-working spaces in Hong Kong, said Michael Glancy, local director of Hong Kong markets at JLL.

“Many developers are trying to learn as much as they can about co-working, and a lot of education needs to be done,” said Glancy.

Developers have an edge on better cost control over co-working space operators, who usually rent from landlords, said Vincent Cheung Kiu-cho, deputy managing director for Asia valuations at Colliers International.

Cheung said more developers are likely to launch shared offices in East Kowloon and Admiralty in the future, as co-working sites have so far clustered in Sheung Wan, Central, and Causeway Bay.

Blueprint also serves as an off-site activity venue for tenants of Taikoo Place, a commercial complex in Quarry Bay, where Swire is the biggest landlord.

It is part of a HK$15 billion (US$1.9 billion) redevelopment project of the complex, which will add One Taikoo Place and Two Taikoo Place, two office towers each sized 1 million sq ft, by 2018 and 2021 respectively.

Swire may also invest in real estate tech start-ups at blueprint after testing their products, Taylor said.

With 12 private office rooms and 90 desks, blueprint can host 250 people in total. It charges HK$4,500 per person for a desk each month, and membership is renewed every month.