More than 1,000 young entrepreneurs in Hong Kong will be able to rent heavily discounted co-working spaces and studios in industrial and commercial buildings as part of a government bid to support creative and emerging industries. Almost 90,000 sq ft of industrial and commercial space provided by 10 landlords will be rented out at half the market rate to young people hoping to launch a business, innovation and technology start-ups, creative industries, and those in arts and culture-related work. Participating landlords must offer the space for at least six years, and they can choose to run and manage it themselves or outsource it to a third-party group. Rent for operators is not to exceed 30 per cent of the market rate, while the rent for users will be capped at 50 per cent of the market rate. The 10 landlords include some of the city’s biggest developers, such as Sun Hung Kai Properties, Sino Group, as well as entertainment conglomerate Emperor Group. Most of the spaces are in refurbished factory buildings converted for non-industrial use, and are located in five urban areas: Tsuen Wan, Lai Chi Kok, Wong Chuk Hang, Wan Chai and Kwun Tong. Five organisations, including the Arts Development Council and Cyberport Management Company, have agreed to serve as operators, and will vet applicants and manage spaces. The scheme was first announced by Chief Executive Carrie Lam Cheng Yuet-ngor in her policy address earlier this month. On Friday, Chief Secretary Matthew Cheung Kin-chung said that the “Space sharing scheme for youth” could help solve one of the most significant obstacles that young start-ups face in the city. “The problem they face is getting the right place at the right rent,” he said. “This scheme will certainly provide a much-needed platform for [young people] with affordable rent at convenient locations.” Cheung added that the scheme was not just about providing space: organisations would be required to provide other support such as mentorships to young people, helping grow their social network, find investors, and enhance their market knowledge. There are landlords and developers who are caring, who do not just care about profit Chief Secretary Matthew Cheung The application period for young entrepreneurs will kick off in the first half of next year, while the government is planning to launch a second batch between 2018 and 2019. When asked why landlords would choose to participate in the scheme when they could earn more by charging market rent, Cheung claimed no extra incentives were needed. “The answer is simple ... there are landlords and developers who are caring, who do not just care about profit and hope that [the scheme] will provide opportunities for more upward mobility for young people,” he added. Entertainment conglomerate Emperor Group said it would benefit from the scheme alongside young people. “This will also help bring new ideas and new technology into our group, which has a diverse portfolio in many different business areas,” corporate executive Alexander Yeung Ching-loong said. The company, which just launched a 5,000 sq ft co-working space in a commercial building in Wan Chai, will set aside 3,000 sq ft for the scheme. In the scheme, participants can expect to pay around HK$1,500 a month for a seat or HK$4,000 for a private office, if they rent the space for at least a year. Hong Kong’s shared office spaces are getting more innovative Jack Yeung Chung-kit, vice-chairman of the Federation of Hong Kong Industries, will run a 5,614 sq ft space in Kwun Tong and said it would not just be renting out hot desks but also more industry-specific areas such as virtual reality experiential rooms Meanwhile, the Development Bureau announced it was considering launching a second round of the industrial building revitalisation scheme, which Lam introduced in April 2010 and halted last year. The bureau hoped to facilitate better use of underutilised factory buildings. Stronger together: millennials drawn to blended co-living and co-working spaces The scheme allowed the single owner of a whole industrial building, or 100 per cent of the building’s co-owners, to refurbish it for other purposes without having to pay a hefty premium, or the difference in property value after conversion. However, owners who applied to redevelop the building as well as modify the land lease to allow other non-industrial uses were still required to pay the premium. Many decided to seek government waivers that relaxed original land-lease restrictions rather than apply to redevelop their buildings due to steep costs. Five of Hong Kong’s best co-working spaces reviewed – free beer if you’re lucky Development authorities said they would consider offering incentives to owners in the land premium if they applied for redevelopment. In exchange, the government would require landlords to reserve a portion of their floor area for arts and creative industries according to their land leases. Between 2010 and last year, the government received 248 applications and approved only 125.