Executive Centre eyes listing in Hong Kong

PUBLISHED : Wednesday, 08 April, 2015, 6:00am
UPDATED : Wednesday, 08 April, 2015, 6:00am

The Executive Centre, which provides serviced office space mainly in Asia, plans to seek a stock exchange listing, possibly in Hong Kong, in the next two to three years.

Paul Salnikow, the chairman and chief executive, sees the planned listing as part of an expansion of the company after 20 years in business.

"From my perspective, we will probably take about two years or a maximum of three years [to list] and Hong Kong is the logical place," said Salnikow.

Founded in 1994, The Executive Centre is one of Asia-Pacific's major serviced office providers, with more than 70 centres across 21 cities in Australia, mainland China, Hong Kong, India, Indonesia, Japan and Singapore.

The company, with 500 employees, operates in grade A office buildings in the central business districts of each city, providing on-demand serviced offices, virtual offices, meeting facilities and videoconferencing.

Turnover last year was US$120 million and Salnikow forecasts it will increase to US$145 million this year.

Last year, Britain-based private equity firm CVC Capital Partners agreed to acquire a majority stake in The Executive Centre from Headland Capital Partners. Funds advised by Headland retain a minority ownership in the business.

With a helping hand from CVC Capital Partners, the company aims to rapidly increase the number of business centres over the next four years.

Salnikow said the company was big enough to launch an initial public offering now, adding that the average client renewal rate was 3.5 times while average length of stay is 31 months.

The Executive Centre has both large and small clients, including the likes of HSBC Holdings, IBM and Apple. "Our physical presence in the market is very firm. But what we are looking at is to give the company a bit more size," Salnikow said.

He said the business experienced rapid expansion following the global financial crisis as big companies did not have the budget to buy or lease large office space.

"After [the global financial crisis], our clients included major corporations instead of just small and medium enterprises," he said.

"We are growing. I am going to Tokyo next week to look for opportunities. We are growing in Singapore and we are growing in India."

Looking ahead, the Asia-Pacific-based company plans to expand globally. "We will be very seriously looking at the North American and northern European markets," Salnikow said.

In C-Suite, Salnikow shares his views on global expansion and future challenges