Will Hong Kong protests, US-China trade war come to the rescue of city’s oversupplied co-working spaces sector?
- Sector has cut access rates, increased rent-free periods to attract customers
- Co-working may become ‘wildly popular’ as firms seek flexibility in current economic climate, operator says
Co-working space operators in Hong Kong could actually benefit from the ongoing anti-government protests, as well as the US-China trade war, according to industry experts.
The sector, weighed down by surging supply, has reported cuts in daily, monthly and yearly access rates, in some cases as steep as 50 per cent, as well as rent-free periods that extend to three months in some instances.
“Over the last two years … as foreign work space brands kept setting up shop in Hong Kong, mainland [Chinese] developers also joined in. The competition in the industry is getting increasingly white-hot,” said Mark Chan, founder and chief executive of Hong Kong-based co-working space operator R One Space. “I expect that within this year, rents at co-working spaces will fall 15 per cent to 20 per cent.”
According to US commercial real-estate services and investment firm CBRE, Hong Kong currently has 2.6 million sq ft of “agile workplace stock”, or co-working spaces.
The amount of newly leased co-working space in the city stands at 979,100 sq ft since the beginning of last year. But new take-up in the first half of this year has declined year on year by 36.1 per cent to 175,600 sq ft.
