Mainland Chinese companies are pushing up demand for upscale shared office space in Hong Kong’s central business district.
The Executive Centre, the biggest flexible workspace landlord in the district’s grade-A buildings, last month saw a fivefold increase in new leases from January.
About 70 percent of the new tenants were Chinese companies, it said.
Photo: Bloomberg
The removal of COVID-19 pandemic restrictions in China has led to an increase of client interest in the territory.
“During COVID, the businesses in mainland China had time to reflect and organize themselves,” Executive Centre CEO Paul Salnikow said. “Now we are absolutely seeing a concerted flow of companies coming in tours of five, 10 people” to take up offices in Hong Kong.
The Executive Centre, owned by KKR & Co and TIGA Investments Pte, holds about 70 percent of the premium shared offices in the district.
While multinational companies make up the majority of its tenant base, Chinese firms are growing.
It recently signed Tongcheng Travel Holdings Ltd (同程旅行), an online travel agency, as a new tenant among other mainland Chinese financial operations.
Hong Kong has seen an inflow of businesses from a diverse range of sectors.
“There are more companies from emerging industries like technology, media and gaming setting up in Hong Kong,” CBRE Group Inc CEO Ada Fung (馮慧詩) said. “They tend to rent in flexible space, unlike banks which want traditional offices.”
Meanwhile, Chinese tech giant ByteDance Ltd (字節跳動) is moving to a bigger office in the district’s International Finance Centre as the company expands its presence in the territory, a company spokesperson said.
TikTok’s owner previously set up a temporary base in a Hong Kong coworking space to house dozens of employees in legal and finance.
ByteDance’s lease would cover about 1,900m2, valued at about HK$130 (US$16.56) per square meter, the Hong Kong Economic Times reported, citing unidentified people in the market.
Firms including BNP Paribas SA and Julius Baer Group Ltd have given up space in the International Finance Centre in the past few years.
Dwindling demand from multinationals and growing supply have weighed on commercial property, potentially causing rents for premium offices to fall as much as 5 percent this year, CBRE said.
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