In Hong Kong, flexible workspace is in limited supply in the core CBD areas of Central and Admiralty. However, there is a major concentration of flexible workspaces in Causeway Bay, which provides financial and other large occupiers with ample opportunity to locate staff outside their own offices. Only the larger and stronger flexible workspace operators can offer both adequate desk numbers and appropriate quality and security.
Sam Harvey-Jones, managing director of Occupier Services, Asia said: “Given the volatility of future headcount needs, not least in the financial sector, the use of flexible workspace makes good sense in enterprise real estate strategy. Flexible workspace now accounts for between 2-5% of total grade A office space in Asia’s four key financial centres of Hong Kong, Tokyo, Singapore and Shanghai, with secure and scalable corporate-level specifications.”
Decentralisation of back office or middle office operations has been a trend in the financial services sector in Hong Kong for several years. Hong Kong has also seen full relocation of operations to decentralised districts in other professional services sectors, notably legal.
The chief alternatives to the finance-dominated CBD are Tsim Sha Tsui and Kowloon East. Average rent in Kowloon East is only 28% of the average rent level in Central. Island East is also attractive to financial tenants. Both Kowloon East and Island East are positioned to benefit from new infrastructure development projects.
Embracing new technology will save costs. In the near term, adoption of cloud-based working models will reduce the space and resources that financial and other large occupiers need to run tech infrastructure. Over five years, fuelled by shifts to online services and further automation, Colliers believes large Asian banks with a consumer focus have the potential to cut branch and staff totals by 20-35%.
Cloud computing has opened a new era of real estate possibility for Asian companies and their staff. By allowing firms to store and process huge amounts of data remotely, the cloud is reducing the need for space and resources. In the banking and finance industry, for instance, physical branches might increasingly provide customer relationship management and transactions online.
“Cloud-based working is also enabling large enterprises to work more efficiently, and with more security, in decentralised models – driving the viability of flexible workspace to accommodate likely fluctuations and decrease real estate cost across organisations,” Jones said.