Will Hong Kong protests, US-China trade war come to the rescue of city's oversupplied co-working spaces sector?

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3025777/will-hong-kong-protests-us-china-trade-war-come-rescue?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
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.
Mark Chan, founder and chief executive of co-working space operator R One Space. Photo: Handout alt=Mark Chan, founder and chief executive of co-working space operator R One Space. Photo: Handout
And this is where potentially rising demand from companies seeking more flexibility amid the protests and the ongoing trade war could come to the sector's rescue.
Current market uncertainties will make companies that "have a lease expiry coming up consider co-working as one of the options [available], due to the ability to rightsize their operation, the flexibility of terms and not having to put capital expenditure into the build out", said Jonathan Wright, head of flexible work space services in Asia at Colliers International.
This opinion was echoed by Nancy Yip, area director at office space operator IWG Hong...