With co-working spaces gaining in popularity, an industry player believes such shared and flexible facilities could amount to almost a third of the Hong Kong office market in less than 15 years from now.
Dominic Penaloza, chief innovation officer at Naked Hub, a Shanghai-headquartered co-working space startup, said co-working spaces could see their share of the total Hong Kong office market surpass 30 percent in future, the Hong Kong Economic Journal reports.
He did not mention the timeframe for the envisaged market share, but he seemed to echo the comments made earlier by a fellow senior executive of a paradigm shift in the market by 2030.
After opening the company’s first co-working center in Hong Kong in July, Naked Hub’s chief executive, Jonathan Seliger, said: “By 2030, it is estimated that 30 percent of the office spaces in Hong Kong will be turned into flexible, shared workspaces.”
“This is a paradigm shift in the way that people work, and we are just at the ground level,” the CEO said, according to a report carried on the website of InvestHK, an investment promotion agency of the Hong Kong government.
Seliger said at the time that Naked Hub aims to have at least 10 significant hubs in Hong Kong within one to two years.
Penaloza said the co-working space market in Kong Kong is being supported by the rise in startup businesses in the city.
The trend is clear, he suggested, outlining expectations that co-working spaces could take up as much as 30 percent of the total office market.
The optimism is not out of place, given that shared workplaces saw a sharp spike in their numbers in Hong Kong in the past few years, rising to over 200 now from not more than 10 three years ago.
Jones Lang LaSalle, a professional services firm specializing in real estate, estimated that 30 percent of traditional offices around the globe will change to highly mobile co-working spaces by 2030.
Enthused by the market projections, American shared workplace service provider WeWork has opened some facilities in Hong Kong.
Among other players, Campfire, a Hong Kong-based co-working space service provider, has obtained seed funding of US$6 million (around HK$46.8 million), HKEJ noted.
Campfire currently operates several co-working spaces in Hong Kong. Their spaces are leased on a monthly basis, and the charge is based on headcounts, ranging from several hundred to several thousand dollars per person.
The huge demand for co-working spaces stems partly from a change in the definition of office. Some large corporations, for example, have started to accommodate individual departments in co-working spaces, in order to boost innovation and flexibility.
Another notable trend is that firms involved in creative industries tend to land in shared workplaces, which facilitate interaction with other people and interpersonal communications, which could bring about more business opportunities.
If things work out well, startups could grow very fast. It would be much easier to expand in a co-working space, compared with traditional offices where contracts are often signed for a number of years, according to Penaloza.
The higher rentals of traditional offices also work in favor of such new office format, he said.
Penaloza added that unlike some other shared economy businesses, the regulatory framework is quite accommodating toward co-working spaces, which is another reason why the segment has posted rapid growth.
This article appeared in the Hong Kong Economic Journal on Oct 25
Translation by Jonathan Chong
[Chinese version 中文版]
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