Why HSBC is renting co-working space

September 26, 2016 09:22
HSBC lacks space at its headquarters to meet expansion needs, which is one of the reasons it has resorted to co-working space. Photo: Bloomberg

HSBC recently rented more than 300 desks in a co-working space in Causeway Bay for its digital and transformation team.

The facility, which is located in Tower 535 in Jaffe Road, is operated by WeWork, the world’s largest co-working company.

Established in 2010, it operates co-working spaces in more than 50 cities worldwide, with more than 30,000 office desks.

The idea of co-working space appeared in Hong Kong several decades ago.

Typically, a company would rent a large office space and then subdivide it into smaller rooms or office desks for leasing to other firms or individuals.

Co-working space used to be popular among start-ups with a limited budget.

Shih Wing-ching, founder of leading property agent Centaline Property, started from renting a small desk in Man Yee Building in Central.

But companies like WeWork have injected some new elements into the co-working space business by offering value-added services.

For example, it arranges functions for its millions of tenants worldwide to help them build network, connect with each other and explore cooperation opportunities.

They also hold various seminars for their tenants, as well as offer professional services like marketing, legal, accounting and financing.

Office fittings are usually modern, with no lack of high-tech equipment such as 3D printer and chic devices like smart coffee machines.

Tenants of co-working spaces enjoy higher flexibility as they can rent on a yearly or monthly basis, or even subscribe to weekly or daily plans.

The whole leasing process can be completed through an app.

As a result, these new-emerging co-working spaces have attracted many start-ups despite much more expensive rentals.

It is said that in the US, WeWork’s properties are always fully let and the waiting list very long.

Some Chinese players are trying to copy the idea.

Soho China (00410.HK), for example, vows to become China’s largest co-working space operator.

Mao Daqing, a former senior executive of Vanke (02202.HK) also founded his own co-working space firm urwork last year.

While tenants of co-working spaces are usually startups or internet firms like Uber and Airbnb, big companies like HSBC are also warming to this concept.

In fact, WeWork does have a base of large corporate clients, including General Motors and Grand Hyatt.

Flexibility is one strong appeal, allowing these large firms to easily adjust their staff size.

By putting their innovation or digital department teams in a co-working space, their staff will be freed from the usual constraints of bureaucracy and hierarchy.

They also can mingle with the startup and tech community and get in touch with the latest developments in the field.

“Our space in WeWork will allow our employees to collaborate in an open plan and agile working environment," said Andrew Connell, HSBC’s regional head of digital, retail banking and wealth management, Asia-Pacific.

"Creating the right environment for our staff, working in the same location as other like-minded teams, including Hong Kong’s fintechs and other startups, is important to us as we continue to attract, develop and invest in the talent we need to meet our digital ambitions.” 

This article appeared in the Hong Kong Economic Journal on Sept. 23

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist