Our latest research shows that demand for Hong Kong’s flexible workspace has remained resilient against the pandemic, with demand for flex space in 2021 up 22% from pre-pandemic levels (2019).
Released today, the annual insights report looks in depth at the demand and supply of Hong Kong’s flexible workspace marketplace, as well as workstation rates, growth and business trends. Findings show that supply of flexible workspace in Hong Kong has also increased, by 6% year on year (2021 vs 2020), and is forecast to grow 15% by 2023, further demonstrating the popularity, strength and resilience of this flex market.
Analysts at Instant concluded that due to Hong Kong’s low COVID-19 cases and lack of restrictions over the last two years, business activity continued to accelerate with the region able to grow its key industries including technology. The take up of flex space from those in the technology sector also increased by 29% year on year - 2021 vs 2020.
Workstation rates drop across key Hong Kong districts
According to the report findings, achieved workstation rates dropped marginally in response to a -10% decrease in demand between 2020 and 2021 which can be attributed to the new wave of Covid-19 cases in late 2021.
Instant’s data reveals that key business districts including Wan Chai, Tsim Sha Tsui and Causeway Bay all experienced a drop in workstation rates year on year (2021 vs 2020). Wan Chai experienced a decrease of -5%, with the average annual 2021 rate sitting at $5,218 HKD. Rates dropped slightly less in Tsim Sha Tsui and Causeway Bay, by -3% and -2% respectively in 2021 compared to 2020, with a desk costing on average $6,435 HKD and $6,527 HKD in 2021 respectively.
The Central District and Sheung Wan differed from the other districts, with rates increasing by 1% and 3% respectively year on year. A workstation in Sheung Wan in 2021 averaged $6,833 HKD per desk per annum, while in the Central district a desk cost $9,477 HKD - the most expensive out of any key Hong Kong district.
According to Bobby Sodeiri, Director at The Instant Group Hong Kong, “There is now a window of opportunity for clients looking to take on flex space at a reduced price before we see rates starting to increase later this year. Covid-19 related restrictions are slowly being lifted, which has led to a new sense of energy throughout the region, leading to more activity across the market. With confidence growing and more businesses starting to return to the office, now is the time to take flex space and get a good deal.”
Comparatively across APAC, Hong Kong is one of the more stable flex space markets with year on year workstation rates decreasing by only -1% in 2021 vs 2020. Workstation rates in other parts of APAC all saw more dramatic price reductions in 2021, dropping in Singapore by -20%, Tokyo by -15%, Seoul by -12% and Sydney by -11%.
“Across most of South East Asia, Instant saw rates decrease in 2021 across key markets as demand for flex space reduced last year due to the pandemic. However, as we begin to enter a more stable global environment managing COVID, with demand for flex space increasing in Hong Kong alone by 15% between Q4 2021 and Q1 2022, we expect to start to see rates for flex space increase across all markets.” added Sodeiri.
Demand for small space requirements up as businesses look to adapt hybrid
Demand for smaller space office requirements has shot up since the pandemic in response to many companies looking to downsize their real estate portfolio due to new hybrid and agile ways of working. The report shows that demand for desk sizes of 3 - 9 increased by 29% in 2021 compared to 2019. Conversely, larger space requirements have reduced with demand for 25+ desk spaces down by -46% in 2021 compared to pre pandemic levels.