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Start-Up Hub Shines

Premium serviced office providers are running at or near capacity as entrepreneurs set up in Hong Ko 

Premium serviced office providers are running at or near capacity as entrepreneurs set up in Hong Kong

 

Rather than waiting for better times to arrive, enterprising professionals are forging their own future in Hong Kong. Robust demand for serviced offices and a steady stream of new arrivals to the city shows that amid the economic gloom elsewhere, Hong Kong’s entrepreneurial spirit is thriving.

The trend was noted by The Executive Centre, provider of six serviced office centres across Hong Kong (and 50 centres in 19 cities across Asia-Pacific). The Executive Centre’s banking and finance client base in Hong Kong rose to 51 per cent in June 2013 from 29.5 per cent in 2010. In 2012 alone, more than 102 entrepreneurs established their business start-ups at its offices.

 Paul Salnikow
 Paul Salnikow, Chairman and CEO, The Executive Centre, says Hong Kong is an ideal location for firms or entrepreneurs looking to expand or start a business in Asia
Paul Salnikow, Chairman and CEO of The Executive Centre, said the high rental of A-Grade buildings in Hong Kong had always underpinned demand in the serviced office market, especially for start-ups and SMEs, as well as multinationals looking for a flexible, cost-effective entry point to Asia’s premier financial centre. However, the global economic uncertainty had proved to be a boon for the sector.

Entrepreneurial Drive

The Executive Centre, founded in Hong Kong in 1994, has grown to operate one million square feet of  

The Executive Centre, founded in Hong Kong in 1994, has grown to operate one million square feet of office space across Asia Pacific

 
“When major bank corporations downsized head counts and cut budgets last year, bankers and finance services people were forced to leave the big banks, but they refused to abandon the business,” he explained. “Armed with their clients and established network, they became entrepreneurial by setting up their own firms. A fully fitted premium serviced office at a prestigious location allows them to return to work without further ado.”

One such entrepreneur, Francis Liang, started his own investment company, Big Champ Holdings Ltd, at The Executive Centre in 2010.  Mr Liang said there are opportunities in crisis. “Shortage and adversity are a powerful catalyst for entrepreneurial endeavours,” Mr Liang said. “In the current economic climate, taking advantage of the lower interest rates and cheaper resources far outweighs other downturn effects. We are seizing this opportunity to maximise our potential by strengthening our foothold in Hong Kong.” 

Jumpstart to Growth

 Chapman Leung
 

Companies relocating and start-up businesses account for a considerable extent of the current demand for serviced offices, says Chapman Leung, Director, Jumpstart Business Centre

Chapman Leung, Director of Jumpstart Business Centre, agreed. Occupancy of Jumpstart’s serviced office space consistently ranges from more than 90 per cent to full capacity.

“Companies having to relocate, either through cost-cutting or downsizing, and SMEs that are starting their own businesses as first-time entrepreneurs, account for a considerable extent of the current demand for serviced offices,” Mr Leung said.  

The majority of Jumpstart’s customers in Central are from the finance and recruitment sectors, with diverse sectors including consultancy, retail and trading dominating in the firm’s Causeway Bay and Tsim Sha Tsui offices, and information technology in Kwun Tong. 

Jumpstart’s premium serviced offices, which include a concierge, help companies increase productivit 
Jumpstart’s premium serviced offices, which include a concierge, help companies increase productivity and sustain a competitive edge 
Mr Leung said that Hong Kong offers an ideal start-up environment. “Compared to registering a company in China, the procedure to register in Hong Kong is less complicated and takes a much shorter time.” In serviced offices that are fully furnished, equipped with telephone and reliable Internet connections and all the necessities for doing business, start-ups can be up and running quickly, he said.

Mr Salnikow noted that Hong Kong, as the gateway to the Chinese mainland, is an ideal location for firms or entrepreneurs looking to expand or start a business, especially since the signing of the Closer Economic Partnership Arrangement between Hong Kong and the mainland. 

“The city is renowned for its economic freedom, political stability, low tax jurisdiction, well-developed financial markets, world-class infrastructure, cultural diversity and highly educated work force, which allow businesses to tap the opportunities driven by vibrant Hong Kong and Asian economies,” Mr Salnikow said.

Search Leads to Hong Kong

 Search Office Space from the UK has opened its Asia-Pacific headquarters in Hong Kong
 

Search Office Space from the UK has opened its Asia-Pacific headquarters in Hong Kong

The current robust demand has also drawn Search Office Space, a UK serviced office consultancy, to locate its Asia-Pacific headquarters in Hong Kong. The business opened in Central in April 2013 as the Asian face of its growing global brand.

Richard Smith, CEO of Search Office Space, described Asia as one of the strongest and most competitive flexible office markets globally. “There are new centres opening there on a weekly basis and we can see the serviced-office market continuing to expand.

Sean Morgan 

Sean Morgan, CEO, Search Office Space Asia believes now is the right time to invest in the Asia-Pacific serviced office sector

 
“While we have always had a presence in Asia and have found office space for many clients throughout Asia-Pacific, we now feel it is the right time for us to open our own office in Hong Kong to ensure that we can provide our clients with the perfect local service, without any geographical and time-zone constraints.”

Sean Morgan, CEO of Search Office Space Asia, said that now is the right time to invest in the Asia-Pacific serviced office sector and to push forward with the consultancy’s exposure in the market.

"The economy in Hong Kong and Southeast Asia is booming. Very real growth in the commercial property sector has led to an increase in demand for spaces across the continent, so we decided a local office would be the most efficient way to keep our finger on the pulse, and to better engage with our customers,” Mr Morgan said.

“We see continuing potential in Hong Kong – a city with one of the highest occupancy costs per work-station in the world. Serviced offices are a solution that is extremely financially-viable to many businesses, so offering our services on a local level will help us help our customers find the perfect flexible solution."

Related Links
Jumpstart Business Centre 
Search Office Space 
The Executive Centre

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