Mainland Chinese companies are pushing up demand for upscale shared office space in Hong Kong’s core Central business district.
(Bloomberg) — Mainland Chinese companies are pushing up demand for upscale shared office space in Hong Kong’s core Central business district.
The Executive Centre, the biggest flexible workspace landlord in Central’s grade-A buildings, saw a fivefold increase in new leases in March compared with January. About 70% of the new tenants were Chinese companies, according to the firm.
The removal of pandemic restrictions in China and Hong Kong has led to an increase of client interest from north of the border.
“During Covid, the businesses in mainland China had time to reflect and organize themselves,” said Paul Salnikow, chief executive officer at The Executive Centre. “Now we are absolutely seeing a concerted flow of companies coming in tours of five, 10 people” to take up offices in Hong Kong.
The Executive Centre, owned by KKR & Co. and TIGA Investments Pte., holds about 70% of the premium shared offices in Central. While multinational companies make up the majority of its tenant base, Chinese firms are growing. It recently signed Tongcheng Travel Holdings Ltd., an online travel agency, as a new tenant among other mainland financial operations.
Hong Kong has seen an inflow of businesses from a diverse range of sectors. “There are more companies from emerging industries like technology, media and gaming setting up in Hong Kong,” said Ada Fung, an executive director at CBRE Group Inc. “They tend to rent in flexible space, unlike banks which want traditional offices.”
Chinese tech giant ByteDance Ltd. is moving to a bigger office in International Finance Centre in Central as the company expands its presence in the city, Bloomberg News reported on Wednesday.
(Updates with details about ByteDance expanding in Central)
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