This is the second article of our Price Heat Map Series 2017. The first article of this series explained our methodology & outlined coworking trends around the world. Curious to learn about which countries are the most expensive to cowork in? Click here to find out!
Hong Kong is buzzing with start-ups at coworking spaces. Why don’t they just work from home? It’s not really possible in a city where the average living space per capita is 48-160 square feet. Hence, the demand for economical and professional workspace in one of the most densly populated cities in the world has been on the rise in the last few years. Headquartered in Hong Kong with 50+ coworking spaces listed, Team Kowrk has analysed coworking trends in HK!
Team Kowrk did this analysis last year, which begs the question: Has anything changed since 2016?
Our analysis shows that prices in Sheung Wan have risen ~45%. Fun Fact: Last year 5 months of rent in Central would get you a year of office space in Sheung Wan. Now, it’s 7 months of rent in Central for a year in Sheung Wan!
Last year we had recommended to our bootstrapped & cashstrapped startup clients to take up coworking space in Sheung Wan instead of Central. The rationale was that Sheung Wan is within 10 minutes walking distance. It is clear that the recommendation we made last year to our users has had its effect. We’re seeing increased demand in Sheung Wan which is pushing up prices in this area. As such, we expect market forces to respond and more coworking spaces to open up branches in Sheung Wan to meet this increased demand.
Kwun Tong (~340 USD) continues to be a great option for people who reside in North Point and nearby areas. Minimise your commute time to ~30 minutes by taking the 601 bus to Kwun Tong!
Let’s take a quick look at our findings in 2017. After modeling numbers from different coworking spaces, the following are our key takeaways. The height of the bars in the diagram below represent the average cost of a monthly dedicated desk in that region of Hong Kong.
We’ve found that coworking prices in Tsim Sha Tsui (hereafter “TST”) are generally not as expensive as Central if we exclude outliers (a few very high end business centres that are charging ~750+ USD per dedicated desk per month). Our models, adjusted for inflation and taking into account expected real estate prices in Kowloon in the next 5 years, indicate that average coworking prices in TST will likely drop by ~15% in the next 3 years due to the entry of lower-priced competitors in the area. If you can’t wait 3 years and want to operate on the Kowloon side, consider Lai Chi Kok (~340 USD) which is only a 15 minute train ride from TST.
Although prices in Sheung Wan (~370 USD) have risen ~45% since last year, it still remains ~40% cheaper than Central (~650 USD) on average. So if you’re looking to save money and yet remain close to Central, Sheung Wan is your best option. Our forecasts indicate that more coworking spaces will open up in Sai Ying Pun, given increased prices in neighbouring Sheung Wan. Stay tuned for updates in 2018!
We’re seeing increased demand & inflated prices for coworking spaces in Kennedy Town after the MTR station opened there, mainly driven by relocated expats. Wan Chai and Causeway Bay (~550 USD) have remained expensive locations to cowork because they are predominately shopping areas with high commercial property rates.
Fun Fact: Variation of prices in Central is very high. The most expensive dedicated desk in Central (~900+ USD) is approximately 5 times the cost of the cheapest dedicated desk (~300+ USD)! Don’t tell anyone, but if you book with Kowrk.com, we can help you find great deals in Central!
If you’re looking to have a prestigious Central address on your business card, you don’t necessarily have to pony up a large sum of money. In fact, you can have your team working from anywhere in HK (or around the world!) and use a virtual office (hereafter, “VO”) service in Central. Our analysis indicates that nearly all coworking spaces offer multiple options like hot desks, dedicated desks, private offices and VO’s. Although only about a third of coworking spaces around the world offer a VO service, that proportion is a little higher in HK. Generally larger spaces offer VO services. Our key recommendation to coworking spaces & business centers located in commercial areas is to start offering VO services if you aren’t already doing so. If you can surmount the legal & operational hurdles, it’s extra cash after all!
Our analysis also highlights that ~85% of coworking spaces in Hong Kong Island can be accessed 24/7, far higher than the global average which is ~35%, contributing to higher operating costs & prices. Hong Kong has a late working culture & a lot of coworking spaces are hosting networking events after office hours. In stark contrast, less than a third of coworking spaces offer 24/7 access in the US, if we exclude NYC. Why is this the case? Possibly to keep costs lower, security concerns, and because people are more conscious of having a work/life balance in the US as compared to HK.
Hong Kong is a mature coworking market. Although we expect more vertical growth in geo-hubs that already have a high concentration of coworking spaces, our forecasts indicate that coworking chains will be quick to horizontally expand to other less ‘coworked’ regions in the country. We predict that more coworking spaces will pop up along the new South Island MTR line. Coworking in Hong Kong is set to grow further in 2018. Have you coworked in Hong Kong yet?
Any questions? Comments? Leave your thoughts below.
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