If you’re a business owner, you know that finding the right office in Hong Kong is challenging, due to the city's high real estate prices but also due to the number of options available.
While office costs here are among the highest in the world, other factors like the location, the type of office, and the size are crucial for businesses to take into consideration. Indeed, a recent survey from Gordon James ranked Hong Kong as the most expensive city for office space.
Many global companies are looking for a physical presence in Hong Kong to engage in its vibrant economic activity and enter the Chinese and Asia-Pacific markets, however, there are also countless local SME and entrepreneurs who wonder where to start when it comes to finding the right place. Let’s discuss some of the main criteria to find an office space in Hong Kong.
The Key Considerations
The office type is probably the first thing you need to look at. Hong Kong offers a variety of office types including private offices, coworking spaces with hot desks and dedicated desk options, and serviced offices, each being great based on your business needs.
- Private offices provide a dedicated space for your company, offering privacy for your business operations and a long-term option for businesses with sustainable forecasts.
- Coworking spaces are ideal for startups and small teams that benefit from a more dynamic, shared environment which encourages networking and collaboration.
- Serviced offices are fully equipped and managed by an external provider like Bela Offices, suitable for businesses that need flexible terms and minimal setup time.
Depending on your business activities, the choice of district is also important, as different areas in Hong Kong have unique vibes and specialise in various industries. For instance, official organisations and law firms are generally located in Admiralty and Central, while marketing agencies are most likely to choose Kwun Tong, North Point, Sheung Wan, or Kennedy Town. B2C businesses tend to be located in shopping areas like Causeway Bay or Tsim Sha Tsui.
The choice between furnished or unfurnished office space is another important criteria, but it depends on your business. Furnished offices are a quick, turnkey solution, while unfurnished spaces allow companies to customise their environment but require a larger initial investment.
Finally, consider the size of the office. It’s important to choose a space that not only fits your immediate needs but also allows for growth as scaling up is a potential future requirement.
Buy or rent
Deciding whether to rent or buy office space in Hong Kong is a significant financial decision that can affect your company's cash flow and capital allocation. Renting offers flexibility and less financial burden upfront, making it an attractive option for businesses not wanting to commit large sums of money initially. This flexibility is particularly advantageous in Hong Kong’s volatile property market, where rental terms can be adjusted to suit changing business scales and economic conditions. For instance, if you opt for a serviced office, it will be much easier to rent a smaller or larger space if your company needs to adapt.
On the other hand, buying office space can be a valuable long-term investment, especially in a high-demand city like Hong Kong. Owning an office might offer financial benefits such as potential capital appreciation and the elimination of rental increases. However, the initial costs are substantial, and the liquidity of assets becomes limited. Also, buying an office generally means renovation and customisation of the workspace, increasing the cost and time to start operations.
Lease Terms and Conditions
Lease terms and conditions are also essential for companies, especially start-ups, as flexibility is a key that not all service providers in Hong Kong might offer. A well-negotiated lease can provide stability and predictability, crucial for long-term planning and budgeting.
It is essential to understand the specific clauses, such as the duration of the lease, renewal options, termination rights, and hidden fees. For instance, some landlords or office rental providers might offer lower rental costs if you choose to rent the workspace for a longer lease term, generally more than one single year.
Conversely, shorter leases offer more adaptability but might come at a higher cost and that’s generally the case if you rent a coworking space on a monthly basis. Additionally, clauses related to maintenance, repairs, and alterations need careful consideration as they can affect your ability to customise the space to your needs and may impose additional costs.
Whether you decide to go for a private office, a coworking space or a serviced office, each has pros and cons and different practices when it comes to the rental contract.
Finding the right office space is never easy but plenty of options are available in Hong Kong. Some even include additional services, especially with serviced offices and some coworking spaces, like virtual office packages, meeting rooms and community spaces. Modern businesses often look for offices that offer more than just workspace, especially since the pandemic that modified employees’ expectations towards more hybrid work arrangements. Nowadays, companies that support well-being, productivity, and networking are trending.
