Changing office dynamics in Hong Kong — A deep dive into Colliers’ 2023 Occupier Survey
In an era where the future of office spaces remains intriguingly uncertain, understanding the evolving dynamics becomes paramount.
In this edition of Reloverse, we look at the significant shifts in Hong Kong’s office landscape through the lens of Colliers’ 2023 Occupier Survey. We’ll explore the seismic alterations triggered by global events, the pandemic and more, shedding light on how businesses and industries are recalibrating their approach to workspaces in response to transitional circumstances.
Pandemic-induced shifts
The pandemic substantially disrupted traditional work concepts and global business operations. As business activities begin their journey back to normalcy in Hong Kong and worldwide, there’s a pressing need to re-evaluate commercial office landscapes. Enter Colliers’ Hong Kong Occupier Survey 2023, which shines a spotlight on the evolving dynamics.
Trends and transitions
Colliers solicited the opinions of over 300 occupiers, aiming to understand the magnitude of change in the commercial office sphere. The survey revealed:
- Changing spaces and relocation: More than a fifth of Hong Kong’s office tenants intend to reduce their office space in the coming two years. Some even consider relocating to mainland China, Singapore and beyond.
- Cost optimisation: Cost-cutting is a significant driver behind these decisions, especially in the face of a weakened economic environment.
- Evolving work models: The rise in work-from-home policies and decreasing business demands further compel businesses to rethink their physical office requirements.
Of the 321 companies polled post-pandemic, 21% expressed the likelihood of trimming operations, pointing to costs, dwindling business demand and extended work-from-home policies as the leading reasons.
Notably, relocation capacities played a part in their decisions. Among those looking to downsize:
- 14% considered mainland China.
- 13% looked towards Singapore.
- 9% eyed other global destinations.
Patrick Groth, Santa Fe’s General Manager for Hong Kong and Taiwan, adds, “Adapting to the swiftly transforming office landscape, especially in dynamic hubs like Hong Kong, is more than just about physical space—it’s about understanding the myriad of factors influencing businesses’ choices, from economic pressures to new work models. At Santa Fe Relocation, we’re not just observing these changes; we’re deeply immersed in aiding businesses to navigate them. The insights from Colliers’ 2023 Occupier Survey underscore the importance of agility and foresight in this new era of workspace evolution.”
Industry variance
Although many respondents aim to shrink their footprint, it’s crucial to note that the intent varies across industries. Fiona Ngan, head of office services at Colliers, observed, “While many occupiers wish to maintain their current office size, a significant number still plan to expand or downsize, influenced by global economic impacts.”
Extended insights
- Hong Kong’s prime office space vacancy rate soared to a record 15.1% by the end of August.
- Monthly office rental rates dipped by 30.3%, at HK$54.70 (US$6.98) per square foot.
- Approximately 3 million sq ft of new office space is predicted to emerge in the year’s latter half.
- Industries like manufacturing, sourcing, trading, shipping and logistics exhibited the most pessimism about office spaces.
Contrastingly, the IT, banking, finance, and insurance sectors displayed optimism, with a sizable percentage intending to increase their office areas.
Economic outlook
Despite the tumultuous first half of 2023, businesses are cautiously optimistic. While concerns about Hong Kong’s economic future (43%) and potential global recessions (34%) remain, confidence in several sectors, especially banking and finance, is on the upswing.
Adapting to the new reality
As businesses grapple with these changes, landlords need to adapt to the shifting sands. Colliers suggest more landlord flexibility, including shorter lease durations and additional incentives like rent-free periods and fit-out cost contributions.
The post-pandemic world has undeniably shaken up the traditional workspace. With an eye on cost optimisation, an embrace of remote work, and strategic relocations, businesses are navigating through uncharted waters, reshaping Hong Kong’s office landscape.
Navigating these intricate office transitions in Hong Kong can be overwhelming. Santa Fe Relocation stands at the forefront of relocation services, ensuring a seamless transition for businesses considering a move. With an unparalleled understanding of global relocation dynamics, our comprehensive suite of services caters to all moving requirements. Trust in Santa Fe Relocation to make your next move efficient, smooth and tailored to your unique needs. Reach out to us at reloverse@santaferelo.com or contact any of our experts listed below and we’ll get back to you.
Damien Cheng
Regional Client Manager
damien.cheng@santaferelo.com
Patrick Groth
General Manager, Hong Kong & Taiwan
patrick.groth@santaferelo.com
Karis Ho
Client Manager
karis.ho@santaferelo.com
Calvin Tang
Sales & Moving Services Manager
calvin.tang@santaferelo.com
Source: Hong Kong Occupier Survey 2023, Determining the new normal, Colliers, September 6, 2023. Click here to view the full report.
