Hong Kong protests spook owners of co-working space operator The Executive Centre, who shelve planned US$750 million sale
- The decision of TEC shareholders HPEF and CVC Capital Partners to pause their disposal of the co-working operator was ‘sensible’ given the social unrest rocking Hong Kong, says chief executive
The boss of shared office-space operator The Executive Centre (TEC) said the decision to place on hold a planned sale of its shares for US$750-million was “sensible” given the uncertainty gripping Hong Kong amid unprecedented social unrest.
“Placing a pause on the shareholder sales process is a sensible reaction to the unknown unknowns of the current political and social issues being played out in Hong Kong,” said Paul Salnikow, chairman and chief executive of the Hong Kong-based company.
The decision of TEC shareholders HPEF and CVC Capital Partners to pause their disposal of the co-working operator is the latest indication that the worst political crisis in the city’s history is souring business sentiment, increasing the likelihood that Hong Kong will fall into a recession. Tourist numbers and retail sales, major pillars of the city’s economy, have suffered huge declines since the massive street rallies began in June.
TEC is 70 per cent and 20 per cent owned by private equity firms HPEF and CVC, respectively, while the remaining 10 per cent is held by the company’s management, according to Reuters, who originally reported the sale had been halted.
Salnikow said despite the current political climate in Hong Kong, the company is having a “banner year” with earnings on track to grow by 24 per cent to US$47 million, and occupancy at 93 per cent from June to August.
“Occupancy will continue above 90 per cent for the coming months, based on our confirmed contracts,” said Salnikow.
Property consultancy Colliers International said the instability could actually help co-working space providers as tenants seek flexibility at a time of uncertainty.
