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Office rental
OpinionComment
Leonia Lee
Leonia Lee

Opinion | As the coronavirus disrupts the Hong Kong office market, how should smart employers and landlords react?

  • Employers have tended to adopt a ‘hybrid’ workplace model, but could also take into account co-working space options
  • Landlords must accept that occupier needs are changing: those who step up to offer flexibility and the right technologies will have a competitive edge

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Large corporations in Hong Kong are now exploring the adoption of technologies that have been shown to boost employee productivity, satisfaction and loyalty. Photo: Getty Images/iStockphoto
Leonia Lee
Last year was a disruptive one for the commercial real estate market in Hong Kong. The prevalence of the pandemic left corporate offices underutilised as people started working from home, with demand declining even for the once-coveted grade A office spaces.
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As corporate occupiers downsize or reconsider their requirements, building owners are left with no choice but to renegotiate leases to offer more favourable rates. This decline contributed to a 2 percentage point increase in the vacancy rate for grade A office space last year.

With office space supply expected to increase by about 1.3 million square feet in the coming three years, large occupiers are increasingly selective about renting their workplaces, not just in taking advantage of the shift but also looking more closely at enhancing staff productivity, efficient use of space, employee loyalty and their brand.

There are two main ways in which we see large office occupiers re-evaluating their workplace strategies. There is a tendency to move towards a “hybrid” workplace model as companies try to reactivate their workplaces with the end of the pandemic in sight. For most companies who take the hybrid model approach, this involves integrating the headquarters into a main office with satellite “hubs” and formalised work-from-home policies, to optimise space and operational expenditure.

This shift pays off best when it is accompanied by a move to agile working and the incorporation of smart workplace technology. When applied successfully, occupiers can look to save up to 14 per cent of office space, while boosting productivity and operational efficiencies.

02:35

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The model also benefits their employees by offering a better work-life balance, less commuting and increased collaboration through a mix of virtual and face-to-face meetings, and more recently, through virtual and augmented reality systems in some sectors such as health care, aviation and manufacturing.
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