Exit Kr Space, enter CEO Suite; Indonesian co-working space operator swoops in to take space vacated by troubled Chinese rival

Indonesian co-working space operator CEO Suite has taken up the slot left vacant by its troubled Chinese rival Kr Space in Hong Kong, wading into a fiercely competitive sector that already boasts the world’s most expensive office address.

In a sign of just how heated the market is, the Jakarta-based shared office operator will pay twice the average rent for its 27,000 square foot location in the K11 Atelier commercial tower in Tsim Sha Tsui, its landlord New World Development (NWD) said on Friday, confirming an earlier report by property news site Mingtiandi.

The new tenant will fork out HK$2.97 million (US$380,000) per month, or HK$110 per square foot for the location, NWD said. That compares with the HK$56 per square foot average office rental in Tsim Sha Tsui in the first quarter of 2019, according to Savills Hong Kong, although many existing offices there are older and of a lower quality.

Beijing-based Kr Space was recently forced to pull the plug several leasing deals in the city, including the one at K11 Atelier, after its venture capital funding dried up.

Industry analysts said the rent being charged for the space is not excessively high given NWD’s US$2.6 billion Victoria Dockside project, where K11 Atelier is located, is the only new high-end project in this core district.

“We do see a steady demand for multinationals to take space in Grade-A products in Hong Kong’s core districts. [Co-working] providers will see how much they can charge per desk before they take up the space. The rent achievable for such projects is much higher than other lower-specification towers,” said Michael Glancy, director of the market department at JLL in Hong Kong.