Office market in Asia

Transcription

1 Office market in Asia Emphasis on serviced offices in Hong Kong and Singapore Note: This document is for representation purposes only. The facts and figures reported are masked. The report does not claim to accurately represent any industry, business entity, or person. August insightbee. All Rights Reserved

2 Table of contents insightbee. All Rights Reserved p. 2

3 Summary According to Regus and CBRE Group Inc, the serviced office market sector is currently small, but has a very significant long-term market outlook: Total available office space Serviced and coworking offices % In Tokyo, the office rents have been decreasing in the period of -. The pipeline office supply is projected at, thousand sqm in, thousand sqm in and, thousand sqm in. Competitive landscape The prominent serviced office suppliers in the Asia region are Regus plc, The Eecutive Centre Limited, Servcorp Limited and Compass Offices. Traditional offices % Prominent players Office market outlook According to Colliers International, the outlook for the Asia office real-estate market looks optimistic, with an increasing number of multinationals epanding in human resources and corporate acquisitions. In China, Colliers anticipates companies in e-commerce and finance to show high growth which could mean increased demand for office space. Chengdu, Bangkok and Ho Chi Minh City will eperience growth in the supply of office space, leading to flat rent rates Offices in China and Singapore Regus The Eecuitve Centre Compass Offices Servcorp Source: Web search insightbee. All Rights Reserved p. 3

4 Regus plc Foundation year: Products offered: Office space, serviced office space, virtual offices, meeting rooms, business lounges, day offices, co-working Headquarters: Luembourg City, Luembourg Other information: Biggest provider of serviced offices, recently entered in a joint-venture with the Singaporean government for the development of a new site Global Number of employees, +.%, Revenue (GBPm),. +.%,. Asia and Pacific Number of employees,. +.%, Revenue (GBPm) +.%. Sources: Annual reports, company website insightbee. All Rights Reserved p. 4

5 Regus plc Global Asia and Pacific, Locations +.%, Locations Hong Kong Singapore Workstations Workstations, +.%,, +.%, Sources: Annual reports, company website insightbee. All Rights Reserved p. 5

6 Regus plc Asia and Pacific workstations Mature Epansion Epansion Closures Total Asia and Pacific Total Global Workstations (avg),,,,, Occupancy (%).%.%.%.%.%.% Revenue (GBPm)..... Net income (GBPm) Revenue per available workstation (GBP) Period end workstations ( Dec ) ,, ,, Source: Annual report insightbee. All Rights Reserved p. 6

7 Regus plc Hong Kong locations Country City Location Offices China Hong Kong Regus QRC China Hong Kong One IFC F China Hong Kong Entertainment Building China Hong Kong The Center China Hong Kong AIA Central China Hong Kong QRC China Hong Kong Shui On Centre China Hong Kong Central Plaza China Hong Kong Hopewell Centre China Hong Kong China Resources Building China Hong Kong Harbour City China Hong Kong International Commerce Centre China Hong Kong International Commerce Centre - F China Hong Kong Miramar Tsim Sha Tsui China Hong Kong Times Square China Hong Kong The Lee Gardens China Hong Kong Grand Century Place - Mong Kok China Hong Kong Berkshire House Quarry Bay China Hong Kong Millennium City China Hong Kong E-Trade Plaza - Chai Wan Source: Company website insightbee. All Rights Reserved p. 7

8 Regus plc Singapore locations Country City Location Offices Singapore Singapore Asia Square Singapore Singapore Market Street Singapore Singapore Bharat Building Singapore Singapore Tanjong Pagar Singapore Singapore Samsung Hub Singapore Singapore MBFC Tower Singapore Singapore Collyer Quay Singapore Singapore Raffles Place - Tower Singapore Singapore One Raffles Place Singapore Singapore UOB Plaza Centre Singapore Singapore Royal Group Building Singapore Singapore AXA Tower Singapore Singapore One Fullerton Singapore Singapore Sultan Link Singapore Singapore Centennial Tower Singapore Singapore Suntec Tower Singapore Singapore OrchardGateway@Emerald. Singapore Singapore Wisma Atria Singapore Singapore HarbourFront Tower One Singapore Singapore United Square Country City Location Offices Singapore Singapore Geylang East Public Library (Regus Epress) Singapore Singapore Toa Payoh Public Library (Regus Epress) Singapore Singapore Paya Lebar Square Singapore Singapore Galais-One North Singapore Singapore Tampines Junction Singapore Singapore JTC Summit Singapore Singapore Jurong Regional Library (Regus Epress) Singapore Singapore The Signature Singapore Singapore The Haven Changi Airport Epress (opening soon) Source: Company website insightbee. All Rights Reserved p. 8

9 Servcorp Limited Foundation year: Products offered: eecutive suites, serviced offices virtual offices, meeting rooms Headquarters: Sydney, Australia Number of employees Number of locations +.% Revenue (GBPm) Global +.% Number of offices. +.%., +.%, Note: Echange rate: - USD=GBP. USD=GBP. Source: Annual report insightbee. All Rights Reserved p. 9

10 Servcorp Limited Asia Southeast Asia and Pacific revenue (GBPm)..%. Asia total revenue (GBPm). +.%. North Asia* revenue (GBPm). +.%. Locations Hong Kong Singapore *Includes among others China and Japan. Ecludes Middle East Source: Annual report insightbee. All Rights Reserved p. 10

11 Servcorp Limited Hong Kong and Singapore locations Country City Location Offices China Hong Kong Central area, Level, Two International Finance Center China Hong Kong Central area, Level, the Hong Kong Club Building China Hong Kong Kowloon area, Level, One Peking Road Singapore Singapore Penthouse Level & Level, Suntec Tower Three Singapore Singapore Level, Si Battery Road Singapore Singapore Level, Marina Bay Financial Center Singapore Singapore Level, PSA Building Singapore Singapore Level, The Metropolis Tower Source: Company website insightbee. All Rights Reserved p. 11

12 The Eecutive Centre Limited Founded: Products offered: Serviced offices, virtual offices, conference centres Other information: Plans to double the number of centres in the - period, company backed by CVC Capital Partners Headquarters: Hong Kong Centres Global Revenue (GBPm). Workstations ~, Tot. office space ~.m sq ft Source: Company website insightbee. All Rights Reserved p. 12

13 The Eecutive Centre Limited Locations Hong Kong Singapore Occupancy rate in Hong Kong.% Country City Details N. of Number of offices Other centers China Hong Kong Level, and, Two Echange Square (- people) - China Hong Kong Level and, Neus Building (-) meeting room China Hong Kong Level, Wheelock House (- people) Ma capacity workstations China Hong Kong Level and, The Hong Kong Club Building (- people) - China Hong Kong Level, Three Pacific Place (- people) - China Hong Kong Level and, Hennessy Road (- people) - China Hong Kong Level, Cambridge House (- people) - China Hong Kong Level, One Island East (- people) Equipped for conferences and trainings China Hong Kong Level, One Island East > offices (- people) Ma capacity workstations Singapore Singapore Level and, Ocean Financial Centre - - Singapore Singapore Level, One Raffles Quay North Tower (- people) Ma capacity workstations Singapore Singapore Level, Si Battery Road (- people) Ma capacity workstations Singapore Singapore Level, Marina Bay Financial Centre Tower (- people) Ma capacity workstations Source: Company website insightbee. All Rights Reserved p. 13

14 Compass Offices First centre opened: Products offered: Serviced offices, virtual offices, conference centres. Other information: One of the largest and fastest growing serviced offices providers in Hong Kong Centers > Locations Hong Kong Singapore Workstations >, Source: Company website insightbee. All Rights Reserved p. 14

15 Compass Offices Hong Kong and Singapore locations Country City Location Offices Hong Kong Hong Kong China Building Hong Kong Hong Kong Central Building Hong Kong Hong Kong Citibank Plaza Hong Kong Hong Kong Cheung Kong Centre Hong Kong Hong Kong Man Yee Building Hong Kong Hong Kong Silver Fortune Plaza Hong Kong Hong Kong The Centre Hong Kong Hong Kong World Wide House Hong Kong Hong Kong Des Voeu Road Central Hong Kong Hong Kong Infinitus Plaza Hong Kong Hong Kong Nan Fung Tower Hong Kong Hong Kong Yardley Commercial Building Country City Location Offices Hong Kong Hong Kong Admiralty Centre Hong Kong Hong Kong Gloucester Road Hong Kong Hong Kong Tesbury Centre Hong Kong Hong Kong Yee Wo Street Hong Kong Hong Kong The Lee Gardens Hong Kong Hong Kong AIA Tower Hong Kong Hong Kong China Minmetals Tower Hong Kong Hong Kong Silvercord Hong Kong Hong Kong Langham Place Singapore Singapore Prudential Tower Singapore Singapore Singapore Land Tower Source: Company website insightbee. All Rights Reserved p. 15

16 China overview Shanghai has the most serviced offices in China with over centres, representing about % of China s market share. These centres are mainly located in central business districts (CBD) such as West Nanjing Road, Middle Huaihai Road and Lujiazui. Shanghai is epected to increase by centres every year. In China, Beijing has the most epensive average workstation monthly rent of serviced offices. Below are some eamples: Phase One of China World Towers: USD, ~ USD, Oriental Plaza: USD,. ~ USD, Beijing Yintai Centre: USD,. ~ USD,. China Central Place: USD ~USD,. Prominent players in China Regus Cities Number of centers Shanghai Beijing Hong Kong Foshan Guangzhou Shenzhen Chengdu Chongqing Total China The Eecutive Centre (TEC) Cities Number of centers Shanghai Hong Kong Beijing Tianjin Shenzhen Guangzhou Chengdu Total China Compass Cities Hong Kong Guangzhou Shanghai Total China Number of centers Servcorp Cities Shanghai Hong Kong Beijing Chengdu Guangzhou Hangzhou Total China Number of centers Note: Echange rate: CNY=USD. Source: Web search insightbee. All Rights Reserved p. 16

17 Hong Kong Trends in serviced office space sector The total number of serviced offices in Hong Kong is close to, mainly located in Central District, Wan Chai, Admiralty and Causeway Bay Major brand operators include Regus, TEC, Servcorp and Compass Brand operators tend to gather in the same building, which indicates that the market is mature, however new centres are steadily increasing An emerging trend is co-working spaces, attractive to start-ups and small companies, the trend emerged in / Hong Kong serviced offices sub-market spread CBD Central District Wan Chai Tsim Sha Tsui Causeway Bay Admiralty Quarry Bay Kowloon Kwun Tong Sheung Wan Number of centres Grade A office market The market is dominated by domestic players, with a.% share of the office space market as of. Mainland corporations and institutions (including banks and insurance companies) are mainly interested in the CBD, Wan Chai/Causeway Bay and Kowloon East areas buildings mn sq ft.% vacancy rate landlords % domestic-owned % developed-owned Trends in the office space sector The office vacancy rate is epected to reach % in, up from % in According to Knight Frank LLP, in prime office space is valued at GBP/sq ft Cost-sensitive tenants are looking for opportunities in less central locations, such as Island East and Kowloon East. Additionally, Tsim Sha Tsui, Kowloon East and Island East have lesser rental volatility Sources: Industry reports, web search insightbee. All Rights Reserved p. 17

18 Hong Kong (continued) Pipeline supply Pipeline supply through end of was set to be split / between Kowloon and Hong Kong Island. In the Kowloon East submarket, a major source of new supply is the redevelopment of industrial buildings into grade A office buildings. The vast number of projects identified do not fulfil the criteria of larger, multinational occupiers, who prefer not to be spread out over multiple floors and prefer floorplates of more than, sq ft. Larger companies prefer to be located in a single landlord building, due to ease of management and negotiation. Smaller occupiers, such as small and medium firms, accounted for % of letting activity in floorplates of more than, sq ft, while % corresponded to large firms. CBRE identified projects totalling. million sq ft of new office space in the - period, with Kowloon accounting for %. Districts Kowloon East Central District Wong Chuk Hang Cheung Sha Wan Causeway Bay Kwai Fong and Tsuen Wan Hunghom San Po Kong Wan Chai Total Sources: Industry reports, web search Supply (total floor area, net, sq ft -),,,,,,,,,,,,, The Kowloon area The government is investing in alternative office hotspots. Thanks to this, the amount of top-tier office space in Kowloon East has doubled to. million sq ft in - and a number of shipping and insurance companies have moved here. The low interest rate environment has resulted in more office occupiers acquiring their own premises. Some of the benefits incurred include operational efficiencies, potential rental savings and certainty of future occupancy. Large, multinational companies have been acquiring offices in the Central District, Sheung Wan, Tsim Sha Tsui and Kowloon East areas. For eample, Manulife acquired the west tower of One Bay East for HK.bn in. Kowloon East has the highest share of strata-title offices, at.% of the market share As a rapidly-maturing sub-market, Kowloon East has attracted many end-users; in corporate occupiers owned.% of the office space Investor /Owner-occupied ration (over, sq ft gross) Owner occupied Investor insightbee. All Rights Reserved p. 18

19 Singapore Trends in the serviced office space sector Serviced offices are generally popular with new-to-market companies from the oil and gas, recruitment, and legal industries. Rent for serviced offices can be as high as USD,/month, as opposed to USD,/month for a rented space. In response to the increased demand for short-term and fleible business space from aspiring entrepreneurs and some foreign companies, Servcorp epanded its office space to office suites in Singapore (). Grade A office market Due to eternal shocks, the average monthly gross rents for Premium Grade office space in the Raffles Place/New Downtown micro-market will continue to increase by -% in. Occupancy rates of Premium Grade and Grade A office space declined island-wide at end-, but the market is epected to eperience a gradual rebound this year. Grade A office space in the Downtown Core has been increasing, currently standing at.% of the office space market; this submarket has a vacancy rate of.%. Trends in the office space sector Net demand for office space in was. million sq ft, compared to. million sq ftin. The growth of employment in the office-occupying sectors was anticipated to translate into new demand for space; an overall prime Grade A rent rise of.% in, and a projected increase of -% in and -% in, especially in Marina Bay and Raffles Place. Tenants might look for lower-cost options, such as suburbs and business parks. The rare differential is as much as -%. According to the Singapore Urban Redevelopment Authority, (URA), Downtown Core occupancy is at.%, followed by Rest of Central Area with.% and Central Area with.%. Companies are transitioning to a more efficient open office concept. Grade A offices could prove an attractive alternative to Grade B Core CBD, given their more modern specifications. URA has implemented a master plan whose aim is to encourage decentralized regional centres that allow the residents to live, work and play outside of the city centre. The opening of the JEM and Westgate office towers was the first step. According to Knight Frank LLP, in prime office space is valued at GBP/sq ft Sources: Industry reports, web search insightbee. All Rights Reserved p. 19

20 Singapore (continued) Singapore is a popular destination for the Asian headquarters of many multi-national technology companies: Microsoft, Google, Facebook, Amazon, Vodafone, ebay, Yahoo!, LinkedIn and Epedia are headquartered in Singapore. According to Cushman & Wakefield, the traditional office space occupier the finance industry has shrunk its market share from % in to % in, whereas tech companies increased their share from % in to % in. Office space occupancy by type Office space occupancy by type Pipeline supply of office space by location The limited pipeline of new office space until will favour landlords, who are epected to gain more bargaining power. This, in turn, could support growth in rental rates, especially for Premium and Grade A office space in the CBD. Pipeline Supply of Real-estate Office Space Finance Energy Tech Consumer goods Diversified Pharmaceutical Other Legal Finance Tech Pharmaceutical Government Real estate Energy Chemicals Professional services Q-4Q Office Space ( , sq ft) Source: Web search insightbee. All Rights Reserved p. 20

21 Selected local competitors Hong Kong Company Properties Coverage Services Jumpstart Business Centre Bridges Eecutive Centre Wheelock House (Hong Kong), Times Square (Hong Kong), Silvercord (Hong Kong), Millennium City (Hong Kong), Langham Place (Hong Kong), Crawford House (Hong Kong), Yen Sheng Centre (Hong Kong), Wheelock Square (Shanghai), L Avenue (Shanghai), Central Plaza (Shanghai), Nanking East Rd (Taipei), The Octagon (Singapore), Dongsung Building (South Korea) China, Hong Kong, Taiwan, Singapore and South Korea Virtual offices, serviced offices, meeting rooms, business registration services Central and Admiralty locations Hong Kong Serviced offices, virtual offices, professional and secretarial offices Conson Langham Place (Hong Kong), Nam Fung Center (Hong Kong), Wan Chai (Hong Kong), Kwun Tong Futura Plaza (Hong Kong), Lippo Sun Plaza (Hong Kong), World Trade Center (Guangzhou, China), Korea Seoul Business Centre (South Korea), Globaltown International Business Centre (Taipei) China, Hong Kong, South Korea, Taiwan Serviced offices, virtual offices, company formation services Sky Business Centre Tsim Sha Tsui and Causeway Bay locations Hong Kong Serviced offices, virtual offices Startup Business Centre Lippo Centre (Hong Kong), Kimberley Plaza (Hong Kong), Millennium City II (Kong Kong), Plaza (Hong Kong), Queen s Centre (Hong Kong), Sun Place Building (Beijing), Xintiandi (Shanghai), Nanjing East Road (Taipei), Finance & IT Tower (Macau) China, Hong Kong, Taiwan Serviced offices, virtual offices, traditional offices, conference rooms, business centres Source: Web search insightbee. All Rights Reserved p. 21

22 Selected local competitors Singapore Company Properties Coverage Services CEO Suite Athenee Tower (Bangkok), LG Twin Tower (Beijing), AXA Tower (Jakarta ), One Pacific Place (Jakarta), Sahid Sudiman Centre (Jakarta), Indonesia Stock Echange (Jakarta), Wisma GKBI (Jakarta), Aiata Tower (Kuala Lumpur ), Mais th ( Kuala Lumpur ), LKG Tower (Manila), Kyobo Building (Seoul), Pudong (Shanghai), World Financial Centre (Shanghai), Pui (Shanghai), Land Tower (Singapore), Mais (Kuala Lumpur) Singapore, Thailand, Indonesia, Malaysia, South Korea, China, Philippines Virtual offices, serviced offices, instant offices, professional services for companies Signature Space The Octagon Building (Singapore), Ubl TechPark (Singapore), Thanh Dung Tower (Ho Chi Minh City), L Avenue (Shanghai) Singapore, Vietnam. China Serviced offices, virtual offices, conference and meeting rooms WANGZ Business Centre, sq ft space with suites (Suntec Tower One, Marina Bay) Singapore Serviced offices OfficeWise Representative broker for Propne Realty Pte Ltd, a network of, commercial buildings Singapore Factories, land, offices, warehouses, shops, takeovers of eisting businesses, furniture, etc. JustOffice Asia Square, AXA Tower, PWC Building, Samsung Hub, Westgate Tower Singapore Serviced offices, virtual offices, meeting rooms Source: Web search insightbee. All Rights Reserved p. 22

23 Disclaimer The information contained in this report has been obtained from sources believed to be reliable. Efforts have been made to validate the information from multiple sources, but the accuracy cannot be guaranteed. The author and InsightBee disclaim all warranties as to the accuracy, completeness or adequacy of such information. InsightBee shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. insightbee. All Rights Reserved p. 23