This week we put our focus on the office leasing and retail markets. Erric Chow of Office Services notes the influence of capital expenditure and lease term flexibility in driving flexible workspace demand, whereas Cynthia Ng of Retail Services illustrates the continued expansion of F&B operators by sharing recent moves in the market.
The rise and rise again of flexible workspace
Capital expenditure and lease term flexibility are always key factors for any occupier when considering relocation. Given some occupiers are still considering downsizing and cost-saving solutions, flexible workspace has seen a return to popularity as a feasible solution.
The Executive Centre is good example of a flexible workspace operator that has expanded their footprint in Central by opening a new centre in AIA Central and 28 Stanley Street. Signature by Regus also expanded to another floor at The Gateway and Compass Offices opened four new centres in Causeway Bay, Admiralty and Sheung Wan.
The growth in demand has led to other operators exploring expansion opportunities as well, and some are event looking to establish a presence. All these activities reflect that flexible workspace operators are monitoring the market and are ready to act on rising demand because of evolving workplace behaviours of occupiers.
We expect to see operators continue their search for space in the range of 10,000 sq. ft., or more. The most notable on-the-ground movement is that landlords are now open to the idea of leasing space to a flexible workspace operator.
F&B retailers to leverage adjusted rental to expand
In the previous weekend and the Mid-Autumn Festival holiday, total restaurant receipts reached HK$360 million across Hong Kong, which follows total restaurant receipt growth of 9.9% YOY in Q2 2021. This demand has seen F&B operators continue to expand in various districts with adjusted rental.
In Central, a new restaurant called Brooklyn Yakuza has leased a 4,611 sq. ft. spaces on the G/F and 1/F of LKF 29. Five Guys is taking another two new spaces of circa 5,000 sq. ft. in City Walk in Tsuen Wan and Olympic City in Tai Kok Tsui as their 7th and 8th shop in Hong Kong. Tam Jai International also proposed to expand with the opening of 173 shops in the coming four years after launching an Initial Public Offering in the stock market.