Modern serviced offices provide sophisticated kitchen facilities with high-end coffee-making equipment in addition to telecom and broadband support

Look at the classified section of any newspaper in big cities in the Asia-Pacific region and you will see at least one full page of advertisements for serviced offices. In good times and bad, this is a booming business.

Serviced offices, and even virtual offices, are a popular option for small businesses. Clients are by no means exclusively newcomers to Hong Kong. As existing businesses find themselves faced with steep rent hikes when it comes time to renew their leases, some reassess their needs and decide that a serviced office will suit their budgets just fine. Rent for a serviced office will not be cheap. Calculated per square foot, it can be double the price of an independent lease in the same building. But the upside is the flexibility, the convenience and the backup without needing to invest in office equipment or carry a payroll. Plus all utilities, cleaning and maintenance are normally included in the rental package.

The most sophisticated setups offer top of the range facilities including video-conferencing options and sophisticated coffee-making equipment. Others are little more than an accommodation address. Anyone thinking of renting a serviced office would be well advised to “test-drive” the phone answering and message handling talents before making a decision. Hong Kong Business experienced surprisingly poor quality on both counts over a week of cold calls.

The Regus Group was arguably the international pioneer in the business of providing serviced offices and it still claims to be the world’s largest provider of what they term “workplace solutions”. In the late 1980s, British entrepreneur, Mark Dixon, was inspired to start Regus during a business trip to Brussels, where he noticed how many business people were forced to work from hotel rooms for lack of a more professional environment. He concluded that there must be a better way to work on the road and at home.

Dixon’s vision was to transform the way companies managed their global real estate needs by having them outsource their office space requirements to a service provider. With this goal in mind, he launched Regus in 1989 with a single business centre in Brussels. Met with strong demand, Dixon quickly developed a global network of fully equipped, furnished and staffed business centres. Clients could use these work places on terms that met their unique needs.

“Today, more than half of the Fortune 500 companies, along with thousands of small- and medium-sized companies, are outsourcing some part of their office requirements to Regus. As a result, companies have reduced their facility costs, increased employee productivity, and are more focused on their core businesses,“ says a Regus company spokesperson.

High-end technology
Hong Kong-based Home2home also spotted a classic gap in the market and set about filling it, says Edward Cabrelli, the company’s director of operations. As the name suggests, this company was originally conceived solely as a serviced apartment operation. “We realised, based on the comments from our apartment guests, that there was a void in the market for high-quality and efficient serviced work spaces. We started to diversify and now provide prospective clients with whole blocks of fully integrated, networked office units.”

Unlike most other serviced business centres, Home2home’s office units are all in buildings that are solely owned and managed by the company. “We do not believe in renting units and subletting them to our clients,” says Cabrelli.

This is a client-driven business and Cabrelli says that recently there has been a clear trend towards very high-end technological demands. “It is quickly becoming a ‘given’ that fixed public IP addresses will be available as well as round-the-clock IT support.

“We have also noticed clients prefer a change away from the more traditional serviced office setup. Instead, they find it more desirable to work in a clean-cut, modern workspace that they can use as a blank canvas. Coupled with this we are now seeing a move towards office space being engineered as a place that is ‘fun’ to work in. More importantly this view isn’t confined to the younger, more ‘artsy’ industries, it is embraced by clients in all sectors.

“At the same time we see a totally new meaning to the phrase ‘flexi-time’. Our clients have access to their offices 24 hours a day, seven days a week and it is not unheard-of to have our clients closing deals at 5am on a Sunday.”

Along with an increasingly nomadic business lifestyle that makes its own demands on space and facilities, Cabrelli says businesses are viewing the serviced office sector in a new way.

“Serviced offices are no longer exclusively a short-term option. With the right facilities and setup they are now viable long-term options for new-start businesses and those that are already established. We are seeing well-established Hong Kong-based companies switch to our serviced offices on long-term leases. To target these clients and also remain desirable to more traditional serviced office occupants, we offer tailor-made leases from just one month up to 24 months to ensure that we are here for the market today and for the future.”

No hidden fees
For $50 per square foot, clients receive a fully self-contained office without extra hidden fees or so-called optional upgrades. Use of meeting rooms, a daily cleaning service, onsite IT support and round-the-clock security are all standard as well as a 24-hour self-service laundry and lounge area. Office size ranges from 700 sq ft to 1,400 sq ft. Every 700 sq ft unit contains seven phone lines, one fax line, Wi-fi and plug-in broadband internet, independent lighting, separate air conditioning units and a full bathroom.

“We provide clients with everything they need to do business, apart from the actual business!” laughs Cabrelli. “Some clients bring in their own furniture, which enables us to cater to almost any industry. The market is definitely expanding. But it is evolving even faster and the most successful companies will be the most flexible. If you are the best then even the sky is not the limit!”