Hong Kong Co-Working Thrives as Singapore Struggles in Shutdown

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(Bloomberg) — On a recent Friday afternoon, dozens of people sat hunched over laptops at TheDesk’s six-story co-working space near Hong Kong’s Central business district, while others chatted over snacks at tables on the outdoor terrace — all of them ignoring government advice to work from home to stop the spread of coronavirus.
Whether escaping tiny apartments that aren’t conducive to work, or less concerned by a virus that has infected around 1,000 residents compared to more than 110,000 New Yorkers, the surprise result is co-working providers are thriving in Hong Kong, even as much of the world remains in lockdown.
TheDesk signed up 25% more new members in the first quarter versus the quarter prior, according to Chief Executive Officer Thomas Hui.
“I think it’s especially because the living environment in Hong Kong is very cramped, so there are a lot of disruptions to people working from home,” Hui said.
The Executive Centre, a high-end serviced-office operator, leased 33% more desk space in the first quarter in Hong Kong than a year earlier. Across its 135 mostly Asian centers, it grew about 9% in the first three months of the year.
Companies are looking to conserve cash and retain flexibility rather than take the risk of committing to a long-term office lease, said CEO Paul Salnikow.
“The idea of signing a fixed lease with fixed rental commitment over a three-year period, which is the minimum term in Hong Kong, and then investing in the fit-out, buying the furniture, is an over-investment for most companies,” he said.
It’s a different story in Singapore, where a government-ordered shutdown of all but essential services means most workers have to stay home, with employers facing hefty fines or even jail if they don’t enforce the measures.
In the early days of the outbreak, marketing manager Jivan Tulsani preferred to use a co-working office rather than work from home, free from the distractions of family members and Netflix.
“I have a very comfortable home, but it’s too comfortable for work,” said Tulsani. “It’s difficult for me to resist temptation to continue watching ‘Homeland’ once the afternoon slump kicks in.”
Now he has no choice. The lockdown has forced most co-working spaces to close, remaining accessible only to workers providing essential services such as banking, logistics and security. Tulsani’s knowledge-sharing platform doesn’t meet the criteria.
Singapore’s co-working spaces are popular with technology firms — from startups to multinational corporations — and the lockdown has hurt operators like JustCo. With all 17 of its centers closed to most workers, usage has declined, CEO Kong Wan Sing said, without providing figures.
Another problem JustCo. faces — not receiving rent relief from its landlords despite the government providing a property tax rebate to ease the strain on commercial tenants.
To help its clients through the crisis, JustCo — which is backed by Singapore’s sovereign wealth fund GIC Pte — unveiled its own multi-million dollar relief package. It will benefit more than 3,000 companies across its centers in eight cities including Singapore, Bangkok and Sydney.
As for WeWork, which made co-working hip before almost imploding last year, while it has closed its Indian offices indefinitely it remains open in Singapore, China and other Asia-Pacific nations.
In Australia, decals have been placed on floors and furniture to meet social-distancing guidelines. Pantries are operating with limited amenities, but the beer taps have been shut off.
In China, Hong Kong and Taiwan, all members must have their temperature checked and wear surgical masks or risk being refused entry, while pets are no longer allowed.
With the world’s biggest work-from-home experiment potentially reshaping the future role of the office, the test for the co-working industry will be to show it can provide a safe space for workers and companies seeking added flexibility.
“The challenge for a multinational is that if you put your staff at a co-working space, can you guarantee that you create a safe environment?” said Tim Armstrong, head of occupier services and commercial agency for Asia Pacific at Knight Frank. “There will be pressure on co-working groups to show that they have gone above and beyond with their health and safety as well, if they want to entice multinationals in.”
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