One aspect of COVID-19’s impact on the flexible workspace is that trends in development have been accelerated in Hong Kong. “Companies who want their team in flexible workspaces don’t necessarily want to be signing new leases because of the many uncertainties for the future,” says Constant Tedder, founder of the Hive. “Secondly, people do want to have reduced commute times, they want to be closer to where they live. That sort of lifestyle that is coming from the demands of their employees and teams, they want a better work experience, which they can have in spaces like ours.”
The Hive is one of the first to start offering flexible workspaces in Hong Kong. They are opening their first Kowloon-based office in Lai Chi Kok after having a dedicated portfolio of offices along the Hong Kong Island strip. “We are really excited about it. It’s the first base that we are going to be operating in partnership with the landlord [under] a management contract,” says founder Constant Tedder. “This is something that we really see emerging in all of our markets, particularly Singapore, Australia and Thailand.”
Hong Kong is slow in the uptake of the management contract model, due in part to the traditional mentality coming forth from - mostly - family-based landlords who often operate on the cautious side.
This management contract is an agreement where the Hive runs a space by helping the landlords to design, fit it out and operate for them. “It is a completely new model for them. The landlord gets the benefit of any profits that flow from that space. So it’s a different type of model [from a lease].” This model of operation is already happening in the US, Europe and Australia where commercial landlords are seeing huge benefits to this kind of partnership.
Another strategy the Hive has adopted is to not overly rely on one set of client base. “Our operations have been able to survive really well through this period, because our customer mix from SMEs, growth companies to freelancers, has been quite flexible and adaptable to this [pandemic] situation.”
Larger corporations have pulled or shrunk their teams quickly, and operators dependent on these teams have found their spaces empty quickly from February this year. “We were able to retain all of our members, and we were able to [momentarily] obtain occupancy through this crisis.” Tedder accredits this to their mixed model and range of sizes [of corporations] they are catering for. Their Entreprise Pass allows customers to allocate to team members who are working remotely, or who don't have an office space in their headquarters.
The Hive also offers support in another way. “As an entrepreneur, I’m always interested in new businesses, and I don’t have the time to run so many companies,” Bedder shares. “So it’s great to be able to potentially invest in other great entrepreneurs and in their businesses.” The founder achieves this through another of his ventures, Honey Capital, which works closely with their portfolio companies to drive growth by leveraging existing networks and sharing experiences.
One market that is drawing a lot of attention now is e-commerce. “With work from home, Software as a Service (SaaS) such as Zoom is a classic example [of technology that grew in COVID-19 times], but there is also direct to consumer subscription e-commerce. These are models that are rapidly emerging. It has been lagging in Hong Kong but it is actually growing very fast now with new delivery services. So we see a lot of growth there. You might think e-commerce is sort of done but actually it’s not. And I think there are going to be a lot of exciting startups in this area. Those pieces of the puzzle are now coming.”