Walking around Central at lunchtime, you will experience bustling streets and a sense of urgency as friends, colleagues and clients meet for lunch. With the exception of mandatory face masks, you could be forgiven for not realising that Hong Kong has been battling Covid-19 for the past twenty months.
The future of work has become a hot topic of global debate. I was recently reminded of my London commute some 16 years ago. The epic 90-minute journey from my spacious home in Kent to the West End of London involved squeezing onto an overcrowded train, navigating the chaos of Victoria station, and standing patiently in line to catch a bus in London’s ubiquitous drizzle. There was a genuine sense of relief when I arrived at my desk.
Conversely, my Hong Kong commute, from my much smaller apartment, is efficient, short, fully air-conditioned and provides seated comfort to read the morning news and check emails.
What these different commutes illustrate is that how and where we work in the future will vary greatly depending on where we live. Hong Kong’s unique urban attributes – its limited living space, short commutes and exceptional public transport networks – are likely to result in an evolution of the workplace.
The real estate head of a multinational banking and finance group recently said that his firm’s strategy before the pandemic was to increase flexible working by promoting collaboration in the office and seeing beyond the 9-5 working day.
During the pandemic, business leaders took the decision to allow colleagues to work from home. As we adjust to the new norm, many are bringing colleagues back to the office due to a belief that the office environs are where business gets done.
While more than 90 per cent of our tenants are fully back in the office, it would be wrong to suggest that businesses are returning to the pre-pandemic status quo. The evolution of the workplace under way before the pandemic has been accelerated.
Workplace strategies will differ by city, but also by industry. We don’t expect a one-size-fits-all approach.
However, a common theme we are hearing is that the office will take on added importance in the new hybrid working model. While remote working has proven to be effective in keeping the engines of commerce running, tenants have told us that the office is integral to the three “Cs” of collaboration, coaching and culture.
A CBRE survey of Asian occupiers in May and June this year attests to this, with 83 per cent of respondents saying that workplaces should drive collaboration and productivity. There can be no substitute for junior colleagues learning from their leaders in a face-to-face setting.
Additionally, for many companies, the office location, environment and experience are part of the fabric that defines their culture.
For sectors such as banking, legal and financial services, which make up 80 per cent of our tenant base, being physically on-site is an operational imperative. Security and confidentiality are business critical.
At Hongkong Land, we have always innovated to meet the evolving needs of tenants. But the pace of change is gathering momentum, especially in the areas of digital, wellness and lifestyle, and space flexibility.
Starting with proptech, demand for touchless technologies has taken off. To give an example, our Centricity App, which brings together our tenant driven services and amenities to smartphones, enables tenants’ employees to adjust the temperature of a room without touching wall-mounted devices.
Cumbersome thermal screenings conducted by security guards are likely to be replaced with smart turnstiles that can record temperatures remotely. In Jardine House and York House, our new turnstiles do just that.
Wellness pods, healthier in-house food options and lifestyle options such as on-site meditation and yoga classes will become the norm. Office layouts will be more collaborative and comfortable. Tenants’ employees will have greater access to a diverse range of food and beverage, shopping and lifestyle options under one roof. In essence, offices will have more of the comforts of home as opposed to the home being the new office.
Increasing portfolio flexibility will become a greater feature, with CBRE data from July 2021 finding that one-third of Asian occupiers are planning to increase their use of flexible space.
The primary result of all of this is that while the office will change, it will play a central role in a new hybrid working world, all the more so in Hong Kong thanks to its unique characteristics.
Further, we believe businesses’ greater emphasis on quality and location as opposed to cost will spur demand in Central. This is supported by data from JLL that shows leasing volumes in the district have doubled in the first half of 2021. And by our own vacancy levels, which have reduced to 5.5 per cent from 5.9 per cent on a committed basis since the end of 2020, ahead of JLL’s August figure of 7.7 per cent for the Central grade A office market in Hong Kong.
While no one can predict what the future will hold with absolute certainty, I believe that the evolution that is now under way will lead to more inspiring and aspirational workplaces for the next generation of professionals.
Neil Anderson is director and head of office of commercial property Hong Kong at Hongkong LandInternet Explorer Channel Network