hong kong annual occupier survey report 2018...against relocation relocation from cbd to emerging...

22
HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018 6 NOVEMBER 2018 COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018 Zac Tang Assistant Manager | Research | Hong Kong +852 2822 0578 [email protected] Daniel Shih Senior Director | Research | Hong Kong +852 2822 0654 [email protected]

Upload: others

Post on 12-Jul-2020

1 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

HONG KONG ANNUAL OCCUPIERSURVEY REPORT 20186 NOVEMBER 2018

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

Zac TangAssistant Manager | Research | Hong

Kong+852 2822 0578

[email protected]

Daniel ShihSenior Director | Research | Hong Kong

+852 2822 [email protected]

Page 2: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

2

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

Business sentiment: While the US-China trade war continues to be headline news, it has yet to make an impact on Hong Kong’s business environment. Further to that, 90% of our survey respondents have either a positive or stable outlook.

Office spaces: Office square footage is expected to increase in the next three years with only 6% of companies looking to downsize.

Workplace strategies: Companies have shown stronger interest in alternative workplace strategies, such as Activity-Based Working (ABW), to enhance their brand image and to attract younger generations of talent.

Employee experience: Hong Kong lags behind other major cities in investing in new technologies (both hardware and software) and staff wellness in the workplace –key elements to attract and retain talent.

Flexible terms: Flexibility is key in today’s fast changing business environments and uncertainties. Highly flexible tenancy agreements allow companies to resize or surrender space more easily; landlords should not only consider these, but also enhance their buildings and incorporate flexible workspaces to retain and attract tenants.

Summary & Recommendations

Daniel ShihSenior DirectorResearch | Hong Kong

Fiona NganHead of Office Services | Hong Kong

90%

of respondents are either positive or stable about their business outlook, and 38% of respondents expect an increase in their office demand in the coming three years.

Colliers International’s Hong Kong Occupier Survey 2018 seeks to understand occupiers’ real estate strategies in the city’s office market. Occupiers surveyed for the report included global companies from several industries, including: banking and finance, information and technology, sourcing and trading as well as beauty, medical, health and wellness.

65%

of banking and financial companies prefer the CBD, which will remain the premium office market for Hong Kong.

36%

of respondents plan for Activity-Based Working in their future office. The banking and finance sector was the leading sector in adopting flexible workplace solutions.

54%

of respondents have employee wellness programmes for their staff; however, the offerings are stil l very basic. Awareness about wellness in the workplace is on the rise, and more investment is needed.

Page 3: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

3

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

Banking and Finance

Retail and Wholesale

Sourcing and Trading

Real Estate and Construction

Professional and Business

Services

32% 10% 10% 8% 8%

Hong Kong

Mainland ChinaRest of AsiaNorth America

Europe

Oceania

9% 21%

42%

9%

2%

17%

PROFILE OF 295 RESPONDENTSOrigins of Participated Companies

Distribution of Industry

Page 4: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

4

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

EXECUTIVE SUMMARY

This is the second Annual Occupier Survey carried out by Colliers International. We would like to take this opportunity to express our gratitude to all respondents.

This year’s survey highlights a few key findings reflecting the challenges companies are facing in the current market conditions:

Flexibility

Results show that the escalating trade tension between the US and China have not affected the business outlook and demand for office space, with the exception of mainland companies. However, with the currently high rental costs, companies need to be agile to thrive in fast changing business situations. We recommend that companies incorporate ‘flexible workspace’ as part of their real estate solution to achieve flexibility and cost savings.

We advise landlords to offer greater flexibility in tenancy agreements, while incorporating flexible workspaces to better accommodate requirements by tenants within their portfolio.

Leadership

Employees are ready for workplace transformation, as 36% of respondents welcome changes brought on by Activity-Based Working (ABW). However, from Colliers’ own experience and as Hong Kong embraces the transformation to a more flexible workspace environment, ABW requires more than investing in a nice, new and bright workspace. Leadership and top management are key to facilitating cultural and behavioral changes.

Employee Experience

More companies have picked up the sound bites about smart offices and staff wellness. However, not enough attention has been given to enhancing the staff experience at work when making new investments in technology or improving the facilities. We recommend that higher priority be given to facilitating staff engagement, collaboration and well-being.

Overall, we expect Hong Kong’s office market to remain constrained by high costs in 2019, prompting both occupiers and landlords to be more flexible in this tight market.

Fiona Ngan Daniel ShihHead of Office Leasing Head of Research

Page 5: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

Have economic and geo-political uncertainties affected the business outlook and office space requirements?

“Only 6% of our respondents have a negative business

outlook for 2019, 38% are considering an office expansion”

Page 6: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

6

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

FIRE

Professional Services

Technology, Media and Entertainment

Sourcing and Trading

55%

33%

23%

16%

25%

15%

17%

6%

17%

3%

5%

4%

8%

9%

4%

8%

14%

4%

13%

23%

38%

2%

4%

8%

24%

2%

15%

3%

Central/Admiralty Sheung Wan/Wan Chai/Causeway Bay

Island East Other Hong Kong Island districts

Tsim Sha Tsui Kowloon East

Other Kowloon districts New Territories

CBD HOLDS ITS OWN AGAINST RELOCATIONRelocation from CBD to emerging new business districts is one of the leading events in Hong Kong’s office leasing market. However, our survey shows that CBD stil l holds its ground for banking, finance and professional companies, as it offers business efficiency that is unmatched by other emerging districts.

On the other hand, sourcing and trading companies have basically left the CBD. As the on-going US-China trade dispute will l ikely create significant disruptions to the existing global supply chain, we expect sourcing and trading companies to be more agile with their office requirements.

Hong Kong has been seeing a revival in the number of local start-ups in the IT, technology, and media and entertainment sectors – the new economy sectors. With the exception of fintech companies, which want to be close to their clients in CBD, new start-ups are l ikely to establish a permanent presence in decentralised districts after leaving incubators and accelerators.

Current office locations

Hong Kong Island Kowloon

Page 7: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

7

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

NEW ECONOMY TAKING THE LEADThe business outlook of survey respondents has not been affected by rising interest rates and the US-China trade dispute. Demand for office space is very positive with only 6% of respondents planning to reduce their office space.

Compared to traditional economic sectors, namely banking, finance, professional services, and trade and logistics, sectors fr om the new economy have a much more bullish outlook on the general business climate and their expectations for expanding their offices – more than 50% of companies in the new economy plan to expand their square footage in the coming years.

Colliers’ recent Top Locations in Asia (Technology) report highlights Hong Kong’s possible rise as a tech centre; benefiting from its proximity to South China, a recent expansion by big technology groups, and surging investment in fintech.

Medical and beauty is also a new economy industry taking the lead, in our latest report, Tapping into the Beauty Pulse, we noticed that landlords have started to provide additional medical floors in office buildings in Causeway Bay and Tsim Sha Tsui.

Business outlook in the coming 12 months Expected office requirements in the coming three yearsBusiness outlook in the coming 12 months

35%

46%

11%8%

FIRE Industry

44%

44%

4%8%

Professional and Legal Services

7%

72%

14%7%

Shipping and Logistics

92%

8%

Beauty, Medical, Health or Wellness

50%

34%

8%8%

Information and Communications

56%38%

6%

Technology, Media and Entertainment

38%

47%

8%7%

OverallExpand Same

Contract Uncertain

NEW

EC

ON

OM

Y

38%

38%

36%

7%

44%

42%

75%

3%

2%

15%

6%

10%

7%

44%

59%

50%

23%

50%

60%

33%

Overall

FIRE Industry

Professional and Legal Services

Shipping and Logistics

Technology, Media and Entertainment

Information and Communications

Beauty, Medical, Health or Wellness

2018 2017

OLD

EC

ON

OM

Y

Contract Expand

Page 8: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

8

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

MAINLAND FIRMS LOSING MOMENTUMCompared to 2017, office demand from Mainland companies has softened due to the changing macro-economic context, the tightening regulations on overseas investment, and China’s slowing economic growth. As a result, we expect the Central office market to face more headwinds with a softening demand by Mainland companies in 2019.

However, the overall Central market should not experience a major decline as the mainstream monthly rents for MNCs and banks have been within the range of HKD150-170 (USD19-22) per sq ft. We expect this range to be sustainable for Grade A office rents in Central.

The growth of companies from Asian emerging markets such as India, Indonesia and the Philippines1 is also likely to stagger, making an expansion of their Hong Kong offices unlikely.

On the other hand, American companies are stil l optimistic about the coming three years, given the positive economic outlook in the US2.

Office requirements in the coming three years by company domicile

1 Bloomberg, Emerging Asia feels pain as fed tightening ripples across region2 Reuters, Powell says US outlook remarkably positive

49%

31%

12%

52%37%

38%

38% 70%

33%53%

5%

4%

16% 11%10%8%

27%

2% 4%

Hong Kong Mainland China Asia North America Europe

Expand Same Contract Uncertain

40%

57%

35%48%

33%

43%

35%

39%

33%

4%

17%

43%

27%12%

33%

Hong Kong Mainland China Asia North America Europe

Expand Same Contract Uncertain

2018

2017

Page 9: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

9

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

LEASING FLEXIBILITY IS IN DEMANDRegardless of expansion or downsizing, companies' prefer to remain in the same building. Staff retention as well as high reinstatement and renovation costs, make relocation an expensive option, even for low cost buildings.

Facing a fast changing business environment, companies are becoming more agile by having to review and restructure their office requirements more frequently. Moving forward, flexible workspace will be an integral part of their office requirements and real estate strategy.

In H1 2018, net take-up by flexible workspace operators was about 600,000 sq ft (55,740 sq m), accounting for 40% of the total new space leased. The upswing in operator take-up is underpinned by a growing number of corporate occupiers adopting flexible workspace as part of their real estate strategy. One of the strategies being deployed is the flex & core1 model, which incorporates flexible workspace in addition to traditional leases.

The proliferation of flexible workspaces throughout Hong Kong make them highly accessible to occupiers in the city, these spaces could be a win-win solution for companies who are looking for flexibility and cost savings.

Preferences for office expansion and contraction

Expansion Contraction

Staying at the same building 48% 42%

Office restacking 22% 33%

Relocation 43% 25%

Pre-commit new buildings 8% 4%

Consolidation 8% 29%

Flexible workspaces (Business centre, co-working)

17% 4%

Not applicable 7% 0%

Note: Percentages refer to the number of respondents considering each of the listed options and planning to expand or contract their office in the coming three years.

1 The concept of the flex-core leasing model is that an occupier takes space on a long-term deal for their core operations together with an agreement with a flexible workspace operator to accommodate fluctuations in headcount.

Page 10: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

10

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

CBD FRINGE IN TRANSITIONCBD fringe areas, namely Sheung Wan, Wan Chai and Causeway Bay, are popular relocation destinations from core CBD; and have fluid markets in terms of tenants moving in and out of the area. However, more than 50% of the companies in CBD fringe areas are considering moving to other districts.

Among the three sub-districts, we believe Wan Chai offers the most opportunity for tenants looking for large floor plates, affordable rents, outstanding accessibility and good business amenities.

In the next decade, we expect Wan Chai to remain popular given the completion of the upcoming Shatin to Central Link which will add five new MTR stations to the area. Future new supply at Wan Chai North, following the relocation of Government office buildings, should further enhance the district.

Landlords in the fringe CBDs should consider renovating old buildings in order to stay competitive, this could include items such as more communal spaces, a sky roof, conference rooms and retail kiosks within the building.

Preferred destination for respondents considering relocation

“Over 50% of companies in the CBD Fringe considermoving to other districts.”

Note: Percentages on the map on the right refer to the number of total respondents from each particular district.

50%

5%

5%

5%

21%

5%

11%

5%

11%

5%

Move out from CBD fringe

IIsland East

Tsim Sha Tsui

Kowloon / New Territories

Kowloon East

Wong Chuk Hang

CBD

42%(same district

relocation)

CBD Fringe

Tsim Sha Tsui

Island EastCBD

CBD Fringe

Wong Chuk Hang

Move into CBD fringe

CBD (Central and Admiralty)

CBD Fringe (Sheung Wan, Wan Chai, Causeway bay)

Is land East/Ts im Sha Tsui

Wong Chuk Hang/Kowloon East

Kowloon/New Terri tories

DecentraliseCentralise

42%(same district

relocation)

Page 11: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

Do you expect any changes in your workplace environment?

“36% of our respondents are ready to adopt an Activity-

Based Working approach for their next office.”

Page 12: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

12

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

EMPLOYEES ENTHUSIASTIC FOR WORKPLACE TRANSFORMATIONHong Kong’s offices are stil l dominated by traditional office layouts. Apart from occupiers looking for more flexible lease terms, the adoption of a more flexible workplace such as Activity-Based Working (ABW) has only started to be discussed. ABW provides choice through a variety of working environments, enhancing staffs’ productivity, experience and engagement – which has become essential for companies to attract talent.

Our survey results revealed that 36% of respondents chose ABW as the most desirable future workplace. When adopting ABW, we highly advise top management to engage their staff before and during the transformation process, as it aims to change the culture, staff behaviours, digital capabilities and work flexibility, among other factors.

Current workplace approaches and future plans

62%

48%

16%

13%

9%

18%

25%

36%

26%

23%

Future

Current

Fixed desk - Open plan

Activi ty Based Working – Open plan with a variety of workspace choices

Fixed desk - enclosedoffice and/or cubicle

Hot Desking - Open plan

Core-flex (leverage onflexible workspace)

MEMBERS ONLY

Note: The concept of the flex-core leasing model is for an occupier to take space on a long-term deal for their core operations together with an agreement with a flexible workspace operator to accommodate fluctuations in headcount.

Flex-core (leverage on flexible workspace)

Page 13: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

13

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

SMART OFFICE: FOCUS ON STAFF EXPERIENCEThe deployment of new technological hardware and software is key to increasing productivity and creating a more flexible workplace. However, there is a lack of awareness and knowledge on how technology can enhance the employee working experience.

We found that companies are more will ing to invest in technologies such as an intranet, HR online processes, and virtual meeting tools to smooth business operations; but these tools are already found in most MNCs and large companies.

Survey result also show that many Hong Kong companies have limited interests in deploying new software and digital platforms to encourage staff engagement, collaboration and communication. An unfortunate situation since these new software options and tools can improve the employee experience and productivity, and drive collaboration, communication and flexibility at work.

We encourage companies to explore the benefits of devoting resources into new technologies to

create a smart working environment, making

the workplace more intell igent and adaptable to company workflows.

Current digital adoption and future plans

58%

52%

38%

37%

34%

31%

26%

23%

8%

12%

14%

13%

13%

14%

16%

13%

Current Plans to deployIntranet

Virtual Meeting Tools E.g.: WebEx, Zoom, GoToMeeting, Skype for Business

Digital Facility ManagementE.g.: Room booking system, Occupancy sensors

On-line Staff Engagement or Social Platform

External Social Networks

Digital Data ManagementE.g.: Hubspot, Salesforce DMP

HR Online ProcessE.g.: e-learning, e-expenses, e-leave

Enterprise Social Media ToolsE.g.: Slack, Yammer, Tinypulse

+

Page 14: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

Do you have an “employee wellness programme” in place?

“54% of our respondents currently have an “employee

wellness programme” in place.”

Page 15: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

15

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

WORKPLACE WELLNESS: EARLY DAYSThe past few years have seen a shift in attitudes, with more concern towards wellness in the workplace. As it becomes more mainstream, companies are introducing wellness concepts into design, policies and operations to meet the needs and requirements of the workforce –particularly millennials who expect health and wellness to be an integral part of the way they work.

As reported by Urban Land Magazine, implementing a successful wellness program can increase productivity by 1%, or reduce turnover by 1% per year. This can save a 150-person company HKD1.2-1.6 mill ion (USD150,000-200,000) or more per year in recruiting and training new employees.1

We recommend companies plan and integrate wellness into their business strategies and real estate facil ities. Also to formulate a comprehensive wellness programme that includes initiatives such as increased greenery and improved nourishment through staff cafes.

Whilst on-site fitness and physical wellbeing are currently not priorities, market sentiment indicates that movement within the office space, better ergonomics, and flexible working arrangements will be of greater importance.

Wellness programs currently in place

1 ULI, Making the case for healthier buildings

Flexible

working hours

46%

Subs idized fitness plans (e.g. gym membership)

24%

Healthy

snacks

54%

Office plants

40%

On-s ite fi tness activi ties (e.g. yoga class)

17%

Preventive care

(e.g. Health checks, physicals, flu shots, vaccinations)

51%

Work from home

25%

Smoking cessation program

7%

Page 16: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

16

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

NEW BUILDING SPECIFICATIONS TO PROMOTE WELLNESS Due to poor air quality in the region and the increasing awareness of the associated health issues, we are seeing a major focus on improving office indoor air quality. Increased ventilation and excellent air quality can improve cognitive performance, reduce the incidence of health problems and increase employee satisfaction within the workplace.

Natural l ight is a also a key consideration when selecting space and planning an office layout. There is a strong relationship between exposure to daylight in the workplace and office workers' sleep, activity patterns and quality of l ife. As such, some companies are ensuring workstations are within close proximity of natural l ight, in part by moving meeting rooms to the center of the floor. Where natural l ight is l imited, companies are using artificial l ighting to supplement and mimic the effects of natural daylight.

Buildings with high wellness standards and certifications are l ikely to be more desirable as companies focus on wellness as a driver of employee engagement, happiness and productivity.

Wellness priorities for companies considering relocation

76%

63%

43%

22%

21%

Good air quality / Air purification

Access to natural light for workstations

Gym and recreational space – on s ite or in close proximity

Office concierge services

Commute facilities (changing room/ bike racks / locker facilities)

Page 17: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

Will we see a new wave of workplace transformation in the banking and financial sector?

“High priority on wellness, and a gradual shifting towards flexible workplace.”

Page 18: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

18

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

SHIFTING TOWARDS A NEW WORKPLACEDue to the disposition of the banking and financial industry – the hierarchical nature combined with a highly regulatory environment, fixed desks and enclosed offices, front-line employees that tend to have individualized desk set ups, and paper-based operations; open plan or activity-based working styles are not common, with only few banks starting to adopt them.

For example, DBS Hong Kong is scheduled to move to new office premises at Two Harbour Square in Kwun Tong in Q4 2018, where they are transforming seven floors into an interactive community workspace with community facil ities, including social hubs, nursing rooms, meeting rooms with panoramic harbour views, and quiet areas for greater productivity and efficiency. The move is planned to benefit the bank’s back office support, including the technology and operations departments.1

The high percentage of companies that expect to adopt ABW or open plan offices are mainly providing it for supporting departments such as marketing, communications and HR.

Banking and finance: Workplace approaches

1 DBS Newsroom, DBS Hong Kong leases new DBS hub

77%

52%

14%

8%

4%

6%

12%

28%

14%

11%

Current Expected change

Fixed desk - Open plan

Activi ty Based Working – Open plan with a variety of workspace choices

Fixed desk enclosed office and/or cubicle

Hot Desking - Open plan

Core-flex (leverage on flexible workspace)

MEMBERS ONLY

Page 19: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

19

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

DIGITALISATION TO SAVE RENTAL COSTSThe banking and finance sector has been shifting to an increasingly digital workplace, enhancing their customer’s and employee’s experience, and improving their management. For example, Standard Chartered Bank has deployed iPhones to employees worldwide, is developing in-house iPhone applications, and is rapidly expanding their internal iPad use.1

In 2018, JP Morgan renovated a floor of its office in Central to enable more technology and create a modern workplace that fits the requirements of new generations. By combining its banking division from 1.5 floors to one, the bank was able to save up to 30% in rental costs.2

Tenants from the banking and finance sector tend to not use social media services due to the sensitive nature of the information they hold, because of this instant messaging tools such as Slack or Yammer are infrequent. Instead, companies opt to create their own internal versions or use Bloomberg-type terminals. However, virtual meeting tools are becoming more prevalent to increase efficiency between employees.

Banking and finance: Digital features

1 Deloitte, The digital workplace

2 SCMP, JP Morgan creates new open-floor storey

Current Plans to deployIntranet

Virtual Meeting Tools E.g.: WebEx, Zoom, GoToMeeting, Skype for Business

Digital Facility ManagementE.g.: Room booking system, Occupancy sensors

On-line Staff Engagement or Social Platform

External Social Networks

Digital Data ManagementE.g.: Hubspot, Salesforce DMP

HR Online ProcessE.g.: e-learning, e-expenses, e-leave

Enterprise Social Media ToolsE.g.: Slack, Yammer, Tinypulse

+

58%

47%

26%

35%

42%

27%

16%

23%

0%

3%

14%

6%

8%

11%

14%

4%

Page 20: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

20

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

EMPLOYEE HEALTH REMAINS A PRIORITYBanking and finance tenants are offering better wellness incentives to employees than any other industry. These are usually policies and facilities or amenities that do not take up large square footage, due to high rental costs. Offices in decentralized locations do offer more space to integrate expanded wellness facilities.

A stand out example is Citi Tower at One Bay East in Kowloon East, which in February 2018 was awarded the WELL Certification Silver Level – which focuses on seven wellness categories of building performance: Air, Water, Nourishment, Light, Fitness, Comfort and Mind - by the International WELL Building Institute.1

The development aims to embrace wellness in business, with employee health and well -being as top priorities. Besides an energising environment for employees, it has also become an aspirational space for clients.

Banking and finance: Wellness programs currently in place

1 Citibank, Citi Tower awarded WELL silver certification

75%

68%

45%

39%

19%

41%

5%

4%

Banking and Finance Overall

On-s ite fi tness activi ties (e.g. yoga class)

Smoking cessation program

Flexible working hours

Subs idized fitness plans

(e.g. gym membership)

Healthy snacks

Adding office plants

Preventive care (e.g. Health checks, physicals,

flu shots, vaccinations)

Working at home options

Page 21: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

21

COLLIERS RADAR OFFICE | HONG KONG | 6 NOVEMBER 2018

INCREASING EFFICIENCY THROUGH WELLNESSThe high-paced, intense nature of the banking and finance industry means that office settings have to be conducive to energetic environments. This means bright spaces with high air quality and air cleanliness are of high importance.

Access to gyms and recreational spaces, within close proximity, is also important due to the strenuous nature of the industry on the employee.

Gyms have become the third highest priority for the banking and finance sector, higher than the average across survey respondents. Stil l , banks prefer a gym near their office rather than setting up a gym on-site, as high office rents require them to be as efficient as possible in terms of space util isation.

Banking and finance: Wellness facilities for the next office location

Good air quality / Air purification

Access to natural light for workstations

Gym and recreational space – on s ite or in close proximity

Office concierge services

Commute facilities (changing room/ bike racks / locker facilities)

84%

71%

58%

16%

13%

Page 22: HONG KONG ANNUAL OCCUPIER SURVEY REPORT 2018...AGAINST RELOCATION Relocation from CBD to emerging new business ... tightening regulations on overseas investment, and hina’s slowing

About Colliers International Group Inc.

Colliers Internation al Group Inc. (NASDAQ: CIGI) (TSX : CIGI) is a top tier global real estate servic es and investment man agement co mpany op erating in 69 countries with a workforce of mo re than 13,000 professionals.Colliers is the f astest-gro wing publicly listed glob al real estate servic es and investment management comp any, with 2017 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising cultureand significant employee o wnership and control, Col liers professionals provide a full range of serv ices to real estate occupiers, o wners and investors wo rldwid e, and through its investment man agement servicesplatform, has more than $25 billion of assets under management from the world’s most respected institutional real estate investors.

Colliers professionals think different ly, share great ideas and off er thoughtful and innovat ive advice to accelerate the success of its cl ients. Colliers h as been ranked among the top 100 glob al outsourcin g firms by the

Intern ational Association of Outsourcing Prof essionals for 13 consecutive years, more th an any o ther real estate s ervic es firm. Co lliers is ranked th e numb er on e prop erty manager in the world by Commercial PropertyExecutive for two years in a row.

Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more than 20% annualized returns for shareholders, over more than 20 years.

For the latest news from Colliers, visit our website or follow us on

Copyright © 2018 Colliers International

The information contain ed herein has b een obtained f rom sources d eemed reliable. While every reasonable effort h as been mad e to ensure its accurac y, we c annot gu arantee it. No responsibility is assumed for anyinaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Primary Authors:

Daniel ShihSenior Director | Research | Hong Kong+852 2822 [email protected]

Zac TangAssistant Manager | Research | Hong Kong+852 2822 [email protected]

Contributors:

Truddy CheungAssociate Director | Workplace Solutions| North Asia+852 2822 [email protected]

Victoria GilbertAssociate Director | Wellness Consulting | Asia+852 2822 [email protected]

Niall RowarkManager | Office Services | Hong Kong+852 2822 [email protected]

For further information, please contact:

Fiona NganHead of Office Services| Hong Kong+852 2822 [email protected]