, Asia’s second largest interior design firm providing design and build services in the corporate workplace sector, has announced the expansion of its operations in Hong Kong, and the appointment of Tom Banwell as Managing Director of Workplace, North Asia.
According to Space Matrix Founder, Shagufta Anurag, the opening of a Hong Kong office demonstrates the company’s “strong commitment to the region.” He adds that the “company's mission is to be the market leader in workplace design and execution in Asia, both in revenue and thought leadership.”
Just last year alone, Space Matrix was responsible for delivering several significant projects in Hong Kong, including Vodafone, Varian Medical, Gartner, Rolls-Royce and Brocade.
Prior to joining Space Matrix, Banwell served as Managing Director of RHK Design in Hong Kong for five years, and has over 14 years of working experience in both the UK and Asia markets. Here, he offers further insight into the company’s regional plans.
Qn: Why was the decision made to open the Hong Kong office?
We are the market leader in South Asia / India and we want to now create the same opportunity to lead the North Asia / China market. With Hong Kong being the entrepot to China and the region, it was only logical that Hong Kong became the initial focus for growth in the region.
Hong Kong is a major primary commercial real estate market in itself. [It] was previously viewed as heavily saturated with existing operators. [While this is] still true, there has been a tectonic change in recent months with some very well established design firms leaving the market, and so a perfect storm exists for a new market entrant – one with its loyal client base, unique service offering, existing operational structure and aggressive growth strategy – to take advantage of. There is a strong desire for a new, dynamic, well run and financially strong design firm, with the Asia wide reach of Space Matrix, to enter the Hong Kong and North Asia market.
Qn: Can you describe the landscape for workplace design in Hong Kong?
The Central leasing market is incredibly active with the greatest net take up in Central in the last three years with vacancy contracting from 3.7 to 2.5 per cent between February and April alone. Central vacancy is now at its lowest level since November 2008. Supply has tightened. From the beginning of the year to date the market recorded a 2.3 per cent increase in Central rents and this will likely exceed January forecasts of +0-5 per cent over the year.
The effect this will have on workplace design in the core CBD market of Central in the short term is that many of our clients are looking at solidifying their real estate positions over the coming 6 to 12 months (if they have not already) – and the current workplace market reflects this. Everyone is very busy – from designers, to suppliers, to contractors – everyone! Going into next year the market will get very tight due to the lack of available space (the next large volume of new Grade A stock is not due to open until 2017/18). As such there will be an increase in restack work – and the ability to deliver intuitive long-term strategic workplace design will be crucial.
That said, many of our clients will be looking away from the CBD to locations such as Kowloon East – larger floor plates that are considerably more cost effective. Many technology, pharmaceutical, insurance and lifestyle clients will look at this location with increased interest.
Qn: Which do you see as key markets for greater expansion in North Asia and why?
Mainland China – obviously. Even with its well-documented supposed current financial woes, we still view having an increased presence and exposure to the mainland China market as crucial to our North Asia expansion plans. We are seeing a huge amount of activity from our clients in mainland China, not just in traditionally busy cities – Shanghai, Beijing and Shenzhen – but also in more peripheral locations such as Guangzhou, Wuhan and Qingdao. This is in large part being driven by our technology and pharmaceutical clients. Some of our tech clients have as many as 10 [over] projects opening up in Asia over the next few years, with China, Taiwan, Seoul and Japan [being] crucial growth areas – so the pipeline is phenomenally strong. As was just mentioned, many of our technology, pharmaceutical and investment clients are driving our expansion into Taipei, Seoul and Tokyo – [so there will be] incredibly exciting times ahead!