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Tips for Finding an Affordable Office Space in Hong Kong?

Updated: Jul 10


Finding affordable office space in Hong Kong can be a daunting task. The city, renowned for its skyscrapers and status as a global financial hub, consistently ranks among the most expensive office rental markets in the world. According to a 2022 Gordon James report, Hong Kong’s remains the priciest market with an average office rent that can exceed US$322 per square foot, a more expensive rate compared to other cities like London or Tokyo.

These high costs pose a significant challenge for small businesses, startups, and even established companies. Yet, despite the challenges, there are practical ways to navigate the office rental landscape and find space that fits your budget without compromising on quality or location.

In this guide, we'll provide you with strategic advices on how to find affordable office space in Hong Kong, covering key aspects like office space options, budgeting strategies, and negotiation tips.


Why are Hong Kong Offices so Expensive?

High Demand

The high demand for office space from diverse sectors such as finance, technology, and professional services drives up competition for prime locations. This influx of companies puts significant pressure on the commercial real estate market, particularly in premium districts like Central, Admiralty, Causeway Bay, Tsim Sha Tsui, but other less in-demand districts that tend to see their prices increases Quarry Bay, Sheung Wan, Kennedy Town, or Kwun Tong.

Limited Supply

Geographically constrained by its mountainous terrain and limited land reclamation, Hong Kong's office space market is heavily concentrated in a few key districts. While newer developments in emerging business hubs like Kowloon East and Wong Chuk Hang provide some relief, the overall supply of quality office space remains limited. The scarcity of land suitable for large-scale commercial projects makes it difficult for new developments to keep pace with demand.

Market Trends

Over the years, rental prices in Hong Kong have experienced significant inflation, particularly in core business districts. Office rents in Central District, for instance, have surged consistently due to a combination of sustained demand and scarce availability. Despite a temporary softening in rental rates during the pandemic, prices remain high. Even secondary districts such as Wan Chai and Tsim Sha Tsui are no longer considered "affordable" options, as they, too, have seen price increases.


What Office Space Options are Available in Hong Kong?

Traditional Leases

Traditional leases are the most common form of office space rental in Hong Kong, particularly for established companies with stable and predictable growth plans. These leases typically involve a long-term commitment and include significant upfront costs such as deposits and fit-out expenses. While traditional leases offer a high degree of stability, they can be financially restrictive, especially for small businesses and startups due to the high rental rates and the inflexibility of lease terms.


Serviced Offices

Serviced offices provide a flexible alternative to traditional leases, usually located in CBDs (central business districts). They offer fully furnished private offices with a wide range of shared facilities, including meeting rooms, reception services, high-speed internet, but also includes various expenses business owners might not have in mind at first, like coffees and teas, cleaning services, reception and mail handling. 

Serviced offices usually operate on a pay-as-you-use basis, allowing tenants to scale up or down as their needs change. The all-inclusive pricing model and flexible lease commitments make serviced offices a popular choice for startups and small businesses seeking cost-effective solutions, but can also be convenient for larger corporations.

Coworking Spaces

Coworking spaces have gained immense popularity in Hong Kong due to their affordability and collaborative environment. They offer flexible membership plans, ranging from hot desks, private desks, to private offices, and cater to freelancers, entrepreneurs, and larger teams. 

Members benefit from access to networking events, workshops, and a strong community of like-minded professionals. For businesses seeking a dynamic yet budget-friendly workspace, coworking spaces can be a valuable option.

How to set your office budget wisely?

Estimating Upfront Costs

The initial costs of securing office space in Hong Kong can be significant. Here’s what to expect:

  • Deposit: Usually, a deposit of two to three months' rent is required, refundable at the end of the lease term if no damages occur.

  • Fit-Out Costs: Traditional leases often come with bare-shell office spaces, requiring fit-outs that include flooring, partitions, furniture, cabling, painting and renovation in general. This can amount to hundreds of thousands of HKD.

  • Government Fees and Agency Commissions: Engaging a real estate agent for lease negotiation may incur additional fees, typically half of a monthly rent as agent fee and a government fee which varies on several factors. 

Recurring Costs

In addition to upfront expenses, it’s crucial to account for the recurring costs associated with maintaining an office space:

  • Rent: This is the most significant ongoing cost. Most office types, traditional offices, serviced offices and coworking spaces offer monthly billing cycles.

  • Utilities and Maintenance: Traditional leases often require tenants to pay for electricity, water, air conditioning, and cleaning services separately. For serviced offices and coworking spaces, these costs are typically included in the package.

  • Management Fees: Commercial buildings usually charge management fees covering security, maintenance, and public area cleaning. These fees vary based on building quality and location. For serviced offices and coworking spaces, these fees are typically included in the package.

Hidden Expenses

Some additional costs can catch you by surprise if not factored into your budget:

  • Internet and Communication: High-speed internet, phone lines, and IT support can add up if not included in the rental package.

  • Insurance: Office insurance for equipment and public liability is essential, especially for larger teams.

  • Parking and Transport: If your team requires parking spaces or needs frequent transport subsidies, consider these costs in your budget.


Where to Find Affordable Office Space in Hong Kong? Finding affordable office space in Hong Kong depends largely on the district. While Central remains the priciest, other areas offer more budget-friendly options without compromising too much on location and convenience.

Central

Central, the traditional heart of Hong Kong's business sector, remains the most prestigious and expensive business location. Prime office buildings like the International Finance Centre (IFC) and Exchange Square are home to multinational corporations and financial institutions. However, there are other options to rent nice offices in premium buildings. At Bela Offices, you can choose to rent your office in various cost-effective centres like One Chinachem Central, New World Tower, Dina House or The Chelsea, located in Sheung Wan, 5 minutes from Central.

Kowloon East

Kowloon East, particularly Kwun Tong and Kowloon Bay, is emerging as a major business hub. Once an industrial area, it’s now a focal point of the government's Energizing Kowloon East initiative. Modern Grade A office buildings like Two Harbour Square and One Kowloon offer high-quality spaces at rents significantly lower, but the district is less accessible if you leave on Hong Kong Island.

Tsim Sha Tsui

Tsim Sha Tsui (TST), located at the southern tip of Kowloon Peninsula, is known for its retail shops, hotels, and vibrant commercial activity. Office rents in TST are lower than in Central but still competitive due to the district's popularity. Modern office buildings like Mira Place offer prestigious office spaces at a fraction of the cost compared to Central. TST is ideal for businesses requiring frequent client interactions, thanks to its central location and excellent transport connectivity.


Wong Chuk Hang

Wong Chuk Hang, on the south side of Hong Kong Island, has transformed from an industrial area into a creative and business district. The opening of the South Island Line has made it accessible to Central District in just 10 minutes. New office developments like One Island South and The Factory offer affordable office space with modern amenities. Wong Chuk Hang attracts creative agencies, startups, and businesses seeking cost-effective alternatives to Central. However, the district is quite far should you or your staff live in Kowloon side.

Cyberport and Science Park

Cyberport and Science Park are two key government-backed technology hubs. Cyberport, located in Pok Fu Lam, and Science Park, in Sha Tin, focus on nurturing technology startups and established firms. Both offer affordable office space through government subsidies and incubation programmes. The vibrant tech community, access to state-of-the-art facilities, and networking opportunities make them attractive locations for tech companies.


How To Negotiate Office Rental Terms Effectively

Negotiating rental terms is an essential part of finding affordable office space in Hong Kong. With high rental rates across the city, understanding how to leverage negotiations can help you secure favourable terms and save on costs.

Importance of Market Research

Before entering negotiations, conduct thorough research on the office rental market:

  • Market Rates: Understand the going rates for different types of office spaces in various districts. For example, Grade A offices in Central District command higher rents than similar offices in Kowloon East.

  • Vacancy Rates: High vacancy rates can give you leverage in negotiations, as landlords may be more willing to offer discounts.

  • Comparable Leases: Compare your potential lease terms with similar offices in the area to ensure you're getting a fair deal.

Negotiating Lease Length and Renewal Terms

The length of your lease can significantly impact your overall rental costs:

  • Short vs. Long-Term Leases: Longer leases often provide stability but may lack flexibility. Aim for a lease length that balances stability and the potential need for expansion. In that sense, serviced office are great options for businesses.

  • Break Clauses: Negotiate for a break clause, which allows you to terminate the lease early under certain conditions. This can be valuable if your business needs change.

  • Renewal Terms: Ensure renewal terms are clearly stated and that rent increases are capped or linked to market rates.


Seeking Flexibility in Service Charges and Maintenance Costs

Service charges and maintenance costs can significantly add to your total rental expenses:

  • Service Charges: Request a breakdown of service charges to identify unnecessary costs. Some landlords may be open to reducing or capping these charges.

  • Maintenance Costs: Clarify the landlord's and tenant's responsibilities for maintenance. Negotiate to include essential services like air conditioning and lighting within the landlord's remit.

  • Rent-Free Periods: If possible, negotiate for a rent-free period at the beginning of the lease to offset fit-out costs and help your business settle in.

Incentives and Concessions

Landlords may offer incentives or concessions to attract tenants:

  • Fit-Out Subsidies: Request a subsidy or contribution towards fit-out costs, particularly for long-term leases.

  • Flexible Payment Terms: Negotiate a payment schedule that aligns with your cash flow, such as quarterly payments instead of monthly.

  • Discounted Rents: Some landlords may offer discounted rents for the first few months or provide reduced rates in exchange for longer lease commitments. However, this option mainly applies to traditional offices.


Why consider a Serviced Office for Affordability and Flexibility

In Hong Kong’s competitive office rental market, serviced offices stand out as a flexible and cost-effective solution for businesses of all sizes. They offer a blend of convenience, affordability, and premium facilities that can be hard to find with traditional leases.

All-Inclusive Pricing

Serviced offices operate on an all-inclusive pricing model that simplifies budgeting and reduces unexpected costs:

  • Utilities and Services Included: Utilities, high-speed internet, and essential services like cleaning and maintenance are typically included in the monthly fee.

  • Reception and Admin Support: Many serviced office providers offer reception services, mail handling, and administrative support, saving you the cost of hiring extra staff.

  • Access to Meeting Rooms: Most serviced offices provide shared meeting rooms and conference facilities, allowing businesses to conduct client meetings without renting additional space.

Short-Term Lease Commitments

One of the primary benefits of serviced offices is the flexibility in lease terms:

  • Monthly Contracts: Unlike traditional office spaces that sometimes require multi-year commitments, serviced offices usually offer monthly contracts, allowing you to scale up or down quickly.

  • Low Deposit Requirements: Deposits are often much lower than traditional leases, freeing up cash for other business needs.

  • Expansion Options: As your team grows, many serviced office providers offer the option to move into larger offices within the same building or network.

Access to Premium Facilities

Serviced offices typically provide access to facilities that might be prohibitively expensive to set up independently:

  • Business Lounges and Event Spaces: Networking lounges and event spaces are ideal for meeting potential clients or hosting workshops.

  • On-Site Cafés and Fitness Centres: Some serviced office providers, like The Executive Centre and Compass Offices, offer on-site cafés and fitness centres to enhance employee wellbeing and productivity.

  • IT Support and Technology Infrastructure: Many serviced offices have dedicated IT support teams and robust technology infrastructure, reducing the need for businesses to invest heavily in their own systems.



Networking and Collaboration Opportunities

The communal environment of serviced offices fosters networking and collaboration:

  • Networking Events and Workshops: Providers like WeWork and The Hive regularly organise events and workshops, creating opportunities for businesses to connect and collaborate.

  • Diverse Tenant Mix: Sharing office space with other companies, from startups to multinational corporations, creates a vibrant ecosystem where ideas and resources can be shared.


Finding affordable office space in Hong Kong is challenging but achievable with the right strategies. Bela Offices offers serviced offices and coworking desks tailored to your needs, providing flexible lease terms, all-inclusive pricing, and premium facilities. Contact us now.





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