High ceilings, beautiful lobbies, raised floors: the standard and aesthetic of Hong Kong’s Grade-A buildings are impeccable. But as we take a closer look at value and worth of the different types of office buildings in Hong Kong, the glamour and appeal of Grade-A buildings might not be worth it for businesses.

The Hong Kong Rating and Evaluation Department has a guideline of attributes when classifying the grade of the buildings. The detailed list covers everything from the quality from Air Conditioning to Management Services. However, upon comparison, the distinction between the A and B grade classifications is merely a difference in adjectives. The final quality and atmosphere in the workplace remains largely the same.

So What Exactly Is The Difference?

Here's a list of all the attributes that the Department takes into account when grading buildings:

  • Finishing
  • Layout
  • Floor Plates
  • Lobbies
  • Air Conditioning
  • Lift Service
  • Management
  • Parking Facilities

Let's take building lobbies and elevators for example.

The criteria dictates that Grade A and Grade B buildings both must include a lobby and elevator services for people and good deliveries. In terms of lobbies, the Department indicates that for a building to be Grade A, it must be "well-decorated" and "modern", two extremely subjective terms. For B Grade buildings, the guidelines stipulate that lobbies must be of appropriately sized and built with "good quality finishes". This play of adjectives is also reflected in the lift requirements. In both types of buildings, the lifts must be well-sized and there must be enough to accommodate to the number of people in the building. However, for Grade A buildings, the service must be "good" while for Grade B, the service must be "adequate".

This type of ambiguous wording is found throughout the description. The bottom line is, the basic functioning of the two buildings are essentially the same; you'll have working elevators, Air conditioning systems, management staff, etc. The Grade A aspect caters more to the aesthetics and personal atmosphere of the building. For Small-Medium Enterprises, Start-ups, and even for large corporations, this type of superficial difference is not worth the astronomically high prices that Grade A buildings command today.

In addition, the evaluation may not be suitable for categorizing buildings for today's market. The list was edited in April of 2000 and has not been altered since then, which means the standards are a little outdated. Many modern day workplace essentials such as wireless network connectivity, charging ports for electric cars, and security technology are not accounted for in the grading guidelines. Thus, many of the qualities which make for an attractive office space are not represented by this evaluation.

How B-Grade Buildings Compare Numbers-Wise

Hong Kong is notorious for its high rental rates; the city has the title of most expensive office rent in the world. What most people do not realize is that the high average rates are mostly perpetrated by the exuberant rates of Grade A buildings. For companies strategically searching for Grade B buildings, office space is much less of a headache. With the right resources and research, businesses can find the right space for a relatively affordable price.

From the data above, the average difference between the cost of a grade A building and a grade B building is around 233.67HKD per square meter of space. JLL properties recommends that offices should start out with 100 square feet of circulation and then add 85 square feet of office space per employee. If we use this office sizing method, here is how much more your office would cost if you choose a grade A building versus a grade B:

Note that this is the average rate for Hong Kong; for areas that are more in demand, the differential would be much higher.

Many people are deterred by the fact that the quantity of Grade-A buildings in Hong Kong is much high than Grade-B buildings, making it hard to find an appropriate space. However, even though there are a lot more Grade A buildings in Hong Kong, it might be easier to locate space in Grade B building. Grade A buildings often have limits on how many different businesses can operate in it. Thus, the only viable option for SMEs are serviced offices in Grade-A buildings. However, in Grade-B buildings, it is much more flexible and it is easier for companies to find a space that is catered for their needs.

What's Really Worth It

According to Regus, the largest expense small companies have after payroll is office space. Thus choosing a grade B office space may be the smartest choice for SMEs. The main distinction between the two grades is a question of taste and aesthetic--the internal function and convenience of the two buildings is essentially the same.

Thus for small businesses, "downgrading" their choice of office space may not actually be a downgrade. For less money, you can get a personalized space which caters to the needs of your companies. Many SME's are turning to online platforms which offer a flexible online marketplace which allows companies to conveniently share their share their space and reduce costs.

Whether you think grade B offices are cost effective, or you prefer the polished serviced offices of Grade A buildings, Quikspaces has got you covered. Explore your future office options today