One of the biggest decisions any company, new or old, must make is the type of office to work out of. Given the variety of options available for entrepreneurs nowadays, selecting an office space can be an overwhelming process. Read on to learn all about the differences between traditional offices, private and shared sublet offices, and coworking spaces to decide what works best for your business.
Traditional office leasing is offered as a bare shell space without any furniture or IT infrastructure and therefore usually involves a higher initial start-up cost.
The traditional leasing structure is becoming increasingly outdated due to the rapid growth of the collaborative workspace industry. Traditional office space has become too expensive for companies, especially for small and medium-sized businesses and startups in Hong Kong. According to Knight Frank’s Skyscraper Index of 2016, Hong Kong has the most expensive prime office space at a price of US$278.50 per square foot.
The traditional office leases in Grade A office buildings typically consist of a longer tenancy period, typically a 5-10 year contract, yet it is difficult for companies to accurately forecast what their business needs will be several years down the road, even for large corporates. Businesses now want options and flexibility in their office instead of long term commitment and security.
Shown above is Ernst and Young’s cubicle layout structure, which consumes an extreme amount of space per employee.
In a common lease, real estate brokers charge commission fees for searching for office space, even if you do not sign a contract through them. At Quikspaces, we do not charge brokerage fees by creating an easy online search platform for small businesses and freelancers to find offices that fit their needs.
Benefits of traditional offices:
- No relocation cost for extended period of time
- Greater ability to plan for future
- Ability to customize office space with personalized branding
Drawbacks of traditional offices:
- Penalty fee for early termination
- Maintenance and repair fees
- High setup cost and long term capital required
Private and Shared Sublet Offices
Private and shared sublet offices provide unused office space that would otherwise be vacant to tenants on a short term basis. This type of space is perfect for SMEs and start-ups looking for flexible terms.
When Airbnb started their company in 2008, their philosophy was to rent out unused homes and apartments. This shook up the hotel industry as it created more affordable and wider selection of options than hotels. Sublet office space is the same concept as AirBnB, but takes advantage of unused office space instead of homes.
Both sublet offices and coworking spaces each have their own separate advantages. The three main benefits that differentiate private and shared sublet offices from coworking spaces are affordability, flexibility, and increased privacy.
Sublet office space is the most cost effective compared to any other option because it optimizes office space that otherwise would not be used. Another cost advantage is the flexibility aspect of the shared office since the tenant is only paying for the time they are occupying it.
By applying the shared office concept, small businesses can create flexibility within their company’s finances. Instead of one person paying for utilities and amenities, the overhead is being split up among users which lowers the cost.
This is one of our office listings at Quikspaces of a shared office that is extremely affordable with a fantastic view in Central.
Startups and medium-sized companies are constantly fluctuating in terms of team sizes. Sublet office space enables companies to dynamically scale up or scale down their office space according to business needs by signing short-term agreements rather than being be locked into a long-term lease.
A shared office provides much more privacy compared to coworking. Coworking consists of a very open layout with high ceilings which creates an exceptional look, but can be quite noisy and distracting.
Benefits of sublet offices:
- More affordable
- Ability to scale up and down space at any time
- Straightforward legal agreements
Drawbacks of sublet offices:
- Offered “as is”, no interior custom design available
- Might have to share office space with other tenants
Coworking space is a shared working environment that consists of many different organizations all working on the same floor, often in an open layout office. Unlike a traditional office, coworking spaces promote collaboration and is best suited for freelancers and entrepreneurs. In Hong Kong alone there are over 80 coworking spaces and counting, run by professional service operators.
While the environment of a coworking space is beneficial for meeting new people and generating creative thoughts through collaboration, the challenge with such an environment is balancing networking with accomplishing work productively. As such, the coworking atmosphere may not be suited for all companies. Bouncing ideas off each other in a collaborative environment might be great for tech startups or marketing firms. However, service-oriented companies likely require more privacy and may be better off in a quieter environment.
This is an image of a coworking space called Ensemble. Its atmosphere is centered around interacting with new people, which can spark creativity.
A great thing about coworking spaces is the amenities that are included in the contract. However typically the more amenities that are included the more expensive the agreement is. Examples of amenities can include beer on draft, billiards, and reclining massage chairs. These amenities are great to give your mind the break it needs for a few minutes during a long workday, but might not be necessary for all companies.
Benefits of Coworking spaces
- Promotes collaboration and networking
- Mobility within the office
- Lots of amenities and social events
Drawbacks of Coworking spaces
- Lots of distractions and high noise level
- Lost time due to socializing
- Lack of privacy
How Can Quikspaces Help?
At Quikspaces, we know the growing pains within any new business. We believe that affordability, flexibility and privacy are key factors affecting your selection of office space. Quikspaces is a tool that gives you the flexibility to scale your office on demand and we have built a platform where you can browse for an office space that caters to your preference of location, price, and type of space you are looking for whether that be single desk or private meeting room.
If you have unused office space that you would like to rent out, you can email us at [email protected] and we can guide you to find a user for your space.
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