Hong Kong serviced office operator makes first foray into Australia with Melbourne lease
Hong Kong’s largest serviced office operator, Compass Offices has made its first foray into Australia, after striking a deal for lease two floors in Tower 4 at World Trade Centre in Melbourne's CBD.
Compass Offices has committed to 1,466 square metres in the 611 Flinders Street building and is planning to take occupancy in March next year.
Gavin Boyd, chief operating officer for Asset 1 WTC, the owner of the building, said the deal with Compass Offices was not just your standard lease but was also “a management agreement, a 50/50 partnership.
“This type of deal has never been done in the Melbourne commercial arena.”
He said the agreement allowed it to cater to a whole range of office requirements. “As serviced offices tend to attract newly established business from overseas, this alliance will allow us to tap international expansion demand, rather than only relying on local relocations,” he said. “This aligns with our ambitions to make the World Trade Centre Melbourne’s hub for international trade.”
The Tower 4 Compass Offices & Asset 1 WTC partnership deal was set to produce significantly above market rent over its initial 10 year term, said Asset 1 WTC in a statement.
Compass Offices vice president of global investment, Alan Mackay said “Australia is an attractive market as there is more demand than supply for serviced office space". "There is a strong opportunity for growth, following a global trend where occupiers are looking for more flexibility as result of a volatile business environment. In the UK for example, over 2% of total office space is now serviced.”
Compass believes markets like Australia would follow this trend soon, as more and more occupiers were reviewing the inefficiencies in their real estate budgets – all the way up to large firms like Google or Qantas, which are all using serviced offices, he said.