Hong Kong’s number of co-working spaces has grown significantly over recent years, attracting not only freelancers and start-ups, but multinational corporations. Co-founder and Chief Investment Officer of theDesk Adrian Yap talks to Julian Hwang about the value of reworked workplaces
Photography by Calvin Sit
Adrian Yap has more than a decade of experience working for the Big Four, specializing in assurance and distressed corporate advisory for multinational companies.
Soft streams of sunlight trickle in between open-air ceiling panels covering an enclosed backyard, casting a warm glow onto rustic patio chairs and tables alongside a column of potted bamboo plants. Seated at one of these tables is a young executive, replying to emails on his tablet while sipping on his coffee. At first glance, this appears to be the setting of a zen coffeeshop amid the concrete jungle of Kennedy Town’s commercial area. But beyond the glass doors of the backyard lies three floors of hot desks, meeting rooms and private offices.
“The ground floor is a communal area where people can get together and exchange views and concepts,” says Adrian Yap, Co-founder and Chief Investment Officer of co-working space start-up theDesk, and a Hong Kong Institute of CPAs member. “Plus, natural sunlight is great for people to refresh their minds, so our outdoor area is an ideal place for teams to get together and generate ideas.”
theDesk’s members include freelancers, designers, start-ups and small- and medium-sized enterprises from sectors ranging from banking to kitchen appliances and luxury watch brands to internationally acclaimed tech unicorns.
Before setting up the company, Yap had the goal of becoming a professional accountant, and after graduating from the Chinese University of Hong Kong he went on to become an Institute member in 2009. Yap’s next step then brought him to PwC, where he worked in the firm’s consumer and industrial products group for five years.
“By then, I wanted a change, so I spent a year in the United States with my family,” says Yap. He then returned to Hong Kong – he much preferred the city’s work environment – and picked up his accounting career again, this time with EY’s transaction advisory team.
After working for the Big Four for nearly a decade, Yap’s entrepreneurial spirit kicked in. “I wanted to create something on my own, so I sought to start my own business,” he says. At around the same time, Yap was working as a workshop facilitator for the Institute’s Qualification Programme, and it was through the programme he met his future business partner, Thomas Hui. “My co-facilitator was friends with Thomas, and he informed me that Thomas had a couple of real estate projects running in China,” recalls Yap. “He asked me if I was interested in meeting him because he was looking for great minds and ideas, so I said, ‘why not?’”
Yap left EY in March 2015, and spent around half a year getting to know Hui better. They would go hiking together in the mornings, and as they climbed Hong Kong’s trails, they would also be brainstorming and learning about each other’s values, morals and personalities. “We tried to focus on what the big trends were in the upcoming economy,” says Yap. “Before we started theDesk, Thomas had worked on a Chinese real estate project where the co-working space WeWork was looking to set up at a new location.” Co- working spaces intrigued the pair, and so they studied the industry to see what kind of potential it held for office workers and millennial entrepreneurs.
Creating stakeholder value
Yap and Hui’s research revealed that a successful co-working space consisted of three core values – flexibility, productivity and community – which are still the company’s values today.
“The future economy is very volatile,” says Yap. Using a corporate bank as an example, he points out that the bank can upsize and downsize its workforce very rapidly in response to the economy. “Under a traditional workspace, you have to enter a two-to-four year lease,” says Yap. “Given the amount of capital expenditure that you have to invest into the office, and if your staff turnover often, then it’s really difficult to anticipate what office size is suitable. So how can a business possibly expect to plan their office space several years in advance?” Through co-working spaces, businesses can accommodate their ad-hoc employees at a more affordable cost. “We offer the most flexible workspace in town because we have both hourly and long-term options available for our members,” says Yap.
To foster a productive environment for users, Yap and Hui wanted to create a place that features an assortment of working environments to meet the different needs of its members, whether they are working alone or in a team.
When it comes to the company’s third core value, Yap believes an inclusive community is what sets the company apart from its competitors such as WeWork and naked Hub. “Without people, you cannot have success,” says Yap. From his experience, most co-working spaces are confined to an exclusive community, or where only “members and other members can create business collaborations and generate ideas together.” theDesk aims to involve people beyond their members. “Our neighbours, vendors, customers, banks and any other parties you can think of can become an inclusive community,” he says. “This makes our pool of talent much larger than just a co-working space.”
Focusing on content marketing has helped to advocate inclusivity, notes Yap. His content marketing team gets in touch with surrounding businesses to write promotional stories about them. One such story was about Hotel Jen Hong Kong, a boutique hotel owned by the Shangri-La Group, and featured a human interest story about their receptionist who entertained guests with cocktails and acrobatic moves.
“It’s really difficult to anticipate what office size is suitable. So how can a business possibly expect to plan their office space several years in advance?”
“We wrote the story without monetary reward in mind,” recalls Yap. Shortly after the story was published, Hotel Jen shared it on their own social media, generating over 10 times the impact of their regular posts. “The effect was so powerful that the Shangri-La Group grew curious and reached out to us.”
The founders’ collaboration with the hotel brought benefits not only to them. “We managed to help one of our members expand their connections as well,” recalls Yap. Backers, a crowdfunding platform and one of theDesk’s many members, owned an offline experience store for the various travel-related products they tried to crowdfund online. “They always wanted to have their products shown under different hotel settings, so that business travellers can get in touch with these new business ideas and products,” says Yap.
Backers is currently in discussion with Shangri-La about potentially showcasing products at the group’s various hotels. “Because we focused on an inclusive community, when we invested on our content media and tried to connect our members with all our neighbourhood businesses, it turned out that our neighbourhood businesses wanted to connect back with us and create more business collaborations with our members.”
According to Hong Kong government statistics, there are roughly 290 million square feet of commercial and industrial building space in Hong Kong, of which only one million square feet is co-working spaces. Yap believes there is tremendous growth potential for co-working spaces because of the volatility of businesses, the demand for productivity and limitations of traditional office spaces.
As CIO, Yap manages existing investments and looks for new potential sites for expansion. “Before we invest in a new site, we need to develop our financial modelling and include how we plan to do all our budgeting and costs,” he says, “and because we’re a start-up, we also need to raise additional funding through external investors.”
Yap converts theDesk’s strategies into quantifiable figures that can help stakeholders to understand the business’ performance, a task he is well-acquainted with thanks to his CPA training. This has helped the start-up through several rounds of successful seed funding to reach where they are today.
“The training has definitely helped me a lot with financial planning in all aspects of the business. This includes but is not limited to: financial modelling of potential sites; budgeting and financial control during the construction stage; cashflow forecast and control on sales and marketing activities; and financial projections and valuations of the business for discussions with potential investors,” he says. “My prior work experience, CPA qualification, and the perceived integrity and reputation of a CPA, all help to provide additional comfort and assurance to potential investors.”
When the company looks to expand into a new neighbourhood, which theDesk defines as the community within a 10-minute walking distance of the target location, a large portion of the work is usually delegated to Yap’s team. Yap looks at each area’s demographics, affordability, convenience and business viability when planning an expansion. “We don’t define a neighbourhood as good or bad,” says Yap, “rather, if we find a neighbourhood that we are interested in, we look at the people there to see what kind of value we can create for them.” One way to do this is through themed co-working spaces, he adds. “For example, if a potential site has a lot of photographers around it, we might consider doing a photography-themed work space to become more relevant to these neighbours.”
As part of its “inclusive neighbourhood” mission, Yap points out that theDesk’s community extends to cover landlords, and it is with this idea that theDesk expanded to Causeway Bay’s One Hysan Avenue and Leighton Centre in November. “Hysan is very supportive of our ideas because we tried to connect their tenants with the rest of Hysan’s [property] portfolio and our members,” says Yap.
Before these new sites, theDesk had been working with Hysan Development to organize events, such as a retail and technology mixer to bring their tenants and theDesk’s membership pool together – fostering collaboration between corporations, SMEs, freelancers and start-ups. “If Hysan’s tenants are happy, then Hysan is happy and will continue to work with us in the future.”
According to CBRE’s Asia Pacific Occupier Survey 2017, 64 percent of multinational occupiers plan to use some form of third-party office solutions, including co-working space, by 2020.