Fiona Waters, Managing Director, speaks at the Australian Chamber of Commerce event ‘A Disrupting Property Market: Locational Strategies for the Next Paradigm’. The panel of senior leaders, moderated by Nigel Smith from Colliers International, discussed the opportunities and challenges facing companies when reviewing their real estate options in Hong Kong. Other speakers on the panel included Daniel Shih from Colliers International, Guy Parsonage from PwC, and Michelle Buultjens from Blueprint.
Fiona introduced the Waters Economics Spatial Economy Model, which tracks employment and businesses in 73 sectors, across the 18 districts in Hong Kong, over 15 years. Fiona suggested that sometimes some of the trends that we perceive to be happening only from anecdotal evidence, are not true when we look at the actual data. It is important to consider both!
Fiona’s message: Beware only looking at newspaper headlines!! Understand the data too!
Mass Exodus from Central started many years ago – Not Quite True!
We tend to think that employment in Central & Western (C&W) District has been on the decline for years – not so - employment in C&W was still growing up to 2014 and had the largest share of jobs of all districts. It wasn’t that C&W was declining, it was that other districts were growing faster. 2015 was the first year in which the total number of jobs in C&W were lower than the year before.
Indeed, in some sectors the number of jobs in C&W is still growing, these include Finance & Insurance Activities and Administrative & Support Services.
Kwun Tong is rapidly expanding in sectors such as Finance and Insurance – Not Quite True!
Employment in Kwun Tong was on the rise in all sectors up to 2014, but in 2015 growth was in sectors which are declining in Hong Kong overall, including Manufacturing, Import & Export Trade and Wholesale Trade.
Whilst the sector has experienced rapid growth in Kwun Tong over the last decade, Financial services saw a decline in numbers in 2015; Real Estate Services were also on the decline.
Fiona’s message: Don’t deny the power of networks and proximity!
Whilst there is lots of discussion about a future CBD2, Kwun Tong and other locations, Fiona had the audience laughing when she pointed out that whilst companies may have offices in these locations, actually nobody likes going there and senior people especially, stay in Central. There is a sound reason for this. The power of clustering and dense business networks in an urban core is one of Hong Kong's comparative and competitive advantages.