Managing risk when choosing the right office location

Major cities compete to attract inward investment, highlighting, among other things, a low tax regime, government incentives, an educated workforce and a favourable business culture, including appropriate built space to carry out commercial activities.

In Hong Kong, the office market has expanded as advances in communication technology and infrastructure improvements have made many decentralised locations more accessible and more acceptable. However, despite this structural shift, core areas remain highly desirable due to non-cost factors – for example, talent attraction.

Increasingly, the available talent pool is playing an important role in regional location decision-making among companies. This also feeds through into real estate on a local level as the ability to attract and retain top talent in high-level, value-added positions remains a central consideration when determining a company’s physical location.

While sourcing and analysing workforce data can be complex, a forensic examination of labour data is critical to the decision of location, and should be prioritised. Once this is done, real estate can really become a strategic asset.

The wealth of data that companies now manage, about the labour market generally and their own employees in particular, is unprecedented. Coupled with more powerful analytical tools this information can be used to challenge accepted wisdom, both with regard to office location decisions and in relation to what employees seek from companies. This can then influence where a company locates and what type of space it needs.