Some Hong Kong workers say they would need a raise to give up hybrid work arrangements, a dilemma that’s expected to prompt more companies to reduce space and dampen office rents, according to a survey.
Based on a Bloomberg Intelligence survey of 350 people in Hong Kong, 27% asked for a raise with the majority demanding a pay increase of 6% or more, if their employers require them to work in the office five days a week. Another 24% said they would change jobs to secure flexible work arrangements.
Companies may adopt hybrid working arrangements to attract talent while cutting floor space, which could lead to rents falling by at least 6% in 2024, Bloomberg Intelligence analysts led by Patrick Wong said in a note published Monday.
That’s after rents dropped at a similar pace annually over the past three years, Bloomberg Intelligence said. The city saw a record 16.4% of empty office space at the end of last year, according to CBRE Group Inc.
To make things worse, the office sector has seen little demand from mainland companies, which contributed to the previous rental surge a few years ago. Such firms accounted for just 11% of new leases in 2023, compared with 18% in 2021, data from CBRE show.
The 350 respondents in Hong Kong were selected using criteria specified by Bloomberg Intelligence to reflect a representative sample for age, geography and gender.
In Tokyo, 20% of 650 people surveyed said they would stay for a salary raise, while 16% would switch jobs.