According to JLL's new research survey, Tenancy Reimagined: Might Memberships Be the Future of Leasing, memberships could be the future of leasing. - A new transaction model will compete with Asian office leasing in the future. As landlords struggle to keep up with the vacancies and the rapid growth of the new digital economy in Mainland China and Hong Kong, a business model where tenants pay membership fees instead of rent has emerged. Sale in Qatar | For Sale in Qatar
Corporate occupiers have traditionally been forced to pay a fixed fee depending on the amount of space leased and long lease terms. JLL, on the other hand, claims that a membership ecosystem will enable companies and individuals to pay for different levels of building access and benefits.
A monthly membership fee can be determined based on each employee's work experience and requirements. They would not only have access to workspaces, conference rooms, and other amenities. They can, however, use all shared facilities, including dining, shopping, social, and wellness spaces.
"As more companies in Mainland China and Hong Kong embrace flexible working arrangements, tenants are seeking more cost-effective and profitable ways to use space," says Gavin Morgan, JLL's Chief Operating Officer in Greater China and Managing Director in Hong Kong.
"This means that tenants would want to be able to distinguish their office properties by providing a favorable work atmosphere for users and be willing to negotiate leasing formats in novel ways." In a "fresh standard," a more versatile leasing model will be able to assist landlords in increasing cash flow and meeting the changing demands of corporate occupiers.
According to JLL's report, empty Grade A office space hit 7.8 million sqm in the fourth quarter of 2020 in the four first-tier mainland cities (Beijing, Shanghai, Guangzhou, and Shenzhen), with a total of 13 million sqm scheduled for completion in 2021 to 2023. Meanwhile, Hong Kong's total Grade A office vacancy rate increased to 8.6% at the end of October, up from 4.4 percent in January 2019.
"The vacancies and the the supply of new builds are placing pressure on building owners to maintain existing occupancy and increase clientele," says Nelson Wong, Head of Research at JLL in Greater China. Owners can allow more effective use of their assets and generate more revenue with a membership ecosystem, while still delivering a higher-quality atmosphere to occupiers at a potentially lower cost."
"Exploring new alliances in which landlords and tenants' interests are matched could lead to alternatives to conventional leasing." Mr. Morgan concludes, "We agree that the future of office leasing will be an ongoing transition rather than a shift to a single model."