Asia's office life revives in Hong Kong and Singapore

While major U.S. cities are still struggling to lure employees back to their desks, workers are once again filling office floors in Asian commercial hubs like Hong Kong and Singapore.

Small apartments in Hong Kong, which are often home to several generations, and efficient transport help spur the revival of the office, said Simon Smith, senior director of research at real estate company Savills. The offices also have free air conditioning during the hot summer months, snacks and entertainment after hours nearby.

A similar situation has developed in Singapore, which in April eased restrictions related to Covid-19 and stopped requiring people to present evidence of vaccination when entering office premises. This allowed businesses to bring more workers back to the office, and many were happy to go because commuting time to work on reliable public transport is usually less than an hour in a compact city-state.

Citywide data for Singapore is not available, but about 70% of workers have returned to the office in the downtown one Raffles Quay building, according to an assessment by ARA Trust Management (Suntec) Ltd., a property investment trust manager who partially owns the property.

Rents for offices in Singapore's central region rose 2.4% in the second quarter from the previous quarter, according to government data.

"There has been a rise in business confidence and tenants are looking to fix rents given that the office rental cycle has taken hold," said Lam Chern Woon, head of research and consulting at Edmund Tie, a Singapore-based real estate consultancy firm.

In a survey of more than 150 companies in Asia published this spring, real estate firm CBRE found that more than a quarter would not allow remote work. About 60% said they plan to give employees some remote working time, but in that group, half said they expect employees to work most or all of the time in the office.

City streets in Asian hubs are once again crowded with office crowds. On a recent weekday in Hong Kong's Wanchai district, workers lined up in rows of three or more inland to grab a cheap takeaway rice lunch with two side dishes. All the tables were occupied at the nearby elite Feather & Bone restaurant, where a plate of onion soup followed by pasta with lobster and cheese costs $32.

Kun Man-chung, who works as a political analyst, makes a short trip to Hong Kong's Central, main office district and regional base for many global and Chinese financial firms every day.

After a long period of mandatory work from home in the midst of the pandemic, 28-year-old Kung said he was seizing the chance to return to the office.

"It's nice to have peace and quiet at home," he said. "But after such a long time, looking at the wall in my apartment made me feel like I was going crazy."

Concerns in Asia about Covid-19 are diminishing despite the persistence of highly infectious Omicron subvariants. Japan is recording more new cases every day than at any time during the pandemic, but the government has not imposed a state of emergency or encouraged people to work from home as it did in previous waves of the pandemic.

This contrasts with New York, San Francisco and other U.S. urban areas, where long commutes, street crime, recent spikes in Covid-19, and the preference of many U.S. employees for remote work have kept office incomes low. Kastle Systems, which manages security systems in U.S. office buildings, says office occupancy is still below 50% 21/2 years after the pandemic began.

Hong Kong has other problems, including China's crackdown in recent years against pro-democracy forces and the outflow of foreign residents. However, Savills recently estimated that the city's premium office space has once again become the world's most expensive, displacing London.

Global companies are more likely to set rules for flexible American- or London-style work in their Asian offices, and as a result, Hong Kong is creating a sense of two directions, said Mr Kung, a Hong Kong worker. His district, Central, has more branches of Western companies and has less infatuation than Wanchai, where local firms predominate.

Tokyo is somewhere between the U.S. and Hong Kong in the process of returning to office. According to nippon Life Insurance Co. and X-Locations Inc., a firm that analyzes mobile phone location data, the rate of people coming to work in Tokyo's office buildings this year has been stable at about 60% of pre-pandemic levels.

Some Japanese companies adopt American-style policies that allow workers to work from home full-time. In June, Toshiba Corp. told employees it planned to continue allowing remote work even after the pandemic is over, citing a survey showing they support the policy.

Makoto Sakuma, who studies work trends at the Nippon Life Research Institute, said the 60% figure is likely to rise when or if the pandemic eases permanently. He said some studies show that Japanese office workers are less productive at home, in part because the country's corporate culture values "reading the air" or nonverbal communication about what colleagues think.