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Small businesses seek less room to maneuver (3)

(China Daily)

09:41, October 31, 2011

Servorp Business Service Co Ltd, the world's second largest workplace suppliers by market value, which is based in Australia, has seven business centers in China and will soon launch a new one in Guangzhou.

"China is such a large market, although traditional Chinese businessmen want to have workplaces on their own and we have to try our best to persuade them," said Michaela Julian, senior manager at Servorp China.

Rising rents play a role in demand in addition to economic growth.

ZZA Responsive User Environments, a research and advisory company based in the UK capital London, released a report on Oct 24 that shows 62.3 percent of its respondents in China use business centers for some or all of their work. The global number is 52 percent.

The report also revealed that business centers are used more than non-office working places such as home and coffee shops.

"The trend is that third-place workers (those not working from a company's headquarters or satellite office) are moving to business centers, away from their homes," said Ziona Strelitz, founder of ZZA.

Statistics from the China Office Research Center show that by June 30, rents for office buildings in Beijing increased by more than 30 percent on average over the previous six months. Some buildings saw rises of 50 percent.

Demand is also being fueled by reduced property costs.

The biannual Regus Business Confidence Index, released in September, shows that 83 percent of respondents expect their revenues to increase over the next 12 months, but 73 percent of them plan to cut or freeze their property costs to remain competitive.

"We liberate companies from the need to plow money into expensive fixed property deals, while offering them the freedom to expand," said Leijten. "That's why we are seeing rising demand for workplace solutions."

Customers can move into new workplaces just taking their computers as soon as they have signed contracts and do not need to spend money on ancillaries such as decorating and furniture.

Suppliers also deal with daily administration affairs at the offices, including providing a staffed reception desk and cleaning.

All the customers share the administration costs, which can reduce daily expenses, Zhang said.

"Our customers can save about 70 percent of the cost of a workplace, generally speaking," Zhang said.

Bigger, transnational corporations also use workplace suppliers when they open branches in new countries and regions.

Magme, a website founded in Canada that provides free online reading, set up its Shanghai operation in 2009 in the Regus' Bund Center site.

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