Chinese co-working space Kr Space, the Beijing-based startup that competes with WeWork in China, is shutting down its Hong Kong Time Square location, marking its exit from the city, according to a Mingtiandi report.
As of Monday, however, DealStreetAsia checked on Kr Asia’s website and noticed that the Times Square location, which covers 3,189 square meters of space with 552 desks, remains up. An email sent to Kr Space has not been responded to.
The company’s desks, which were originally expected to lease for HK$10,000 to HK$12,000 per month, are now being offered for HK$5,500, based on its website post.
Kr Space, which operates at least 40 co-working spaces in major cities in China, including Beijing, Shanghai, Guangzhou, Hangzhou, Nanjing, Wuhan, Tianjin, Xiamen, and Hefei, opened in the Times Square complex nine months ago.
The report said the Times Square location has been put on the market by its owner, Wharf Holdings, months after Hong Kong property developer Chinachem Group slapped a $63.8-million lawsuit on Kr Space for allegedly breaching a contract to take up seven floors at Chinachem’s One Hennessy building in Wan Chai.
Shutting down its Times Square location would mean the exit of Kr Space from the Hong Kong market, which was originally part of the startup’s efforts to add 10,000 desks per month to its portfolio. The company was also reported to be shutting down six mainland locations.
Kr Space raised Rmb1 billion ($145 million) in May led by existing investor IDG Capital. It said back then that it will pursue its new business strategy to achieve its goal of becoming a full life-cycle enterprise office service provider.
The company earlier said it aims to expand not only in China but also in Hong Kong, Singapore, Tokyo and other cities in the Asia-Pacific region. Started in 2014, Kr Space already counts IDG Capital, Gobi Partners, and Prometheus Capital among its investors.
A report released by industry association China Real Estate Chamber of Commerce early this year said the combined area of co-working space in four first-tier cities in China surged by almost 60 per cent between the end of 2017 and October last year.
However, 40 per cent of the co-working centres were more than half empty as of October and 40 co-working brands had shut in the first 10 months of 2018.