Finding space to expand in a new world order

"Office rentals in Beijing are now among the most expensive in the world," said Leijten.

Beijing Financial Street and Jianguomen Central Business District in China's capital city ranked third and fourth as the world's most expensive office areas in the first half of 2013, after Hong Kong Central and London's West End, according to a semi-annual costs survey by CBRE Global Research and Consulting.

Pudong and Puxi, two prime downtown business districts in Shanghai, were among the top 20 in the league.

According to Leijten, the average cost to rent a prime office in first-tier cities is still on the rise. In Beijing, the rent for one square meter per month has increased from 200 yuan ($33) to 350 yuan, up 75 percent, over the past two years.

With robust demand and low supply in downtown areas, he said the high-end office leasing market will remain stable and there is no likelihood rent prices will fall in the CBDs.

On the other hand, with the US and European economies remaining weak and the Chinese economy experiencing a mild slowdown, "companies tend to be more cautious with big and long-term fixed rents and investments", said Leijten, who is ready to tap into the opportunities he sees in the mismatch in the market.

Most multinationals set up their first office in China with only three to five people, but the minimum space of a conventional office in a grade-A office building is normally 200 square meters, bonded to a three-year lease contract, said Leijten.

"The moment you sign up for a lease for three years, it means your business is committed in size and location for three years. That's obviously not an option for companies entering new markets or uncertain about their future, that want more flexibility and control over their costs."

Working in a business center also saves companies from handling other costs such as property management, electricity, air-conditioning, cleaning, maintenance and reception and pantry services, he said, adding that using Regus can save up to 65 percent of costs compared with a conventional office.

"For foreign companies entering China or Chinese companies going overseas, Regus can significantly lower the entry barriers, especially for companies that start small and don't know exactly how the expansion will develop."

The caution of multinationals has helped Regus take some bold steps in China over the past years. Regus' portfolio in China has been growing at 60 to 80 percent a year over the past few years, with a growing share coming from Chinese clients, according to Leijten, a Sinophile whose wife is from Shanghai.

Changing Culture

A small but efficient office at a business center has also become a more popular choice among Chinese companies, who used to regard their workplace very seriously.

"Twenty years ago Chinese companies used to buy their offices and say: 'Look, this is my office' as evidence of their success to clients. But it's becoming more and more impractical, especially with rocketing prices in the commercial property and the changing needs for the size and location of office space," said Leijten.

"Clients are not impressed just by big desks any more. They attach more importance to real performance."

As a result, business centers with small units in good locations have become more popular among service providers, such as Bie Junlin, who runs Shanghai Qiu Duan Trading Co, a service provider for high-end construction projects.

"We are a small enterprise. Being able to focus on our business is essential to us," Bie said.

"Business centers suit our needs and budget perfectly. It's also convenient to be situated in a central location, especially with access to some of the largest trading and exhibition centers in the city," he added.

The changing attitude also applies to Chinese companies going overseas.

With a changing economic landscape and bigger focus on efficiency, extravagant spending in setting up an overseas presence is being replaced by limited investment and a flexible setup.

"In this way, the going-overseas decision can be made more quickly because the opportunity cost is much lower," Leijten said, adding that Regus business centers are also the choice of Chinese companies such as Baidu Inc when expanding overseas.

According to Leijten, who has more than 20 years of experiences in the service industry and who before joining Regus worked at Air France and KLM Royal Dutch Airlines, 70 to 80 percent of Regus' clients in China were foreign companies 10 years ago. "But now we're tipping over to the Chinese side. Now it's 50-50 between foreign and Chinese companies.

"Most global fortune 500 companies use Regus across the world, including many locations in China. The share of internationally operating Chinese companies using Regus worldwide is still behind those from developed countries. I expect this to change in the near future."