PULLQUOTE: "I think Shanghai is one of the most expensive cities in the world, if you want to maintain high quality service standards - the challenge is the ability to translate business opportunities into revenue at high costs of operations."

CEO SUITE is a five-star serviced office provider with operations in Shanghai, Singapore, Kuala Lumpur, and Jakarta. Mee Kim, who has 15 years of experience in the industry, shares her market insights with EuroBiz.

How is the market for serviced offices in Shanghai?

In comparison with other Asian cities, serviced offices are still very new in China, with the highest supply concentration in Shanghai. Even so, we are looking at fewer than 10 centers here as compared to about 40 in Singapore, so there is still plenty of room for growth! We opened our first center in Shanghai in November 2003, and we are currently looking at opening centers in Beijing, Guangzhou, and a few other major cities in China.

How long did preparations for entering this market take?

It took me a year to do research, locate the best premises, and put in place the right team members and set-up details - as compared to other cities, the preparation process for Shanghai has taken much longer. We consider the preparation process to be the most important and strategic process in any business plans, and have thus taken time and efforts to ensure we place ourselves in the niche market in this competitive business. Just like in the hotel industry where there are the different star-rated hotels, there are also different grades of serviced office to fit everyone's pockets. We call ourselves a five-star boutique serviced office. At the top-end of the market in the industry, there is limited supply because of limited prime commercial real estate as well as well as qualified local support and management.

How does the market here compare with that of other Asian cities?

China is boiling and exciting while the other major Asian cities are still in recovery. There used to be more than 50 serviced office centers in Singapore before the Asian economic crisis, but the number has now declined with the economy. In less than three months since we set up here, our occupancy rate has reached an amazing 65 percent. Demand is high here in this city, but so are operational costs. I think Shanghai is one of the most expensive cities in the world to maintain an operation with a high service level. The main challenge is the translation of attractive business opportunities into profits at such high costs of operations.

What do you look for in staff members?

Our staff is the key to our success. All our managers and team members are multilingual, and multicultural. Recruiting, and retaining staff of such calibre is costly. They have experience dealing with clients from different countries; understanding the local culture is as important as speaking the language.

Who are your main clients?

Our clients include multinationals like ANZ, Dell, ExxonMobil, Hutchinson, KPMG and Mitsubishi. In Shanghai, our clientele list comprises of very varied industries and nationalities - including sectors such as manufacturing, IT, oil and gas, telecommunication, and even the entertainment industry. This represents a good combination which reflects the booming economy. In the old days, our other centers in other locations saw the same mix too, but now in Jakarta for example, we have mostly clients from the oil and gas sector, the mix is not as diverse as it used to be.

How has technological advances affected your business?

It has made us reconsider our strategies and pushed us to add new features and adopt the latest technology. It used to be sufficient to simply provide a telephone set, but now, a telephone system equipped with a unified messaging system is almost a basic requirement. Clients now have the choice and freedom to access their calls anywhere in the world, anytime of the day. High speed, reliable internet access is now almost indispensable to every client. We have invested as necessary in order to provide the best there is today; all our common areas are equipped for wireless internet connection; our boardroom is tele/video-conference ready; and Reuters is our partner for round-the-clock up-to-date news - accessible right here in our boardroom. All these add to our investment costs.

What trends contribute to growth in your sector?

Big multinationals tend to outsource everything these days, including their office space requirements. Many companies no longer believe in heavy capital and time investment, especially those in the IT sector. Most companies these days would rather not set up their infrastructure from scratch. This is where economies of scale matter and we step in. With serviced offices, there is a lot of flexibility considering today's world filled with uncertainties.

Do you see a surge in the number of competitors in the next few years?

Yes, but this is a business that requires real know-how. There are very limited personnel with sufficient experience and management expertise in the market. A good management team can only be established with years of training and coaching. And until these intangible resources become more readily available, I don't foresee a huge increase in the number of competitors. The pie remains sufficiently big enough to be shared.