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DIALOGUE: Centred on Excellence - Interview with Paul Salnikow, Chairman & CEO, The Executive Centre
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altThe Executive Centre is Asia’s only clearly-defined premium serviced office provider, with 47 centres in 18 cities. Founded in 1994, it currently manages over 900,000 square feet of office space, and operates in locations through Asia. The Executive Centre provides serviced offices, virtual office representation services, meeting and conference facilities, and business concierge services to multinational corporations, small and medium enterprises, and start-ups locally, regionally and internationally. Business Tianjin had a chance to speak with Mr. Salnikow about the serviced office industry and future goals of The Executive Centre. 

Office buildings often become landmarks, even symbols of cities. What design vision or common standards do you have for selecting a new site? 

In accordance with The Executive Centre’s motto: “Excellent Locations. Excellent Service. Excellent Value”, all of our centres are within each city’s hub of business activities, being highly accessible with solid transportation. We look for well-designed, well-managed, and the most sought-after Grade-A office buildings with prestigious business addresses. 

What kind of professional team do you have to accomplish all this?

I have a professional corporate expansion team to conduct continuous monitoring and evaluation of Asia’s top 40 economic centres, using a defined set of experience-based criteria to identify the best locations for our new centres. We hunt across all markets, all the time. The Executive Centre’s reputation for quality and brand leadership is opening opportunities for direct landlord deals with premium developers.  

Why did you choose a career in this industry, and how did the idea of founding The Executive Centre come into being? 

The business began when I, being a property manager for a Saudi investment group in Hong Kong, was looking at ways to add value to the office element of my client’s portfolio. I realised that with a successful serviced office, I could generate not only market rent for the landlord, but a substantial profit as well. Coming from New York and having worked in London and Tokyo, always in property, I had encountered and used the serviced office concept in the past. At that time, serviced offices were rather primitive places, offering basic furnished offices, and not much more. In 1994, recognising a market niche for premium serviced office suites in Hong Kong, I established The Executive Centre with premium fit-outs, ergonomic furniture, state-of-the-art telephony systems, and professional business services support. In 2000, I started focusing on the centre’s network expansion with private equity funds. The Executive Centre was one of the very first serviced office companies to operate in Asia, and quickly established a reputation for having the best locations, best service, and best value.

What are your personal plans, as well as your plans for the corporation in the coming five years?

Despite the current global economic slowdown, I am confident of the growth at The Executive Centre in the coming years, both in terms of capacity and revenue. Our ongoing network expansion shows that there is a rising demand for premium serviced office space and this is, in part, driven by uncertainty.
The Executive Centre is currently growing at the rate of five to eight new centres each year. Turnover and profitability are both increasing by 40 percent annually. The Executive Centre will continue to grow across both existing and new Asian markets, as well as look into establishing a presence in emerging markets, namely Gulf States and Russia. 
With our client-focused strategy, strong management team, and highly motivated workforce, The Executive Centre will grow to become the second largest in Asia, and the third largest in the world in five years’ time.

 altVirtual offices are a new and interesting concept for many. Did it originate with the Executive Centre? What kinds of customers demand this service?  
Although The Executive Centre did not originate the virtual office concept, we are among the early pioneers of virtual offices in Asia. 
A virtual office is an ideal option for businesses of all sizes from individual entrepreneurs and home businesses, to small-to-medium sized enterprises, and multinational corporations who seek to run their operation or test a new market without setting up a physical presence.
As part of our comprehensive range of virtual office services, The Executive Centre provides clients with a prestigious business address, in a premier Grade-A building, in a central business district location, that is ideal for their business identity. Our virtual office business address is fully supported by a variety of services including mail forwarding, dedicated telephone answering and other professional services according to their requirements.

How much would it cost to set up and maintain a virtual office?

The cost of setting up a virtual office with a business address is minimal. Depending on the centre location and the scope of services provided, normally the cost is roughly CNY 500 to CNY 2,000.

Although you are a top operator in this field, you still have competitors. How do these other companies compete, and who is your biggest competitor? 

The Executive Centre is Asia’s only clearly-defined premium serviced office provider, and is the only serviced office business focused on the pan-Asian market. Other serviced offices providers who compete with us in Asia actually operate globally, but with less market penetration in Asia than The Executive Centre. They focus on providing top-grade serviced offices with good service in good locations, but The Executive Centre is committed to providing premium serviced offices with excellent service in excellent locations. Our clients are Asian businesses or Asian decision makers, and we fully understand their needs.

altWhat do you think of “serviced offices are one of the best performing growth sectors in commercial property”?

The serviced office industry is a rapidly growing segment within commercial office space, growing at an annual rate of 73 percent globally. A multitude of businesses and industries have started to realise the advantages of deploying flexible workplace solutions. The attraction of serviced offices not only lies in their flexibility of lease terms, but also the value-for-money services that assist start-ups in speeding up their establishment and capitalising on more business opportunities. Time, money, and effort are the three key components in driving business. 

How do you regard the advantages that serviced offices have on the changeable market?

At a time of ongoing global economic uncertainty, companies are finding it hard to forecast their expansion pace over twelve months, let alone three to five years. Serviced offices offer greater flexibility than traditional offices, providing companies with a platform to adapt quickly and decisively to rapidly changing market conditions, resulting in better planning, and therefore better business. When companies intend to move their offices into a new city or country, it normally takes around 4-5 months to deal with furnishing, designs and decoration, and so on. Serviced offices however, take merely 1 week to be ready for business, making it much more cost effective. 

altCan you evaluate the acceptance level of customers from mainland China for serviced offices?

I think China is becoming more aware of the benefits a serviced office can bring. The China serviced office market has been on a steadily upward trend since 2005. Shanghai is currently ranked 11th worldwide in the provision of serviced offices and Beijing 26th. Serviced offices in Grade-A and premium buildings in central business district locations are reaching an average monthly rate of CNY 6,500 and up, per workstation. We believe in the bright future of China’s serviced office market, The Executive Centre will continue to grow across existing markets, as well as expand into second-tier cities such as Hangzhou and Shenyang, which are moving into more service-based economies. 

Is your family living with you in Hong Kong? How do you enjoy life there? 

I have been based in Hong Kong for over 22 years and have seen the transformation of the city from a British colony to a confident leading Asian city. It has been a fascinating two-decade transformation, which of course has been driven by China’s economic and social evolution. 

Could you tell our readers one thing that has been the biggest influence on your growth (that brings you to where you are today)?

My father taught me that when I do something, I should always seek to do it the best that I can. Also, that I should always understand that “my best today” can be even better tomorrow with focus and effort. We apply this lesson at The Executive Centre every day. We are Asia’s premium serviced office provider, the best, but we understand that to retain that position of trust with our clients, we must do an even better job with them today, than we did yesterday. Be happy with your achievements, for they are stepping stones to further achievement.

altThe Executive Centre is expanding constantly. What would you say about the great achievements you’ve made for your organisation? 

The Executive Centre is growing at an annual average rate of 30 percent. We are accomplishing this by meeting strong client demand for our centres and services. Early on, I understood that a great company cannot be defined as being one leader and many followers, but rather, a great company is defined by being a great team. The concept of teamwork is one of the core driving principles at The Executive Centre, we all interact, work together, and rely on each other’s performance.  I have a responsibility to each and every one of my team-mates to do my best for them, and they for me, and all of us for each other. It works very well. In fact, we believe in this concept so strongly that words such as “employee” or “staff” are never used at The Executive Centre. We have team-mates, partners, and members. 

Is there anything else you want to add or any closing thoughts?  

Our first priority is always to understand and meet our clients’ needs. Our client-focused strategy will continue to cement our position of leadership and keep us in the vanguard as Asia’s premier serviced office provider.
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