The Executive Centre (TEC) was founded in Hong Kong in 1994 by New Yorker Paul Salnikow and has weathered the ups and downs of the global property market since then. It has over 200 offices in 33 cities, spanning Australia to the Middle East. While on the surface this might seem like a real estate business, Salnikow firmly believes that The Executive Centre is a service business, delivering the same kind of experience one would get when visiting any five-star hospitality venue.
In 2021, a consortium led by KKR & Co Inc and Tiga Investments bought out the previous private equity investors in TEC, but Salnikow remains in charge and recently told Bloomberg that he plans to open seven new sites with a total of 2,100 workstations across Asia and the Middle East in 2024. Here, AmCham HK sits down with Chelsea Perino, Managing Director of Global Marketing & Communications at TEC, who is also the co-chair of AmCham’s Women of Influence Committee.
Chelsea Perino’s first experience with TEC was working in one of their offices in Seoul, South Korea. When she interviewed for the job with founder Paul Salnikow, he asked first if she had heard of TEC before. She had to laugh and say yes, and gave a detailed explanation of why her employer, Samsung, needed offices with soundproof rooms and private servers that ensured complete security while working on various digital advertising strategies and activations for the Korean giant.
Salnikow put her in charge of marketing at the beginning of 2017, a new role for both parties, when the company had only 75 offices. She built up a marketing team from scratch. “TEC had been fueled by the growth of its clients. The big multinationals all had retainer contracts with property brokers like Jones Lang LaSalle Inc (JLL.NYSE) and CBRE Group, Inc. (CBRE.NYSE) and we would get our leads from the brokers. Even up to 2010, when WeWork Inc. (WEWKQ.NYSE) came onto the scene, there were really only three global providers of flexible workspace at scale.”
Perino came on board at a time when serviced offices were going through a rapid evolution, from providing cubicles for individual workers to common spaces, barista coffee and hot desks to digital nomads. Now Perino says the approach of TEC and the industry has changed decisively. “One size does not fit all,” she says. “I like to sit at an open desk with noise and people around when I am doing heads-down work, for example, but not many people that I know enjoy that work environment.” It’s all about customization and flexibility, Perino says. Post-Covid, multinationals are much more cautious about their needs for space, how long they will need it, and how flexible those spaces can be.
The era of hybrid work has meant that companies need less of a footprint in terms of office space, and greater diversification in terms of the kinds of space they offer. In 2021, Standard Chartered PLC (STAN.L) conducted a survey together with TEC of data points to help inform the financial group’s corporate real estate strategy.
Standard Chartered had assumed that perhaps 50% of employees wanted flexible working conditions; instead, they found that 75% wanted “flex”. In an earlier report, JLL found that 49% of employees wanted “socialization spaces” to boost their office experience, and the McKinsey Global Institute reported that 85% of companies had accelerated the digitalization of employee collaboration since the Covid-19 outbreak.
TEC aims to be the premium product in its category, the “Chanel of flexible workspace,” as Perino says. Its service is akin to a five-star hotel, with premium furniture and state of the art technology customized for data security requirements. It is also stringent about its growth strategy, compared to WeWork. “We do no speculative growth,” she says. “We will not acquire an office unless we can be sure it will be profitable. We have never left a lease unattended, and our clients know that we will be here as long as they are.”
The pandemic added an obsession with hygiene to the TEC mix. Regulations might be different not only country to country but district to district. Organizations started paying more attention to social distancing and regular cleaning, And so TEC needed to be extremely clear about all the precautions they were taking to ensure the workplace, despite being shared, was still safe.
But the silver lining was that Covid forced companies to ask how to be smarter about managing resources. Perino says: “A lot of companies are asking now if they need the traditional 10-year leases. Reducing real estate costs is ahead even of reducing headcount. If they want to bring in a project team, and have no space in their own office, how do they find Grade A office space on short notice?”
According to Perino, MNCs are reducing 15-20% of their traditional assets, seeking to replace it with something more agile, and paying for the resources they need at that specific time and place. And for work from home or transiting employees, if only 60% are coming into the office, they are recognizing that the unused 40% is an unnecessary cost. “Flexible workspaces give companies the ability to scale up and scale down as they need – the beauty is that you only pay for the space you use.”
Perino, who studied anthropology as an undergraduate at New York University, is attentive to the ways in which the culture of work is changing. She says, “The office will change from a place where people do individual work to collective work, which will also be a crucial point of business success. People want to have a sense of purpose. If they never get a chance to interact with colleagues, or have a chance to learn something unexpected, their capacity to be inspired will be reduced.”
She expects that gradually MNCs will move back to a more in-office approach, with required office time but also the flexibility to work from alternative locations. But they will still have to adapt their offices to a new style of working, and many traditional office buildings are difficult to change. “But if an organization’s lease is coming up, instead of signing a new, 10-year lease they can come to TEC and lease a 50-person office with stand-up desks, Herman Miller chairs, and wi-fi that works. It’s so much more efficient, and you don’t have to invest in capex,” Perino says.
More than 80% of TEC’s customers are MNCs, but there is still room for stepping outside the box. In one of its more remarkable innovations, in September 2023 the company announced a collaboration with Dream Impact (DI), a Hong Kong-based platform for social enterprises and impact ventures with over 120 social impact partners. The ESG Innovation Lab will serve as a membership community, with the lab providing services such as strategy consulting, hiring and recruitment, ESG reporting and Board of Directors training. It has a full dedicated floor with coworking desks, two combinable meeting rooms and a tatami area for gatherings.
If Perino comes across as a hyper-charged luxury market professional, her career has been anything but conventional. From Albuquerque, New Mexico, her great-great grandfather on her mother’s side helped sign New Mexico into statehood. Her father was a first-generation Italian immigrant. Initially she wanted to be a doctor, then decided that wasn’t the right path, and studied anthropology, also not the right path.
To figure things out, she took a few years off and travelled the world, including a stint working at a dive center in Zanzibar. After completing her Masters’ in Public and Organizational Relations at Montclair State University in 2012, she focused on the advertising industry in New York but found little sympathy for her resume gaps and lack of experience in advertising. It was tough even to get an interview. Finally, a friend helped her get a job at Deep Focus, a digital media agency, and she was on her way.
Today, in addition to her demanding role at TEC, she’s a remote faculty member at Montclair and gives talks ranging from “The Power of Not Knowing,” for TedX in 2018 to brand building for female entrepreneurs. Asked by one interviewer what she would be doing if not working at her current job, she said: “I’d be a full-time author, lecturer, and public speaker (instead of just doing all of the above part time). For now, she’s helping to re-invent the future of work for one of the most successful firms in the flexible workspace business.