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Editor’s note: This article, by Chris Betros, originally appeared on JapanToday.com.

TOKYO —

Nowadays, for many start-up companies, serviced offices are a much more practical option than dealing with all the hassles of trying to rent an office. One of the newest serviced office providers in Japan is Hong Kong-based Compass Offices, which opened its first business center in Tokyo’s Toranomon area on March 11 2011.

Situated atop Kamiyacho subway station, the business center provides banking grade IT and telephony systems and support, meeting rooms for tenants and virtual office clients, as well as concierge services. Currently, Compass has 22 floors in 14 locations in Hong Kong, Singapore and Tokyo.

Japan Today editor Chris Betros speaks with Compass Regional Sales Director for Asia, Alastair Gledhill, to hear more.

What is your background?

I’m from the UK and have been based in Hong Kong for the past seven years. I joined Compass in June last year. Compass was founded in 2009 by Andrew Chung and is a private company. I was looking for new challenges and it’s quite exciting to be part of a new business like Compass. We want to set a new direction for what serviced offices should be. We have knowledge within the company of using serviced offices and the frustrations that have come out of that and the good things as well. Our challenge is to take the bad things and make them better to create a new way of doing business.

What are your strengths?

One of the big things in this industry is there tends to be a lack of clarity of what you might receive when you go into a serviced office. Before Andrew started Compass, he had used serviced offices and one of the frustrations he felt was that he couldn’t get that clarity. We’re a one-stop shop. If we say what the cost is, then nothing else will come up as an extra. Also, because we are new, we have been able to take advantage of some of the advances in technology that have come through recently. We’ve built what we believe is a superior platform to be able to deliver a better service to clients.

What is most important these days, and this is the feedback we get, is the technology side of things, and what services we can provide with that. For example, Compass provides fingerprint security going into data centers, total monitoring 24/7 and proper on-site IT support.

Another area where we are very strong is the contacts we have. We can get back to our customers quicker than anybody else and ensure that we deliver what they ask for. One of the comments we hear regularly from customers is that when we give them information, it doesn’t have to be disseminated into this or that, but that it is simple and straightforward.

How many business centers does Compass have?

Throughout Hong Kong, Singapore and Tokyo, we now have 25 floors in 15 locations. We’ve got to the point in 18 months that took some of our competitors 10 years to get to.

Is it a competitive industry?

Very much so. In Hong Kong, there are more than 100 business centers. Here in the greater Tokyo area, there are more than 300. Our challenge here is that we have just one business center, while our biggest competitors are in 20-plus locations. However, we are confident we can grow. Companies are starting to outsource much more than they used to. I think there is clearly a market for us. We certainly see Tokyo being as big as Hong Kong. It’s just going to take a little longer.

How long did it take to get your first Tokyo business center up and running?

We opened our first center on March 11, which as you know was the day of the big disaster. The timing was unfortunate, but we’d been planning it for a year or so, looking for the right location and the right partner to work with.

How do you market Compass?

We do a lot of networking, talking to partners who provide us with services; we go out into the field to let possible clients know we are here. We have a team of 14 salespeople in Hong Kong, whose job is to not only sell for Hong Kong, but also tell their customers that we are in Tokyo. In fact, of the clients we have in Tokyo now, probably around about 20% started in Hong Kong or Singapore and were waiting for us to open here. That is a good sign we are doing the right thing.

Ultimately, we’ve got to build a reputation for ourselves and that will come from people going out and telling others what experience they have had here. For us, this is a numbers game; the more people we talk to, the more people we tell about what we do, the more clients we’ll have. What has impressed me each time I come here is the level of interest we have when we go and meet new people. They are ready for a little bit of a change. There has been a lot of interest from real estate companies and the client base in general about what we are going to do in Tokyo.

How different is it dealing with clients in Japan, compared to Hong Kong?

In Japan, you know that when a client signs, they have signed for the right reasons. They’ve done their due diligence and they are with us because they want to be. Provided you deliver, you will end up with that customer for a long time. In Hong Kong, there tends to be a lot more chasing for the best deal and moving around.

How is the demand for virtual offices?

We’ve actually signed up more virtual clients in Tokyo than office clients right now. That is partly due to clients out of Singapore and Hong Kong and partly because the virtual service just happened to be found by people searching online. I think it will be a massive piece of the business because of the mobility. For example, a client might be based in London but they have a footprint of virtual offices in 25 cities around the world. They might never visit those cities. Services such as language-based phone calling will be important—having someone in Tokyo answer your messages when you’re in London.

How do you choose your locations?

We look at a lot of places. One of the key factors in choosing a location is accessibility. Here, we are right above a subway station, and there are plenty of buses and taxis. We are actively looking for our 2nd and 3rd locations in Tokyo right now. On current projections, we’ll be full here in the next 3 or 4 months. I want to be very cautious that we open with a very stable first center. Economic cycles in Japan are somewhat slower than they are in Hong Kong, so we have a bit more time to develop the business.

In an ideal world, before you open a new center, you want to be 90-95% occupied in the current locations because then you always have something for new clients. Businesses grow and move. They get to a point where they outgrow the space we can provide. That leads to different opportunities, so we can work with them and provide a larger office at another location, and we free up more space.

How flexible are you on office size and leasing terms?

One of the keys to this game is being flexible structurally and on timing. We can take down a wall and make a bigger space or repartition a space easily as well. Companies scale up and down much more now. Our biggest customer here is 20 work stations. As for terms, we have a number of partnerships. From one month upwards is preferred. Obviously we want to build long-term relationships with customers.

What are your responsibilities?

When we go into markets, we have to be very sure of who we will be working with, what we will be doing and how we will do it. So I travel a lot. I am very much involved with the day-to-day organization of the business from a sales and marketing perspective. I am very lucky to have sales directors in each city who run their teams very efficiently.

I pretty much inspect all possible locations. As you can imagine, I have seen a lot of real estate recently. I like to talk to clients and get feedback on areas where we can improve. In Japan, we have to coax that out of clients, whereas in Hong Kong, they’ll shout it at us.

When you’re not working, how do you like to relax?

I do a lot of sailing, water sports and other outdoor activities—something to take the mind off work.

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