Executive Centre settles in to high growth phase (hktdc.com)


	Paul Salnikow, founder and CEO of The Executive Centre, says Hong Kong’s clear advantages have given his business a leading edge

An idea for increasing profits for landlords has turned into a thriving global business for entrepreneur Paul Salnikow, a New Yorker and former property manager.

Recognising a market niche for premium serviced office suites in Hong Kong, Mr Salnikow established The Executive Centre in 1994 as a half-floor operation in Bank of America Tower, Central. Today, The Executive Centre has grown to become Asia-Pacific's leading premium serviced office provider with 21 centres across 10 cities, including Hong Kong, Tokyo, Seoul, Beijing, Shanghai, Taipei, Singapore, Jakarta, Sydney and Sofia (Bulgaria). Its latest two centres in Hong Kong are part of a HK$156 million (US$20 million) investment programme targeted at opening 20 new centres in Asia and Europe by 2008.

Mr Salnikow could have chosen any city to set up his business, but says Hong Kong offered clear advantages.

Profitable environment

"Hong Kong has always been known as a free-market, an entrepreneur's haven, but with excellent rule of law and simple low taxation," he said. "The lack of corruption also played an important part. Nowadays, Hong Kong is one of the world's leading cities, with impeccable transport links, a highly educated and motivated work force, and a concentration of international and local business people that makes doing business in Hong Kong efficient and profitable."

The business began when Mr Salnikow, then property manager for a Saudi investment group, was looking at ways to add value to the office element of his portfolio. He realised that with a successful serviced office he 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," Mr Salnikow said. "At that time, serviced offices were rather primitive places, offering basic furnished offices and not much more. What we have created with The Executive Centre is entirely different. Our centres have core Central Business District locations in premium buildings, with top-end corporate fit-outs, the latest in IT and telephony, and sophisticated personal assistant support for clients."

Client focused

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 per cent annually. "We can sustain this performance because we are focused on serving the client, addressing their accommodation and business support needs. We are also benefiting from the fact that all Asian economies are growing," Mr Salnikow said.

Its largest market is Hong Kong, where The Executive Centre has four centres in Central, one in Wan Chai and one in Quarry Bay. The company has positioned itself at the four corners of Central with an Executive Centre in Cheung Kong Centre, the Entertainment Building, Wheelock House, and Bank of America Tower. It has a centre in Pacific Place Three and another in Cambridge House in Swire's Island East development. Together, these centres comprise over 120,000 square feet of premium serviced office accommodation serving over 150 companies in residence today.

"You ask about our success, well I can tell you that our average client stays with us for 29 months," Mr Salnikow said. "I think that's pretty impressive considering that all clients have the right to serve notice at any time. People stay because they find our centres to be welcoming, and the perfect working environment. Our Executive Centre teams are professional, can support clients in all manner of work, and yet are very friendly and personable. We also don't brand. By that I mean that when you enter an Executive Centre you will never see our name, or logo, anywhere. Why? Because we present the centres as the corporate homes of our clients - so it's their face that we promote, not ours. Clients really appreciate that philosophy."

Committed to Hong Kong

And though he is CEO to a team of over 140 staff across 10 markets, Mr Salnikow still believes in giving one-on-one service, inviting clients to contact him personally to discuss their needs. "Though I am CEO of a team of over 140 staff across 10 markets, I am really only here to serve the client," he says.

As The Executive Centre continues to grow, its focus will remain on Asia-Pacific. And its global headquarters will stay firmly entrenched in the city where it all began. "Hong Kong has rediscovered its role in Asia - as the financial and commercial location most open to international business, established under one of Asia's strongest and cleanest rules of law," Mr Salnikow said. "We are moving from strength to strength in Hong Kong."