business, office rental, hong kong property, companies find falling rents in central hard to resist as they lap up office space in hong kong’s main business district

An increasing number of companies are taking advantage of the sharply lower rents, locking in leases in sought-after towers in Central, Hong Kong’s most desirable office address.

HashKey Group, a pan-Asian global digital asset financial services group, is moving its headquarters to Three Exchange Square, in Connaught Place from Pok Fu Lam, taking up the entire 14th floor, or 10,105 square feet, from September 16, landlord Hongkong Land announced on Wednesday.

“Our new offices at Three Exchange Square will be our global headquarters and our largest office,” said HashKey, which was founded in Hong Kong and has offices in Singapore and Tokyo.

The new headquarters is 50 per cent bigger than HashKey’s 6,773 sq ft current base in Cyberport, which it plans to retain for its technology and support teams.

business, office rental, hong kong property, companies find falling rents in central hard to resist as they lap up office space in hong kong’s main business district

A photo from October 2017 shows pedestrians walking outside the Three Exchange Square building (left), which houses the Hong Kong stock exchange. Photo: AFP

Rents in Central, the city’s main’s business district, have fallen by 26.4 per cent from their peak in the second quarter of 2019, and this is providing an incentive for some firms to return to the CBD, said real estate consultants, who added that Hong Kong remains a top choice for international companies setting up headquarters.

“Flow of capital, rule of law, low tax rates, talent, stock exchange and the prospect of further significant growth for Hong Kong as a part of the Greater Bay Area will continue to see the city thrive as a place of business,” said Alex Barnes, head of agency leasing at JLL in Hong Kong.

JLL expects grade A office rents across the city to fall by as much as 10 per cent this year before rising by up to 5 per cent next year, while Knight Frank expects office rents on Hong Kong island to increase by as much as 3 per cent in 2022.

The normal lease period in Hong Kong for offices is three years at fixed terms with an option to renew for another three years.

In July, auctioneer Christie’s signed up a 10-year lease to take up 50,000 sq ft spread over four floors at The Henderson in Central, which is to be completed in 2023. The building, which is coming up on the site of the former Murray Road multistorey car park, is being developed by Henderson Land Development.

China International Capital Corporation (CICC) and S&P Global have also signed office lease deals in Central.

CICC, the country’s largest investment bank, rented another 53,000 sq ft of space in One IFC in the second quarter, while the rating agency recently moved into Three Exchange Square from its current location at the ICC in West Kowloon.

“Financial Institutions are still a major driving force for Hong Kong’s grade A office, both by size as well as by rental amount,” said Ada Fung, executive director, advisory and transaction services for offices at CBRE Hong Kong

Banking, finance and insurance firms occupy 39 per cent of grade A office space, the most among all sector, in CBD, which includes Central and Admiralty, according to Colliers.

business, office rental, hong kong property, companies find falling rents in central hard to resist as they lap up office space in hong kong’s main business district

Grade A office buildings like the IFC in Central are popular with banking and finance firms. Photo: AP Photo

“We believe they will remain the future demand-drivers backed by different cross-border new financial initiatives, including the Stock Connect, Bond Connect and Wealth Management Connect,” said Rosanna Tang, head of research for Hong Kong and Greater Bay Area at Colliers.

Hongkong Land said financial firms accounted for 42 per cent of its tenants as of end June 30.

“HashKey’s decision to move to Central … exemplifies a growing ‘flight to quality’ as financial markets participants in particular see the benefits of being part of a core Central ecosystem that supports their business and talent development goals,” said Neil Anderson, director of Hongkong Land.

Latest breaking 24h news around the world Latest breaking 24h news around the world - Page 2 Latest breaking 24h news around the world - Page 3


LATEST NEWS

NEWS RELATED

China Evergrande's carmaking unit says it is suspending some new energy vehicle projects due to fund shortage

The electric vehicle (EV) unit of China Evergrande Group, the debt-laden property developer, is forced to halt some of its new energy vehicle projects after failing to pay its suppliers, according to a stock exchange filing late Friday night. “In light of the adverse effects on the liquidity of the…

Read more: China Evergrande's carmaking unit says it is suspending some new energy vehicle projects due to fund shortage

Evergrande debt: Hui Ka-yan's childhood dreams fuelled a debt binge and audacious goal that has left the world on tenterhooks

The first of a three-part series on the China Evergrande Group looks at how the world’s most indebted developer grew to its current size and how it avoided scrutiny when China’s authorities cracked down on debt in 2017. On an overcast Monday in early 2017, Hui Ka-yan chaired a staff…

Read more: Evergrande debt: Hui Ka-yan's childhood dreams fuelled a debt binge and audacious goal that has left the world on tenterhooks

Bordeaux wines topple Hermes' Birkin bags, Scotch whisky as top luxury investment during pandemic

Wines have replaced Scotch whisky and Hermes handbags as the best performing luxury investment during the pandemic, according to Knight Frank. The average price of investment grade wines rose 13 per cent in the 12 months to June, while the average price of the coveted handbag declined by 3 per…

Read more: Bordeaux wines topple Hermes' Birkin bags, Scotch whisky as top luxury investment during pandemic

China's central bank intensifies cryptocurrency crackdown as it targets offshore exchanges with ties to mainland

China’s central bank has intensified its crackdown on cryptocurrency activities, warning on Friday that anyone involved in providing support to an offshore exchange could come under investigation. It is in one of the country’s most explicit warnings to date targeting foreign platforms. In its latest reiteration of its ban on…

Read more: China's central bank intensifies cryptocurrency crackdown as it targets offshore exchanges with ties to mainland

HNA's founder Chen Feng, chief executive Adam Tan Xiaodong, detained by police as aviation group is broken into four units

Two top executives of HNA Group have been detained by China’s police, days after one of the country’s largest private conglomerates was broken down into four separate businesses following its bankruptcy restructuring. HNA’s founder and former chairman Chen Feng, and the former chief executive Adam Tan Xiangdong have been detained…

Read more: HNA's founder Chen Feng, chief executive Adam Tan Xiaodong, detained by police as aviation group is broken into four units

Chinese firms warn of hit to bottom line as provinces introduce power cuts to meet energy consumption targets

Several mainland-listed companies have warned about the impact of the ongoing power cuts on their operations because of local governments’ need to meet their energy consumption targets, causing their share prices to plunge. The companies’ warnings came amid a new wave of power rationing that started in at least 10…

Read more: Chinese firms warn of hit to bottom line as provinces introduce power cuts to meet energy consumption targets

HSBC, UBS among big banks to have cut exposure to China Evergrande as outlook worsens for debt-stricken developer

Big banks and fund managers have been heading for the exit and reducing their exposure to China Evergrande Group in recent weeks as the outlook has soured for the world’s most indebted property developer. As a result, many financial companies sought to reassure investors and downplay their exposure as questions…

Read more: HSBC, UBS among big banks to have cut exposure to China Evergrande as outlook worsens for debt-stricken developer

HSBC, Bank of China among five lenders to complete deals as southbound Bond Connect debuts

Five major banks including HSBC and Bank of China (Hong Kong) completed the first batch of cross border bond trading via the newly launched 500 billion (US$77.4 billion) southbound Bond Connect on Friday morning. BOCHK, one of the note-issuing banks in the city, said it completed transactions for 27 mainland…

Read more: HSBC, Bank of China among five lenders to complete deals as southbound Bond Connect debuts

Richard Li-backed FWD insurance group publicly files for US IPO

Hong Kong stocks set for weekly loss as Evergrande sell-off prolongs amid silence on debt status

China Evergrande: from ‘controlled demolition' to near-certain default and state takeover, money managers outline views on unfolding debt crisis

China's US$1.24 billion sovereign bond draws strong demand in Hong Kong on eve of southbound Bond Connect launch

Owner of TamJai, SamGor rice noodle restaurants aims for HK$1.4 billion in Hong Kong IPO

Climate change: Hong Kong utility CLP scales up zero emissions goal, says ‘impact on electricity price won't be as much as people fear'

Computers bungle basic math to show erroneous data of bitcoin's 90 per cent crash on Pyth

Airbus confident of delivering hydrogen-powered aircraft by 2035 as it looks to address climate change

OTHER NEWS