China’s ICBC To Lease 10 Floors At Cheung Kong Center II
HONG KONG – Sources revealed that the Industrial and Commercial Bank of China (ICBC) is poised to ink a deal to occupy 10 office floors in the Cheung Kong Center II in Central. If it proceeds, it will become the biggest office rental deal in the city so far this year, reported Mingtiandi on Wednesday evening (16 August, SGT).
ICBC also plans to occupy a 6,000 sq ft ground-level unit in Cheung Kong Center II for a branch location. The bank is also said to be getting naming and signage rights for the building as part of the transaction.
Market analysts estimate that ICBC would pay a monthly rent of HK$80 (US$10.22) psf to HK$90 psf ($11.50) to lease the 200,000 sq ft workspace in Cheung Kong Center II, making it the largest tenant in the 41-storey Grade A office building to date. However, the experts think ICBC would enjoy a 25 to 30 percent discount due to the scale of the commitment.
If the lease agreement is signed, it would enable owner CK Asset to fill up almost 33 percent of the 32 office floors in the commercial property. Also, the office landlord is said to have secured another 3 tenants for about 1 office floor at the tower, which is expected to be completed later in 2023.
Cheung Kong Center II, which is the redevelopment of Hutchison House, is estimated to cost HK$31.8 billion (then US$4 billion) when it was announced in 2018.
Office leasing professionals told Mingtiandi that ICBC has been looking for a new office for some time, with rumours swirling that the company may be interested in acquiring Hongkong Land’s Three Exchange Square.
The office rental transaction, which is said to be awaiting final approval from ICBC’s executives in Beijing, would lead to the transfer of the Hong Kong headquarters of the world’s biggest bank by assets from Champion REIT’s 3 Garden Road a few blocks away.
At the end of 2022, office rents at 3 Garden Road average HK$99.7 psf. The 1992-vintage commercial property has struggled to maintain tenants amidst an increasingly competitive market, with its office vacancy rate rising from 11 percent in 2022 to 17.3 percent at the end of last year.
And if ICBC manages to achieve even HK$10 psf in rental savings at Cheung Kong Center II, it would reduce the bank’s monthly rent by HK$2 million. Besides moving a block or two closer to Hong Kong’s commercial heart, ICBC’s potential new home would provide the bank with 3.2 metres of ceiling height and amenities such a “Zen Sky Garden” on level 26.
Furthermore, sources revealed that ICBC is moving some of its back office employees to Sun Hung Kai Properties’ The Millennity in Kowloon East’s Kwun Tong.