Central Office Space Huge Drop In Rents

More Firms Lease Central Office Space Amid Huge Drop In Rents

HONG KONG – More businesses here are securing leases in the prestigious office buildings in Central amidst a significant drop in office rents, reported The South China Morning Post (SCMP) on Wednesday morning (15 September, SGT).

For instance, multinational digital asset financial services provider HashKey Group is relocating its HQ from Pok Fu Lam to Connaught Place, where it has agreed to lease a 10,105 sq ft office space occupying the entire 14th floor of Three Exchange Square starting on Thursday (16 September), announced property owner Hongkong Land on Wednesday.

“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,” stated Hongkong Land’s director Neil Anderson.

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

The new HQ is nearly 50 percent larger than its current 6,773 sq ft headquarters in Cyberport, which the company plans to continue leasing for its tech and support departments.

HashKey’s move comes as office rents in Central declined by 26.4 percent from its peak in Q2 2019. Property consultancy Jones Lang LaSalle (JLL) said this has prompted some companies to return to Hong Kong’s most desirable business address.

For the whole of 2021, JLL foresees that Grade A office rents across the city could fall by up to 10 percent, before rebounding by around 5 percent by 2022. In comparison, another property consultancy, Knight Frank, projects that overall office rents in Hong Kong could drop by as much as 3 percent next year.

HashKey is among a growing list of companies lured by the drop in office rents in Central. In July, Christie’s agreed to lease 50,000 sq ft of commercial space at The Henderson, which is expected to be ready by 2023. China International Capital Corporation (CICC) also rented another 53,000 sq ft of office space in One IFC in Q2 2021, while S&P Global took up a 22,000 sq ft office space at Three Exchange Square.

“Financial institutions are still a major driving force for Hong Kong’s grade A office, both by size as well as by rental amount,” commented Ada Fung, Executive Director for advisory & transaction services for offices at CBRE Hong Kong.

Banking, finance, and insurance companies lease 39 percent of grade A office space, the most among all sectors, in Hong Kong’s CBD, which includes Central and Admiralty, based on data from Colliers. Hongkong Land also shared that as of 30 June 2021, financial firms made up 42 percent of its occupants.

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