International Firms Lease Hong Kong Offices Amid Low Rents

Hong Kong’s office market appears headed for a turnaround, thanks to its decade-low lease rates.

Multinational firms are taking advantage of office rents that have fallen nearly 50 percent since 2019, Financial Times reported. Average monthly office rents in Hong Kong’s financial district fell to about $12 per square foot in June, compared with $21 in 2019, according to Cushman & Wakefield data cited by FT.

Hedge funds like Point72, private equity groups such as General Atlantic, and law firms including Akin Gump are among those moving into newer and more centrally located offices in recent months, betting the market seemingly bottoming out.

Last week, Hong Kong-based insurer FWD signed what it says is the “largest office lease” of the year in the city, inking a decade-long deal for 330,000 square feet in Swire Properties’ Taikoo Place, according to the Financial Times.

International wealth and asset management firms are growing in Hong Kong with an estimated $4.5 trillion under management, according to the Financial Times.

General Atlantic and Point72 are decamping for The Henderson, one of the city’s newest skyscrapers designed by Zaha Hadid Architects. Akin Gump is also planting a flag at the 36-story building. New York-based trading firm Jane Street Capital signed a $4 million-per-month lease for 223,437 square feet harborfront offices, more than doubling its footprint in the city.

In total, more than 200 companies have applied for Hong Kong offices this year, many of them Chinese companies looking for offshore funding for international expansion. Chinese social media platform Xiaohongshu, which made waves in the U.S. following news of an impending TikTok shutdown, recently opened a 7,000-square-foot office in Hong Kong.

Vacancy rates in prime office buildings in Hong Kong hit a record high of 17.4 percent at the end of last year, per the Financial Times.

The amount of new leasing space available for rent reached its highest point since 2019 in the second quarter, data from Cushman & Wakefield showed.

— Chris Malone Méndez