Carlyle Moving Hong Kong HQ to The Henderson in Central

Henderson Land Development has secured a second tenant at its 36-storey office building in Hong Kong’s Central business district, with US private equity giant Carlyle Group having agreed to lease about 20,000 square feet (1,858 square metres) of space at The Henderson, according to an announcement made by the developer this week.

In a move to consolidate its Asia Pacific headquarters, Carlyle and its fund of funds and secondaries unit AlpInvest Partners will be settling into at least a full floor of the Grade A office tower on Murray Road, relocating from Admiralty’s Two Pacific Place and Three Garden Road.

“We appreciate the trust placed in us by Carlyle, which has chosen to relocate its Asia Pacific headquarters in Hong Kong to The Henderson as it continues to grow and expand its more than two-decade presence in the region,” said Henderson Land’s chairman Martin Lee Ka-shing in the announcement. “As a world-class developer, we hope to team up with more of the likes of Carlyle to contribute to the long-term prosperity of Hong Kong.”

The Henderson is now 15 percent pre-leased, with the Carlyle deal being announced about one year after Henderson landed Christie’s as its first tenant, with the British auction house set to move into about 50,000 square feet in the building when it opens in 2024.

Central Headquarters

Designed by architectural firm Zaha Hadid Architects, The Henderson adds about 465,000 square feet of floor area at 2 Murray Road next to Chater Garden. The tower, which is located less than a 10-minute walk from the Central MTR station, also sits within 500 metres (546 yards) of both the 72-storey Bank of China building and the 63-storey Cheung Kong Center.

Asking rents at The Henderson are said to average around HK$130 per square foot per month, according to market sources. That rate is about 8 percent higher than monthly rates at Carlyle’s former offices at Two Pacific Place and Three Garden Road, which average HK$120 per square foot, sources said.

The developer controlled by the family of billionaire Lee Shau-Kee, which paid a record HK$23.3 billion ($3 billion) to acquire a former Murray Road car park in 2017 to make way for the project, has already received top level design credentials for the tower – including platinum precertification in both the WELL Building Standard (WELL) and the LEED standard for green buildings.

Braving the Downturn

Construction continues on the Henderson against a backdrop of sliding office rents in Central, which by the second quarter had declined as much as 25 percent from the same period in 2019, said Leung. Following that market peak, the months of social protests and the outbreak of COVID-19 in 2020 drove asking rents for Grade A offices in Central down to around HK$100 per square foot per month, Leung said.

Henderson’s latest leasing deal was announced after Hong Kong’s Grade A office market shrank by 96,800 square feet (8,993 square metres) in June, after eight straight months of positive take-up, according to JLL’s latest property market monitor.

Despite the challenges facing the city’s struggling property market and the slow pace of leasing at its Murray Road project, Henderson in November of last year acquired Site 3, a 516,312 square foot commercial plot in Central, for a record price of HK$50.8 billion.

That acquisition positioned the blue chip developer to become the second largest commercial landlord in Central after Hongkong Land, with at least 500,000 square feet in the project having been set aside for offices.