Hundreds of thousands of people may be marching in Hong Kong’s streets and the famously expensive housing market has started looking shaky, but international financiers are still leasing pricey offices in Central, so at least its business as usual in this part of Asia’s financial capital.
This month New York-based investment firm Millennium Management agreed to lease half of a floor in Two International Finance Centre in Central for a total of HK$2.21 million ($280,000) per month, according to market sources who spoke with Mingtiandi.
The New York-based hedge fund manager is paying the equivalent of HK$170 per square foot per month for its new home, making the new agreement one of Hong Kong’s most expensive office leases reported so far this year, despite signs that occupiers are rethinking the appeal of Central’s world leading real estate rental costs.
Moving From Agriculture to Finance
Millennium, which was founded by financier Israel Englander in 1989, will be taking up 13,000 square feet in the mid-zone of the 88-storey office building within Sun Hung Kai and Henderson Land’s IFC complex.
The deal, understood to have been brokered by CBRE, relocates the hedge fund manager, which operates around 200 investment teams globally, from the Agricultural Bank of China Tower at 50 Connaught Road Central, just across the elevated road from the IFC’s harbourfront location.
The relocation brings Millennium into an area that some global financial heavyweights including JP Morgan and Citibank have already fled in favour of newer buildings and lower rents in Kowloon East.
Battle of the Hong Kong Business Hubs
Millennium has chosen to remain in the city’s traditional business hub, where grade A office rents averaged HK$139.6 per square foot per month during the first quarter of this year, according to Colliers International.
The high rents are one of the reasons why, as JLL reported last month, corporate occupiers reduced the amount of office space which they were leasing in Central by 14,500 square feet in April compared to March — the sixth straight month of falling leasing levels in the district, although the agency still found only a 2.2 percent overall vacancy rate in the area, consistent with its March figure.
With Central leading the world for the highest office rents, its often Two IFC, the taller of the two towers in the Sun Hung Kai and Henderson project, which pushes the upper limits for leasing rates in the district.
Earlier this year, Korea’s Mirae Asset Financial Group has taken up a 13,000 square foot space on the 43rd floor of the 420-meter skyscraper for HK$2.34 million per month, or HK$180 per square foot, according to the local media.
Bankers Keep Their Club in Central
Millennium’s decision to stay in Central came two weeks after the Hong Kong Bankers Club made its own decision to stay close to the island financial action.
on the 20,000 square foot (1,858 square meter) home in Central’s Nexxus Building from some HK$2 million ($255,000) per month, equivalent to HK$100 per square foot.
In late May, the Hong Kong Bankers Club, which counts 1,000 corporate members from among the city’s elite banks, law firms and financial services providers, leased a new 20,000 square foot (1,858 square meter) home in Central’s Nexxus Building for around HK$2 million per month, after being forced to relocate from Hongkong Land’s Gloucester Tower.