Canadian financial services firm Manulife now has a third office tower in Kowloon East bearing its trademarks as PAG’s International Trade Tower has been rebranded under the name of its anchor tenant.
“We are excited to broaden our footprint into another Grade-A building, now called Manulife Place,” said Damien Green, chief executive officer of Manulife Hong Kong and Macau in a press release. “This move is a significant milestone for Manulife in Hong Kong, demonstrating our continued commitment to investing in this important market and meeting the needs of mainland Chinese visitors as the borders gradually reopen,” Green added.
The renaming is the second identity switch for the building which connects Kwun Tong Road and Wai Yip Street near the Ngau Tau Kok MTR station, after PAG had re-christened the former Mapletree Bay Point with the International Trade Tower moniker after buying the office block from Singapore’s Mapletree Investments in 2019.
The name change for the grade A office tower on Wai Yip Street in Kowloon East comes after the insurer in April agreed to occupy four floors in the ITT, marking the city’s biggest office leasing dea since 2019 in terms of floor area, and the largest in Kowloon East since 2018.
Manulife Heads East
A former industrial area which has been a focus of government redevelopment efforts, Kowloon East has attracted a number of big name tenants this year as multinationals such as Manulife take advantage of newer properties with larger floorplates and lower rents in the emerging commercial district.
The firm’s relocation of some of its workforce into the newly renovated space provides a welcome boost for Kowloon East, which has the lowest occupancy rate of any of Hong Kong’s primary hubs, even after vacancy fell to 13.4 percent as of end-October, which represented a 0.4 percentage point drop compared to a month earlier, reported JLL.
Average monthly rents in Kowloon East during October remained steady from the previous month at HK$30 per square foot, making the cost of renting in the area some 73 percent less than the prevailing rates in Central, where office tariffs averaged HK$113.60 per square foot per month during the same period, according to a Knight Frank report.
Manulife has become one of the mainstays of the migration to Kowloon East with its new lease in Manulife Place covering 145,000 square feet (13,471 square metres) of space in the 660,301 square foot property.
With assets under management of HK$8.6 trillion as of 30 September, Manulife had been on a hiring spree since its April lease agreement with the company now employing more than 11,000 advisors in the city, according to its statement. Now that the new office is ready, Manulife expects to house as many as 3,400 of its agents in the space at full capacity.
The new lease in the property known for its 3.2 metre ceiling heights and 35,000 square foot floor plates gives the insurer its fourth location in Kowloon East and its third on Wai Yip Street after the company had acquired what is now the Manulife Tower in 2013 to complement its current headquarters in the Manulife Financial Centre at 229 Wai Yip Street.
Office Market To Bottom Out
Major leases such as Manulife’s have remained rare this year in Hong Kong, as the city’s office market struggles to find its footing after a nearly two-year downturn.
Prime office leasing activity in the city contracted by 643,400 square feet in the first 11 months of 2021, although JLL noted in its year-end property review that the majority of this figure had been recorded in the first half of the year. Since then, more instances of expansion had taken place in recent months, with some tenants reversing their decisions to surrender office premises, the property services firm added.
Bupa Insurance followed Manulife in signing a mega-lease in Kowloon East as it agreed in June to lease a 92,490 square foot office space in Nan Fung and Link REIT’s The Quayside in Kwun Tong, as it relocated from Quarry Bay.
Despite the net retraction in Hong Kong’s office market this year, property brokers painted an encouraging picture of what to expect in 2022.
“We believe the office market has entered the last phase of the current down cycle and is on the cusp of recovery in the near future,” said Alex Barnes, JLL Hong Kong’s head of agency leasing, at the firm’s Year-end Property Review and Market Forecast press conference last week. Vacancy rates could, however, edge higher due to a considerable amount of office supply scheduled for completion in 2022, he added.
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