Canada-based financial services firm Manulife said Wednesday that its Hong Kong operation had signed a lease agreement for 145,000 square feet (13,471 square metres) of office space in Kowloon East, marking the city’s biggest office leasing deal in terms of floor area since July 2019.
The deal, which will see Manulife Hong Kong take up four floors at International Trade Tower, is also the largest since April 2018 in Kowloon East, a historically industrial area undergoing commercial redevelopment.
Manulife will serve as one of the anchor tenants at ITT — a building owned by Hong Kong-based fund manager PAG — as the firm continues a hiring spree that saw headcount reach 10,706 in the city by the end of 2020, up more than double in a decade.
“We are excited to conclude this lease deal as part of our plan to accelerate our agency expansion and further support our continued growth,” Damien Green, CEO of Manulife Hong Kong and Macau, said in a release. “It has been our goal to achieve annual double-digit growth in our agency force to meet increasing customer demand for protection. This also reaffirms Manulife’s long-term commitment to our ambitious growth agenda in Hong Kong and solidifies our leadership in the financial industry.”
Feeling Right at Home
ITT will be Manulife’s fourth Grade A office in Kowloon East, making the firm one of the largest employers in the area. Manulife Hong Kong has been based at Manulife Financial Centre since 2009. It acquired Manulife Tower in 2013 and expanded its agency offices to The Quayside, owned by Link REIT and Nan Fung Group, in 2020.
The new office is just a three-minute walk from Ngau Tau Kok MTR station, in the heart of what Hong Kong officials are promoting as a second CBD for the Asian financial hub. The 23-storey ITT was completed in 2018 and acquired by PAG from Singapore’s Mapletree Investments in February 2019 for as much as HK$9.9 billion ($1.27 billion).
“We are very proud to have Manulife, a multinational premium brand with deep roots in Hong Kong, as ITT’s anchor tenant,” said Claire Chan, managing director at PAG. “We believe this best-in-class workspace, in a thriving neighbourhood, will help bolster the wellbeing of Manulife agents and support the company’s future development.”
The leasing deal was brokered by CBRE Hong Kong.
Jump-Starting the Market
The Manulife transaction will deliver a boost to a Hong Kong office leasing market hit by a wave of tenant downsizings in recent months.
In the latest pare-down, French bank Societe Generale said late last month that it would trim its presence at Swire Properties’ Three Pacific Place to six floors from seven as part of a five-year renewed lease starting in October.
In the previous two months, Bloomberg reported that Singaporean bank DBS would release two of the eight floors it occupies at Swire’s One Island East tower in Quarry Bay and that the UK’s Standard Chartered would relinquish eight floors it occupies in the Standard Chartered Bank Building in Central and rent out three levels in its Kwun Tong office that it owns.
In addition, Hong Kong news site HK01 said German giant Deutsche Bank was surrendering three of the 12 floors it leases at the International Commerce Centre in West Kowloon.
Meanwhile, the little-known Bank of Dongguan from mainland China leased space on the 25th floor of Two International Finance Centre in Central after Japan’s Nomura gave up the offices in 2020.
In JLL’s Hong Kong Property Market Monitor report released in mid-March, the agency revealed that Grade A office rents in the city declined for a 21st straight month in February, as the overall vacancy rate remained steady at 9.3 percent.
In February, the amount of Grade A office space leased in the city fell by 55,100 square feet, with tenants surrendering a record 1.77 million square feet.