Despite daily protests that have brought real estate activity to new lows in Hong Kong, co-working operator WeWork has continued to take up more space in the world’s most expensive office market.
The New York-based shared space specialist is said to have leased a 60,000 square foot (5,574 square metre) space on Wanchai’s Queen’s Road East for a total of HK$2.7 million ($340,000) per month, according to local media reports this week.
The shared office giant, which has filed the prospectus for its initial public offering this week, is taking up four mid-level floors at the 64-storey Hopewell Center on 183 Queen’s Road East for the price of HK$45 per square foot, marking its fourth new location in the city within this year.
WeWork Grabs Space in Wanchai Landmark
WeWork is leasing the Wanchai space as office availability begins to rise in the district two metro stations east of the Central business hub.
Average rents in the Wanchai and Causeway Bay submarket fell by two percent during the second quarter to an average of HK$77.4 per square foot per month as of the end of June, according to data provided to Mingtiandi by Cushman & Wakefield.
Net absorption in the Wanchai-Causeway Bay submarket in the second quarter amounted to less than 90,800 square feet, according to C&W statistics, resulting in availability in the sub-market increasing by one percentage point to 7.3 percent as of the end of June.
The 60,000 square foot space which WeWork is said to have secured was previously rented out to business services provider Tricor Group, which has recently relocated to a 70,000 square foot new home at Landmark East in the eastern Kowloon’s Kwun Tong.
The 39-year-old Hopewell Center, the first circular skyscraper in Hong Kong, is named after its developer Hopewell Holdings. The Hong Kong-listed infrastructure and property firm, which is controlled by 84-year-old billionaire Gordon Wu, still keeps its headquarters in the building, with Wu’s office located on the top floor.
The iconic tower, about 450 meters south of the Wanchai metro station, is part of Wanchai’s dining and entertainment landmark, The East, which brings together the retail floors of Hopewell Center and the neighboring QRE Plaza, Wu Chung House and GARDENEast.
WeWork Becomes Hong Kong’s Most Active Tenant
The Wanchai lease is the latest in a string of deals for WeWork in Hong Kong, as the New York-based shared office giant becomes the city’s most active lease signer this year.
In March, WeWork agreed to rent the entire Generali Tower on 8 Queen’s Road East, about 550 metres northwest of Hopewell Center in a deal said to cost the company HK$5.03 million per month. The lease of the 18-storey building, which includes a gross floor area of 67,000 square foot is priced at HK$75 per square foot.
In May, the co-working unicorn rented 100,000 square feet at Henderson Land’s new H Code lifestyle building on Central’s Pottinger Street, for HK$55 per square meter, just one month after it took on six new floors, totaling 150,000 square foot (13,935 square meter) in Wharf’s Harbour City complex near the Star Ferry terminal in Tsim Sha Tsui.
In July, WeWork leased two floors at the Octa Tower on 8 Lam Chak Street in Kowloon Bay, securing another 50,000 square feet of space at HK$25 per square foot, or HK$1.25 million per month.
IPO on the Way
WeWork, now has rebranded itself as the We Company, filed the prospectus for its initial public offering earlier this week, taking the latest step towards what is expected to be the second largest stock debut of this year.
The paperwork provided what is believed to be a placeholder value of $1 billion for the stock offering, which earlier accounts had indicated was aimed at raising around $3.5 billion. Timing for the equity sale has not yet been finalised.