Sun Hung Kai Properties

Financial firms drive up office rent rates in Central

PUBLISHED : Wednesday, 21 March, 2007, 12:00am
UPDATED : Wednesday, 21 March, 2007, 12:00am

Strong demand for office space from financial institutions and foreign hedge funds drove office rents in Central 4 per cent higher last month.

Average rents of grade-A offices in Central jumped 4.1 per cent to HK$130 per square foot last month, according to Knight Frank research.

The company recently helped Abax Global Capital to lease new office premises on the 67th floor of Two IFC in Central with monthly rent of HK$150 per square foot, a record high for office rents in Hong Kong.

China Construction Bank recently leased two whole floors with net area of more than 16,000 square feet at York House.

United States hedge fund Providence Equity Partners has also leased a whole floor in York House for its first office in Hong Kong.

Mark Bernard, executive director of commercial agency at Knight Frank, said: 'Many of the overseas hedge funds choose Hong Kong as their first office location in the region due to Hong Kong's developed financial markets as well as its strategic location within North Asia.'

Mr Bernard said their clients in the financial and banking industries were seeking more space.

However, the vacancy was at an extremely tight 3 per cent. 'We are hard pressed to find them the space that they need,' he said.

Mr Bernard expects office rents in Central to rise 10 per cent to 15 per cent this year.