Sun Hung Kai Properties

Fortis expands in Central despite increasing rents

PUBLISHED : Wednesday, 04 April, 2007, 12:00am
UPDATED : Wednesday, 04 April, 2007, 12:00am

Fortis, a Belgian financial group that agreed to buy control of Pacific Century Insurance, would soon sign a lease for office space at Three Exchange Square, undeterred by rising rents in the prime Central business district, a source said.

Fortis, which now leases offices in Wan Chai, would rent an additional 30,000 square feet of space in the grade-A office tower at a monthly rent of HK$100 per square foot, the source said.

Fortis joined other global financial firms in moving into Central despite unabated rent rises in the prime district.

Average rents at grade-A offices in Central rose 4.1 per cent to HK$130 per square foot in February, according to Knight Frank research.

Abax Global Capital earlier leased new office premises on one floor at Two IFC for a monthly rent of HK$150 per square foot, a record high for office rents in Hong Kong.

The source did not say which of Fortis' operations will move into Three Exchange Square.

The group's offices in Wan Chai, including Fortis Bank Asia Tower and Central Plaza, take up about 90,000 sq ft of gross floor area.

Fortis and Hongkong Land, the landlord of Three Exchange Square, were unavailable for comments last night.

Fortis is set to add the insurance arm into the local operation after it agreed last month to buy 50.48 per cent of Pacific Century Insurance, a Hong Kong-listed firm controlled by Richard Li Tzar-kai, for HK$3.53 billion.

Property consultants said as some financial groups were paying higher rents to move into Central, existing tenants may be forced to seek other locations when they expanded.

Morgan Stanley was still in talks with Sun Hung Kai Properties about leasing eight floors in what will be Hong Kong's tallest building, the 118-storey International Commerce Centre at Kowloon Station, according to another source.