JP Morgan leases Quarry Bay space
United States investment bank JP Morgan has rented 11 floors at One Island East in Quarry Bay and plans to hire more staff in Hong Kong as it sees rosy business prospects in the Asia Pacific.
It announced yesterday its commitment to lease up to 237,000 square feet from the 43rd floor to the 54th floor of the 70-storey building, the largest transaction ever for the Swire Properties-owned complex.
'Our decision to take this additional space basically has been driven by the rapid expansion of our business footprint. We've seen significant headcount growth and looking out longer term beyond 2011, we expect continuous growth relative to current economic conditions,' said Roy Kinnear, the chief operating officer of JP Morgan Asia-Pacific. 'While there may be ups and downs we are growing overall in Hong Kong and the region.'
A Swire Properties spokeswoman confirmed the deal without disclosing details. Property agents said the asking rents for offices exceeded HK$35 per square foot.
JP Morgan will move into Island East One in four stages. The first batch of 700 staff is expected to take up the new offices on August 1, mainly from divisions such as technology, parts of treasury and securities services as well as some other support functions.
Unlike other global financial firms in the city, JP Morgan has no plans to move out of its headquarters in Central. The company rented 207,000 sq ft at Hongkong Land Holdings' Chater House for 10 years in 2001.
'Our Asia-Pacific headquarters in Hong Kong will remain in Chater House in Central and retain a maximum of 2,000 staff,' said Gaby Abdelnour, the chairman of JP Morgan Asia-Pacific.
Added Mr Kinnear: 'We are committed to Central as a key business location while recognising the economics. To the extent that businesses are moved out of the area we will always retain some kind of that presence in Central.'
Financial institutions have been stung by soaring rents in Central and moved into grade A offices in non-core business districts since last year.
Morgan Stanley said last August that it had leased 10 floors with 350,000 sq ft at International Commerce Centre in West Kowloon for its headquarters. The company will move out of its offices at Exchange Square in Central.
Credit Suisse Group leased the top 10 office floors with a total gross floor area of 300,000 sq ft at the end of last year. The firm is expected to move its entire Hong Kong operations to ICC from Exchange Square in Central.
Andy Yuen Chun-yin, a director of business space at DTZ, said fears of a recession in United States had driven the financial institutions to expand their business in Asia, which has more business opportunities.
'The financial institutions remain active in looking for office space for expansion in Hong Kong,' he said. He expected office rents in Central to rise 5 to 10 per cent in the first half, while rents in other districts would have a small growth.