Hong Kong property

US$600,000 monthly office rent at Cheung Kong Center is a breeze for digital currency exchange BitMEX

Cryptocurrency trading platform BitMEX breaks record in paying HK$225 per square foot in rent for entire floor in Li Ka-shing’s Cheung Kong Center

PUBLISHED : Wednesday, 22 August, 2018, 7:07pm
UPDATED : Wednesday, 22 August, 2018, 11:34pm

BitMEX, a trading platform for bitcoin and other cryptocurrencies, has rented the entire 45th floor of the Cheung Kong Center for HK$225 per square foot per month, making it the most expensive office in Hong Kong.

The cryptocurrency firm will take nearly 20,000 square feet in Li Ka-shing’s skyscraper in Central, the city’s core financial district, according to sources familiar with the matter. That would mean the monthly rent will be nearly US$600,000.

The rent has smashed the highest recorded price for office space in the city made in 2011, which stood at HK$210 per square foot.

Office rents in Hong Kong on the brink of soaring past all-time high set before 2008 financial crisis

BitMEX, founded in 2014, earlier considered taking half of the floor at HK$205 per square foot.

Agents said that the current rent at Cheung Kong Center is about HK$170 per square foot while the recent average asking price has soared to HK$200 to HK$210.

“That [HK$225] would set a new benchmark and further drive up the city’s office rents,” said James Mak, district sales director at property broker Midland Commercial.

Hutchison Property Management, a unit of CK Asset, in charge of leasing at the 62-storey tower, declined to comment while Arthur Hayes, chief executive officer of BitMEX, did not respond to inquiries.

“In the past half year, we’ve seen more digital currency or blockchain companies coming to look for spaces in Central,” said John Siu, managing director of Cushman and Wakefield. “[Central] can polish the image of a company.”

BitMEX’s trading volume was US$3.3 billion in the past 24 hours, according to CoinMarketCap. According to The Sunday Times in the UK, which conducted an interview with one of the founders of BitMEX in July, the company is worth around US$3.6 billion. It is one of the largest trading platforms of bitcoin in the world.

Hong Kong’s Central remains the world’s most expensive office address for the third straight year

“Fintech firms are willing to pay high rent to set up offices in Central,” said Denis Ma, the head of research at JLL.

He expects office demand from fintech firms to rise as mainland financial institutions have slowed their expansion in Hong Kong.

Cheung Kong Center is the headquarters of Hong Kong’s richest man Li Ka-shing’s conglomerate.

The grade A office tower also boasts some blue-chip tenants, including Goldman Sachs, Bank of America and investment bank Jefferies Financial Group.

BitMEX will also be the new neighbour of the Securities and Futures Commission, the city’s securities watchdog, which is on the 35th floor.

Hong Kong is the world’s most expensive city in which to rent an office, with Central fetching an annual rent of US$307 per square foot, 30 per cent more than the US$235 per square foot in London’s West End in second place, and almost 53 per cent higher than the US$201 per square foot at Beijing’s Financial Street in third place, according to a report by CBRE.

Vacancy rates in the Central office market are less than 1 per cent, according to Thomas Lam, senior director at Knight Frank.

“Multinational corporations have no choice but to pay higher rents if they plan to expand or open an office here. Most grade A office buildings have a long waiting list,” Lam said.

Additional reporting by Peggy Sito