New York law firm White & Case opens 3 floors at Hongkong Land’s York House as tenants cherry pick from Central’s office market slump
- White & Case opened a 25,000-square foot (2,300 square metres) office across three floors late last month in York House, part of Hongkong Land’s Landmark complex
- The lease marked the firm’s return as a Hongkong Land tenant, after spending 15 years down Queens Road Central at Central Development Limited ’s Central Tower
“We are pleased to return to the Hongkong Land Central portfolio as we make room for our expanding team and future growth, [where] we look forward to continuing our focus on excellence and serving our clients as we deepen our expertise and presence in the market,” said Eugene Man, the executive partner at White & Case’s Hong Kong office. “York House will provide our employees and clients with unparalleled access to corporate and market leaders in one of the world’s leading international financial hubs.”
Central’s office rental charges, still among the highest in the world, dipped by 0.1 per cent in March from February, according to JLL. Overall office rents across the city fared worse, with a 0.2 per cent drop in the same month.
Still, the return by White & Case as a Landmark tenant was “not a sweetheart deal,” said Hongkong Land’s director Neil Anderson.
“White & Case chose to return to the Hongkong Land Central portfolio to make room for their expanding team and future growth and support their talent retention efforts,” he said. “York House is not a cheaper location. White & Case wanted to improve their workplace environment and saw the move as a flight to quality.”
The vacancy rate in Central dipped to 7.3 per cent in March, compared with 8 per cent in December 2021, according to data provided by JLL. City authorities have begun to gradually relax some of the social-distancing rules that were enforced in January to keep the highly transmissible Omicron variant of Covid-19 in check.
Money buys Chinese tenants the cachet of Central
The gradual improvement in the take-up rate of empty offices is sustainable in the coming months as social distancing rules are further relaxed, and more employees return to work from their offices, said Colliers Hong Kong’s executive director of capital markets and investment services Thomas Chak.
“Market momentum and activities are likely to improve in the second half as the government gradually relaxes the social-distancing rules from April 21 onwards,” Chak said. “Transactions will become more active in the second half, given the recovery cycle for the sector has been largely delayed by the Omicron strain of the coronavirus.”
Institutional investors are also likely to be more aggressive as they seek opportunities in Hong Kong, property consultants said.
“In fact, 68 per cent of the first-quarter investment transaction [value] in Hong Kong were by institutional investors,” Chak said. “Most of the key investors [who] have their teams and presence in Hong Kong, [they] may have delayed their site inspection or decision-making process, but with the Omicron wave gradually stabilising, the investment market will become active again.”