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Cheryl Arcibal

With prime office vacancy rates at record highs and rents continuing to slide in Hong Kong’s main business district of Central, tenants are making the most of the situation and moving to prestigious addresses.
US money manager Invesco is relocating its regional headquarters to Hongkong Land’s Jardine House.
The firm has signed a lease for 33,000 sq ft in the iconic building, known for its distinctive round windows, overlooking the Victoria Harbour from November 1.
“We believe that Invesco is moving back into Central as part of a wider trend we are seeing in the market of a flight to quality,” said Neil Anderson, director and head of office, commercial property, at Hongkong Land.
Henderson pays record US$6.5 billion for Central harbourfront land
The companies did not provide any details about the lease.
“With Hong Kong as the heart of our regional operations, it’s rare to have this unique opportunity to move into one of the most iconic buildings in Central,” said Terry Pan, CEO for Greater China, Southeast Asia and Korea at Invesco.
The relocation trend in the Hong Kong office property market is likely to continue well into 2023, according to Cushman & Wakefield.

“Moving within the same district is always part of the trend of flight of quality moves,” said Rosanna Tang, Cushman & Wakefield’s head of research for Hong Kong. “With rents now more attractive across the submarkets and landlords becoming more flexible, some of the tenants definitely will take this chance to look for premises in the more prime and central location and premises with better management or facilities.”
With some 2 million sq ft of new office space available in Hong Kong as of the end of the third quarter, the vacancy rate has risen to 16 per cent, up from 13.8 per cent in the second quarter, said Tang. Overall office rents declined by 2.3 per cent in the same period.
The move to Jardine House marks Invesco’s return to Hongkong Land’s Central portfolio. From 1998 to 2005, Invesco occupied two floors in Three Exchange Square, which is owned by Hongkong Land. It then moved to Champion Tower, also in Central, occupying space comparable to its new lease in Jardine House.
Rents in Champion Tower and Jardine House are comparable, averaging around HK$88.20 (US$11.2) per square foot at the former and HK$90 per square foot at the latter, according to analysts.
Hong Kong’s reopening to revive office market from its longest slump
As of the first half of the year, banks, asset managers and other financial services companies accounted for more than 40 per cent of Hongkong Land’s office tenant profile in Central, according to the landlord.
The current downturn in Hong Kong’s office property market has been described by CBRE as its “longest and deepest”.
The property consultancy said that an additional 8.2 million sq ft of office space expected in the next two years coupled with record-high vacancies, will drag rents down by as much as 5 per cent this year and by another 5 to 10 per cent next year.
“There are multiple reasons companies relocate, even within the same district,” said Alex Barnes, managing director at JLL in Hong Kong. “This could be to accommodate fluctuations in size, changes in workplace or management direction that may require a different approach to real estate.”
He gave the example of Christie’s move to The Henderson in 2024, which will allow the auction house to accommodate a change in their strategy.
“Sustainability scorecards are increasingly being used by businesses as they shortlist and sign up to new leases,” Barnes added.


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Hong Kong property

Invesco relocates to Hongkong Land’s Jardine House, seizing on rising office vacancies, falling rents in Central

Hongkong Land owns the 52-storey Jardine House office tower in Central. Photo: Nora Tam

Rising office vacancy rates in Hong Kong’s Central business district have pushed rents down. Photo: Felix Wong

Hong Kong, mainland China to see office rents decline through 2022 amid Covid-19 policies, while Singapore, Seoul surge

A night view of Guangzhou, which will see rents decline 3 per cent through the rest of 2022, according to a property consultancy forecast. Photo: Shutterstock

A view of commercial buildings in Hong Kong. The city will see office rents decline by 2.5 per cent in the second half of the year. Photo: SCMP / Dickson Lee

Li Ka-shing’s developer unveils design of Cheung Kong Center II, a 41-storey skyscraper in Hong Kong’s Central

Artist’s impression of the Cheung Kong Center II, which will be a new prime office tower in Central. Photo: SCMP Handout

Oxfam closing charity shop operations after 43 years as Hongkong Land plans to convert Jardine House space into food court

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Take overview shots of the Oxfam Shop, with their new fair trade products included. It's for a story on the growing popularity of fair trade products in Hong Kong, pictured at Silvercord in Tsim Sha Tsui. 10 October 2006

Business

Property

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US money manager has leased 33,000 sq ft in the iconic Jardine House from November 1
The relocation trend in the Hong Kong office property market is likely to continue well into 2023 amid falling rents, according to Cushman & Wakefield


US money manager Invesco has leased 33,000 sq ft in Jardine House from November 1. Property consultants say that the office relocation trend is likely to continue well into 2023 amid falling rents.
