Chinese tech stocks: companies listed in Hong Kong rush for Tsim Sha Tsui offices lured by cheap rent, railway links

The forecast comes after Tencent, which has been listed on the local bourse for some years, leased a 10,000 square-foot office space in The Gateway

A slew of short-video apps such as Bilibili, Duoyin, and iQiyi are reportedly eyeing flotations on the city’s stock exchange

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Aerial view of Nathan Road in Tsim Sha Tsui, one of the area’s main shopping zones. Photo: May Tse

Published: 10:30am, 17 Feb 2021Updated: 10:58am, 17 Feb 2021

Cheaper rents and proximity to the high-speed rail link between Hong Kong and mainland China are likely to boost shopping haven Tsim Sha Tsui’s standing as a preferred location for Chinese technology companies that are looking to go public via the city’s stock exchange, according to analysts.

The forecast comes after Tencent, which has been listed on the local bourse for some years, recently expanded its footprint in Hong Kong by leasing a 10,000 square-foot office space in The Gateway, a building owned by Wharf (Holdings) in the district. It has other offices at Three Pacific Place in Wan Chai and the World Finance Centre, also in Tsim Sha Tsui.

Tencent would be paying HK$6 million (US$770,000) in rent per year for The Gateway space, or HK$55 per square foot, which is about a fifth lower than the HK$70 per sq ft it would have paid for the same space two years ago, agents said.

With popular Chinese short video app Kuaishou Technology having recently listed its shares in Hong Kong, and its competitors such as Bilibili, Duoyin, and iQiyi reportedly eyeing flotations, the city is likely to see these companies lease office space, offering some relief to landlords grappling with high vacancy rates as the economy reels from the impact of the Covid-19 pandemic. Tech firms account for 10 per cent of total tenants in Hong Kong offices, according to Colliers.

“In China, Shenzhen has been a tech hub instead of Hong Kong, but [because of Chinese stock listings], it is believed that more tech firms will set up offices in Hong Kong” said Daniel Wong, CEO of Midland IC&I. “They will locate their offices in different locations, but probably not Central because of the high rent.”

Shenzhen-headquartered Huawei Technologies, one of the world’s largest telecommunications equipment providers, and smartphone maker Xiaomi also have offices in The Gateway in Tsim Sha Tsui.

“Tsim Sha Tsui offers cheaper rental, it has better building quality compared with Hong Kong Island, and is close to the West Kowloon station,” said Fiona Ngan, head of office services, Hong Kong, at Colliers International.

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