Companies head back to Central where tumbling office rents in Hong Kong’s prime business district have made trophy addresses affordable
- Central endured a 7.6 per cent vacancy rate, equivalent to 1.2 million sq ft of empty space, in the first quarter of the year, a 15-year high
- Rents are down by a quarter from two years ago, giving companies the opportunity to get an address in the city’s iconic buildings
S&P is relocating to Three Exchange Square in Connaught Place from ICC in West Kowloon later this year, a spokesman for the credit-rating agency has confirmed to the Post. The building is in Exchange Square, the complex that houses the Hong Kong International Arbitration Centre and the Hong Kong stock exchange.
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US investment firm Susquehanna International Group is also leaving Three Garden Road to move to AIA Central, the building known for its resemblance to a Chinese junk boat “with a significant cost savings”. The Post has contacted Susquehanna for comment.
These moves come after Central endured a 7.6 per cent vacancy rate, equivalent to 1.2 million square feet of empty space, in the first quarter of the year, a 15-year high, according to Savills. Rents in the district fell 3.8 per cent.
“Flight to quality is certainly a trend which companies are looking at,” said Fiona Ngan, head of office services, Colliers Hong Kong. “Grade A office rents have dropped circa 25 per cent over an 18-month period so businesses can look to make the most of this drop and relocate to Central for the same cost from fringe or decentralised districts.”
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At the peak of office rents in mid 2018, the gap between Central and Island East, one of the most popular non-central office options for many companies on Hong Kong island, was about 175 per cent. This gap has narrowed to 120 per cent, according to Colliers.