Source:
https://scmp.com/business/companies/article/2187523/aia-bidding-farewell-its-iconic-building-wan-chai-eye-future-good
Business/ Companies

AIA bidding farewell to its iconic building in Wan Chai with an eye on a future of good fortune

  • New building, constructed on same site, will be tech savvy with green elements.
  • Locally, the building was considered "lucky" because it was located near a cemetery and has windows that look like coffins
AIA Group’s Edmund Tse Sze-wing stands outside the AIA building in Wan Chai. Locals say the windows look like coffins, which brings luck. Photo: Jonathan Wong

AIA, one of Asia’s largest insurers, is spending huge sums of money to rebuild its 50-year-old Wan Chai headquarters because it sees strong growth ahead, according to its chairman Edmund Tse Sze-wing.

“An ageing population, growing wealth and the opening up of the Greater Bay Area will all lead to strong growth of the insurance industry in the next 50 years in Hong Kong. This is why it is worth it to rebuild our headquarters in Wan Chai to prepare for our next 50 years’ expansion,” Tse said at a group media briefing that was part of activities to bid farewell to the building located at Stubbs Road.

As first reported by the South China Morning Post in December, AIA plans to redevelop the Stubbs Road headquarters over the next four years. Construction begins in April.

While the company once considered renovating the building, the Hong Kong listed insurer eventually decided to opt for redevelopment.

“We want to introduce the most advance technology and equipment to our headquarters. This could not be done by the renovation, as the Stubbs Road building was first build in 1967 and was too old to add in the new technology. We have thus decided to demolish the building and rebuild it with the concept that it will include all the latest information technology, green concept and energy saving equipment,” he said.

Tse declined to give the sum of investment or other details as it is still subject to the government’s approval of the redevelopment planning.

Property agents estimate the construction cost will reach HK$1.4 billion, with the building being valued at about HK$8 billion when completed.

Tse said the Stubbs Road redevelopment building will continue to act as its Hong Kong headquarters for AIA, the same as its current status. AIA Central at 1 Connaught Road Central, which has been in use since 2005, serves more as a regional headquarters.

Tse, at 81 years old, was among the few remaining employees who had worked in the AIA headquarter when it was first completed in 1969.

He led a group of journalists to tour the building last week and arranged hundreds of staff for a farewell ceremony for the old building, which was the first commercial building in Wan Chai.

Goldman Sachs, KPMG and Freshfields Bruckhaus Deringer have relocate their back offices from Central to cheaper suburbs in recent years. The Securities and Futures Commission is also joining the list of those exiting Central and is moving to Quarry Bay in 2020 to escape high rents. The exodus has sparked a humorous phrase – “de-Centralisation.”

Grade A offices cost between HK$92 and HK$192 per square foot to rent in November of last year, and sold for between HK$38,000 and HK$50,000 per square foot, according to Knight Frank. Rents were expected to rise a further 5 per cent this year, according to Nomura Research, while sales prices were also likely to increase, agents said.

Tse said the need to expand outside Central happened 50 years earlier for AIA and will continue.

“Back then, our offices in Central in the early 1960s were too small. Our founder Cornelius Starr considered we needed to build our own headquarters. We opted for buying our own land at Stubbs Road to build the 27-floor building then,” Tse said.

The building, the tallest in Wan Chai and the first commercial building outside Central, became a landmark in Wan Chai. Locals liked to say that the building had two things going for it that brought good fortune and money, based on Chinese feng shui: its location next to a cemetery, and its windows that are shaped like coffins.

James Kinoshita, the architect of the AIA Building in 1969 who was behind many iconic buildings in Central including the Jardine House, played down the feng shui speculation about his design.

“Actually, the windows itself is continuous and placed clear and away from the structural columns which is located on the external surface of the building. Therefore it may appear that the windows are hexagonal shape viewing from the outside but the windows are independent of the column,” Kinoshita said in a written reply to the Post.

AIA have leased offices at the Hopewell Centre in Wan Chai as temporary office space for 900 staff and consultants during the redevelopment.

The redevelopment coincides with the 100th anniversary this year of AIA's founding in Shanghai in 1919 by American Cornelius Starr, who later expanded the business worldwide to become American International Group (AIG).

Tse said it was Starr’s idea to have a helicopter landing space at the top floor of the AIA Building, as he wanted to fly to it.

“However, Mr Starr died a year before the building was completed in 1969. The helicopter landing space was thus never been used,” Tse said.

The building has served the thousands of agents and staff of AIA during many up and down times, including the booming insurance industry days of the 1980s and the global financial crisis in 2008, when the US government took control of AIG under a rescue plan requiring US$180 billion in emergency funding.

AIA was listed in Hong Kong in 2010, raising HK$159.08 billion, a record for the city, according to stock exchange data. AIG sold its remaining stake in AIA in 2012.