Stratospheric rents in Hong Kong’s Central? No problem for cryptocurrency start-ups
Annual occupancy costs in Central average around US$307 per square foot a year, topping London’s West End and Beijing’s Finance Street, according to CBRE Group
It is going to take more than a US$600 billion crash in digital assets to deter cryptocurrency companies from splashing out on some the world’s priciest offices.
Cryptocurrency exchanges and investment funds are leasing space in several of the most prestigious buildings in Hong Kong, home to the highest rents anywhere. Companies from BitMEX to Diginex Global have signed up for a combined 72,000 square feet (6,690 square meters) of grade A space in Central and Causeway Bay this year, according to Colliers International.
That represents about 15 per cent of the grade A space taken up since January on Hong Kong Island by mainland Chinese firms, which have dominated the city’s market for prime office buildings in recent years. The soaring rents have prompted tenants including BNP Paribas and Goldman Sachs Group to seek cheaper locations for some of their staff.
That these young cryptocurrency firms can afford the rent -- together, they are paying an estimated HK$10 million (US$1.3 million) a month, according to the various buildings’ going rates -- shows their optimistic outlook in the face of the sector’s recent woes. Colliers said all five leases were signed after bitcoin peaked in December and then nosedived. These days, US$1.3 million will get you approximately five floors in New York’s One World Trade Center.
Bitcoin, the largest cryptocurrency, has tumbled 65 per cent since its peak late last year. Its explosive rise and dramatic collapse, along with that of rival tokens, has prompted authorities from China to the US to scrutinize digital assets. Some firms, like cryptocurrency exchange Kraken, are pulling back, while others, including Binance, are still in hiring mode.