The current historic high in terms of office vacancy rates is the 15.9 per cent recorded for Hong Kong Island in July 2003, according to Knight Frank.
Some foreign banks that have reduced their office space in Hong Kong between the second half of 2020 and the first half of 2021 include Deutsche Bank, which used to occupy a 104,0000 sq ft office in ICC, and Standard Chartered, which had a 65,000 sq ft office in Standard Chartered Bank Building, according to Savills.
Meanwhile, demand from mainland Chinese companies is being hampered by the border closure. Beijing’s tightened regulation of certain sectors such as tech, among others, is putting further pressure on the office property segment.
Firms such as Mantra Dao, which offers services on Ethereum, Binance Smart Chain and Polygon, Satori, which operates a digital asset platform, and 8 Block Capital, which focuses on cryptocurrencies, are on the other hand emerging as new tenants on the fringes of Central, according to Savills.
“Central and Sheung Wan have become target areas for [such] companies as they look to expand and set up their operational footprint,” said Richie Lau, director of office services, Colliers Hong Kong. “If a company has all the approved licences in place and is already trading, expansion is an obvious next step and we’ve seen companies like HashKey recently expanding into Three Exchange Square and taking a whole floor, with an existing presence in Cyberport.”
Paul Yien, director of office leasing advisory at JLL in Hong Kong, however, said that for now the demand from these companies was in its infancy and still insignificant. “We saw a few transactions related to cryptocurrency companies, blockchain and NFTs,” he said. “It has yet to become a new trend in the office leasing market.”
