Law firm’s new office in Central a sign demand still strong for quality space
US law firm White & Case’s leasing of new premises in Central shows that demand remains firm for choice commercial space in the district.
The company opened a 25,000 sq ft office across three floors late last month in Hongkong Land’s York House, leased for an undisclosed price.
Executive partner Eugene Man said the office gave the company room for expansion and “provides our employees and clients with unparalleled access to corporate and market leaders in one of the world’s leading international financial hubs”.
Hongkong Land director Neil Anderson said White & Case was looking for an upgrade.
“York House is not a cheaper location. White & Case wanted to improve their workplace environment and saw the move as a flight to quality.”
The deal comes as office rents in Hong Kong have fallen 27 per cent from their peak late last year, according to Morgan Stanley. Prices are likely to remain soft as 4.6 million sq ft of new grade A office supply is likely to be added this year, the second-highest annual addition since 6.8 million sq ft were added in 1998.
Central’s office rents, still among the highest in the world, dipped by 0.1 per cent in March from February, according to JLL, while overall office rents across the city saw a 0.2 per cent drop.
The vacancy rate in Central dipped to 7.3 per cent in March, compared with 8 per cent in December 2021, according to JLL.
The gradual improvement in the take-up rate of empty offices would be sustainable in coming months as social distancing rules were further relaxed, and more employees returned to work from their offices, according to Thomas Chak, Colliers Hong Kong’s executive director of capital markets and investment services.
“Market momentum and activities are likely to improve in the second half as the government gradually relaxes social-distancing rules from April 21,” Chak said.
“Transactions will become more active in the second half, given the recovery cycle for the sector has been largely delayed by the Omicron strain.”
Institutional investors were also likely to be more aggressive as they sought opportunities, he said.
“In fact, 68 per cent of the first-quarter investment transaction [value] in Hong Kong were by institutional investors,” Chak said.
“Most of the key investors [who] have their teams and presence in Hong Kong, may have delayed site inspection or decision-making process, but with the Omicron wave gradually stabilising, the investment market will become active again.”