As landlords navigate soft office demand, tech and digital enterprises are stepping in to capitalise on falling rents and more favourable terms
Digital bank ZA Bank is taking 45,000 square feet (4,181 square metres) across four upper floors at Hysan Development’s Lee Garden Eight for its new headquarters, adding to a wave of financial and technology companies reshaping Causeway Bay’s commercial landscape.
The move comes as landlords across the district grapple with a changing property market marked by excess office space. The bank is scheduled to move into Tower 3 in 2027, coinciding with Hysan and partner Chinachem Group completing the delivery of about 1.1 million square feet of commercial space to the district in the fourth quarter of this year.
The leasing push comes as Causeway Bay and Wan Chai continue to absorb office supply, with demand recovering more slowly than in Central. Grade A office vacancy in the two districts stood at 9.8 per cent in August, according to a property consultancy.
Hysan’s office portfolio was 93 per cent occupied at the end of June, down from 94 per cent six months earlier. Office turnover fell 1.3 per cent in the first half to HK$694 million (US$88.5 million), while rental reversions remained negative, according to interim results published in August.
To offset these trends, Hysan has targeted more fintech and other digital economy tenants for Lee Garden Eight . Over the past few years, ample supply and cheaper rents have prompted some companies in the district to move to Central.
“The new economy tenant portfolio is becoming stronger,” said Ricky Lui, Hysan’s executive director and chief operating officer. Leasing activity, he noted, had picked up recently, with the current tenant mix roughly split among financial services, professional services and co-working operators.
“The pre-leasing is progressing well,” Lui added, saying Lee Garden Eight had reached double-digit occupancy. “The project is definitely one of the choices tenants consider when they look for a new location, and we are very confident about that.”
For ZA Bank – which began operating in 2020, surpassed 1 million users last year and now has about 400 to 500 employees – the expansion would support continued hiring, said CEO Calvin Ng.
“We have been staying in our previous office for quite a long time, so we want to upgrade both the hardware and software,” Ng said at a welcoming ceremony on Wednesday.
“We also want a workplace that is more comfortable and convenient for employees, including better options for social gatherings and dining,” Ng noted, citing Causeway Bay’s mix of offices, restaurants and other amenities as an important factor in the bank’s decision. ZA Bank has no immediate plans to open a physical branch.
The broader shift is also visible at street level. Causeway Bay was once one of Hong Kong’s main luxury shopping districts, with international brands paying some of the city’s highest retail rents. As rents have fallen, financial and technology companies have started taking prominent retail space.
EleBank, another licensed digital bank, is taking a 1,640-square-foot ground-floor shop in Causeway Bay for about HK$500,000 a month, according to market sources. That stood at about 76 per cent below the HK$2.1 million monthly rent paid by Fossil for the shop at its peak in 2012, according to a local property agency.
