The Devon House building will be renamed FWD Tower next year and become the insurer’s Hong Kong headquarters.
FWD Hong Kong has signed a decade-long lease for 330,000 sq ft of office space in Taikoo Place, marking the largest office rental deal in the city this year, according to a joint statement from landlord Swire Properties and the insurer on Wednesday.
The company would consolidate and expand its presence in the Devon House building by adding four and a half floors to accommodate business growth. The expansion will make FWD the largest office tenant in Taikoo Place, a complex featuring 10 prime office towers. Devon House will be renamed FWD Tower next year.
“Establishing FWD Tower as our Hong Kong headquarters marks a major milestone in our growth journey and reflects our long-term commitment to the city’s role as a global financial hub,” said Ken Lau, Hong Kong CEO and managing director of Greater China.
FWD has been a tenant in Taikoo Place since 2014.
“We are delighted to strengthen our long-term partnership with FWD through this significant expansion,” said Tim Blackburn, CEO of Swire Properties.
“The recent completion of the Taikoo Place redevelopment project has established a new benchmark for the office sector in Hong Kong, and will significantly contribute to the city’s competitiveness as a global financial centre,” he added.
While FWD and Swire Properties did not disclose the leasing rates, a property agent said the effective monthly rent was about HK$20 (US$2.56) per square foot. A public property listing shows that advertised rents at Devon House are roughly HK$40 per square foot.
According to agents, the space taken by FWD was previously occupied by tenants such as DFI Retail, Burberry and Philip Morris International. The latter has moved to another building within Taikoo Place.
Hong Kong’s office leasing activity rose for the fourth consecutive month in July, pushing down elevated vacancy rates that have been weighing on rents, according to a property agency.
Last month, tenants leased a net 190,000 sq ft of prime office space, with Shell Hong Kong leasing 12,300 sq ft at The Millennity in Kwun Tong, relocating from Landmark East in the same district.
From April to July, the market absorbed a net 463,000 sq ft of office space, the agency said.
In June, Jane Street Asia leased 223,437 sq ft across six floors in Henderson Land’s New Central Harbourfront for HK$137 per square foot, totalling HK$30.6 million monthly, excluding fees. The transaction made the quantitative trading firm the development’s anchor tenant, accounting for 70 per cent of the office and ancillary space in the first phase.
Currently under construction, the premise is set to be handed over to Jane Street in 2027, with a five-year lease beginning in 2028 and an option to renew for an additional four years at prevailing market rates.
Despite improved leasing activity, Hong Kong’s grade A office rents continued to decline, dropping 0.5 per cent in July from the previous month. Experts noted that the city faced a surplus of commercial space that could take seven to 15 years to absorb.
Hong Kong has 15 million sq ft of excess office space – more than the total current inventory in the Central business district, according to another property agency.
