Rents for prime offices in Central could rise up to 5 per cent, according to a property consultancy, while another one expects a gain of as much as 8 per cent
Ares Management, one of Asia’s largest alternative investment managers, is doubling its real estate footprint in Hong Kong, a move that aligns with a broader expansion by financial firms and demand for office space in the core Central business district.
The Los Angeles-based asset manager would add about 12,500 sq ft of space in The Landmark-Gloucester Tower , where it has been a tenant since 2017, according to a statement from the landlord Hongkong Land on Monday. The new lease will be effective in March.
“We are delighted that Ares has chosen to expand in Hongkong Land’s Central portfolio, underscoring our position as the location of choice for financial services firms as we provide an unparalleled community of innovative services, world-class amenities and superb connections for our tenants,” said Neil Anderson, director and head of office and commercial property at the largest commercial landlord in Central. “The broader flight to quality trend solidifies our leading position in building experience-led city centres.”
As of June, banks and financial services firms accounted for 42 per cent of all office tenants, making them the biggest category in the developer’s Central portfolio, according to Hongkong Land.
Hong Kong’s prime office property segment was poised for better fortunes this year as leasing activity increases and new supply eases, according to analysts.
Last year, overall office rents in the city fell 2.9 per cent from a year earlier, the least since 2019, according to a property consultancy. Rents in Central were broadly flat, while Tsim Sha Tsui recorded growth of 2.9 per cent, it added.
This year, rents for grade A offices in Central were likely to increase up to 5 per cent, according to another property consultancy.
“Office leasing activity is expected to be quite diverse across subdistricts, while the flight to quality will continue,” a property consultant said.
Premium Central office rents were likely to rise by as much as 8 per cent, while overall rents on Hong Kong Island were likely to decline up to 5 per cent, Wong said.
Meanwhile, the supply of new grade A office space this year and next was likely to be lower than in the last two years, according to forecasts.
Projected completion of 3.28 million sq ft of prime office space in 2026 and 2027, compared with 3.62 million sq ft last year.
Last year, a number of major leasing deals were signed, including US quantitative trading firm Jane Street Asia in June agreeing to lease 223,437 sq ft for HK$30.6 million (US$3.93 million) a month at Central Yards , Henderson Land’s under-construction mixed-use development at the New Central Harbourfront.
Hedge fund Qube Research & Technologies signed a lease last month for 146,000 sq ft spread across six floors, making it the largest private tenant at Two International Finance Centre .
The London-based firm will take up the space occupied by UBS Group, with the lease set to begin in 2027.
