Bank hops on bandwagon with Central lease retreat

Bloomberg and Kevin Xu

Standard Chartered (2888) is relinquishing its lease on eight floors it occupies in the Standard Chartered Bank Building in Central and will rent out three levels in its Kwun Tong office that it owns, Bloomberg reported.

The office space will become available between next month and April next year.

The Central building's landlord, Hang Lung Properties (0101), is asking for HK$6 million a month in rent for the floors, which span approximately 60,000 square feet.

A Standard Chartered spokeswoman declined to comment. A spokeswoman for Hang Lung Properties said the company isn't in a position to discuss an individual tenant's arrangement, but added that it regularly reviews its office leasing portfolio.

Standard Chartered has said it's looking at office leases carefully in an environment where lenders face pressure to control expenses even before the coronavirus hit. The London-based bank decided to offer flexible work options to more than 90 percent of its 85,000 staff around the world late last year.

Other foreign companies in Hong Kong are trimming office space after work-from-home arrangements took hold during the pandemic. Multinational companies constituted 75 percent of the total surrender of office stock in the last quarter in Hong Kong, according to Cushman & Wakefield.

BNP Paribas recently decided to hand back a floor in Two International Finance Centre. Last year, Nomura and Macquarie Group each gave up some office space in Central.

The vacancy rate for Central's grade A office market reached the highest since 2004 in December, according to Jones Lang LaSalle.

Separately, CHFT Advisory & Appraisal valued the residential site at 9 and 11 Mansfield Road on The Peak at between HK$6.3 billion and HK$6.5 billion, or HK$43,500 to HK$44,800 per buildable sq ft.

The tender closes on Friday. The site covers a total area of 54,540 sq ft.

In December, Wharf won the tender for an adjacent residential site at 2, 4, 6 and 8 Mansfield Road for HK$12 billion, or HK$46,272 per buildable sq ft.

The government had offered to sell the plot, which occupies 2, 4, 6, 8, 9, and 11 Mansfield Road in 2018, but the tender was canceled after bidders failed to meet its reserve price.

This original site has been divided into two parcels for disposal in the fiscal year ending in March.

In the primary market, Chinachem Group said it will release the first price list of Mount Anderson in Kwun Tong on Sunday.