Firms head east to avoid high Central office rents

BNP Paribas and Freshfields Bruckhaus Deringer are amongst the first to move.

As prime office rents in the highly-sought after Central submarket continue on an upward trajectory, an increasing number of multinational corporations and local companies are opting to decentralise and relocate to non-core areas to save on rental costs, according to a press release from Cushman & Wakefield.

Traditional Central tenants like Freshfields Bruckhaus Deringer and BNP Paribas are moving to non-core areas like Hong Kong East to reduce excessive Central rental overheads.

A separate study by JLL’s Premium Office Rent Tracker reveals that Central office space is the most expensive in the world with a cost of $210 per square feet monthly – ahead of Midtown New York and West End London.

It comes as no surprise that companies have joined on the relocation trend as Hong Kong East as the area similarly offers prime business conditions conductive for setting up headquarters.

"However, for traditional Central tenants, Hong Kong East is a more viable alternative for relocation thanks to its proximity to Greater Central, improving highway connectivity new and high quality office space and maturing F&B / retail supporting amenities. We expect more companies to 'head east' in 2018 as part of a cost saving and office upgrade strategy," said Cushman & Wakefield Executive Director Keith Hemshall.