Hedge funds ‘still need Hong Kong office space’

[Published June 2011 and updated June 2023] Despite Hong Kong having the most expensive office space in the world, demand is still high in the city, mostly from expanding hedge funds, it has been reported.

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According to Bloomberg, Connecticut-based hedge fund SAC Capital is considering boosting its office space in the location by at least 20 per cent. The fund has recently hired more employees to work out of its 5,000-square-foot office in York House, in Central.

Additionally, Ortus Capital, a Hong Kong-based hedge fund has decided to increase its office space by 20 percent in St George’s Building.

During the financial crisis in 2008, many hedge funds fled from the region, but now cities like Hong Kong and Singapore are seeing the return of these funds.

Bernard Chu, Director at Sagarmatha Capital Ltd., a Hong Kong real estate broker with expertise in hedge funds and private equity firms, told Bloomberg: “Hedge funds and private equity are capable of paying higher rents and they make decisions fast.

“They’re willing to pay around 5 to 10 per cent more compared with investment banks, law firms and accounting firms, and they’re willing to pay an even higher premium for grade A buildings such as the International Finance Centre.”

Earlier this year Hong Kong office space climbed to be the most expensive in the world, closely followed by the West End of London and Tokyo.

However, it has been reported that the price of office space in Hong Kong has been driving some companies to move to its rival city Singapore.

And while Singapore is currently building a raft of new office space, central business districts in Hong Kong are not set to benefit in the next year from any fresh space.

Editor’s notes: As of Q1 2023, Hong Kong’s Central district remained the most expensive location to rent office space in the world.

However, it was reported that following the pandemic and the lifting of certain limitations, office leasing activity had increased in Hong Kong and that some office agents were expecting rents to increase by 5 per cent over 2023.