South China Morning Post
Hongkong Land Holdings, owner of The Landmark and The Exchange Square in Central, is poised to upgrade its half-century old buildings with modern features it hopes will help attract a new generation of millennial bankers and lawyers. The 132-year-old landlord, which owns some 450,000 square metres of prime office and retail properties in Central, has been experimenting with a more modern aesthetic packed with "Instagram moments" in some of the city's iconic buildings, where many young hotshots work on IPOs and M&A deals worth billions of dollars. International companies have been relocating back to Central, Hong Kong main's business district, where rents are down by a quarter from two years ago, giving organisations the opportunity to get an address in the city's trophy buildings. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Last summer, Hongkong Land launched a modern food court with nine stalls run by some of the city's trendiest purveyors of food and drink, including Honbo, Co Thanh and Young Master Brewery, in the basement of Jardine House. And a gallery featuring New York graffiti and street art in a replica carriage of the city's famous subway has been on display since March in the basement of The Landmark. "What we see is that while the older generation of professionals in suits and ties will continue to have a place in Central, it is also very important to build an ecosystem for the next generation of leaders," said Raymond Chow, executive director of Hongkong Land, the biggest office landlord in Central. "Historically bankers and business people like me would spend our 5:30 happy hour meeting friends at bars. But now the new generation might say: 'Hey, there is a new spinning class at 5:30, we should go spinning.' "So what that probably means is we provide less bars and put more spinning facilities out there." More innovative and trendy Instagram-moment check points will be rolled out in the next six to 12 months as Central goes all out to woo back the new generation of some of its prestigious former tenants. "Over the next few months, we will have a series of new F&B outlet openings and other concepts for spaces in our portfolio to cater for the new requirements of our clients and tenants. Some tenants are actually asking for more space. S&P is a testament to the fact that many people love being in Central," said Chow. International companies are returning to Central as office rents in the district become more affordable once more, including S&P Global Ratings's impending move to Three Exchange Square, Hongkong Land property also houses the Hong Kong stock exchange. Rents have fallen nearly 30 per cent from a peak in 2019 before the protest movement and Covid-19 hit the city, according to International property consultant Cushman & Wakefield. Hongkong Land, however, reported average rent for its Central offices last year was HK$120 per sq ft, barely changed from 2019. "Flight to quality is certainly a trend which companies are looking at," said Fiona Ngan, head of office services, Colliers Hong Kong. "Businesses can look to make the most of this drop [in rents] and relocate to Central, for the same cost, from fringe or decentralised districts." Private equity firm FountainVest Partners is set to move from Champion Tower on Three Garden Road near Admiralty to the IFC, Sun Hung Kai Properties' iconic buildings on Hong Kong Island. US investment firm Susquehanna International Group is leaving Three Garden Road to move to AIA Central. "I cannot see things getting worse [for Central]. In fact, as the vaccination rolls out globally it should drive better economic activity. Why wouldn't Central continue to be robust and why wouldn't demand [for its office space] pop through the roof? But a lot will depend on the vaccination situation and the opening of borders," said Chow. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.