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Deutsche moves to West Kowloon
German
bank joins Credit Suisse and Morgan Stanley at the ICC building in Hong
Kong's West Kowloon district
Hong Kong’s Central district is slowly
losing its bankers. The latest defector is Deutsche Bank, which will be
joining Morgan Stanley and Credit Suisse at the International Commerce
Centre (ICC) across the harbour in West Kowloon.
Deutsche Bank announced yesterday that it has signed an agreement to lease
up to 18 floors in the ICC and will move its entire bank – all divisions,
management and support functions – to the building in 2010. This will help
it allow for an anticipated staff expansion from its current 1,500 to up to
4,000, and enable it to put everyone into one building.
It plans to start moving staff into the ICC in the third quarter of 2010,
occupying an initial 12 floors. Deutsche Bank’s overall space commitment
and expansion options total 62,000 square metres in the new ICC A-Grade
commercial development, which is billed as one of the most environmentally
advanced in Hong Kong.
Hong Kong’s Central district is slowly
losing its bankers. The latest defector is Deutsche Bank, which will be
joining Morgan Stanley and Credit Suisse at the International Commerce
Centre (ICC) across the harbour in West Kowloon.
Deutsche Bank announced yesterday that it has signed an agreement to lease
up to 18 floors in the ICC and will move its entire bank – all divisions,
management and support functions – to the building in 2010. This will help
it allow for an anticipated staff expansion from its current 1,500 to up to
4,000, and enable it to put everyone into one building.
It plans to start moving staff into the ICC in the third quarter of 2010,
occupying an initial 12 floors. Deutsche Bank’s overall space commitment
and expansion options total 62,000 square metres in the new ICC A-Grade
commercial development, which is billed as one of the most environmentally
advanced in Hong Kong. -
2008 May 7 FINANCE
ASIA
Credit Suisse
moves to West Kowloon
The
firm will take 10 floors in the International Commerce Centre early next
year
If you were wondering who was next in line to join
Morgan Stanley in West Kowloon, the answer is Credit Suisse. The firm plans
to cross Hong Kong harbour and move its entire Hong Kong operations to the
International Commerce Centre (ICC) building in West Kowloon by 2011. Morgan
Stanley announced in August that it will lease 10 floors in the same
building.
Credit Suisse will initially occupy the top 10 office floors of the ICC
including a client reception suite on the lucky-numbered 88th floor –
in the very top zone, totalling 300,000 sq ft. The new facility, which will
result in Credit Suisse's office space expanding by 40% in Hong Kong, will
have a capacity for over 2,000 employees. The bank will start moving staff
to the ICC during the second half of 2008 – although the 118-storey
tower isn’t expected to be completed until 2010.
West Kowloon is across Victoria Harbour from Central, which is on Hong Kong
island. At the moment, most investment banks are located in Central or
neighbouring Admiralty – however with Morgan Stanley and Credit
Suisse’s announced move, that balance is changing.
"We are delighted to be announcing this move
to the ICC. Hong Kong is very important to us and this tenancy agreement
underscores our commitment to the long-term growth of our Hong Kong
businesses,” says Paul Calello, who was promoted to New York as CEO
last February but is still also acting as CEO of Credit Suisse Asia-Pacific.
The ICC building is being developed by Sun Hung Kai Properties and will
boast around 35 restaurants, cafes and bars and the shopping mall planned
for the building will be around 25% bigger than the mall in IFC2. A gym is
planned for the building, an ice rink, and a 12-screen cinema.
Out-of-towners may end up booking into the trendy W Hotel, or in the
Ritz-Carlton, which will be at the top of the ICC, thus making it the world's
highest hotel.
Aside from the shopping and dining aspect, Credit Suisse took a unique, very
politically correct in its pitch regarding the upsides of moving into the
new building. In its press release announcing the move, the firm underscored
that it will introduce technology into the ICC to reduce energy consumption.
At ICC, Credit Suisse will become the first office worldwide to introduce “thinclient”
computer terminals for all of its staff, which will eliminate the need for
each employee to have an individual personal computer, and instead all
terminals will be linked directly to virtual desktop images running on
remote servers that will be housed outside the ICC. The bank forecasts that
should help reduce power consumption by 20%.
Now, if the bank can manage to convince its staff to walk up 88 flights of
stairs rather than use the elevators, it will not only save energy, it will
also have a super fit team of bankers. - 2007
December 6 ASIA
FINANCE
ICC's low rents
lure financiers over the harbour
Another investment
bank has been drawn away from Central to International Commerce Centre in
West Kowloon - a move analysts believe will trigger even more financial
houses to go across the harbor because of more attractive rents there.
ICC's developer Sun Hung Kai Properties
(0016) and Credit Suisse said the bank will take up the top 10 floors of the
office tower atop MTR Kowloon station.
Credit Suisse will take up some 300,000
square feet, an expansion of the bank's Hong Kong office by 40 percent to
house a 2,000-strong staff.
Support departments will move from
Exchange Square to the ICC in the second half of next year. The relocation
will be completed by 2011.
ICC has signed leases for 60 percent of
the building's 2.5 million sq ft total floor area, said Victor Lui Ting, Sun
Hung Kai Real Estate Agency managing director.
Credit Suisse followed Morgan Stanley,
who signed a lease for 350,000 sq ft in the lower floors of what would be
Hong Kong's tallest building.
"Because of successful leasing
results, we will raise rents in phase 2 by 10 percent from the current HK$42
psf," Lui said.
DTZ Debenham Tie Leung business space
director Alan Yuen Chun-yin expects more companies to relocate to ICC. The
firm is currently talking to a few major financial institutions.
Despite the rent hike, Yuen said it is
still attractive compared to Central.
ICC and International Finance Centre in
Central have been built according to the same specifications. Both have been
co-developed by SHKP.
According to Jones Lang LaSalle, prime
offices rentals in Central rose 6.7 percent last quarter, chalking up a 21
percent surge so far this year.
Spot rents in IFC and Exchange Square hit
HK$176 per sq ft, and HK$120 psf respectively.
Financial firms like Morgan Stanley and
Credit Suisse have offices scattered around Central. It is impossible to get
all their staff under one roof in the core business area due to a lack of
space.
"As vacancy rates in Central dive
below 2 percent, ICC represents a very good alternative for major tenants
keen to expand and consolidate," said Chris Marriott, deputy managing
director and head of leasing at Savills Hong Kong.
But analysts had mixed reactions as to
whether ICC will make an impact on rents in Central. Lehman brothers said
ICC and One Island East in Quarry Bay coming on stream will create a cap for
Central rents, while Yuen and Marriott said the effect would be small and
gradual.
Lui expects the pace of rent hikes in
Central to ease by about 10 percent next year.
- 2007 December 6 THE
STANDARD
Morgan Stanley
moves to West Kowloon
The investment bank rents 10 floors in the soon to
be third tallest building in the world, the ICC in Hong Kong's West Kowloon
district.
Morgan
Stanley has announced that it will lease 10 floors in the International
Commerce Centre (ICC), making it the first investment bank to cross Hong
Kong harbour and open offices in West Kowloon.
It expects to relocate its entire staff of roughly 1,500 people working in
Hong Kong (which is where its Asia-Pacific headquarters are based) at the
end of 2008.
"We have had positive experience in being among the first banks that
moved into newly developing business locations, such as midtown in New York
and Canary Wharf in London," says Hans Schuettler, Asia CEO of Morgan
Stanley, adding: "What initially always seems a world apart in a few
weeks proves to be the right step."
If you don't know your way around Hong Kong, here's the quick low-down.
West Kowloon is across Victoria Harbour from Central, which is on Hong Kong
island. Most investment banks are located in Central or neighbouring
Admiralty. While a huge percentage of Hong Kongers regularly commute more
than an hour to work, taking ferries, buses and trains, many others“
particularly white-collar workers in Central and Admiralty“ never leave
the island.
Now the lure“ at least to the ICC building is undeniable. The ICC,
which is being developed by Sun Hung Kai Properties, is currently only half
of its planned height of 118 storeys. But you already can’t miss it.
And even if you don't end up working in the tower, chances are you'll visit
it. It will boast around 35 restaurants, cafes and bars and the shopping
mall planned for the building will be around 25% bigger than the mall in
IFC2. A gym is planned for the building, an ice rink, and a 12-screen
cinema. Out-of-towners may end up booking into the trendy W Hotel, or in the
Ritz-Carlton, which will be at the top of the ICC, thus making it the
world's highest hotel.
But you may also end up working in the building. Banks, after all, have to
consider West Kowloon. For one, there’s cost. Grade-A office space in
Central averaged HK$91.04 per square foot for the month of May, but that
includes the rent of some of the smaller, never-meant for a bank, space
still scattered about district. According to the South China Morning Post,
Morgan Stanley's relocation cuts the bank's rent by HK$4.5 million a month
to about HK$10.5 million, although Morgan Stanley officials declined to
comment.
But more important, there's simply no room left in Central and Admiralty.
Morgan Stanley, for example, has nearly doubled its headcount from five
years ago. As a result, it has been occupying office space in five buildings
across Hong Kong. The move to the ICC building enables it to consolidate
everyone in one spot.
Given that the average vacancy rate for grade-A office space was down to
4.05% in May, from 4.53% in February, while most banks are still hiring more
people, the space crunch is real.
Now with Morgan Stanley moving out of Central the occupancy rate is somewhat
alleviated “ surely someone will be keen to take its space in Three
Exchange Square. Several bankers, off the record, joked that they're loathe
to move off Hong Kong island - they'll just wait for other banks to move,
and thus make more room in Central and Admiralty.
But who else might join Morgan Stanley in West Kowloon? While no one is
raising a hand just yet, most bankers will tell you that they are going to
have to at least consider the ICC. As one banker said: "you find
someone who says, we're not looking or we're happy with what we have, either
they have no growth plan or they are lying."
"We're
obviously going to have to look at what they're offering over there,"
says Sim S Lim, Citi country officer, Hong Kong. "Kowloon is only
five minutes away, if the price ends up being one-third or one-fourth of
what it is here, you have to start looking at that."
"We'll look over there. Y you have to, it's allegedly going to be
40% cheaper. You can't ignore that," says Barclays chairman and CEO
Asia-Pacific, Robert Morrice.
Meanwhile, as first movers, Morgan Stanley got to make a splash. The signing
ceremony included Raymond Kwok, vice chairman and managing director of Sun
Hung Kai Real Estate Agency, and Schuettler of Morgan Stanley.
Both wore corsages (and removed them as early as possible), and clinked
flutes of champagne after they signed the ceremonial lease agreement at 3pm
before a room full of reporters at the Four Seasons hotel. In a case of
advertising you couldn’t pay for, Kwok began by saying, "As all
of you know, Morgan Stanley is the best investment bank worldwide...".
With comments like that, it may well be worth leading the way across the
water." - 2007 August
9 FINANCE
ASIA
SHKP
$5.56b wins West Kowloon site
Sun Hung Kai
Properties (0016) bagged a prime seaview site in West Kowloon for HK$5.56
billion as it threw caution to the wind amid sluggish bidding from
developers concerned about the high reserve price and the prospect of a
judicial review related to the site.
The price was 32
percent above the opening bid of HK$4.2 billion, but was at the lower end of
market estimates.
This was despite
the Hoi Fai Road site offering a sea view, unlike another West Kowloon site,
at Yan Cheung Road, which sold last month for HK$4 billion or 54 percent
above the opening bid.
In terms of
accommodation value the Hoi Fai Road site, which was triggered for auction
last month by Wheelock Properties (0049), stood at HK$6,066 per square foot,
lower than the Yan Cheung Road site at HK$6,147 psf.
An SHKP
spokeswoman confirmed it had won the site as sole bidder but could not offer
details such as the total investment required.
Developers had
mixed views of the final bid, with Peter Woo Kwong-ching, chairman of
Wheelock Properties (0049), saying it was a good market price, while Cheung
Kong (Holdings) (0001) deputy chairman Victor Li Tzar- kuoi commenting that
it was quite high.
"The price is
within expectation, although maybe at the lower range," said auctioneer
Chris Mills, the Lands Department assistant director.
He declined to
comment on whether a judicial review application filed Monday by a Sham Shui
Po resident had affected the sentiment of developers. The writ accuses the
Town Planning Board and Lands Department of not following guidelines to
promote health and welfare during planning and urged the rezoning of the
plot.
"Bidders
would have factored it in the bids if they saw any justifications or risks
attached because of the judicial review," Mills said.
The Lands
Department also warned potential bidders before the auction that the Town
Planning Board had received an application to lower the plot ratio for the
domestic portion from 6.5 to 5 and to impose a height restriction on part of
the site to allow better ventilation.
The plot,
sandwiched between One Silversea and The Long Beach, has a site area of
122,204 sq ft and provides a total gross floor area of 916,522 sq ft, of
which 794,319 sq ft is residential.
"The result
... was at the lower end of market expectations, mainly due to the recent
legal issues," said Tony Chan Tung-ngok, executive director at Vigers
Appraisal and Consulting.
Centaline Property
Agency research department associate director Wong Leung-sing reckoned the
opening bid price was already very high, with reference to existing
secondary market prices in the area.
"They are
already very brave to go to this [final] price," said Wong, noting the
very tight site, limited seaview and the possible judicial review.
Midland Surveyors
director Alvin Lam Tsz-pun said the final price was about right as it was
similar in accommodation value to the Yan Cheung site.
Lam noted it was
11 percent higher than two inland West Kowloon sites sold in September 2005
at an accommodation value of about HK$5,400 psf.
Midland Realty
sales director for Kowloon Jeffrey Wai Man-chun said the accommodation value
of HK$6,066 psf was about 20 to 30 percent higher than prevailing secondary
market prices at Olympic station and would allow prices in West Kowloon to
consolidate.
Wai believes SHKP
could sell the units at between HK$9,000 and HK$10,000 psf.
Cheung Kong deputy
chief manager for sales Francis Wong See-chung said Tuesday, in expectation
of a good auction result, the developer would revise upwards its indicative
selling price for the initial batch of units for its upscale Celestial
Heights project at Ho Man Tin from HK$13,000 psf to more than HK$14,000. The
project is awaiting pre-sale approval.
- 2007 June 13 THE
STANDARD
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