Banks abandoning CBD for areas with cheaper rent

Swire Properties Ltd said this movement has already begun.

Banks in Hong Kong will start shifting front-office operations into the Island East district and away from the more expensive Central Business district said Swire CEO Martin Cubbon.

He said this has already started on a very small scale and predicted going traders moving east. He said banks want to expand at an affordable pace and that will compel them to go to places like Tai Koo place, a complex of 10 office towers in the Island East district.

Swire is the biggest commercial landlord in the Island East district. It intends to spend as much as US$1.5 billion in the next seven years to renovate older industrial buildings into office space.

Swire has benefited from tenants seeking to relocate from the city’s central business district, where office rents are among the highest in the world, to other easily accessible neighborhoods.

It owns about 10.6 million square feet of prime office space and 2.4 million square feet of retail space in Hong Kong. It has about 6 million square feet of commercial real estate in mainland China.