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UBS Group will lease an entire 14-storey office tower in Hong Kong – almost double the space it initially planned – helping provide a vote of confidence for a city battling to keep its status as the region’s premier financial hub.
The deal will give the Swiss lender 460,000 square feet (42,735 square metres) of space in the building, which is being developed by Sun Hung Kai Properties in West Kowloon. That is 84 per cent more than the 250,000 square feet of space UBS announced it would rent in 2022.
The move showcases UBS’s commitment to Hong Kong’s business, chief executive officer Sergio Ermotti said at a ceremony on Wednesday (Mar 27). Though the new office, which is expected to be ready in 2026, will mean that UBS will move out of the central financial district in Hong Kong island, it will consolidate the bank’s staff in one place instead of scattering them across several locations in the city.
The new office building is part of the upcoming development by Sun Hung Kai near the high-speed railway station that connects Hong Kong with mainland China. The bank aims to make use of the office’s location to take advantage of the opportunities in the Greater Bay Area, said Amy Lo, who heads UBS’s business in Hong Kong.
Morgan Stanley and Deutsche Bank have also relocated across the harbour to Kowloon, while UBS currently has its local headquarters at the iconic International Finance Centre in Central.
Separately, the announcement comes at a time when the city is suffering from a record-high amount of empty office space amid cost-cutting efforts by tenants. Hong Kong’s vacancy rate climbed to an unprecedented 16.4 per cent at the end of 2023, according to CBRE Group data. Grade-A office rents could fall as much as 10 per cent this year after slipping 6 per cent in 2023, it forecasts. BLOOMBERG
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