- About 15% of premium corporate offices in Hong Kong, one of the most expensive cities in the world, Occupied by crypto-related companies
- Financial institutions like Goldman Sachs and BNP Paribas exploring cheaper locations due to high rent
- Landlords still wary of crypto startups, demanding up to 1 year rent payment in advance
Cryptocurrency investment funds and exchanges are now the leading new tenants in Hong Kong, taking up space in the most prestigious addresses in the home of the highest rents anywhere. Crypto startups are collectively paying at least HK$10 million (US$1.3 million) monthly in regions where the annual average rent is at least $307 per square foot.
BitMex Leading the Pack
A comparison report in the South China Morning Post shows that the same amount of collective rent is enough to take up at least 5 floors in New York’s One World Trading Center. The report names the leading tenant BitMex, a crypto derivative trading company that has occupied 20,000 square feet at the 45th floor of Cheung Kong Center, paying $28.66 per square foot totaling $573,200 per month.
The company moved its headquarters from the “expensive” Victoria Harbour region in August where it was paying $3.18 per square foot. The cryptocurrency startup now operates alongside leading financial institutions like Bloomberg LP, Barclays PLC, Bank of America, the Securities and Futures Commission of Hong Kong and Goldman Sachs Group. Philip Pang, Colliers’ associate director of office services has taken note and said:
“Blockchain companies show no signs of slowing their expansion in Hong Kong, these firms are leasing space in top-tier office buildings.”
Hong Kong is among the most expensive cities as far as it concerns office rent alongside London, New York, and Sydney, but crypto startups are moving into these prestigious offices at higher rates than any other industry. Bitmex and cryptocurrency mining firm Diginex Global, are collectively occupying 72,000 square feet and forking out $1.3 million monthly.
The report released by SMCP says leading banks already explored moving to cheaper locations for their headquarters because of the astronomical rents in Hong Kong. The report said Goldman Sachs was planning to move from Central Hong Kong in the next few months to Causeway Bay where rents are said to be 30 percent lower while PNB had already moved to Taikoo Place. The current going rate of $307 per square foot per year is higher than what tenants pay in Beijing’s Finance Street or London’s West End.
There has been an 80 percent drop in the valuation of the crypto market in the last nine months but crypto business, specifically crypto exchanges have continued to prosper and generate large revenues. However, major landlords in Hong Kong are still wary of crypto-related tenants and are asking one year’s rent in advance, as in the case of Cheung Kong Center.