Crypto Startups Target Skyscraper Offices Across Hong Kong
Hong Kong’s real estate industry is among the world’s most expensive comparable to global centers such as New York City, Sydney, or London. Despite the expense, crypto oriented startups are taking over Hong Kong, occupying office spaces within skyscrapers that mark the city’s skyline.
According to previous reports by CCN, an Ether and Bitcoin trading platform, BitMEX, relocated their HQ into a beautiful forty-fifth-floor office within the Cheung Kong Center. The office itself covers 20,000 sq feet with each square foot valued at just under $30. On a monthly basis, the startup spends a whopping $573,200. Previously located in a part of the city called Victoria Harbor, the BitMEX office was spending only $3.18 on each square foot despite the location being notorious for high-end property values.
Neighboring financial giants worldwide such as Barclays Plc, Goldman Sachs, Bank of America, as well as Hong Kong’s SFC, the digital exchange will operate within one of the most expensive skyscrapers known to the city center.
Cryptos Make a Mark on Hong Kong’s Skyline
Hong Kong’s popular publication, SCMP, stated that even the largest financial entities including Sachs and BNP have taken interest in seeking out less expensive locations from which to run their businesses within the city. Hong Kong has experienced a rise in rental rates that even multinational banks are taking into account. Comparing other major locations worldwide such as London or Beijing, Hong Kong Central’s rental fees cost occupants approximately $300 for each square foot per annum, significantly more costly than the aforementioned locals.
During an interview with SCMP, Philip Pang, Colliers’ associate director, noted that blockchain tech-based businesses are exponentially expanding, taking out leases for high-end office spaces as a stance of dominance and assurance to retain clients and talent alike. SCMP also reported that Sachs has already made plans to move out of the building in the coming months in order to cut rental costs by 30%. Their new office will be based in Causeway Bay. Similarly, BNP has made the switch to Taikoo Place.
Landlords Remain Skeptical
Although the digital asset market has been hit by value losses ranging in 80% throughout the majority of 2018, crypto oriented companies have powered through with success. Exchanges have been seen to generate major revenue despite market instability.
However, success is not enough to ease real estate landlord’s skepticism of the rapid inflow of startups within the city’s hottest locations. Reports have claimed that the Cheung Kong Center agreed to BitMEX’s rental request with a demand for one year’s rent paid in full, costing the startup nearly $6.8 million. This agreement clearly notes an existing weariness towards crypto companies within the Hong Kong rental market.
Jones Lang LaSalle’s research lead, Denis Ma, explained that large deposits are a common method used by landlords to help achieve an agreeable balance between assurance in long-term tenancy and the risks associated with new tenants. However, BitMEX’s deposit was a significant request, equivalent to the price of multi-story buildings located in major zones such as Tokyo or Kuala Lumpur.