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Swiss private bank Julius Baer will move into Swire Properties' new 41-floor skyscraper, Two Taikoo Place in Quarry Bay, in what Colliers described as the largest "decentralisation deal" in more than two years in Hong Kong.
The bank, currently based in Central, said it has leased four floors of the office building, which is scheduled for completion in the second quarter of 2022.
Swire said it has successfully secured its first anchor tenant, which is from the finance sector and will take up four floors covering 100,000 square feet of the new building, but did not provide further information. The company would not say whether it was referring to Julius Baer.
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"We are increasingly attracting a greater proportion of both professional services and those from the banking sector. For most of them, obviously [moving from Central] represents cost saving, but they are also increasingly looking for space where they can design offices that cater to a new workplace strategy," said Don Taylor, director of office, Swire Properties.
Julius Baer currently has three floors in the International Finance Centre (IFC) with a lease expiring at the end of 2023 and two floors in Exchange Square expiring in March 2023, according to Land Registry documents.
"We will continue to have our presence in Central in the foreseeable future. We continue to hire and this new premises in Quarry Bay will be our significant investment in Hong Kong," said the bank, which has its headquarters in Zurich. "This will allow us to expand our presence in the next decade [and] to design the future workplace and cater to the growing needs of our clients."
The average monthly rent in Quarry Bay was about HK$50 (US$6.44) per square foot in the first quarter, just 40 per cent that of Central, according to Colliers.
That would mean the Swiss bank could save nearly HK$5 million a month with a wholesale relocation.
"Such a move would save the Swiss bank at least half of what it used to pay," said Chris Hui, head of landlord representation at Colliers.
"This is the biggest decentralisation deal since the SFC announced its relocation to Quarry Bay in late 2018.
Decentralisation has become a growing trend as companies have left Central, the world's most expensive place to run an office, to take up space in non-core districts such as Causeway Bay, Quarry Bay and Tsim Sha Tsui. It has been going on since late 2018, when rents hit a record high in the city.