Swiss luxury watchmaker Audemars Piguet has secured a prominent space at The Henderson in Central, marking a significant milestone for the flagship commercial building developed by Henderson Land. The announcement, made in a statement on Tuesday, has elevated the occupancy of this prestigious development to approximately 50 percent.
Audemars Piguet’s decision to lease an entire floor encompassing 12,000 square feet within the 465,000-square-foot tower comes at a time when Hong Kong’s office rental market grapples with record-high vacancy rates, attributed to soaring interest rates and a decelerating economy. This move underscores the resilience and allure of The Henderson, which is set to be officially inaugurated in the final quarter of 2024.
Martin Lee Ka-shing, Chairman of Henderson Land, remarked, “The endorsement from prominent international brands and industry giants like Audemars Piguet comes as another ringing validation of The Henderson’s unique strengths and its prominence as a new iconic landmark of Hong Kong, strengthening our city’s international status.”
Audemars Piguet joins the ranks of distinguished tenants at The Henderson, including London-based Christie’s, French-owned auction house, US-based private equity firm Carlyle Group, and Canada’s Pension Fund. The watch manufacturer will utilise its leased office space to accommodate the AP House, a premium retail house offering clients an immersive shopping experience for its exquisite timepieces.
Market sources suggest that Audemars Piguet is set to pay an approximate HK$120 (US$15.32) per square foot for its rented space at The Henderson, reflecting the premium nature of this location.
In addition to Audemars Piguet’s tenancy, Henderson Land revealed that an undisclosed art gallery, with branches in both the US and Europe, has expressed interest in securing space within this architecturally distinctive building. The Henderson is poised to join the ranks of avant-garde structures in Hong Kong’s Central district, alongside iconic landmarks such as the I.M. Pei-designed Bank of China tower and Norman Foster’s 44-floor skyscraper headquarters for HSBC.
This development at The Henderson holds the potential to boost confidence in the property market, which has faced challenges. Colliers data indicates that Hong Kong’s prime office space vacancy rate reached a record high of 15.1 percent towards the end of August, exceeding the 13.1 percent level recorded in September 2003.
Monthly office rental rates have witnessed a notable decline, down 30.3 percent to HK$54.70 per square foot from the peak levels observed in January 2019, when office vacancies reached a historic low of 3.5 percent, according to Colliers data.
Furthermore, the property consultancy predicts an additional 3 million square feet of new office space to come online in the latter half of this year.
In parallel, market participants remain attuned to the Federal Reserve’s monetary policy, given that Hong Kong’s interest rates closely follow those of the United States due to the city’s currency peg. Commercial banks in Hong Kong have increased their prime rate five times since September of the previous year, resulting in a cumulative rise of 0.875 percentage points, reaching levels last witnessed in February 2008.
Elevated interest rates have spurred several asset owners to list their properties for sale. Notably, Hotel Ease Mong Kok is currently on the market for HK$730 million, representing a discount of over 30 percent compared to its acquisition price of HK$1.1 billion in 2018.
