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Jane Street has struck one of Hong Kong’s largest prime office leases since before the Covid-19 pandemic, underlining how the New York-based trading firm has emerged as a challenger to Wall Street’s biggest banks.
Under the deal, which relates to a central business district complex still under development, Jane Street will pay an estimated rent of more than HK$30mn per month ($3.8mn) for a five-year lease of six floors starting in 2028.
Jane Street, which already has modest office space in Hong Kong, will take 223,437 sq ft at a rental price of approximately HK$137 per sq ft, according to a statement by Hong Kong-based developer Henderson Land Development on Friday, with an option to extend for four more years at the market rent.
Henderson Land said that the lease “marks the largest single office leasing transaction for Hong Kong’s Central Business District in decades”.
Jane Street has been snapping up extra office space to match its pace of revenue growth, seeking to double its London footprint to about 500,000 sq ft and increasing its presence in New York to about 1mn sq ft.
Last year, Jane Street generated annual trading revenues of more than $20bn, on a par with Morgan Stanley and behind only Goldman Sachs and JPMorgan.
The Hong Kong lease comes at a time of changing sentiment about the city’s prospects as a global financial hub.
The city’s developer tycoons have been suffering under a glut of prime office supply and weaker demand following three years of zero-Covid restrictions and Beijing’s political crackdown. Banks including HSBC have also been facing increased exposure to defaulted commercial real estate loans in Hong Kong and a rise in credit losses.
Prime office rents in the central business district have fallen by more than 20 per cent since 2022, to about HK$89.8, according to data from commercial property firm Cushman & Wakefield.
However, the Chinese territory could stand to benefit from rising tensions between the US and China.
Chinese battery maker CATL’s $5.3bn Hong Kong listing last month came amid growing desire for secondary listings in the city by Chinese companies seeking to secure offshore funding. The float propelled the territory towards the top of the rankings for listing destinations and has boosted trading.
Former Morgan Stanley Asia chair Stephen Roach this month said he had changed his view of Hong Kong’s future as a financial centre, saying the city stood to benefit “from the more powerful strain of financial decoupling” between Beijing and Washington.
There have been a number of high-profile office deals signed in recent months, including by US hedge fund Point72. But movements in the prime office market will continue to rely “heavily on the economic revival of both Hong Kong and Chinese mainland businesses”, said Wendy Lau of real estate group Knight Frank.
Jane Street did not immediately respond to a request for comment.
Additional reporting by Eric Platt in New York
