Manulife Financial Corp, in Hong Kong, has recently made the decision to acquire office space outside of the traditional banking and insuring location: Hong Kong’s central business district. Canada’s biggest insurer has paid the second-highest amount for office space outside the central business district: HK$4.5 billion for the 512,000 square foot Kowloon East building, which is due to be completed by the end of 2015. This isn’t the first high-profile tenant to have made the move, with JPMorgan Chase & Co. and Bank of America core already having located their offices away from the centre. Both these companies needed additional space and decided to look outside the centre for cheaper rents in order to help control their costs amid slowing corporate finance activities. 

The on-going economic impact on the sector has encouraged more and more banking and finance companies to seek to acquire cheaper space outside the city’s CBD. Many are now starting to use the CBD as their main headquarters and as their client-facing office, and then taking further additional space outside the CBD to house the majority of their staff.

Alex Goode from Morgan Pryce believes London is starting to see a similar pattern emerging among the larger tenants. A number of companies are looking to acquire reduced space in the glamorous offices of Mayfair; the central office space that is taken provides the client-facing aspect of their business and the company simultaneously acquires space on the outskirts of the city – for example in Slough – to house the majority of its staff. “This allows companies to continue to grow while cutting costs: they can maintain their Mayfair postcode while expanding on the outskirts at half the rent.”

Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.