Multinational Companies are Fleeing Hong Kong



ORIGINAL POST
Posted by Ed 10 mths ago
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Foreign companies are vacating Hong Kong offices at a blistering pace
 
Multinational companies vacated 61 percent of the 577,000 square feet of office space that was vacated in the second quarter, according to Bloomberg. That’s compared to a 47 percent share of surrenders in the first quarter.
 
Total surrenders jumped 55 percent from the first quarter to the second quarter. Total availability — vacant space combined with space that will become available within 12 months — hit a 15-year high of 10.7 percent at the end of June.
 
Cushman & Wakefield’s Keith Hemshall said “there’s no particular area or one type of industry,” that’s vacating more than any other and attributed the surrenders to cost-cutting and layoffs.
 
Hong Kong’s overall real estate market has been on a downward spiral for over a year amid sustained protests against the Chinese government’s gradual erosion of Hong Kong’s financial and political quasi-independence. The coronavirus pandemic has only worsened the situation.
 
The Chinese government recently announced that it could freeze assets and seize real estate if its security minister has “reasonable grounds” to suspect the property is related to a national security threat, according to Bloomberg.
 
 
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COMMENTS
Ed 10 mths ago
Some global companies are considering shifting some of their treasury operations out of Hong Kong as the United States moves to end the city’s privileges, senior bankers said, in the latest blow to the territory’s status as a major financial hub.
 
 
“Companies’ treasury operations follow trade flow and now there are many questions around Hong Kong’s status as a trade hub,” said a Hong Kong-based banker with a leading global trade finance bank.
 
 
“Some (multinational corporations) are considering shifting a part of their treasury operations (out of Hong Kong) to start with and then gradually scale it up,” the banker said.
 
A leading U.S. retail chain, which operates hundreds of stores around Asia, is already in early talks with its banks to move some cash management related operations to Singapore from Hong Kong, the banker said.
 

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