CLSA renews office lease with Swire Group, defying parent’s reported order to cut ties with company that drew China’s ire
- Hong Kong brokerage renews lease for offices at Swire Properties-owned One Pacific Place
- Beijing has been critical of how Swire Group-owned Cathay handled staff during Hong Kong protests
Brokerage CLSA has renewed its office lease at Hong Kong conglomerate Swire Properties’ flagship property. The Financial Times reported on Wednesday the firm had been under pressure to quit the premises by its mainland Chinese state-owned parent, Citic Securities.
Swire Properties’ parent, Swire Group, which owns Hong Kong carrier Cathay Pacific, has drawn Beijing’s ire after airline staff took part in the protests that have rocked the city since June.
Rick Gould, CLSA’s chief executive, in an email to staff on Wednesday, said the Hong Kong brokerage had renewed the lease for its more than 70,000 sq ft offices at One Pacific Place. The email was obtained by the South China Morning Post, but CLSA declined to comment when approached about details of the lease.
Swire Properties, however, confirmed that the lease had been renewed. “We can confirm that our lease agreement with CLSA for their tenancy at One Pacific Place has been extended,” the company said in an emailed statement. “Swire Properties values our long-standing relationship with CLSA, with the firm having a long-term tenancy at our two major office portfolios of Pacific Place and Taikoo Place,” it added.
CLSA has leased office space at One Pacific Place since 2000, Swire Properties said. The brokerage currently occupies office space covering three-and-a-half floors.
Cathay shareholder pressed to condemn ‘violent’ Hong Kong protests
The brokerage, acquired by Citic in 2013, was under pressure to move out of One Pacific Place, because Swire Group had upset Beijing, according to the Financial Times.
Sources at CLSA, however, said the brokerage was unlikely to defy Citic. If the firm was under pressure to leave One Pacific Place, it had no option but to comply, a senior manager speaking on condition of anonymity said.
The Chinese central government was critical of how Cathay Pacific handled its staff and management during the Hong Kong protests, and accused the airline of not acting quickly enough to discipline staff who took part in or supported the demonstrations.
Swire Pacific sees headwinds as protests hit many of its units
Following news that two airline pilots had been involved in the protests and the leak of passenger information by two ground crew, China’s aviation put unprecedented pressure on the airline, citing safety and security concerns. Rupert Hogg, the airline’s chief executive at the time, and Paul Loo Kar-pui, his deputy, subsequently resigned mid-August, after Beijing pushed for a reshuffle of Cathay’s top management.
Offices at the 36-storey One Pacific Place currently command a monthly rent of HK$140 (US$17.8) per square foot, said James Mak, district sales director at property broker Midland Commercial.
He said CLSA probably needed to pay HK$120 per square foot for its office space, putting its total cost at HK$8.4 million monthly. “It is normal for existing large tenants to get a lower-than-market rate when they renew leases,” Mak said.
Founded in Hong Kong in 1986, CLSA has 2,000 employees and 21 business locations across Asia, Australia, Europe and the United States.
