Mainland renters outpace Western tenants as biggest spenders for luxury rental homes in Hong Kong

Corporate tenants from the mainland have overtaken their Western peers as the dominant force in Hong Kong's luxury residential leasing sector, as a growing number of Chinese firms establish ­offices in the city.
The top-end of the luxury residential leasing market has seen an uptick in demand in recent months, as companies look to Hong Kong as a financing and trade hub, analysts said.
"We see more mainland corporates, particularly newly listed firms in Hong Kong, will be generous when it comes to leasing homes for their top executives," said Louis Ho, principal sales director for The Peak & South Mid-Levels West at StatelyHome, a luxury home sales unit under Centaline Property Agency.
Ho said it is not uncommon for mainland executives to be housing costing HK$300,000 (US$38,222) a month, compared to HK$200,000 for executives of Western firms.
JLL said mainland corporate tenants accounted for 20 per cent of the high-end luxury residential leasing market last year, up from just 5 per cent in 2013.
"Mainland clientele were a significant part of activity in the high-end luxury level of the rental market," said Laurie Lankester, head of residential at JLL.
The number of Chinese companies setting up corporate offices in Hong Kong increased 75 per cent over the past 10 years, of which 65 per cent set up regional headquarters in the city, she said.
"It's the driver for the leasing demand," Lankester said.
The housing budgets for senior mainland staff tend to be in excess of HK$150,000 per month, rising to well over HK$300,000 per month for penthouses or luxury flats of 1,200 to 4,000 sq ft on The Peak or Mid-Levels, Lankester said.
"In general if there is a new set up in Hong Kong, mainland companies may offer a slightly more generous package because many are trying to build up their brand," said Bonnie Chan, associate director of residential services at Colliers International.
In the past year, multinational companies have switched tact on housing packages, offering employees a lump sum that enables them to choose their own rental homes. Previously, multinational firms tended to provide housing packages separate from employee salaries.
As a result of the new rules, many clients have adopted a more conservative approach towards spending on rental accommodation.
"Some clients are also considering accommodation outside traditional areas, such as Tseung Kwan O, Tai Po, and Sai Kung," Chan said.
Many of these communities have become viable for foreign families thanks to the new international schools which had opened, Chan said.
Lankester said mainland corporate tenants prefer new developments with luxurious lobbies as well as a high standard of security and extensive club facilities.
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Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.