Crypto exchanges and startups have become a common sight in Hong Kong’s most elite skyscrapers, where most legacy market banks and institutions are on the verge of moving out. Popular banks and companies have relocated their staff into more reasonably priced areas, but crypto-focused companies and startups haven’t seemed to budge, or want to for that matter.
Joseph Young, a well-known cryptocurrency analyst and commentator, recently commented on this odd occurrence, highlighting the fact that analysts say that this “status allows startups (like BitMEX) to retain talent.”
Goldman Sachs and BNP are moving out of Hong Kong Central because of extremely expensive office spaces.
Yet, BitMEX is renting out Cheung Kong Center’s 45th floor, at $28.66 per square foot, paying $573,200 per month.
Analysts say the status allows startups to retain talent pic.twitter.com/axYBZo82UJ
— Joseph Young (@iamjosephyoung) September 28, 2018
Crypto Firms Spending Big
Cryptocurrency exchanges and companies recently took to leasing some of the most prestigious office areas in Hong Kong, which has quickly become the real estate capital of the world, hosting the crème de la crème of office spaces. At the Cheung Kong Center’s 45th floor, renting out 20,000 square feet at $28.66 per square foot is BitMEX, a popular, world-recognized cryptocurrency exchange that has become well-known for its leverage feature. That’s upwards of $573,200 a month that the company is spending on rent alone.
Other crypto-companies have also followed the trend of dishing in money for a premium headquarters. ANX International Ltd. has leased 33,000 square feet at Lee Garden One, Diginex Ltd. renting 7,500 square feet at the Two International Finance Centre. On the whole, crypto companies lease about 72,000 square feet in total, paying around $1.3 million per month to their landlords, according to Colliers International Inc.
The extravagant companies state that with premium and luxurious workplaces, they are hoping to attract talented individuals. “Blockchain companies show no signs of slowing their expansion in Hong Kong,” said Philip Pang, an associate director of office services at Colliers. Pang added: “These firms are leasing space in top-tier office buildings to attract and retain talent.”
Although Bitcoin has had a major crash this year, netting to a loss of hundreds of billions of dollars, it hasn’t seemed to affect the way cryptocurrency companies operate. Though some companies like Kraken are rolling back to a smaller working staff, several other companies such as Coinbase and Binance are still looking to expand their workforce.
However, not all companies are compliant with the recent rent surge. Hong Kong houses some of the most expensive rental areas in the world, and obviously, not everyone is going to stick around. Major banks like Goldman Sachs and BNP Paribas are on the lookout for cheaper alternatives, several of which could cut the cost of their rental expenses by almost 30%.
Landlords on Crypto Companies
Despite the enormous sum of money blockchain companies are ready to pay, landlords still remain skeptical about the concreteness of the lessee and their stay. It is not uncommon for crypto firms to deposit large amounts of money at the very start to reserve their stay at top-notch office buildings. To secure a spot in Cheung Kong Center, BitMEX paid one year’s rent upfront to landlord CK Asset Holding Ltd., according to local media reports.
Although it is unclear how long blockchain companies can afford these extravagant expenditures, it is sure to shed light on how successful cryptocurrency exchanges can be, even in bear markets.
Photo by Ryan McManimie on Unsplash