Hedge fund Dymon expands Hong Kong office, bucking trend

Hong Kong - Hedge fund firm Dymon Asia Capital is expanding in Hong Kong’s central business district, at a time when the city is seeing

record premium office vacancies

and declining rental rates.

Dymon has signed a lease for a 7,000 sq ft office in Edinburgh Tower in the Landmark commercial complex owned by Hongkong Land Holdings, said Mr Kenneth Kan, the Singapore-based deputy chief executive officer.

The new space can seat more than 70 employees, double what its current office in the Nexxus Building can accommodate, he added.

The vacancy rate of grade-A offices in Hong Kong hit an all-time high of 16.7 per cent at the end of March, while rents declined for the 20th consecutive quarter, according to a CBRE Group report.

New supply combined with cost cutting may lead to more empty premium office space and keep pressure on rental rates, it added.

Dymon has occupied the Nexxus Building office since 2016 and has more than 30 employees in Hong Kong, Mr Kan said. The US$2.5 billion (S$3.4 billion) multi-strategy hedge fund returned an estimated 10 per cent in the first five months of 2024.

Out of nearly 15 portfolio managers it has hired since the start of 2023, 40 per cent have chosen to be based in Hong Kong, even though they were offered the option of working in its other locations, including Singapore, Tokyo, Mumbai and Shanghai, he said.

“With a growing pool of talent choosing to work in Hong Kong, this necessitated the need for a larger office, prompting us to search for a suitable space earlier this year,” he added. “Hong Kong remains a key market for Dymon Asia and we will continue to grow our team here.”

Hong Kong has been trying to lure back talent and firms after stringent Covid-19-era restrictions, geopolitical concerns and China’s economic slowdown led to an exodus. Such government efforts have been complicated by harsh economic realities.

A lack of investment banking deals has prompted some international financial firms to shrink office space. Hong Kong’s proceeds from initial public offerings in the first quarter were the lowest since 2009. Bank of America cut more than one floor in Cheung Kong Centre in Central to move some of its staff to a cheaper location, Bloomberg News reported in March.

Mainland Chinese companies, once the city’s most aggressive tenants leasing premium offices, are not rushing in either. They represented only 8 per cent of the new leases in the first quarter, according to data from CBRE.

Dymon plans to move into its new office in the fourth quarter. Mr Kan declined to disclose the length of the lease and the rental rates, citing a confidentiality agreement. BLOOMBERG