Location: Hong Kong
Topline: Oracle had been occupying three floors (37/F, 39/F, and 46/F) of Lee Garden One in Causeway Bay since the year 2000. The multinational computer technology firm had also leased 16 car parking spots in the building. The original lease was due to expire on August 31, 2017, subject to a renewal option. Given the increased rent in Causeway Bay and the necessity to restack the office, Oracle needed CBRE’s guidance on whether to retain its footprint in Lee Garden One or relocate to another building.
Strong demand and historically low vacancy levels throughout 2016 and 2017 made the market extremely competitive.
The rents in Causeway Bay reached a historic peak.
The options were limited as some properties were removed from the market.
A short lease extension at Lee Garden One was required due to the fact the completion date of Lee Garden Three was scheduled two months after Oracle’s lease expiry.
It is difficult to negotiate the best possible terms during a lease extension.
Solution & Outcome
CBRE has conducted demographic research and shortlisted a variety of options in the surrounding area. CBRE has conducted financial modelling to clearly and transparently explain the options to the client. CBRE has negotiated with different landlords to determine Oracle’s best offers and factored in rent during the lease extension.
CBRE analyzed various office planning scenarios and determined that Oracle should leverage the landlord’s desire to keep the brand within the portfolio to attract Oracle’s industry peers.
CBRE maintained its positive track record with Oracle by successfully structuring a new lease of 34,296 square feet at Lee Garden Three at a highly competitive rental rate. This solution enabled Oracle to rationalize their portfolio without any compromise to the firm’s image, location, and building quality.
CBRE also helped Oracle generate major cost savings by reducing the firm’s overall footprint by one-third (1/3) of its original office size without having to reduce the number of staff.