Microsoft Takes Space In Cyberport

by Mary Swire, Tax-News.com, Hong Kong

20 June 2002

When Hong Kong's high profile Cyberport development opened in April with just three tenants occupying barely half of the first phase 335,000 square feet, and Oracle - one of the original supposed 'anchor' tenants - saying it would not be taking up its space for the time being, critics were quick to write off the project, which is not in the central commercial district.

Now it seems that the Jeremiahs were premature, as Microsoft says it will move its 250 Hong Kong employees to Cyberport in October, giving the controversial project a much-needed boost. Cynics say that this is just a piece of brown-nosing on Microsoft's part, since it wants to suck up to the government, which is PCCW's partner in the Cyberport project.

Be that as it may, Microsoft Hong Kong general manager Mark Phibbs said the move was a commitment to Cyberport and the SAR's efforts to become an information technology hub for the Pearl River Delta.

"We said we would be an anchor tenant in Cyberport and we believe in living up to our commitments. We share the Government's vision of creating a knowledge-based economy in Hong Kong," Mr Phibbs said, praising the campus-style atmosphere of Cyberport, likening it to Microsoft's headquarters in Redmond, Washington, and said the company had looked at other options before making a decision.

Microsoft signed a five-year lease on 40,000 square feet in phase one, taking up two floors in the 10-storey building. All of the company's Hong Kong employees will move, vacating the two floors in City Plaza 3 and 4 they have occupied for the past decade. It is understood that Microsoft is paying between $11 and $13 per square foot.

Carrie Yau Tsang Ka-lai, the Secretary for Information Technology and Broadcasting, said that 80% of the available space in the first phase of Cyberport had been leased. "The fact that we were able to lease out 80 per cent of the space during an economic downturn is not a bad report card," she said.

When completed by the end of 2003, Cyberport will include 1.1 million sq ft of offices, a 270,000 sq ft commercial centre and a hotel. A residential development of 2,800 luxury flats will be completed between 2004 and 2007.

Mr Phibbs said there had not been undue pressure put on the company to move, although admitting that discussions had taken place, including some involving SAR Chief Executive Tung Chee-Hwa. Mr Tung said attracting a major company such as Microsoft was a significant achievement for Cyberport. "The presence of such an international leader at Cyberport will draw other companies to come to work with us."

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