Oracle Puts Off Cyberport Occupation

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

26 April 2002

After Phase one of Hong Kong's much vaunted Cyberport development opened two weeks ago with just three tenants occupying about half of the project's 353,000 square feet, Oracle - one of the original supposed 'anchor' tenants - has said it will not be taking up its space for the time being.

None of the 15 anchor tenants has in fact taken space, other than project developer Pacific Century CyberWorks which is occupying three of the five let floors.

The Government last year made much of the fact that fifteen supposed 'anchor' tenants had signed letters of intent, and is still claiming that about 30 of the 80 companies that had applied for tenancies wanted to move in during the first phase. Oracle's Asia-Pacific executive vice-president, Derek Williams, said the software company remained committed to Cyberport, but plans for occupation of space were dependent on the performance of its Hong Kong operations.

Apart from Oracle, the 15 companies that signed letters of intent are: Microsoft, Cisco Systems, CMGI, Hewlett-Packard, Hikari Tsushin, Hua Wei, IBM, Legend Holdings, Oracle, Portal, Silicon Graphics, Softbank, Sybase, Yahoo! and Pacific Convergence (a subsidiary of Pacific Century CyberWorks).

"For Hong Kong this has not been the most buoyant economy over the last 12 months. Like other companies, we have to watch our expenditures and manage our growth," said Mr Williams. "You've got to be realistic in the market places where you are, and Hong Kong certainly is a place where we are being careful."

Oracle has been concerned about sales in Hong Kong for some time, describing the SAR last year as being in a "very difficult position". Mr Williams said the Government had contacted Oracle to discuss Cyberport but had not put any pressure on the company. Oracle chief executive Larry Ellison is a member of Tung Chee-Hwa's Council of International Advisers.

When asked if Mr Tung had used the relationship to promote Cyberport, Mr Williams said: "Not in the recent past, no."

Oracle has a research centre in Shenzhen and is planning to open another one in Beijing, but denies that mainland bases are a substitute for Hong Kong as such. Still, Mr Williams said the Shenzhen operation was set up partly because of the high cost of locating in Hong Kong.

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