Lease Term
Office premises are normally offered on short lease terms of two (2) or three (3) years at a fixed rent for the period. Larger space users may request longer lease terms of six (6) or nine (9) years with a provision for review of rent at the end of every third year to the then prevailing market rent.

Option To Renew
In some cases, it may be possible to secure an option to renew the lease upon expiry of the original term for a further two (2) or three (3) years period. The Tenancy Agreement will detail the conditions under which the option may be exercised including the serving of notice and method for the assessment of the new rent to be paid during the renewal perioid.

Rent Review
Large space users typically enter into leases of six (6) years or more with a provision to review the rent to the prevalling open market every three (3) years. Typically, the rent review clause within the lease agreement will set out how the open market rent shoud be determined under certain parameters otherwise known as Assumptions and Disregards. Furthermore, in the event that the Landlord and Tenant are unable to agree the rent, there is a mechanism within the lease to enable either part to refer the matter to a Independent Valuer, acting either as an Expert or Arbitrator.

Break Clauses
In general Hong Kong leases cannot be assigned and only limited subletting is permitted. Tenants may request a Break Clause to terminate the lease early. The landlord may request a Break Clause to terminate the lease early for either sale or redevelopment purposes. The ability to carry out such a break will be regulated by the required notice period.

Tenancy Agreement
The rights and obligation of both tenant and landlord during the lease term will be detailed in the Tenancy Agreement under the landlord and tenants covenants. In most Grade A buildings, this will be in a standard format and landlords are normally reluctant to accept major amendments.

Prior to signing the Tenancy Agreement, which constitutes a legally binding contract, tenants are advised to have this document reviewed by their legal advisors. We would be pleased to recommend a shortlist of reputable legal firms.