Manulife Financial Corp has inked a deal to pay the second highest price on record for an office tower in Hong Kong. The location is ideal for companies wanting to manage overheads through cheaper rentals in buildings located outside of Hong Kong's Central Business District.

The biggest insurer in Canada would fork out HK $4.5 billion or US $580 million to the developer, a subsidiary of Wheelock & Co for the Kowloon East building, a 512,000 square foot office tower. The building would be open for business by 2015 and would be Manulife's corporate headquarters.

Hong Kong is the second highest office occupancy cost just a few points below London's West End district. The demand though is still increasing but this time at the outskirts of the Hong Kong CBD, as more and more businesses seek lower operational and administrative costs. 

As for the purchase, Manulife has paid about HK $8,790 per square foot. According to statistics from Asian research firm Cushman and Wakefield is second only to Agricultural Bank of China Ltd's purchase of No. 50 Connaught Road near Central at a price tag of HK $4.9 billion.