Tenants and investors both eager to occupy Kowloon East: Colliers
Both tenants and investors are optimistic about the long-term outlook for the office-space market in Kowloon East district, with 44 percent of respondents in a survey expecting rents to catch up with Tsim Sha Tsui (TST) in 10 years.
Current rents in TST are approximately 25 to 35 percent higher than Kowloon East, property consultancy Colliers International said in a report released Monday. Survey respondents estimate office rents in Kowloon East to grow by 5 to 8 percent in the next six months but only 0 to 3 percent in TST, according to the report.
After talking to 100 office tenants and investors or owners who currently occupy or own places in Kowloon East or TST, the property consulting firm also found that 52 percent of respondents indicated that they will consider Kowloon East as one of their relocation options upon the expiry of their leases.
The government’s various initiatives to develop Kowloon East will benefit office rental growth in the area, underpinned by the development of transport facilities, creation of new land as well as the conversion of existing industrial buildings, said Simon Lo, executive director of research and advisory for Asia at Colliers.
“While Central’s Grade-A office rents in September 2011 remained 4 percent below the peak of July 2008, Kowloon East on the contrary registered a record high at HK$30 per square foot per month last month, 12 percent more than its pre-financial crisis level,” said Lo.
Chief Executive Donald Tsang announced in October’s policy address that the total Grade A office floor space in Kowloon East’s Kwun Tong and Kowloon Bay had grown 2.5 times to 1.4 million square meters and the government intended to develop the area into a core business area.
Secretary for Development Carrie Lam held a press conference October 13 detailing the ambitious plans to turn Kowloon East – including the site of the former Kai Tak Airport – into another core business district (CBD), and transforming 4 million square meters of land into commercial offices.
A monorail with a price tag of HK$12 billion is also scheduled to link up the area to public transport, according to the government.
litao@chinadailyhk.com
China Daily
(HK Edition 11/01/2011 page2)
http://www.chinadaily.com.cn/hkedition/2011-11/01/content_14011696.htm