Alternative space on offer in East Kowloon
Henderson Land Development believes its San Po Kong industrial building, to be completed in the second quarter of next year, could provide alternative office space for enterprises seeking relief from high rents in Central.
The 22-storey Midas Plaza is the first building to go up in the industrial district in East Kowloon in the past decade. Six units have been sold at an average selling price of HK$2,800 per square foot since sales started last week.
Property agents said the building could be competitive as alternative office space since it is equipped with high-quality facilities and features a marble lobby while asking rentals are typical of industrial space. Rents for high-quality office space in Kowloon Bay, such as phase three of Enterprise Square, are twice as expensive.
Tony Tse Wai-chuen, the general manager of sales at Henderson, said the building would be attractive to companies elsewhere in San Po Kong as well as new tenants to the area.
He believed the development had the potential to offer new headquarters for some tenants in Central, such as banks.
Tommy Lee Man-kwong, a senior sales manager of Centaline's industrial department, saw a diverse range of tenants for the development. 'It will be attractive to factory owners, corporates and investors because the neighbourhood has been without a new building for a long time. And the price is also attractive,' he said.
Mr Lee noted that space was available in the building for as little as HK$2,400 per square foot, which was slightly more expensive than office space offered by some 20-year-old industrial buildings in the area.
However, he warned that since the development was on an industrial lease, only 30 per cent of the space could be offices, while the rest must be used for industrial-related activities such as factories or warehouses.
'It is possible for the developer to apply for a lease change, but since this will require payment of a premium to the government the selling prices will not be as cheap as it is now,' he said.
A spokeswoman for the Lands Department said the owners could seek permission to have a permanent change on land use, but this would require zoning amendments.
