Two towers of strength during turbulent times
Upbeat developer says occupancy at Kowloon Commerce Centre is satisfactory despite the global financial crisis, writes Kenneth Ko
The Kowloon Commerce Centre, developed by Sun Hung Kai Properties, expects to attract a wide range of businesses including multinational companies, trading firms and those in the garment, logistics and service industries.
The grade A office project at 51 Kwai Chung Road, next to Kwai Hing MTR station, is a redevelopment of a former Kowloon Motor Bus depot and is being built in two phases. Tower 1 is a 35-storey building ready for occupation, providing a total floor area of 500,000 sqft. The second phase is scheduled to be completed in 2010.
Lo King-wai, general manager (office leasing) at Sun Hung Kai Properties subsidiary Sun Hung Kai Real Estate Agency, said the leasing response to Tower 1 had been satisfactory with a target rent of HK$18 per sqft a month, and about 30 per cent of office space at the building had been committed as of last month.
'Our project is in the major transport hub of West Kowloon with easy access to the airport and container terminals. While the large supply of new buildings in East Kowloon has drawn much market attention, Kowloon Commerce Centre [KCC] offers a good choice for companies looking to expand in West Kowloon,' he said.
'There is good demand from companies of different sizes in different businesses for quality offices in non-core districts.'
Mr Lo said the global financial turmoil created market uncertainties in the short term that could affect the pace of business expansion in certain sectors. But he remained optimistic about the prospects for office leasing in Hong Kong. 'The overall leasing market is healthy with underlying demand. The outlook is expected to be stable and there are still negotiations for major leases under way. We do not expect any significant downturn or tenants surrendering space,' he said.
'Office leasing is a long-term business. As long as we have demand, the market fluctuations in the short term are not major considerations. Risks always come together with opportunities. Even today, some businesses that had not been hit that much by the prevailing crisis might take advantage of the environment to secure larger space at more attractive rents.'
SHKP hopes to see KCC, with its exceptional grade A office building facilities and specifications, help transform the district into a new commercial hub for various businesses.
Tower 1 features ceiling heights from about 2.85 metres to 3.1 metres, and an average floor area covering about 23,000 to 25,000 sqft. SHKP emphasises its environmentally friendly design, such as the provision of landscaped areas and sky gardens, maximising the use of natural light, enhancing energy efficiency, installation of carbon dioxide sensors to improve indoor air quality, and using eco-friendly or recyclable materials, such as reused piling, for construction.
Mr Lo said KCC had adopted various eco-friendly and greening design concepts, and was the first building in Hong Kong complying with the standards and requirements of the Leadership in Energy and Environmental Design.
He said it was SHKP's established policy to actively promote green building and encourage sustainability in various aspects of development - from planning to design, construction and property management.
'We strive to introduce new elements and ideas in our projects to meet the increasing needs of tenants. And we do the utmost to maintain and upgrade our existing buildings with more green initiatives such as replacing the air-conditioning systems with better chilling systems to save more energy,' he said.
'A lot of effort is also made on the software side, especially constant upgrading of the property management services. We provide systematic training for our people to improve their skills and the quality of services continuously.'
To raise customer satisfaction Mr Lo said the company valued long-term relationships with tenants and provided flexibility in the leasing aspect to cater for their needs. Instead of a standard lease term of three years, for example, it could offer a shorter or longer period to cope with tenants' demands.
Other options include the right of tenants to take up more space for business development when needed.