Cinderella district ready for the ball
OVER the past few months, increased debate has arisen over whether, and when, Tsim Sha Tsui will upstage Central as the territory's prime office district.
The discussion has been sparked by the migration of more multinational companies who have left their traditional homes in Central for the attractive and newly completed Grade A office towers in Tsim Sha Tsui.
Buildings like The Gateway, Peninsula Office Tower and Park Lane Square are just some of the quality premises springing up across the harbour.
It is understood that Hongkong Bank may move part of its back-office operations from its headquarters building in Central to Wharf's 1.2 million square foot The Gateway project after signing a three-year lease contract for 77,000 sq ft.
Earlier, solicitors' firm Victor Chu and Co also announced a move from Exchange Square to The Gateway.
Japanese trading group Itochu Corp is another notable to have left its home in Central for Tsim Sha Tsui.
Dorren Lee, director and general manager of Harriman Leasing, the marketing agent for The Gateway complex, attributed the recent trend to the widening disparity between rental levels in Central and Tsim Sha Tsui over the past year.
With average asking rentals for Grade A office space in Tsim Sha Tsui ranging between $38 and $45 per sq ft, which is less than half rents being asked for in Central, the district has attracted some large-space users who want to relocate their entire operation, or significant parts of it, to decentralised locations to reduce overheads.
But Ms Lee predicted the migration would slow down.
She said many multinational companies, particularly financial institutions, still preferred to stay on Hong Kong island, the traditional financial centre of the territory.
Another factor is that a narrowing of the gap between rents in the two districts is anticipated because of the stability of Central's office rental market.
Analysts expect office rental growth in Tsim Sha Tsui to surpass growth in Central in the next few months because of the increasing demand.