Alternatives to Central emerging
New business districts in decentralised locations across Hong Kong Island and Kowloon are springing up as a more cost-effective alternative to the traditional core Central area.
Kowloon East, encompassing a growing number of commercial buildings in Kwun Tong and Kowloon Bay, has emerged as the top choice for many companies in recent years, including established banking, insurance and financial businesses.
On the other side of Victoria Harbour, Hong Kong East is becoming a popular commercial area boasting major office buildings such as Taikoo Place and Cityplaza.
Simon Lo, executive director of research and advisory for Asia at Colliers International, says the big rental gap between the central business districts and new areas is the driving force behind the trend.
For many businesses, location is no longer a key concern, in particular where improved infrastructure has made commuting and transport easier, Lo says.
Kowloon East will become the second central business district, with the expansion of its office cluster following the completion of the government's Kai Tak redevelopment programme, he says.
The first block of government offices - containing 540,000 sqft of gross floor area - is expected to be completed next year. Eleven government departments will relocate to the building. With supporting infrastructure, such as the 9km elevated monorail system, in place, Kowloon East will be the leading source of office supply and will attract a good mix of tenants.
Wong Chuk Hang is another up-and-coming business district, boosted by the construction of the MTR's South Island line, due for completion by 2015. A number of office developments are in the pipeline. Lo says West Kowloon has the potential for growth with a mix of commercial projects, including hotels and offices, being built along the Guangzhou-Shenzhen-Hong Kong Express Rail Link.