The commercial tower will be completed in three phases, covering five office zones.

The first phase will include two zones spread across 900,000 sqft of office space. It will be ready for occupation at the end of next year or early 2008. The second phase, one zone consisting of 600,000 sqft of office space, is scheduled for completion in mid-2009. The third phase, two zones, will include the Ritz-Carlton Hotel, which will occupy the top floors.

There will be an observation deck open to the public and restaurants between levels 99 and 101.

Phase three will open in February 2010.

The building will have a gross area of 21/2 million sqft, equivalent to twice the floor area in Two IFC.

ICC developer Sun Hung Kai Properties expected the new premium address in Kowloon peninsula to be attractive to multinationals. Because of the Union Square's transport links to the mainland, the development is also expected to appeal to manufacturing and trading companies with business in China.

'The demand is there,' said Sun Hung Kai Real Estate Agency deputy general manager - leasing, K.W. Lo. 'An increasing number of mainland firms are setting up offices in Hong Kong. ICC, with its transport network, should attract mainland companies.'

The developer has set the lease rate at HK$35 per sqft, with preferential offers of about HK$28 for tenants seeking large areas. This compared favourably with the average office leasing rate of HK$30 in Tsim Sha Tsui.

Savills, one of the firms appointed to market ICC, believed the new address would be a draw to tenants in Central with expansion plans and companies in Tsim Sha Tsui looking to upgrade their offices.

According to Maggie Chu, Savills senior director for Kowloon commercial leasing, office vacancies in Central have dropped by 3 per cent.

'Companies in Central have nowhere to expand,' she said. 'They have to look elsewhere. Union Square is just five minutes away by MTR or five minutes from IFC via the Western Harbour crossing.'

Ms Chu also expected ICC to catch the eye of business tenants in Tsim Sha Tsui East who faced upgrading limitations because the buildings they occupied were owned largely by individual landlords.

'Tenants paying HK$25 per sqft would be tempted to pay a little more for a premium address, and with such design features as raised floors, high ceilings and spectacular sea views,' Ms Chu said. 'And it will be convenient for companies with business in the mainland. Their clients can travel easily here, and there are upmarket hotels here for them.'

She said marketing ICC should pose no problem. 'ICC doesn't need selling. IFC and Two IFC are the reference points. Having the Ritz-Carlton on the top 15 floors and a W Hotel next door would help set the tone,' she said.

'The only difference is that ICC is on the Kowloon peninsula, and there might be some resistance from companies in Central to the idea of moving across the harbour, which is why the rents will be a third of what they are in Central,' she said.

She expected ready buyers for the 2? million sqft as they came on market in stages. 'It's not a big volume to digest over three years. The economic climate is healthy and conducive to company expansion,' Ms Chu said.

CB Richard Ellis has also been appointed to market ICC.

Nigel Smith, CB Richard Ellis executive director, office services, said the staggered supply of ICC space would 'soften any blows' on the market.

'There will be just 900,000 sqft of supply in the first phase, so we do not expect the impact on rent levels some people expect. In fact, some market observers who have looked at the total supply predict a sharp decline. We expect a smoother curve over a three-year period, a U-shaped curve rather than a V-shaped curve.'

While cost was a key consideration, location was the next most important point that prospective tenants would consider before moving to ICC.

Mr Smith said tenants changed district when rents rose. He said escalating rents in Central had prompted tenants to consider decentralising and moving to other commercial centres, such as Quarry Bay, Kwun Tong and West Kowloon.

'Tenants decentralise for different reasons, such as infrastructure, floor plate size, delivery by developers [whether it is on time or to the quality stated] and cost,' he said. 'ICC offers a 30,000 sqft floor plate. It commands just a third of the rents of Two IFC, or half the average prime rent. It will be attractive as long as rents are half of what they are in Central and at least HK$15 per sqft less than what tenants are paying.'

Mr Smith believed the ICC tenant mix would be 50 per cent in trading and commerce and the balance in the finance industries.

The Ritz-Carlton hotel at the top of ICC will have 300 rooms and convention and conference facilities. It will be the highest elevated hotel in the world, surpassing the one in Jin Mao Tower, in Shanghai.