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Kenneth Ko

PRIVATELY-RUN Kowloon Development Co has drawn a strong response for the lease of retail space at Pioneer Centre, its new commercial development in Nathan Road, Mongkok.

  Prospective tenants, including fashion retailers, restaurants, electric appliances retailers and food operations, have made commitments to about 70 per cent of retail space, amounting to 220,000 sq ft, according to leasing agent First Pacific Davies.

  But the leasing response for office space in the centre has been slower and no tenancy agreements have been concluded yet.

  The Government was said to be negotiating for about 110,000 sq ft of office space.

  Bosco Leung, director of First Pacific Davies, said a number of leases were under negotiation but some companies were waiting until mid-year when the building would be ready for occupation.

  Tenants in negotiation included local and foreign companies.

  Mr Leung said there was no similar large-scale quality office accommodation available in Mongkok so the Pioneer Centre would be in demand.

  Asking rents, starting at $32 a square foot, would be attractive, especially to companies which did not need to locate centrally where rents were higher, he said.

  He said interest rate rises would have minimal effect on the office rental market, and did not expect to see rents fall due to limited supply and continuous decentralisation from core districts.

  Pioneer Centre is the first grade A office and retail development in Mongkok to be made available for more than 10 years. The property, erected on a 37,000 sq ft site, provides a total gross floor area of about 500,000 sq ft.

  Henry Lui, real estate manager of Kowloon Development, estimated the construction cost of Pioneer Centre at between $500 million and $600 million.

   He expected the property would generate an annual rental income of $200 million to $250 million.

  Bruce Leung, associate director of the retail department at First Pacific Davies, said Pioneer Centre had secured anchor tenants for its retail space at monthly rents of $55 to $300 a square foot.

  Tenants committed for space included Le Saunda, Giordano, U2, Bossini and Broadway, he said.

  One basement level will accommodate a food court while restaurants have signed up for the fourth to sixth floors. The ground floor to the third floor will be for retailers.

  Lawrence Wong, director of Sheraton Valuers, said Pioneer Centre had virtually no competition from nearby properties.

FACT FILE DEVELOPMENT: Pioneer Centre, office and retail, at Nathan Road in Mongkok DEVELOPER: Kowloon Development Co OFFICE SPACE FOR LEASE: 15 floors SIZE OF UNITS: 1,000 to 22,000 sq ft (whole floor) AVERAGE RENT: From $32 a square foot a month RETAIL SPACE FOR LEASE: Eight floors - from basement one to the sixth floor RENT: $55 to $300 a square foot a month TOTAL OFFICE SPACE: 280,000 sq ft TOTAL RETAIL SPACE: 220,000 sq ft COMPLETION DATE: April to May DATE OF OCCUPATION: Expected in June LEASING AGENT AND PROPERTY MANAGEMENT: First Pacific Davies FACILITIES: Two basement level car parks, and two cinemas on in retail floors LEASE PERIOD: two to three years 



New commercial centre a Pioneer in Mongkok