Sun Hung Kai Properties (SHKP) says the leasing response to its South West Tower in Central is encouraging, despite market concerns about increasing office supply. Leasing and management manager Chu Man-chung said about 35 per cent of office space in the tower, above the airport railway's Central terminus, was committed. Another 15 per cent was under negotiation with deals expected to be closed in coming months. Mr Chu said most space in the building would be committed and occupied by the end of this year. ING Barings is a leading tenant, leasing up to eight floors or about 142,000 square feet in the 38-storey building. Another investment house, JP Morgan, is understood to have committed to lease two floors. Mr Chu said tenants committed so far were mainly from the finance sector but he declined to identify them. He did not disclose the rentals achieved, but agents estimated they were in the region of $60-$70 per sq ft. The 784,000 sq ft building is being developed by a consortium led by SHKP and Henderson Land Development. It is part of the 4.5 million sq ft International Finance Centre development above the Central Station which will comprise another 88-storey office tower, three levels of retail podium and two hotel-serviced apartment blocks. Mr Chu said although the overall office supply would be large in coming years, new offices available in Central remained limited. The South West Tower would help relieve the shortage of offices available in the core business area. SHKP's key office properties continued to achieve high occupancy rates, with the vacancy rate less than 3 cent, Mr Chu said. The group had managed to achieve reasonable rents on lease renewals this year, despite the overall pressure on office rentals. There was no obvious increase in the mobility of its office tenants, he said. Meanwhile, SHKP's luxury residential property portfolio mainly was on Hong Kong Island and had recorded strong performance. Leasing activity continued to be stable for properties on Hong Kong Island where supply was limited, he said. The company also had managed to achieve improved rents when renewing old leases, because the previously agreed rentals were at low levels. For new leases, rents had been adjusted slightly downwards, but the change was no more than 10 per cent compared with last year's peak levels, Mr Chu said.