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SCMP Reporter

Rents for grade A strata-title buildings in Tsim Sha Tsui and Kowloon have fallen by as much as 20 per cent since the beginning of the year, according to property agents.

 A recent survey by Cushman & Wakefield shows rents in Tsim Sha Tsui have dropped by 15.51 per cent.

  Meanwhile, those in Tsim Sha Tsui East have fallen 19.3 per cent since last October.

  However, agents said rents in single-ownership buildings had been more resilient during the economic downturn.

  With the office sales market quiet on Hong Kong side, rental activity in Kowloon was still active because of falling rents and the ample supply of relatively good quality stock, they said.

  'Everybody is renting,' Bryan Ho, senior manager, commercial department, with Treasure Land Property Consultants, said.

  Rents in Kowloon have been in a steady, albeit slow, decline since January when rents fell by about 7 per cent. However, the slide has slowed with rents falling a mere 1 per cent for strata-title buildings last month, according to Treasure Land's figures.

   Leasing activity in Tsim Sha Tsui East has picked up recently as more traders, especially toy manufacturers, have decided to upgrade their premises.

  'The prospects of a better year than last year in terms of overseas retail sales in the United States and Europe has traders, especially toy manufacturers, looking to upgrade,' Mr Ho said.

  The relatively cheap rents were also acting as an incentive, luring people out of older buildings.

  Space in Concordia Plaza had been rented for $18.50 per square foot for a bare shell and for around $22 to $23 per sq ft for a decorated unit.

 Rents in South Sea Centre were even more attractive, with deals having been agreed at $15 to $16 per sq ft. However, space in single-owner buildings could only be rented at a premium.

  Space in Sino Group's Empire Centre is going for $25 to $28 per sq ft, depending on the view.

  According to property agents, there was some movement out of the single-ownership buildings as a result of the variance in rent levels.

  At the same time, landlords were offering longer rent-free periods in an attempt to keep their existing tenants.

 They said leasing of new buildings such as Wharf Holdings' Gateway II and Titus Square had been slow as a result in the downturn in the market.



Kowloon remains active as slide in rents continues