Hongkong Land, the biggest commercial landlord in Central, remains optimistic about the medium to long-term prospects for office rentals despite near-term pressure. Commercial property executive director Raymond Chow Ming-joe acknowledged that grade-A office rentals in Central faced downward pressure amid ample short-term supply. 'The pressure is mainly coming from Two International Finance Centre, due to be completed next year,' he said. However, Mr Chow said he expected the oversupply to work itself out soon. 'The supply in Central in the coming five to six years will be much lower than the historical average. 'There will be a flat rental reversion, possibly slightly negative, in the near term. The prospect is good in medium to long term,' he said. Mr Chow said Hongkong Land's overall occupancy rate was 95 per cent and existing rentals were stable. He said the leasing market was not bad and half of the company's new office building, Chater House in Central, had been let. Chater House has 483,500 square feet of net office space and 45,000 sq ft of retail space. Mr Chow said the retail portion was fully let, mostly to Armani as the site of one of the Italian fashion group's largest retail premises. However, no new office tenants had committed to Chater House since United States financial giant JP Morgan signed on as anchor tenant in October last year. The building received its occupation permit two months ago. JP Morgan signed a 10-year agreement for the top 11 office floors in Chater House with a total of 207,000 sq ft at a monthly rental of more than HK$60 per square foot. This means the US bank will vacate the space it now occupies in two other Hongkong Land properties - 120,000 sq ft in Jardine House and 80,000 sq ft in Exchange Square. Mr Chow said two floors previously let by JP Morgan in Jardine House were under offer but he declined to give details. He said the asking prices for Hongkong Land's office portfolio had not changed in recent years; he declined to disclose achieved rentals. 'We could maintain a satisfactory rental level as we keep on upgrading the quality of our premises to facilitate a better working and shopping environment in Central,' he said. In recent years, Hongkong Land had spent about HK$200 million to refurbish Alexandra House, expanding the retail podium by 10,000 sq ft, he said. The company would also commit more than HK$10 million to a scheme to beautify Central by providing more greenery and pedestrian facilities. 'We might choose somewhere near the Prince's Building and start working early next year,' he said. Hongkong Land owns about five million sq ft of commercial properties in Central.