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SCMP Reporter

HONG Kong is a regional leader in the creation of intelligent buildings but do businesses need - or want to pay for - the frills of a sophisticated office environment?    Yes, say those who believe modern financial businesses need the adaptability and technology that comes with these buildings.

   No, say those who believe businesses need four walls and a roof and are more concerned about the higher rent that comes with high intelligence.

  Citibank Plaza, Great Eagle's new edifice on Garden Road, is the latest of the intelligent buildings which have been springing up in the territory over the last three years.

  Begun in the US, the concept first arrived in Hong Kong in the shape of Exchange Square and the Hongkong Bank building in the mid-1980s.

   Now, Hong Kong, along with Tokyo and Singapore, boasts various high-tech structures.

   At Citibank Plaza, tenants are offered computerised climate control and lighting designed to create the most comfortable - and therefore efficient - environment possible.

   Above and beyond that, the building's raised floors and ducts allow the efficient installation and movement of communication lines.

   It is also designed so that work stations and offices can be altered in size and shape quickly to allow businesses to adjust and grow.

   Such frills cost around $55 per square foot at Citibank Plaza.

   Analysts estimate that ''intelligence'', is generally worth an extra $2 per sq ft.

   The frills are seen as helpful to the high-profile financial firms that want the prestige of a Central address and need the most efficient communications available.

  And these financial firms are increasingly expanding their presence in Hong Kong to take advantage of the boom in China, the growing capital markets and the roaring stock market.

   ''Tenants want a much higher standard of service,'' David Faulkner, a partner at Brooke Hillier Parker, said.

   ''They are no longer content to take the shell of a building and fit it out to a basic standard . . . the growth of information technology means that old-style buildings are not flexible enough to handle the sophisticated equipment,'' he added.

   Michael Mahony, a director at Jones Lang Wootton, said: 'Intelligence' is a marketing asset.

    ''Tenants are more likely to stay longer in a building with raised flooring and will probably be reluctant to move to a building without raised floors,'' he added.

  However, critics of the intelligent craze are quick to point out that Citibank Plaza, which is now about 90 per cent occupied, was slow to lease when the sales campaign began in 1991.

   Furthermore, they say, the real expansion areas in Hong Kong are outside the Central business district, proving that businesses prefer a reasonable rent to excessive sophistication.

   Chris Thrift, director of Richard Ellis, said the recently completed Central Plaza did not advertise itself as ''intelligent'', but had proved popular.

  The Wan Chai landmark building was now almost fully let and with rents at $55 per sq ft, it had higher rents than many Central properties.

    ''Many developers feel intelligent buildings are a waste of money,'' Mr Thrift said.

   ''People are prepared to sacrifice sophistication for longer term security of tenure and the ability to fix overheads over a period of years . . . Central Plaza is a straightforward 78-storey office building . . . but it did it no harm in the marketplace,'' he added.

      Mr Thrift also said sophisticated communications systems could be expensive to use and that Hong Kong Telecom offered systems sophisticated enough that businesses did not need intelligent buildings to use them efficiently.

    But Hong Kong Telecom has itself chosen high-tech raised flooring for its new structure under construction in Quarry Bay.



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The high cost of intelligence