Kowloon Bay mall expected to generate $300m in first year Kerry Properties is poised to reap more than $300 million in annual rental income from its MegaBox shopping centre in Kowloon Bay during its first year of operation, rising to $400 million in subsequent years. The 1.1 million square foot mall, part of the Enterprise Square 5 development, has a construction cost of $2 billion. It is scheduled for completion in early 2007 and will be Kerry's first wholly owned shopping centre in Hong Kong. MegaBox Development executive director Tom Tong Kwan-ki said about 40 per cent of the retail space had been committed by potential tenants. He is confident 50 per cent of the space will be snapped up by the end of the year. The project, which would be the largest and tallest shopping centre in eastern Kowloon, had attracted a number of new overseas brands, Kerry Real Estate Agency marketing manager Kimmy Lau Pik-wai said. A signing ceremony with one overseas tenant that committed to lease 100,000 sqft is scheduled for next Monday. Mr Tong said 60 per cent of the shops at MegaBox was more than 10,000 sqft. The unique 19-storey vertical shopping centre is built around totally connected modules, with a vehicular driveway reaching all floors. Drivers can reach the topmost zone in only three loops. The development will also comprise an international-standard ice rink. Mr Tong said Kowloon Bay had become a red-hot neighbourhood after several land auctions at high prices this year. After developing a number of premium office towers in Kowloon Bay in recent years, Mr Tong said Kerry had become a major contributor to the area's transformation from an industrial district to a pre-eminent location for grade-A offices. He said the completion of MegaBox, coupled with the government's redevelopment plan for the old Kai Tak airport site and Kowloon East's population of about two million, would help turn Kowloon Bay into an important new metropolitan district. Kerry is negotiating with the government to build a bridge connecting major buildings in the Kowloon Bay district to the Kowloon Bay MTR station. The group was also in talks with the government to turn a 100,000 sqft open area in front of the MegaBox development into a public recreation park, Mr Tong said. Enterprise Square 5, which also comprises about 500,000 sqft of office space, is expected to contribute a further $100 million in annual rental income for Kerry upon completion. Ms Lau said office rental in Kowloon Bay was about $16 per square foot. The group plans to launch the office portion before the second quarter of next year. It is confident office rental for Enterprise Square 5 could reach $18 to $20 per square foot.