A shortage of supply has spurred small developers to aggressively put up office buildings in Kowloon's industrial districts. With a flood of new stock coming to the market, property agents now expect downward pressure on office rents in Kowloon East. According to Colliers International, about 3.56 million square feet of new supply from six office buildings will be made available in Kwun Tong and Kowloon Bay this year and next. Colliers International research director Simon Lo Wing-fai said the average office rent in Kowloon East dropped 2.3 per cent to HK$20.90 per square foot last month from HK$21.40 per square foot in January. However, office prices in Kowloon East are rising. Reggie Lai Yui-chung, project planning manager at Billion Development, said demand for saleable office buildings in Kowloon Bay and Kwun Tong was strong. Its office building at 83 Hung To Road in Kwun Tong was launched this year. The 35-storey office building provides a total gross floor area of 300,000 sqft. Most of the office floors have been sold at HK$3,800 to HK$3,900 per square foot, and only four floors remain for sale. Mr Lai said most of the buyers were industrialists looking for headquarters and long-term investment. 'They need the office to manage their factories in the mainland, and they prefer to buy rather than rent,' he said. Mr Lai said demand from industrialists remained strong amid the fast economic growth on the mainland in the past few years. He also said the growing number of mergers between industrial groups was boosting demand for new office space. However, the supply of saleable offices in the area was limited because of a focus by leading developers on residential projects in the past few years, Mr Lai said. As a result, small developers have been given the opportunity to initiate profitable office projects in the area.