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Christopher Dobson

While the United States subprime market and credit crisis may be spreading gloom in the business world,  with the potential for a recession looming, for Sun Hung Kai Properties the future looks bright with a rapidly expanding portfolio of grade-A office space.
And, with the International Commerce Centre (ICC) coming on stream in stages, the prospects for the future are rising as rapidly as the 490-metre tower.
Sun Hung Kai Real Estate Agency deputy general manager, office leasing, Lo King-wai, said that Sun Hung Kai Property's premium office portfolio was performing strongly, with occupancy now at more than 95 per cent, while new leases and expansion by existing tenants were signs of business confidence.
Mr Lo believes that strong leasing activity is central to the company's success and will continue to bode well for the office market.
'Property is our speciality and we are positive [about our position],' he said.
'We also have years of experience and blueprints, such as IFC, that reassure the industry. Markets fluctuate all the time, but there is still impressive growth in the demand for office space. '
That grade-A demand is being met by the continuing development of the West Kowloon commercial hub, including what will be Hong Kong's tallest building, which will be completed in 2010.
Mr Lo said the mega-tower would offer an alternative for multinationals and the structure's quality would speak for itself.
'We are extremely positive about the mixture of tenants we have been able to attract and are still attracting,' he said.
'The complex is like a city unto itself, embracing everything from five-star hotels, The W Hotel and The Ritz-Carlton, and luxury residences such as The Cullinan and HarbourView Place,  to extensive shopping such as Elements and entertainment venues.'
Sun Hung Kai believes location is a big part of what makes the ICC so attractive.
It is close to Central and Tsim Sha Tsui and, because it is also the hub of two MTR stations and two above-ground rail lines, it offers quick transport to virtually every point in the SAR, including the airport.
'As you can see, it is a very complete vision,' Mr Lo said.
But it is not just the ICC that is driving the company's continued success. With many other developments the office leasing expert said it was in a 'powerful position' in the top-end-properties sector.
'Our 'landmark' developments include the Sun Hung Kai Centre and Millennium City, as well as ICC and some of our joint venture projects such as IFC and Central Plaza.
'Our high-end office portfolio consists of more than 10 million sqft,' Mr Lo said.
But even with this substantial reserve Hong Kong has seen steadily rising demand for offices for several years coupled with an increasingly limited scope for adding new space in Central.
However, Mr Lo firmly believes that there is still scope to grow in this sector and there is always room for improvement, innovation and more excellence.
'The natural response is to expand the central business district,' he said.
'Prospective tenants are more than willing to do this if the property is right, that is, if it entails no sacrifice of convenience, stature, efficiency and amenity.
'In developments such as ICC we are hoping to show that this extension to the traditional business districts entail no sacrifice and offer positive advantages.'
With the iconic ICC at its heart, the West Kowloon development, totalling 2.5 million sqft of grade A space will go some way to narrowing the gap between demand for quality office space and the supply.
Although if Hong Kong's economy and business status continue to grow, it still will not solve the long-term need for top-quality premises.
'If the trends of the past few years hold true, ICC and some of the other projects coming to fruition over the next two or three years won't totally fill that gap,' Mr Lo said.
'Demand will probably continue to outstrip supply for some time, so it is safe to say that projects such as ICC are just the first wave of a new generation of intelligent, better and more efficient mixed-use complexes.'
But besides spurring a geographic shift from traditional commerce centres, Mr Lo believes projects such as West Kowloon will also serve as standard-bearers.
'They will set the pattern for tenants' expectations in build quality, space flexibility, efficiency and convenience,' he said.
Sun Hung Kai's approach was based on experience and an acute understanding of demand, and capitalising on what Mr Lo described as 'our knowledge of the end-users'.
'The better you understand their present and future needs, the more effectively you can anticipate where the market is heading. It is as simple as that,' he said.



Business can only go up for active HK developer