Landlords make a killing as the 'billboard jungle' takes root

Hong Kong landlords are famous for squeezing revenue out of every last square inch of their buildings. For some, that means renting not just the horizontal surfaces, but the vertical ones as well.

The rights to hang neon signs and billboards from Hong Kong's high-rises increasingly equates to big money for landlords.

'Some buildings are generating higher income from advertising than the rental from their office or retail space,' Mak Siu-tong, chairman of Convey Advertising Company, said.

An 11-storey building at the junction of Canton Road and Peking Road near Harbour City in Tsim Sha Tsui is one example. Owned by local investment company Wai Woo, only the shop on the ground floor has been leased. For the rest of the building, the landlord is looking for a single tenant willing to pay a monthly rent of HK$780,000, including the billboard that wraps around two walls. Property agents calculate that the office space could rent for HK$330,000, while the advertising hoarding rights could go for HK$450,000.

The billboard advertising is worth considerably more than the floor area due to the high pedestrian flow in the area and the fact that the building has a total floor area of only 13,000 sq ft.

Daniel Wong, business development director of advertising agency JM Network, said while that situation was rare, many landlords were trying to maximise profits by offering building exteriors to advertisers. Location and size are the main factors determining advertising rates.