Good news, bad news in Kowloon rent rise

THE likes of Peter Woo Kwong-ching, Robert Ng Chee Siong and Yu Ching-po will be rubbing their hands with glee this morning after reading how much Cheung Kong (Holdings) plans to charge for office space in the public sale of Concordia Plaza.

The average price of $12,200 per square foot set yesterday by vice-chairman Victor Li is aggressive - to say the least - for a property in Tsim Sha Tsui East.

If he gets that much, which seems highly likely given the strong response from the internal sale, then the implications could be enormous.

Until now, prime office space in Tsim Sha Tsui East has been fetching $8,000 to $10,000 per square foot, not that there has been much on the market.

Assuming Cheung Kong's asking price sets the norm, then other big office landlords such as Kumagai Gumi and Sino Land Co can look forward to a significant jump in the values of their portfolios.

If office prices in Tsim Sha Tsui East jump, they are likely to follow suit in Tsim Sha Tsui West, where values traditionally have been $1,000 to $2,000 a square foot higher.

Mr Woo's Wharf (Holdings), with its giant Gateway project coming up for lease, will be delighted.

Grade A space in Lippo Sun Plaza, close to the Gateway, recently has been going for just over $10,000 a square foot.

Given this, the value of Gateway One could have soared 10 to 20 per cent overnight.

In addition to the $12,200 average asking price, the $15,500 a square foot premium price paid by Golden Harvest for the top floor of Concordia Plaza serves as a warning of just how high Kowloon-side prices could go.