Start-ups’ desire to stay close to Central works to Sheung Wan’s advantage, says property investor
- Office rents in Sheung Wan range from HK$30 to HK$40 per sq ft compared to more than HK$100 per sq ft in nearby Central
Demand for office space in old buildings in Sheung Wan, close to Central, remain sought after by start-ups and small businesses who cannot afford exorbitant rents in the core business district, which have been pushed beyond their reach by mainland finance firms, according to a Hong Kong-based real estate fund.
Market observers forecast rents in Central, which have risen above HK$100 (US$12.8) per square feet, to fall by up to 5 per cent this year, but that is small consolation to small businesses.
“About a quarter of our tenants have relocated from Central,” said Patrick Wong Tsu-an, chief executive of Tenacity International, which bought 299 QRC, a 36-year-old office building in Sheung Wan for HK$2.1 billion last June from local investor Francis Law Sau-fai. Law is the second son of Lo Siu-tong, founder of developer Yu Tai Hing.
Rents in Sheung Wan range from about HK$30 to HK$40 per sq ft, he said.
“Our building is filled with local tenants ranging from innovative firms, design companies and finance firms,” he said.
The 25-storey office tower, a four-minute walk from Sheung Wan MTR station, has a gross floor area of 94,500 square feet. The tower’s price tag works out to HK$22,000 per sq ft.