New prime office space in Central up for lease
The 31-storey CCB Tower on Chater Road is offering nine of its floors to tenants at rents comparable to other grade A blocks in the district
CCB Tower in Central, a new office building developed by a consortium of China Construction Bank and Lai Sun Development, has been released in the market for lease.
The 31-storey office tower, located on the site of the former Ritz-Carlton Hotel Hong Kong, is seeking tenants for offices from the 19th to 27th floors. The remaining floors on the top and lower zones will be occupied by China Construction Bank.
According to Jones Lang LaSalle, the leasing agent for the building, the asking rents ranged from HK$150 to HK$160 per square foot on lettable floor area.
Laurens Chan, director of the markets department at Jones Lang LaSalle, said yesterday that the rental pricing levels were comparable to other prime grade A office buildings in Central.
The average asking rents of the International Finance Centre (IFC) and AIA Central in the district are about HK$180 per sq ft, while recent transactions show the average committed rents are about HK$120 per sq ft.
Despite Central's office market being clouded by the weak global economy since the second half of last year, Chan said landlords were not offering longer rent-free periods to lure tenants.
He said CCB Tower would offer a two- to three-month rent-free period only, in line with the market. "We kicked off the leasing campaign a month ago and received interest from mainland companies and financial institutions," he said.
"Some of them are new to Hong Kong and some are already located in Central, but looking for new office space for expansion or downsizing. They are interested in leasing one to three floors of the building."
CCB Tower, located on Chater Road next to AIA Central, will provide a total gross floor area of 224,429 sq ft. Its floors range between 6,900 sq ft and 7,400 sq ft. It is scheduled for opening in November, and will be the only new grade A office building in Central.
"The office leasing market in the first quarter was very quiet," Chan said. "But we have seen a little improvement recently. There has been a new take-up by financial institutions of grade A offices such as the Cheung Kong Centre, Two IFC and AIA Central over the last two months."
Jones Lang LaSalle manager Andrew Yates said the vacancy rate in Central was 4.2 per cent and 6 per cent in top-end office buildings. The firm forecast office rents in Central would drop 15 to 20 per cent this year.
In 2006, Lai Sun decided to redevelop the Ritz-Carlton site into an office block. A year later, China Construction Bank bought a 40 per cent stake in the project from Lai Sun for HK$1.37 billion.