Causeway Bay landlords mull upgrades as rents tipped to increase

Landlords in Causeway Bay are either accelerating or pondering redeveloping their old properties as improved infrastructure linking Central and non-core districts would spur office rents higher over the next 10 years, according to industry experts.

Colliers International executive director Simon Lo Wing-fai said office rents in Causeway Bay would benefit once the Central-Wan Chai bypass and Island East Corridor Link due to be completed in 2017 are finished.

"The rental gap between Central and Wan Chai or Causeway Bay will be narrowed," he said.

In its latest report, Colliers said the rental premium of Central over Wan Chai and Causeway Bay would narrow from 46 per cent last year to 23 per cent in 2025, driven by improved infrastructure.

In 2025, Grade-A office monthly rents in Wan Chai and Causeway Bay would increase 118 per cent to HK$136.90 per square foot from HK$62.90 per square foot last year, it said. Central Grade-A office rents would jump 83.5 per cent to HK$168.10 per square foot in 2025, from HK$91.60 per square foot last year.

Colliers' forecast came after news that The Excelsior hotel may be torn down to make way for a commercial development after 42 years as a Causeway Bay landmark.