Concrete Analysis | Opinion: Is a Kowloon East CBD for real or just a planner’s dream?

The new HKSAR administration may offer new directions for Hong Kong, but we will have to wait and see. Being a veteran of the commercial leasing sector, forgive me for having my own expectations (if not high) for the commercial property market.

The idea of Kowloon East becoming a CBD2 is definitely not something new, but will this idea be realised or is it just a planner’s pipe dream?

The long-term severe shortage of commercial space in traditional core business districts has been pushing developers and tenants to look for office space in rising star locations such as Kowloon East, Wong Chuk Hang and Cheung Sha Wan for some time.

Carrie Lam Cheng Yuet-ngor, the chief executive-elect who, let’s not forget, used to be in charge of the Development Bureau, was one of the core members to advocate turning Kowloon East into CBD2.

This is one reason why I am inclined to hold high hopes for the upcoming development blueprint for this neighbourhood. Looking at what the government has proposed to date, the aspiration is to build a business location on a par with Central. Problems with realising this vision are already apparent, however, as new office supply in Kowloon East has surpassed the speed of local infrastructure development and the legacy transport network is currently unable to support the traffic generated by the large number of office tenants who already call the area home.

As temporary oversupply of commercial space in Kowloon East looks likely, the government has recently placed more emphasis on launching sites in Cheung Sha Wan and Wong Chuk Hang, putting a “brake” on fast-developing Kowloon East. Call me a worrywart, but this situation, while expedient in the short term, may hinder the development of Kowloon East in the long run. In stimulating the development of commercial space, tenant mix plays an extremely significant role.

If we take a look at the tenant mix in Kowloon East, most occupants are what we call “support-function business arms” such as accounting functions or human resources while traditional CBDs such as Central and Admiralty still house the front-of-house staff who serve clients directly. This is shaping an impression that Kowloon East is a second-tier consideration for tenants in finding commercial space and any equivalence of this neighbourhood with the traditional CBDs or even an international CBD may not be realistic.