Office rents headed higher in Island East and Tsim Sha Tsui, as Central exodus gathers steam
- The HK$36 billion (US$4.59 billion) Central-Wan Chai Bypass and Island Eastern Corridor Link is set to open Sunday
- Faster transit links will help boost demand for offices in Quarry Bay and North Point, analysts say
The decentralisation of companies moving away from the core business district will accelerate after the opening of the HK$36 billion (US$4.59 billion) Central-Wan Chai Bypass and Island Eastern Corridor Link on Sunday, according to property consultants.
The bypass means vehicles will only need five minutes to travel from Central to North Point at Island Eastern Corridor, down from as much as 35 minutes currently, according to the Highways Department.
Banks and service companies are likely to consider moving to Island East, given the faster transport links, analysts said.
“As the economy has uncertainty, organisations will be more cost-focused,” said Paul Yien, head of landlord representation at JLL. “If transport time is short, it will attract the tenants, especially those who need large floor space. The bypass is the gateway to Island East, which makes it more connected to Central.”
Tenants such as EY and Baker McKenzie, which relocated out of Central last year, have rented or pre-committed to 429,000 sq ft of net floor area in Island East, according to JLL.
Rents of prime office at Island East stood at HK$53 per square foot on average at the end of December, while those in Central amounted to as much as HK$128, according to JLL.