New transport projects will create nine hubs in Hong Kong, boost property, says Colliers International
- Office rents are expected to narrow between Central and nearby business districts
- Property prices will be boosted in Admiralty and Tamar, Wan Chai, Central and Western districts, Eastern district, West Kowloon, Kowloon City, Sha Tin, Tuen Mun and Hung Shui Kiu and Lantau North
New railway lines and road networks will lead to the emergence of nine office, retail, business and cultural hubs in Hong Kong over the next five to seven years, according to a new study by property consultancy Colliers International Hong Kong.
Property in the districts of Admiralty and Tamar, Wan Chai, Central and Western districts, Eastern districts, West Kowloon, Kowloon City, Sha Tin, Tuen Mun and Hung Shui Kiu and Lantau North will report a boost in prices amid improved potential, the study, released last week, said.
Office rents are expected to narrow between Central and nearby business districts, in particular. Nigel Smith, managing director at Colliers International Hong Kong, said office rents in Central were currently about 50 per cent higher than in these districts. He, however, did not say by how much would office rents here catch up with those in Central, the world’s most expensive.
Office rents in Hong Kong have averaged US$193.67 per square foot over the past 10 years, according to Knight Frank.
Greater connectivity within the city will allow Hong Kong to capitalise on the role it will play in the development of the “Greater Bay Area”, the initiative by Beijing linking the special administrative regions of Hong Kong and Macau with nine neighbouring cities in the southern Guangdong province into an economic powerhouse.
The 11 economies cover a total area of more than 56,500 square kilometres and were worth US$1.58 trillion in 2017.
“What’s really interesting are those connectivity corridors, the West Kowloon corridor that goes up to Qianhai, Shenzhen, and the central or eastern side that goes up to Dongguan. These are big game-changers, and part of this big game-changing vision is the Lantau Tomorrow Vision,” said Smith.
According to Colliers, starting in 2025, when infrastructure projects and redevelopment of buildings are expected to be completed, there will be a narrowing of rental rates in office buildings between Central and the neighbouring areas of Admiralty, Wan Chai and even Causeway Bay.
Here’s how Hong Kong property would benefit from Greater Bay Area
Ricky Lau, deputy managing director and head of office leasing at consultancy Savills, however, said infrastructure was just one of the reasons why there could be a narrowing of rental rates.
“The narrowing of rents is not only because of location or transport. There are other factors as well. If you don’t have new buildings in one area, that’s not going to help with the narrowing of rents. It’s a chicken and egg issue,” Lau said.
Real estate services company Cushman and Wakefield, meanwhile, said retail locations in Kowloon were benefiting from new transport links such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link, which connects the city with 44 mainland China destinations.
Average daily mainland Chinese visitor arrivals grew by 19 per cent year on year during the first two months of 2019, the biggest in five years, with a 21 per cent year on year rebound in same-day visitor volume.
