bably a good time to move into Central district to take the
advantage of the attractive rents.
S RENTS tumble amid a glut of office space, competition among
landlords in ritzy Central business district has gone into overdrive.
Competition is particularly keen on new structures like Cheung Kong
Center and One International Finance Centre.
Industry watchers say it has become common these days for landlords to
offer six to nine months of free rents on top of the competitive rate
to draw clients.
Given the millions of square feet of grade-A office space available
for lease, they have no choice, a property agent said.
A property analyst with a European house says office rents could come
off by another 10 per cent this year, but in large buildings like
Cheung Kong Center or One International Finance Centre, rents are
starting to stabilise as landlords have achieved a certain level of
"Landlords (with) occupancy rates of over 50 per cent in their new
developments will be less inclined to offer the same lease-terms
compared with the time when they first offered their properties for
He said the achievable office rent in Central is around $40 to $45 per
sq ft, and it was justified to relocate one's office with a more than
$10 per sq ft difference.
Property agents say now is probably a good time to move into Central
district to take the advantage of the attractive rents.
In the first quarter, average office rentals tumbled between 9.6 per
cent and 20.6 per cent from levels in the last quarter of the previous
year as supply jumped massively.
The plunge came as some 9.4 million sq ft of new office space came
onto the market last year and 5.6 million will be added this year and
Figures provided by Vigers Hong Kong show that average net effective
monthly rental in Central has reached reached $35.5 per sq ft in the
With location probably the single most important consideration for any
business, there could be no better time than now to set up office in
the heart of commerce _ Central.
Cheung Kong Center, which towers 62 storeys and is located at the
heart of Central, counts among its tenants the most powerful business
institutions in the world, including the Bank of China Tower, Hongkong
Bank headquarters and Citibank Plaza.
Cheung Kong Center, designed by world-renowned architect Cesar Pelli,
can be considered as much a work of art as an efficient working
Hutchison Whampoa, the leasing agent for Cheung Kong Center, is not
disclosing the average rent, but analysts estimate the average
effective rent at $25 to $30 per sq ft considering the long rent-free
period it has offered tenants. It is way below the $50 to $55 per sq
ft target set by senior management before the launch.
Real estate agents say the occupancy rate in newly completed grade-A
office buildings stands at 65 per cent, and another 10 to 15 per cent
of available floor space is under negotiation.
The agents note that occupancy rates in older buildings in both
Central and fringe districts have fallen for some time now as tenants
move to newly completed grade-A buildings.
This has forced landlords of such property to be more flexible and
competitive in offering rents and incentives to secure tenants. But
the new buildings are getting the best deals.
Cheung Kong Center, for instance, has signed investment bank Goldman
Sachs (Asia) for a 12-year lease on eight-and-a-half office floors,
becoming the leading tenant late last year. Hutchison is believed to
have offered up to two- and-a-half years rent-free period along with
reasonable rent as sweeteners, but the two groups have remained
Cheung Kong Center is close to everything _ all the major financial
institutions, multinational corporations, banks, lawyers, stockbrokers
and Hong Kong's top five-star hotels.
Most importantly, the location puts the tenant at the centre of all
people he has to do business with.
A fung shui master says the development not only has a central
location; the site also has good fortune. At the foot of the Peak and
in front of Victoria Harbour, Cheung Kong Center lies harmoniously at
the heart of the financial and business centre.
Perfectly square in shape, the centre stands for stability, endurance
and long-lasting prosperity _ the perfect ground for any business, the
In addition, nothing inspires people more than an amazing view.
Nothing empowers employees more than standing high above the whole of
Hong Kong. From Cheung Kong Center, large glass windows from floor to
ceiling give occupants a 360-degree panorama of Victoria Harbour,
Kowloon Peninsula and the Peak.
Inside the building, floor plates are highly efficient with large open
spaces and high ceilings. Offices are all designed with the latest
raised floor system.
Tenants can design a wide range of efficient layouts and redesign or
alter an entire office plan at very little expense. At 20,000 sq ft to
22,000 sq ft lettable area, they are some of the largest column-free
floors in central Hong Kong.
Air-conditioning is supplied through raised floors.
Cheung Kong Center's most powerful business weapon is
telecommunications. Every office, every desk is plugged to the world
via the most advanced fibre-optic network.
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