Supply shortage in the core area to rebuild commercial buildings
The redevelopment of the Excelsior Hotel is not the first case of redevelopment of the commercial building. Cheung Kong (1113) announced the implementation of the redevelopment of the Hutchison Building in Central at the end of July. This aspect reflects the huge potential for appreciation of commercial buildings. On the other hand, it also shows that commercial buildings are in short supply. Apart from residential areas, Hong Kong still lacks commercial land.
Cheung Kong will launch a redevelopment plan for Hutchison Building next year. It is expected to have a floor area of over 490,000 square feet and a height of 41 floors. It is expected to be completed in 2023. The Group said that the supply of commercial buildings in the core area of Central is in short supply. The market demand for office space in Hutchison Building has been strong. The Group believes that the redevelopment will enhance the property valuation and increase rental income. When the general market forecast to 2023, and Hutchison House price per square foot will be between 70000-80000 yuan, the total value is expected to more than 30 billion yuan.
Construction of new CBD to increase commercial land
There is a lack of commercial land in Hong Kong, especially in the core business districts. The vacancy rate of the Central Commercial Building has been hitting new lows and the trend of rebuilding commercial buildings is foreseeable. However, apart from rebuilding the commercial building, it is not a good idea to construct a new core business district.
“Starting Kowloon East" was introduced many years ago. The Government is keen to build East Kowloon as the second core business district (CBD2). In recent years, many developers in Hong Kong have also flagged East Kowloon, proving that the plan has great development prospects. The policy address will be published today. Whether it will revisit the Kowloon East Project is worthy of attention.