Chinese-funded buildings can be top half of the sky
Chinese-funded institutions are particularly fond of Central District. Recently, the newly completed commercial building in Wanchai has also been seized by Chinese-funded institutions. This reflects the low vacancy rate in Central District and the renting of leased borderline sites, which will cause Hong Kong Island’s commercial building rent to hit new heights. .
The office rents have been repeatedly broken. According to the Jones Lang LaSalle report, overall office rents rose by 1.1% month-on-month in April. The monthly increase was the highest in two years, while in March it was only 0.2% month-on-month, which shows that the recent rise was suddenly accelerated. . Analysed by district, the leasing demand is mainly concentrated in Hong Kong Island East and Kowloon East. Based on the new leased-out floor, the total leasing turnover in Hong Kong totaled 76%.
Chinese capital coming in Hong Kong
The reason for the good rent is, of course, because of the large number of new rental transactions, and the fact that China Capital has become a driving force. This is evidenced by the recent rental situation of a new commercial building. In the early years, Hua Tuo dismantled the Chung Hsien Mansion in Wanchai and rebuilt it into a new commercial building called One Hennessy. It provided 315,000 square feet of floor space and is still under construction. It will be completed in the second quarter of next year. In terms of location, the property is not in the most traditional core location, but the pre-leasing situation is very satisfactory. The recent building has recorded two major leases. The largest hand is a maximum of 8 floors, a total of about 96,000 square feet, from the mainland of Pudong, Shanghai. The Development Bank leased it. At present, the Bank has extended its lease in the United States Banking Center and Pacific Place. The 8 floors on the lower floor of the same building total about 84,000 square feet. The new tenant is a Chinese-owned working space, KR Space, which is the first time to open a business in Hong Kong. The two leases involved a total of 180,000 square feet of floor space, accounting for 60% of the total floor area of the project. It is worth noting that the rent is $90 to $100. It is the first time in Wan Chai District that the rent for each floor has exceeded the one hundred yuan mark, which is basically comparable to that in Central and Admiralty.
On the figure figures, Chinese-funded institutions have become the main force of the core area rental. Statistics from Jones Lang LaSalle show that in 2011, Chinese-funded companies accounted for about 18% of the commercial rental transactions in Central District, and only about 9% of the total in Hong Kong. After that, the number has risen, and by the end of 2014, the ratio of Chinese-funded assets had exceeded 30%, and in 2016, it was a major breakthrough. The ratio increased sharply by 10% to 46% from 36% in 2015, and the proportion has slightly increased since last year. It is already close to 50%. In other words, half of the new leases in the Central Shopping Mall are from Mainland institutions. In 2017, the floor area of Chinese-funded leases amounted to 550,000 sq. ft., which is definitely a major user.
The above-mentioned new commercial building in Wanchai has two distinctive rental features. Shanghai’s Shanghai Pudong Development Bank is one of the top ten banks in the Mainland. It has a large scale and its Hong Kong business is temporarily not much. In fact, many Chinese-funded financial institutions have not yet come to Hong Kong to open their businesses. Some emerging technology companies have not yet been accounted for. If a number of companies come to Hong Kong to open their business, renting one or two floors of office space will be difficult. imagine.
In addition, the above-mentioned KR Space is a co-working space with a Chinese-funded background. This is an emerging industry in recent years. The Mainland has been prosperous for several years, and operators are also increasing. Now they are entering Hong Kong. There are traditional financial and real estate companies, as well as emerging technology and space-sharing institutions. At present, Chinese-funded institutions have a lot of strength and scale, and they also have the goal of expanding their businesses. It is normal to start business in Hong Kong.
Grab the rent line area
Chinese-funded office buildings are different from those of European and American institutions. The latter mainly considers cost considerations as the major premise, while Chinese-funded enterprises are relatively indifferent to prices. The most important thing is to settle in the core Central District to show the status of the company. However, in fact, the vacancy rate in the Central Plaza building has dropped to a record low. Each Super Grade A commercial building is almost fully leased. If the Chinese-funded agencies want to rent 50,000 to 100,000 square feet of floor space, there will be no vacant building at all. With rent available, the Chinese company has also begun to transfer to the borderline area. For example, in Shanghuan and Wanchai districts, if there are quality commercial buildings or newly completed buildings, the rent can also be paid. The rent of the Central Plaza commercial building has a low vacancy rate. The transfer of Chinese capital to Wanchai, Sheung Wan and Causeway Bay etc. also pushed up rents. The original rental of Central was only moved to Hong Kong Island East, which resulted in a low rate of east vacancy on Hong Kong Island and a rise in rental rates. In this chain reaction Next, Chinese capital has become the driving force behind the constant innovation of rents.