East nine commercial buildings usher in the supply peak
East Kowloon a new batch of commercial supply to kill, 10 years ago, East Kowloon had commercial peak, after several years after the rebound in rents. Now there is another peak, can you repeat the history of fast?
This year the supply floor up to 257 million feet
As early as 2011, the Government proposed to start East Kowloon, and in a few years approved a number of commercial land, determined to become the CBD2. After several years of concessions and consortium investment, the new commercial buildings will be one after another, this year is more appropriate supply peak, according to DTZ figures show that in 2016 the East Kowloon area supply of about 714,000 square feet of floor, and this year with more than one A new building completed, the supply of views to see 2.57 million square feet, is a 10-year high. In addition, the bank statistics show that the next two years there are still 2 million square feet of floor completed. In other words, the next few years is the peak supply of East Kowloon.
East Kowloon this year, the newly completed commercial buildings are mainly concentrated in the Kowloon Bay to Ngau Tau Kok area, but the general number of commercial buildings to absorb the volume is not high, such as Singapore’s Feng tree industry Mapletree Bay Point, temporarily named Feng tree center, the total floor of about 660,000 square Feet, the owners of the beginning of this year for rent. Until the beginning of this month only recorded the first two rental, engineering consultants and shared work space WeWork rent a layer, the occupancy rate of about 1 percent.
In addition, Jinli Feng (01031) Zhu Tai last year to 6.528 billion yuan, to the Swire Properties (01972) to buy Kowloon Bay Hongzhao Road commercial project, building renamed Kingston Financial Center, is now leasing. As for the factory Liu Han Song family early cast Chang Yue Road land, named Hong Kong Feng Center, more than two properties with the occupation this year, providing a total of nearly 880,000 square feet, it is learned that has not yet rented any floor. Earlier this year, the same area high silver financial international center completed, the total floor area of 852,000 square feet, the occupancy rate has not yet reached half. In addition, the short term New Territories (00016) and Wang’s (00099) Kwun Tong One Harbor Road 2 will soon be occupied, providing 340,000 square feet. The new supply of the floor has not yet been calculated by a group of commercial and commercial buildings into commercial projects, the absolute supply peak.
About 10 years ago, the East Kowloon had run into a commercial supply peak, 07-8, the area Landmark East, the International Trade Center, Manhattan Place, Manulife Building, etc., a total of about 3.8 million square feet of new supply at the same time, To three years, to absorb the situation is very good, the rent from the lowest 10 yuan, jumped to 30 yuan, the occupancy rate so far ideal. However, the overall market conditions today, slightly different from the 10 years ago.
In the same year, there was only about $ 10 in the rent of the new commercial buildings in East Kowloon. The most attractive places in East Kowloon were the rents and the rents were very high. As long as tenants moved from Hong Kong East to East Kowloon, rent savings of 60 to 70%, just to make the organization cost savings.
The price of the lift is too slow
Today, the East Kowloon commercial rents, generally about 25 to 30 yuan, if the Hong Kong Island East commercial buildings to move out, can save a substantial reduction in rental expenses. East Kowloon commercial owners said that an agency to consider the relocation, you must consider the removal costs, including renovation costs and other costs, it is understood that with the renovation costs increase, the removal fee from 12 to 13 yuan per foot, rose to more than 20 yuan , In other words, if you can not save more than 20 to 30 yuan per seat rent, the agency will choose to stay in the original site renewal. East Kowloon rents rose more than 10 years ago, coupled with the cost increase, the rent savings rate narrowed, reluctant to move difficult and then.
In addition, Hong Kong Island is principally engaged in core business lots (Admiralty, Central) and sideline lots (Wan Chai and Causeway Bay). Rent is very cheap. Therefore, Hong Kong businessmen have moved to East Kowloon for cost savings. Hong Kong Island today, a choice, that is, Huang Zhu Hang, feet rent only about 20 yuan, in other words, the East Kowloon commercial owners, more than an opponent, I believe this time to absorb the progress, slower than many years ago.