Taikoo Square will create a new business district core area
Guy Bradley, chief executive of Swire Properties (01972), said that the Taikoo Fangcheng Group will focus on building a location, the supporting facilities in the region will become more mature, and it is expected to become the core area of the new commercial building. The overall commercial market conditions are not affected by the Sino-US trade war. Expected to continue to rise.
In June this year, Swire Properties sold its third and fourth commercial buildings in the Taikoo Shing Center to Hengli Investment for 15 billion yuan. For the rare sale of commercial buildings, Bai Deli said that the reason for this interview is simple. Reinvesting the funds, moving from the old building to the new building, rebuilding the property into Chaojia Building in Taikoo Square, increasing supply is a future strategy. Regarding whether or not to sell its commercial buildings, he pointed out that the group has always liked to hold on to the long-term, unless it has an opportunity to consider it.
Taikoo Place Concept Establishing a Community
Under the effect of high rents and low vacancy rates in the Central District, the surrounding commercial districts are also well-received. For example, the Taikoo Place commercial buildings on Hong Kong Island are also 100% occupancy rate, and the types of tenants are becoming more diversified, even in the past. Leading companies such as law firms and accounting firms have also settled in Taikoo Square.
Bai Deli pointed out that Taikoo Place, like the Midtown District of New York, can be another core business district. “The improvement of transportation facilities is very important. The Central Wan Chai Bypass will be completed next year, shortening the distance between Central and Hong Kong Island, and the Central District tenant will come to Hong Kong Island East, office building. The area is larger, the quality of the property is enhanced and there is more public space. The rent is half of Central and is economically viable.”
Swire Properties has been actively developing Taikoo Place. In the early years, the Taikoo Place Redevelopment Project was implemented. It involves two office buildings, “One Taikoo Place” and “Two Taikoo Square”. It provides about 2 million square feet and has a total investment of 15 billion yuan. Close to completion, the pre-leasing rate is as high as 95%, and there are many well-known tenants including fb, Baker McKenzie, etc. Bai Deli said that because of a warm response, he is also very confident in the two rents.
He believes that the concept of Taikoo Place is not just a new commercial building, but also a community. “In addition to the building, we provide a lot of public space, including two green and relaxing gardens, Taikoo Central Plaza and Taikoo Garden. The guests feel that we are not only building but not a community, so they are more willing to stay in this area.”
Chinese institutions will continue to expand
This year, the rent of Jiaxia in Central has repeatedly broken, and the vacancy rate is extremely low. The occupancy rate of office buildings in Pacific Place has reached 100%. Bai Deli pointed out that the demand for commercial buildings is strong, including the increase in the proportion of Chinese-funded institutions in recent years. With the increase, there are more Chinese new tenants in Pacific Place. Not only financial institutions, but also other Chinese-funded industries. In the medium to long term, Chinese-funded institutions will continue to expand and require more floor space.”
In recent months, the market has added uncertainties, that is, the Sino-US trade war. He said that it has not seen any impact on the rental market in Hong Kong. “It is hard to say how much impact it has. At this stage, it has not yet felt that the Sino-US trade war has brought a lot of Impact, we continue to receive a large number of inquiries. The biggest problem in the core area is the lack of new supply for a long time. I believe that the rents of commercial buildings will continue to rise in the short term.”
Reconstruction of the Golden Bell Gallery will be of interest
The next potential new supply in the core area is expected to be the Golden Bell Corridor Redevelopment Project. He pointed out that since there is no specific information on the relevant tenders, it is not possible to evaluate the bidding or not, but it is definitely interested in the project. “The Golden Bell Gallery and Pacific Place are just A bridge can be connected, so it must be of interest.”
In addition to Taikoo Place, Wong Chuk Hang is another business district under development. South Island Place, a new commercial building in Wong Chuk Hang, a subsidiary of Taikoo, is about to enter the market. Bai Deli revealed that the pre-leasing rate has reached 50%, which is very desirable and benefited from The MTR South Island Line is open to traffic. Wong Chuk Hang and Admiralty are only two stations away. I believe the prospects of the area are good.