Hong Kong’s office market may be mired in a slowdown, but one of mainland China’s biggest telecom providers is committing to more space in the city as it gets ready expand its 5G mobile service.
Telecom giant China Mobile has leased a whole floor in Sun Hung Kai Properties’ Kowloon Commerce Centre in West Kowloon, agreeing to rent the 23,572 square foot (2,189 square metre) space for HK$777,876 ($99,189) per month, according to a report in the Hong Kong Economic Times.
The move by China Mobile, which is the largest mobile phone network operator in China, comes despite generally slower leasing activity in the city, and follows up on the state-backed player having earlier secured multiple floors in the 2008-vintage complex.
China Mobile Now KCC’s Biggest Occupier
The reported lease deal would see China Mobile take up the entire top floor of one of the towers in the 35-storey project on Kwai Cheong Road in the Kwai Chung area of Kowloon.
The telco is paying the equivalent of HK$33 per square foot per month for its new floors in the 501,700 square foot complex after having originally signed up to lease 100,000 square feet in the same grade A office tower when the project was first completed.
China Mobile later purchased those floors from Sun Hung Kai, and the company has since taken on additional floors with its footprint in the building, prior to the latest lease, said to total some 170,000 square feet.
Sun Hung Kai built the twin-tower Kowloon Commerce Center on the site of a former bus depot with tower one completed in 2008 and tower two which includes retail and F&B outlets, completed in 2012.
Linked by an air-conditioned walking bridge, the premium office development is about 550 metres from the Kwai Hing metro station, and the KCC also has convenient connections to the Kwai Tsing Container Terminals, the Lok Ma Chau border crossing and to airport express train to Hong Kong International Airport.
Besides China Mobile, the complex is also home to DHL, Roxy Electric and Bank of America Securities.
Leasing Activity Shifts to Kowloon
As companies weigh up growing global economic woes and their impact on Hong Kong, demand for office leasing has notably reduced, particularly in Central, which has traditionally been the most expensive office market in the world, according to Alex Barnes, head of markets at JLL Hong Kong.
The more affordable rents on the Kowloon side, however, have continued to pull in tenants, with leasing transactions remaining stable. In July, US-based co-working space provider WeWork leased two floors at the Octa Tower on 8 Lam Chak Street in east Kowloon’s Kowloon Bay, securing 50,000 square feet of space at HK$25 per square foot, or HK$1.25 million per month.
In May, Hong Kong’s FTLife Insurance was said to be agreeing to pay HK$4.41 million ($561,806) per month to rent a 126,000 square foot (11,706 square metre) space in the LVGEM NEO project in the Kwun Tong area, a harbourfront office project which is scheduled to be completed in the third quarter of this year.