New World Development’s K11 division has won an occupancy permit for its latest Hong Kong office project, kicking off formal leasing activity for K11 Atelier King’s Road, according to an announcement by the company late last week.
The 22-storey office tower, which is located approximately half-way between the North Point and Quarry Bay MTR stations in the eastern part of Hong Kong island, aims to provide both traditional and flexible office spaces in what brand-conscious K11 calls a “Vertical Creative City.”
The 440,000 square foot (40,877 square metre) tower is the latest grade A building to hit the market in the Island East area, which lies around six kilometres east of Central district, and K11 has already secured pre-leasing commitments for half of the office space, according to the announcement.
Tenants to Begin Occupying Tower This Year
K11, which bills itself as “a unique concept brand pioneered by cultural entrepreneur Adrian Cheng” is the signature division of the New World executive vice chairman and scion, and received its occupancy permit for K11 Atelier King’s Road four weeks ahead of schedule. The company now says that it expects to hand over offices in the high tech tower to its tenants by the end of this year.
The project, which received an added connectivity boost from the opening of the Central-Wan Chai Bypass earlier this year, is said to be leasing space at rates approaching HK$60 per square foot per month.
The project has been pre-certified at the platinum level both under the LEED scale of the US Green Building Council and the Well Building standard for healthy dwellings, as well as reaching provisional platinum status under Hong Kong’s BEAM Plus green building certification.
K11 announced that it had secured an international media company as an anchor tenant, occupying nine floors of the tower, which averages 20,000 square feet per floor. According to local market sources, that anchor tenant is multinational advertising agency WPP, the UK-based parent company for Ogilvy & Mather, Young & Rubicam and JWT.
Cosmetics brand L’Occitane is also said to have pre-leased at least one whole floor in the building, with some 220,000 square feet of the tower now pre-committed.
East is the New Black
The Quarry Bay project is New World’s fourth K11 Atelier office project after it opened earlier projects in Shanghai and Guangzhou, as well as the Victoria Dockside complex which debuted in Kowloon last year.
The company’s latest project is benefitting from a surge of interest from international corporations in shifting their office locations to the traditional middle class neighbourhood.
“Hong Kong East has continued to perform strongly in Q2,” Reed Hatcher, head of research for Cushman & Wakefield in Hong Kong told Mingtiandi. “Despite a number of sub-markets seeing little demand in the quarter, net absorption in Hong Kong East totaled 174,000 square feet.”
Hatcher further pointed out that, despite the debut of the K11 project and the earlier opening of Swire Properties’ One Taikoo Place, vacancy in the eastern district was just 7.6 percent in the second quarter of this year, a figure which drops to 3.9 percent if the King’s Road tower is excluded.
Average grade A office rents in the North Point/Quarry Bay area averaged HK$56.7 per square foot per month at the end of June, according to the agency’s figures, a rate less than half of the HK$138.2 per square foot prices prevailing in the city’s posh Central district, which may help explain the popularity of new buildings such as K11 Atelier King’s Road.