Swire Properties is building a foothold in southern Hong Kong Island, as the blue-chip developer this week celebrated the topping out of South Island Place, its first office project in the gentrifying hub of Wong Chuk Hang.
The 28-storey, grade A tower jointly developed with Hong Kong-based builder China Motor Bus Company, is expected to be completed in late 2018, and will add to the Pacific Place landlord’s growing list of commercial project’s in the city’s alternative office locations.
The company has already begun leasing the new building and says that rental levels are comparable to that of other premium office buildings in the district. One Island South developed by Wheelock Properties just ten minutes walk from Swire’s new project in Wong Chuk Hang is charging HK$25-29 ($3.2-3.7) per square foot per month.
Lords of Quarry Bay Try the South Island
“South Island Place is our first Grade-A office development in the up-and-coming Wong Chuk Hang district,” said Don Taylor, director for the office division at Swire Properties in a statement.
“Wong Chuk Hang has seen a rapid transformation from a traditional industrial area into a fast-emerging commercial and residential hub on Hong Kong Island,” he added. “We believe South Island Place will have broad appeal to companies that see the benefits of locating in this burgeoning area with easy access to traditional commercial areas.”
The project has received tenancy enquiries from financial institutions and law firms, according to local media reports.
The topping off this week is the latest milestone in a twenty-four year journey that started with China Motor Bus and Swire jointly purchasing the former bus station site in Wong Chuk Hang in 1994 with the goal of constructing an industrial centre on the site. The plot, which was a former hub for the former bus company, was leased to a car park operator for an extended period until the partners were able in 2014 to modify the planning permission to allow development of a commercial project on the site. The development broke ground in 2015.
With a gross floor area of approximately 382,500 square feet, the building provides 15,000 to 20,000 square feet per floor. The office tower overlooking Aberdeen Harbour is located a five-minute walk from the Wong Chuk Hang metro station.
Wong Chuk Hang Project to Lease Alongside One Taikoo Place
South Island Place is not the only office tower adding to Swire’s commercial offerings in the city. The Hong Kong-listed builder’s 48-storey One Taikoo Place, set to be completed in the third quarter, had leased out half of the space as of late January to multinational firms including Facebook and Baker McKenzie.
The one million square foot (92,903 square metre) property has average asking rents of around HK$50-70 ($6.4-9) per square foot per month. Two Taikoo Place, the 191-metre tall companion to One Taikoo Place is expected to add another 46 floors of office accommodation to the Quarry Bay area when it is completed in 2021.
The South of Hong Kong Island Heats Up
Wong Chuk Hang, located in the south of Hong Kong Island east of Aberdeen, and just two stops from Pacific Place on the two-year-old South Island MTR line, is emerging as an upscale residential and commercial area, a transition spurred by the opening of the Wong Chuk Hang metro station in late 2016.
Last December, the city’s subway operator MTR Corp awarded Sino Land and Kerry Properties the 600-home plot adjacent to the Wong Chuk Hang metro station for an undisclosed amount. The site, valued at over HK$10 billion, is expected to provide luxury homes.
The land bid was Sino Land’s second prize in the one-time factory hub. In October 2016, Sino Land and Emperor Group won a commercial plot at Yip Kan Street and Wong Chuk Hang Road for HK$2.5 billion, or HK$8872 per square foot, breaking the record of price per square foot for commercial sites in Hong Kong.
Commercial properties in the area have also proved popular with investors. The BT Center, a 15-storey commercial building situated at 23 Wong Chuk Hang Road, was sold for HK$1.48 billion ($189 million) to Hong Kong-listed developer and investor Rykadan Capital in October.