Plans to turn Kowloon East into Hong Kong’s second central business district received a boost last week after JP Morgan announced it would establish a major presence at Link REIT and Nan Fung Development’s 77 Hoi Bun Road office complex. The bank is set to occupy about a quarter of the 82,116 square metres of gross floor area on offer as it looks to create a branded office.
The financial services giant reached an agreement with Link REIT and Nan Fung Development to pre-lease 225,000 square feet (20,900 square metres) over several floors in the complex, which is under construction at the Kwun Tong intersection and due for completion in 2019.
The development at 77 Hoi Bun Road consists of two connected Grade A office buildings that offer harbor views. There will also be a retail podium with basement car park at the site. Kam Shing Kwang, JP Morgan’s senior country officer for Hong Kong, stated that the firm would keep its Asia Pacific headquarters at the Chater House building in Central while using the new Kowloon East as space to expand its operations.
Government Backs Second CBD Initiative In East Kowloon
With rents for grade A office space in Central among some of the most expensive in the world, the Hong Kong government is backing Kowloon East as a second CBD. In addition to revamping the former Kai Tak airport site and building a number of MTR extension, the area is the designated test ground for smart city development.
A recent JLL report noted that Kowloon East has overtaken Wan Chai-Causeway Bay as Hong Kong’s second-largest office market in terms of office floor space, ranking only behind Central as the most popular place for corporates to park their staff. Volkswagen and personal care company Kimberly Clarke are among the firms to have moved to the area in recent months.
“(The deal with JPMorgan) reflects Kowloon East’s strong potential as an emerging central business district. Robust demand for office space in Kowloon East will bolster the occupancy rate and rental growth of properties in the district over the long term,” Link Asset Management CEO George Hongchoy said.
Wheelock Snaps Up $823 Mil Kwun Tong Site
It won’t just be JPMorgan moving into the Kwung Tong neighborhood during the coming years. Wheelock Properties snapped up a HK$6.39 billion ($823 million) site on Kwun Tong Sin Fat Road right down the street from Link REIT and Nan Fung Development’s office project.
The 196,550 square foot (18,260 square metre) site was the first residential land plot sold since the introduction of the latest property cooling measures. Both local and mainland firms were among the bidders for the site which is expected to house more than 1,100 units when finished.
Wheelock Vice Chairman Stewart Leung Chi-kin, noted that the price was reasonable for the project and added that he expects sales to begin in about three years from now.