The Energizing Kowloon East initiative has accelerated development of Kwun Tong business areas. There are a lot of commercial buildings located along Hoi Bun Road, Kwun Tong, where many conglomerates are headquartered. Developers and consortiums are also moving in and expanding their land reserves in the region. This has led to a surge of the value of top-quality offices in the area, and the rental and sale markets are as well flourishing. The 38 Wai Yip Street, Kwun Tong Project co-developed by CSI Properties and Billion Development was launched to the market recently, boosting the sentiment in buying and selling commercial buildings in Kwun Tong, gradually pushing upward the floor price of the buildings available for sale in the area, and enticing investors into purchasing buildings with high potentials.
Active rental and sale markets
Hoi Bun Road, Kwun Tong has enormous development potentials, due primarily to the significant development scale of some large-size sites in Kwun Tong acquired by developers through bidding in early years. Coupled with the fact that the Grade A buildings in the area enjoy breathtaking sea views and the magnificent views of the cruise terminal are right from the doorstep, these buildings have been in the spotlight and favored by the market ever since their construction were completed. The most actively traded properties are Rykadan Capital Tower, One Harbour Square and C-BONS International Centre.
These three Grade A offices have posted satisfactory sales of floors over the years. A total of 6 transactions have been recorded since 2017, four of which involved Rykadan Capital Tower while another two involved One Harbour Sqaure. One Harbour Sqaure, a Grade A office building sitting at 181 Hoi Bun Road, Kwun Tong, recently sold a whole floor covering an area of 18,314 square feet (unverified) at approximately HK$250 million, with the transaction price reaching about HK$13,700 per feet which now serves as a new price indicator for the office buildings along Hoi Bun Road.
Kwun Tong, a prime choice for investors due to its promising prospects
With respect to massive transactions, 8 Bay East, an office building located at 123 Hoi Bun Road previously owned by Wheelock, were sold to LVGEM China at about HK$9,000 million. The project has an aggregate floor area of approximately 596,000 (unverified), with an average price of around HK$15,000 per feet.
The project even set a new record for the office building transaction price in Kowloon District. It will be re-developed by LVGEM China as its first property project in Hong Kong and has been renamed LVGEM NEO. LVGEM China chose to gain a foothold in Hoi Bun Road because it is bullish about the office building projects in Kowloon East.
Billion Development, which holds several projects in Kwun Tong, recently partnered with CSI Properties to develop the commercial building at 38 Wai Yip Street, Kwun Tong. Pre-sale of the project started earlier this year, registering overwhelming sales results. In particular, the entire sixth floor of Tower A covering an area of approximately 11,286 square feet (unverified) were sold at around HK$146 million, with an average price of HK$12,900 per feet. The project comprises two commercial buildings with a total floor area of 493,000 square feet (unverified) and is expected to be ready for occupation in the fourth quarter of 2019. The construction of the show flats of the project were completed and the flats will be open to the public in the short term. It is expected that more prospective buyers will be attracted to visit the show flats.
As the vacancy rates of the office buildings in Central District remain low and their rentals and selling prices are on the rise, those with promising development outlooks in Kowloon East are enthusiastically sought by the market. Kwun Tong is a prime choice for businesses, attributable to its brilliant prospects and more floors and storeys for selection. The office buildings along Hoi Bun Road also receive a great deal of attention from Chinese and multinational companies because they are newer and have premier quality with panoramic sea views and views of the cruise terminal. At the same time, the leasing activities in the region are increasingly active while rentals are moving upward as well, contributing to the creation of a more favorable business environment, and showing prominent investment values.
Stanley Poon Chi-ming, managing director of Centaline Commercial
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