High demand drives conversion of industrial buildings into offices, transforming Kowloon East into business hub
With Grade-A rents that are 30-40% of those in Central, Kowloon East offices are an attractive rental option for the back-offices of banks, insurance firms and major corporates.
Vacancy rate rose to 8.0% in February 2016 with the completion of two developments in Kwun Tong.
Over 20 parcels of land in the district have been earmarked for office development by the government since 2011as part of the Energizing Kowloon East Office scheme.
Kowloon East is undergoing a major transformation as part of government plans to create an additional core business district, ‘CBD2’. Including the Kai Tak development area, it is envisioned that CBD2 will become Hong Kong’s largest commercial district, double the current size of Central in terms of commercial floor space.
In the past the area was primarily an industrial zone, conveniently located next to some of Kowloon’s most densely-populated residential neighbourhoods, where much of the city’s workforce resides. Nowadays, many of the factories have been converted into office buildings in response to widespread demand for office rental in Kowloon.
Pioneer Place is one of a number of refurbished office buildings recently completed in Kwun Tong. The recent launch of the Goldin Financial Centre in Kowloon Bay with its 24 storeys (35,000 sq ft) of prime office space also signals blue chip developers are ramping up investment in area. Other key office properties in Kowloon Bay include the 39-storey One Kowloon, one of the tallest retail complexes in Hong Kong offering nearly 24,000 sq ft of office space, and the popular Nan Fung Commercial Centre.
Comprising the award-winning Landmark East Tower 2 - AIA Kowloon Tower and the adjacent AXA Tower, Landmark East is a twin tower complex in Kwun Tong just three minutes’ walk away from an MTR station and the APM shopping centre. This commercial property offers a total of 1.3 million sq ft of Grade A office space, and is an appealing option for many financial houses, banking operators, international trading companies, and other professional service providers with plans to expand and moving away from the Central business district.
There are few areas in Hong Kong growing as rapidly as Kowloon East. With so many new properties and retail centers springing up, the district is now the third largest commercial centre in Hong Kong, after Central/Admiralty and Wanchai/Causeway Bay.
The district will undergo further transformation when the areas not currently served by the MTR are included on the Shatin-Central Rail Link network, scheduled for completion in 2021.