CBRE Research
Kowloon East –Hong Kong’s CBD 2.02 |
2017 CBRE, Inc.
| 3Kowloon East –Hong Kong’s CBD 2.0
EXECUTIVE SUMMARY
Technology is transforming the way people work
and corporates operate. It is also making it more
feasible for companies to operate ofces outside of
city cores. Decentralisation is a popular occupier
strategy in Hong Kong given high rents and tight
space availability in the CBD. Ageing building stock
in many core ofce submarkets is also weighing on
corporates’ leasing decisions.
New decentralised ofce submarkets in Hong Kong
are set to provide occupiers with cost efective
options outside of Central, Wan Chai / Causeway Bay
and Tsim Sha Tsui. These submarkets ofer rents
only a quarter of those in the CBD and are just a few
MTR stops away from Central. Travelling distance to
these locations will shorten further as infrastructure
continues to improve. Buildings in these areas are
signifcantly younger than those in core submarkets
and are built to the highest standard.
Of these decentralised ofce submarkets, Kowloon
East is best-equipped. The area has developed over
several years and is already a popular location
for large ofces. Most large corporate ofces in
Kowloon East perform a head ofce role either for
Hong Kong or Asia Pacifc.
This report by CBRE Research profles the Kowloon
East CBD and explains the reasons why it is set to
outperform other emerging ofce submarkets in the
coming years and establish itself as a new CBD for
Hong Kong.
CBRE Research
Kowloon East –Hong Kong’s CBD 2.04 |
INTRODUCTION
Hong Kong’s high ofce rents frequently generate
global media headlines. CBRE Research’s Global
Prime Ofce Occupancy Costs Report has ranked
Hong Kong in the world’s most expensive ofce
markets since 2012. The city’s high rents are
primarily due to the limited supply of ofce space
and the fact that just 0.4% of its land area is
allocated for commercial use.
Occupiers must pay very high rents for space in
Central CBD properties that are ofen several
decades old, even though they are maintained
and managed to a generally high standard. The
specifcations of some buildings are unsuitable
for technologically advanced occupiers who
increasingly require advanced designs and hi-tech
features to support their business operations and
justify high occupancy costs to global headquarters.
Non-core SubmarketsCore Submarkets26101418
<5 years6-10 years11-15 years16-20 years21-25 years26-30 years31 years
Source: CBRE Research, Q3 2017
*Core submarkets include Central, Admiralty / Sheung Wan, Wan Chai / Causeway Bay, Tsim Sha Tsui
Figure 1: Core offce submarkets gradually facing ageing issues
Grade A Offce Building Stock (mil sq. ft. NFA)
Building Age。