Kowloon Bay Redevelopment

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Sino Land's winning bid of $1.82b rekindles debt worries
Developer's 'too heavy' price for Kowloon Bay commercial site reminiscent of aggressive bidding strategy in 1990s
Ernest Kong
23 February 2005
South China Morning Post

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The Auction


Sino Land stormed back on to centre stage in the property market yesterday, but its aggressive $1.82 billion winning bid for a Kowloon Bay commercial site baffled analysts.

One analyst said Sino Land's outlay of $2,988 per square foot for the 50,752 square foot property was "too heavy" in terms of rental yield and comparable pricing in the industrial neighbourhood.

The bid almost tripled the opening bid of $608 million and was well above estimates for the first commercial auction since October 2001.

"The bid translates into a rental yield of about 3 per cent and will be quite risky if interest rates rise," the analyst said. "The projected selling price of over $5,000 per square foot for the completed project is also on par with the price of grade A office space in Central 9 Queen's Road about 18 months ago."

Yesterday's bidding, which lasted more than an hour, narrowed to a two-way contest between Sino Land and Kerry Properties after veteran investor Lobo Law Ka-po withdrew at $1.64 billion.

Although the commercial site - which Sino Land said would be developed mainly into offices, a shopping centre and possibly a boutique hotel - was relatively small, analysts said the hefty bid would remind investors of Sino Land's overly aggressive bidding strategy during the 1990s property boom that saddled it with huge debts.

In March 1997, it paid a record $11.8 billion for a 275,472 sqft residential site in Siu Sai Wan, which now houses the Island Resort upmarket apartments. Prices being fetched there are lower than the developer's costs.

Sino Land had been keen to change its aggressive image and shifted to a low-key approach, acquiring smaller sites about two years ago to replenish its land bank when prices were low. Among its latest acquisitions were a $266 million private tender for a site at 53 Conduit Road, Mid-Levels, and a small Urban Renewal Authority project in Shamshuipo.

The developer was also outbid for five previously auctioned government residential sites.

BNP Paribas Peregrine regional property analyst Adrian Ngan Wai-hung said yesterday's bid would put pressure on Sino Land's share price in the short term. It dropped 2.81 per cent yesterday to $6.90.

"The genuine value of the site should be about $1.5 billion to $1.6 billion, which is the price at which most other competitors dropped out," Mr Ngan said.

"Kerry Properties and Sino Land can afford to over-bid as both have significant portfolios in the district that will benefit from a high selling price of a government site," he said, adding that firms with a key portion of investment properties would get a lift from the high auction price.

The frenzied response to the Kowloon Bay auction was also prompted by the bullish outlook in the office market.

Analysts cited the 50 per cent price rise at Enterprise Square Three, the Kowloon Bay development by Kerry, since its launch in February last year.

According to property agents, the tower's medium-floor office space, which was sold to leading names such as Esprit and BCBG for about $2,000 per square foot in February last year, is now selling for more than $3,500 per square foot in the secondary market.

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$1.8b bid beats land auction hopes
Sino Land's high price for Kowloon Bay site underscores property market revival
Foster Wong
23 February 2005
South China Morning Post

Hong Kong's first auction of a commercial site since 2001 attracted frenzied bidding from developers, boosting confidence in the commercial property sector and swelling the government's coffers.

But while most analysts said the auction had sweetened prospects for the property market, they were far less certain about the benefits to the winning bidder, Sino Land.

The vacant 50,752 sq ft site, in an industrial neighbourhood of Kowloon Bay, sold for $1.82 billion. That comfortably exceeded consensus estimates of between $842 million to $1.12 billion, and was nearly three times the official reserve bid of $608 million.

Pang Shiu-kee, managing director of SK Pang Surveyors, said: "The land auction result shows that the property market revival is not confined to the residential market, but extends to the office market as well."

It took just over one hour, and 62 escalating bids, for Kerry Properties to concede defeat to Sino Land, which won the right to develop the site into 609,027 sq ft of commercial space. The developer can choose to erect offices, retail facilities, a hotel or all three.

Proprietors of commercial buildings in Kowloon Bay responded to the news by immediately raising their asking prices for office space by an average of 10 per cent, according to Midland Realty.

Owners in nearby Kerry Properties' Enterprise Square Three, the district's highest-end building, were demanding $4,400 per sq foot immediately after the auction, up from $4,000 on Monday.

"Developers are hungry for new projects," said Tony Chan Tung-ngok, executive director of Vigers Appraisal and Consulting.

But that hunger may have led to an irrational valuation of the site, for which Sino Land has paid an accommodation value of $2,988 per square foot, Mr Chan said. Sino Land will need to fetch as much as $5,000 a square foot to turn a profit, while average selling prices in the are range from $3,000 to $4,000.

Including the proceeds from yesterday's auction, the government has collected more than $20 billion from the sale of six land sites this financial year, which is far more than its original forecast of $4.56 billion and enough to help tip the budget deficit into surplus.

PricewaterhouseCoopers partner Guy Ellis predicts a $20 billion surplus for the 2004 financial year.

Meanwhile, developers are hoping the auction results will bolster their demands for more land. "We hope the government will put more land sites into the land application list for developers," said Stanley Ho Hung-sun, chairman of the Real Estate Developer's Association.

KCRC chairman Michael Tien Puk-sun said his company would not speed up its residential projects despite the land sale result.

Additional reporting by Ambrose Leung

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Stock of the Bay
12 December 2005
Hong Kong Standard

Defying the laws of physics, if not of real estate, Hong Kong is a city with more than one "core." Every few years, it gives birth to a new one, and the honor, in this first decade of the 21st century, belongs to Kowloon Bay.

Forget Central. Forget Causeway Bay, Quarry Bay and Taikoo Shing. A district that was once mostly factories and warehouses abutting the old Kai Tak airport is where the commercial real estate industry is currently pursuing its holy grail, "Grade A" office space.

In Kowloon East as a whole, the amount of office space is expected to grow 70 percent between now and 2010, making it a match, accommodation-wise, for Tsim Sha Tsui East. By that time, Kowloon Bay alone will be home to 5.7 million square feet of Grade A premises, said Simon Smith, senior director of research at property consultant Savills.

It will be several years before established core areas produce any significant quantities of new office supply. This is being fully reflected in prices. At Two IFC, Central's most prestigious address, for instance, rents have reached a prohibitive HK$100 per square foot per month.

"It's very difficult to find fresh sites in core areas these days," said Smith.

The concept of Grade A space is rather nebulous, referring to buildings with the basic modern conveniences such as elevators, air-conditioning and telecoms ducts, regardless of location.

Not all Grade A office space is created equal, however.

"We do not see top-tier financial institutions moving out of Central," Smith stressed, but there is strong demand for premises in Kowloon Bay from manufacturers, trading companies and back-offices of banks.

The analyst said Kowloon Bay faces no real threat from International Commerce Centre, a 2.5 million square foot monster now under construction in West Kowloon. It is wooing a different target group, composed of bigger multinationals, lawyers and accountants.

Strictly speaking, this is Kowloon Bay's second makeover. The first came at the start of the 1990s when a number of the featureless, low-rise factory bunkers the district was famous for yielded their places to dual-vocation buildings designed for tenants who needed both industrial and office premises.

Sino Land started the trend with its Metro Centre One in 1991, followed the next year by Kerry Properties with the first phase of Enterprise Square. The two developers remain the driving force in the district.

Despite the district's proximity to Kai Tak, developers appear unconcerned about what will become of the former airport lands. Whether Kai Tak, according to the various proposals now circulating, is given over to a cruise ship terminal, a mega-stadium, housing, green space, or all of the above, it will be years _ and many political controversies _ before any of it begins to affect Kowloon Bay.

The focal point of the current transformation is Kerry's Enterprise Square 3, opened last year. A silvery, cylindrical building of 41 stories, it's the architectural standout of the district, especially after dark when the anchor tenant _ the international garment chain Esprit _ switches on its huge red neon sign.

Right next door, Kerry is building Enterprise Square 5, incorporating a 1.1 million sqft retail complex called MegaBox and 500,000 sqft of office space, due for completion in 2007.

Across the street, private developer Glorious Sun has a 680,000 sqft office building under construction.

Behind it, preparation work is under way for a 710,000 sqft office tower for another private builder, Manhattan Realty. Part of the same cluster is Sino Land's new 600,000 sqft office and retail complex, where work is just beginning. Sino purchased the land at a hotly contested government auction in February, forking out a generous HK$1.82billion, nearly three times the government's minimum asking price. Sino chairman Robert Ng, who said the district could easily become as big and diversified as Tsim Sha Tsui East, revealed that the company might also locate a five-star hotel on the same site.

Several streets away, the six-story Sing Tao Building was sold in July to a private developer for HK$370 million. It will probably be demolished to make way for a 500,000 sqft commercial building.

Even if all of these projects are not enough to satisfy the hunger for new offices, there are two Kowloon Bay lots totaling 667,000 sqft on the government's current application list of land that may be sold to developers, said Kenny Suen, managing director of consultant Vigers Asia Pacific.

There's talk as well that a site earmarked for a hotel with gross floor area of 855,480 sqft may be added to next year's list.

It can only be a matter of time before more owners of buildings whose functions don't necessarily fit with the concept of an office district decide to cash in on the land boom.

Though its owner denies having any immediate plans, the Kowloon Motor Bus depot is considered a good candidate for redevelopment. Conveniently enough, the bus company is 33 percent owned by Sun Hung Kai Properties, one of Hong Kong's two largest developers.

The Oriental Daily News building has similar potential. The newspaper moved its main operations to a new plant in Tai Po earlier this year.

The Hong Kong International Trade and Exhibition Centre has long been a disappointment to its owner, Hopewell Holdings. The building, opened in 1996 to provide exhibition and meeting space as well as offices, had an occupancy rate of only 60 percent, according to its latest annual report. Hopewell now aims to turn it into an entertainment destination with total floor area of 600,000 sqft.

And Henderson Land, the No 3 developer in town, is in talks with the government about converting Big Star Centre, opposite the Sing Tao Building, into a 10-story hotel with 296 rooms.

To buy office space in Kowloon Bay now costs anywhere from HK$2,600 to HK$3,200 per square foot, up 40 percent since the start of the year, said Suen. Office rents in the district have climbed almost 16 percent to HK$12- $16 psf per month.

While industrial rents in the district are up 7.3 percent on average to HK$8- $11 psf per month, Midland Realty says the industrial buildings farthest from the Kowloon Bay MTR Station command only HK$5-$7 psf.

"Clearly, if I owned an industrial building in Kowloon Bay, after seeing those figures I would knock it down and put up a commercial building in its place," Suen said.

The population of the areas surrounding Kowloon Bay certainly seems sufficient to support big retail developments such as Kerry's MegaBox.

Suen said Kowloon Bay is a catchment area for nearly three million people. It's estimated there are 100,000 jobs in the district already, a figure that should rise to 120,000 by 2008 as new office buildings open.

"There's a demand for shopping centers for personal spending and office needs," he said.

One problem that could slow the pace of Kowloon Bay's development is inadequate public transportation.

The Kowloon Bay MTR Station is linked to the MTRC's own Telford Plaza commercial complex, but there are no subterranean walkways to connect it with other buildings. Bus stops are sparsely located, and some of the biggest office buildings in the district are at least a half-hour walk from the subway.

The Hong Kong Economic Times recently reported that five developers, including Sino, Kerry and Hopewell, would like to form a partnership with the MTRC to build an elevated light rail system to link their developments with Kowloon Bay Station.

Lam Chan, MTRC projects communications manager, said none of the developers had submitted any proposals yet. The transit operator carried out a preliminary study of the district, according to its 2003 annual report, but Lam said the report had been shelved. Any new transport initiatives will have to be coordinated with the overall planning for the area, he added.

Suen of Vigers believes the developers are still haggling over the proposed route of the light rail line and how to divide up the costs of the project.

The analyst said that, well before light rail becomes reality, there will be a network of footbridges, similar to what exists in Central, to connect Kerry's buildings, notably the MegaBox retail complex, with Telford Plaza and the MTR.

A transitional neighborhood such as Kowloon Bay is bound to produce some stark contrasts before the new finally overwhelms the old _ what Savills' Smith, in the jargon of the industry, calls "interface problems."

For example, both the sleek office towers being built by Glorious Sun and Manhattan Realty will initially stand cheek by jowl with the peeling paint and crumbling masonry of the Yip On Factory Estate, which was built by the Housing Authority in the 1970s.

Suen said the authority may return the land to the government to allow for redevelopment, or heed suggestions to put the buildings to other uses, as "creative arts villages," for example.

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A haven for rent refugees
Demand is growing for office space in the industrial district of Kowloon Bay, where firms can more than halve their costs
31 May 2006
South China Morning Post

Kowloon Bay is fast becoming a prime focus in the office leasing market as Hong Kong's towering rents force companies to relocate to cheaper business zones.

Two major new developments - Kerry Properties' Enterprise Square Five and Glorious Sun Enterprises' One Kowloon - had begun pre-leasing activities and were drawing a growing number of rent refugees from a wide range of industries wanting to move into the industrial district, industry players said.

"The main reason for the growing demand for office space in Kowloon Bay is that rents in core business districts are just too expensive at present," said Tom Tong Kwan-ki, an executive director at Kerry's MegaBox Development, part of Enterprise Square Five.

"The new commercial premises in the district are not only filling up the shortage of supply in traditional CBDs, but also helping companies to save more than half of their rent."

Mr Tong said Kerry was now in talks with several anchor tenants who were interested in taking whole floors or multiple floor space in the remaining tower of its new project, with prices averaging about $20 per sq ft.

Potential tenants were in logistics, trading, electronics and shipping, and were located outside Kowloon Bay, including Tsim Sha Tsui and Causeway Bay.

Hong Kong was ranked the third most expensive business location among 117 global cities last year, with annual office occupancy costs increasing 61 per cent to US$107.20 per square foot, according to a DTZ Debenham Tie Leung survey.

Hang Seng Bank last week graphically demonstrated the benefits of cost savings by leasing Tower 2 in Kerry Properties' Enterprise Square Five.

The lease is for 15 floors totalling 262,000 square feet for a fixed term of six years, with an option to renew for three years.

The company plans to relocate about 1,600 of its staff from its Hang Seng Building headquarters in Des Voeux Road, Central, by the end of next year. The Hang Seng Building has been sold to Morgan Stanley Real Estate for $2.25 billion.

The bank said it would rent the new office for about $17 per sq ft, 75 per cent lower than the average rent of about $70 per sq ft in Central.

"It is a good move by Hang Seng Bank to lock in those low-cost levels. Rents there are still at a steep discount [compared] to core locations," said Simon Smith, senior director of research and consultancy at Savills (Hong Kong).

"The whole area is undergoing an upgrade. But the problem in the area is arguably its relatively weak internal linkages among buildings compared to somewhere in Island East, which is quite unified by the Swire portfolio."

Kowloon East, which comprises Kowloon Bay and Kwun Tong, rapidly followed in the footsteps of Island East by targeting tenants wanting to move from Tsim Sha Tsui to reduce their office rental costs.

The old industrial area is undergoing a commercial makeover and is expected to be Hong Kong's third-largest office market with a supply of 10 million sq ft by 2010, compared with about 5 million sq ft at present, according to Savills' data.

Kerry Properties is part of Kerry Group, the largest shareholder in the SCMP Group, which publishes the South China Morning Post.

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Kowloon East offices attract plenty of tenants
International companies on the island are crossing the harbour to take up cheaper spaces in brand new buildings
31 January 2007
South China Morning Post

Japanese-based Ricoh Corp and Parsons Brinkeroff of New York will relocate their offices from decentralised districts on Hong Kong Island to One Kowloon, a newly completed building in Kowloon East.

Lured by cheaper rents and brand new office space, the two will lease a total area of 180,000 square feet at One Kowloon, developed by Glorious Sun Enterprises, sources said.

The office spaces they will lease are similar in size to their existing premises.

The rent, which they were negotiating, was expected to be close to HK$20 per square foot but was still 14 to 40 per cent lower than what they were paying at their existing offices, agents said.

Ricoh Hong Kong, the local arm of Ricoh Corp, would leave Tai Yau Building in Wan Chai and move to an 80,000 sqft office in One Kowloon, while Parsons Brinkeroff, an international planning and engineering company, was relocating from AIA in North Point to take up 100,000 sqft of office at One Kowloon, sources said.

The deals are expected to be signed before Lunar New Year.

Jones Lang LaSalle, the marketing agent for the project, refused to comment on the leasing.

One Kowloon provides a total floor area of about 700,000 sqft, including 30,000 sqft of retail space. It also has about 250 parking spaces.

The occupation permit was granted last month.

Jones Lang LaSalle had earlier said that more than 13 floors of office space had been taken by the end of last year.

One Kowloon has attracted many office tenants who have long resided on the Island side. More than 50 per cent of the tenants in One Kowloon were from Hong Kong Island, Fiona Ngan, the head of markets at Jones Lang LaSalle, said earlier.

In its latest research report, Jones Lang LaSalle said competitive rentals and the completion of new supply contributed to a relative increase in demand for grade A offices in Kowloon East in the fourth quarter.

Demand came mostly from cost-sensitive tenants moving or establishing secondary offices. With the rental gap between grade A offices and non-grade A/industrial office buildings in Kowloon East narrowing over the past few months, upgrading demand had become more apparent, the report said.

For instance, Bausch & Lomb and Maersk have moved to One Kowloon from offices on Hong Kong Island, while Phillips Van Heusen Far East and WKK have upgraded into the new building from non-grade A offices in Tsim Sha Tsui and industrial offices in Kwun Tong, respectively.

Meanwhile, DHL has become the second-largest tenant to pre-commit to the forthcoming Enterprise Square 5, which is now more than 75 per cent pre-committed.

Desmond Poon Chi-ming, an associate director at Chartersince Surveyors, said One Kowloon was finding it easier to get tenants as it was one of the first among a number of buildings to be completed in Kowloon East.

But he said the district would feel pressure on rents and some landlords were expected to adopt a rent-cut strategy to attract tenants. Most of the supply will come next year and in 2009.

Kowloon East, which comprises Kowloon Bay and Kwun Tong, is expected to be Hong Kong's third-largest office market with a supply of 10 million sqft by 2010, compared with about five million sqft now, according to Savills' data.

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Decentralised hubs make for liveable city
19 April 2007
South China Morning Post

With plans under way to turn Kowloon Bay and Kwun Tong into Hong Kong's third-largest commercial district by 2010, the market is decentralising to compensate for the lack of large floor-plate commercial stock in our central business district.

This is good news for Hong Kong, as creating new business districts is the first step to easing the market pressures caused by soaring office rents, shortage of land, and traffic congestion in Central. Prospective tenants will be provided with more price and space options, which will help improve Hong Kong's competitiveness and efficiency.

Yet this trend is about much more than just providing office space. It is a golden opportunity to help create a more liveable Hong Kong.

Cities such as Tokyo, New York and Barcelona have all achieved success through decentralising their business districts as an urban planning and economic development strategy, yet Hong Kong is unlike any of these places. In our case, the harbour presents a significant barrier to the connectivity of Kowloon and Hong Kong Island. There are currently only three road crossings, two rail crossings and nine ferry crossings. Although these address some of the key commuting flows, they are insufficient for business travel.

To expand the CBD successfully throughout the shorelines, we need to minimise point-to-point travel time with a dramatic increase in the array of cross-harbour transportation, including additional rail, road and ferry crossings, as well as water taxis and small vessel services.

By thoroughly interconnecting the shores of Victoria Harbour from Kwai Chung to Kwun Tong and from Kennedy Town to Shau Kei Wan, the entire harbour district can in essence become the CBD of the Pearl River Delta. Central can be allowed to breathe again.

We must recognise the topographic reality of Hong Kong and its natural constraints to development. Central is the narrowest part of the land available for development along the shores of Victoria Harbour. Gridlock and an increasing choking of the area have been the repercussions of packing too much in too little space.

Extending the web of the CBD will divert development and congestion away from the choke points. New market opportunities will appear in newly-connected areas as competition increases with easier access, while interesting new uses of land sprout up and mix in with commercial areas to create a better live-work-play balance.

The spreading of development will create places of attraction for residents and tourists alike along the entire north and south shorelines. These areas will bolster the limited tourist zones we have and increase our capacity to entertain more visitors. And the variety of water-borne transportation will themselves become tourist attractions, turning Victoria Harbour into an exciting hub for business, tourism and recreation in the Pearl River Delta.

Paul Zimmerman is convenor of Designing Hong Kong Harbour District

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Skyline Tower rents surge 140pc
25 April 2007
South China Morning Post

Sino Land says rents at its grade A office building Skyline Tower in Kowloon Bay have surged as much as 140 per cent for leases up for renewal in June.

Most of these agreements were signed during the economic slump and Sars crisis in 2003.

"Office rents in Kowloon Bay still have further room for increase," said Allan Chan, an associate director at Sino Land.

These were the first batch of leases expiring, which accounted for more than half of the one million square foot Skyline Tower.

Mr Chan declined to disclose the rate being achieved for the renewals but said the old leases were HK$7 to HK$10 per square foot.

The current asking monthly rents at Skyline Tower was HK$20 per square foot, he said.

"We've got lots of old tenants asking for more space for in-house expansion, with some wanting to expand their offices to 40,000 sqft from 10,000 sqft," Mr Chan said. Besides Skyline Tower, Sino Land is also developing two other grade A office projects in Kowloon Bay.

The company is in talks with potential tenants at another grade A office development at the junction of Sheung Yuet Road and Wang Chiu Road, also in Kowloon Bay. In 2005, the group paid HK$1.82 billion for the site in a government land auction.

Mr Chan said the 700,000 sq ft office project in Sheung Yuet Road, which is due for completion by June next year, was in a pre-leasing stage, but the rents had not yet been finalised.

He said the potential new office supply in East Kowloon would not put pressure on rents as they would not all be put on the market at the same time.

"Some new office projects have already leased 70 per cent of their space even before completion," Mr Chan said, adding that demand for quality office buildings in the area remained high.

The company also plans to redevelop the Po Hing Centre industrial building, also in Kowloon Bay, into a 400,000 sq ft grade A office and expects to complete the project within two years.

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DHL takes space at Enterprise Square
16 May 2007
South China Morning Post

Freight and logistics company DHL International has agreed to lease seven floors of Tower One in Kerry Properties' Enterprise Square Five in Kowloon Bay.

The new premises, comprising 120,000 square feet of gross floor area, will become the Hong Kong base for DHL Express, with about 800 employees expected to move in at the end of the year.

The Enterprise Square Five complex on Wang Chiu Road has a gross area of 1.6 million sqft. It comprises two office towers and MegaBox - East Kowloon's largest shopping complex with 19 floors of shopping space.

Kerry Properties did not disclose rents for the site, but property agents said the asking price for office space was between HK$23 and HK$25 per square foot per month.

Kerry Real Estate Agency executive director Chu Ip-pui said that with the proposed redevelopment plan for the former Kai Tak airport site, it was expected that Kowloon Bay would become a prime office location for East Kowloon.

Property consultants said the area would fast become a focus in the leased office space market as Hong Kong's steep rents force companies to move to cheaper districts.

Last year, Hang Seng Bank took an early lead in the district by leasing Tower 2 in Enterprise Square Five.

With Central net effective rents averaging HK$85 per square foot according to DTZ, the bank has 262,000 sqft spread over 15 floors for a fixed term of six years. It has an option to renew for three years.

The company plans to move 1,600 staff from its Hang Seng Building headquarters in Des Voeux Road, Central, by the end of this year.

Kerry Properties is controlled by Kerry Group, the largest shareholder in SCMP Group, which publishes the South China Morning Post.

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房會擬09年交還政府拍賣
拆九龍灣廠廈靚地值25億
24/11/2007







港府落實東九龍規劃之後，近年九龍灣、觀塘一帶大變身，潮流氣息的商場紛紛取代舊式商廈，房屋委員會亦擬在○九年中清拆區內有三十二年歷史的兩幢九龍灣工廠大廈，然後將地皮歸還政府拍賣，房屋委員會商業樓宇小組下周四將開會討論。由於工廈位於較佳地皮，附近商廈價值不菲，有測量界估計地皮拍賣價值最少可為庫房進帳二十五億元。

房委會現時在九個地區建有工廠大廈，多於七十年代或之前建成，自從本港工業北移之後，不少工廈都異常冷清，環境十分惡劣，加上房署工廈的設備遠低於現代工廈水平，導致單位長期空置。由於有關工廈十分殘舊，每年維修費用逾一億元，但實際收回的租金不多，不符成本效益，房委會認為有必要盡早清拆，避免得不償失。

九龍灣兩幢房委會工廠大廈於一九七五年落成，佔地零點七九公頃，連地下在內樓高七層，屬舊式分層工廠大廈，共有八百零七個單位，但現已十室九空，僅剩不足二百租戶，當中部分更屬受房委會清拆工廈影響而搬遷到該處的租戶。房委會給予租戶十八個月通知期，租戶如租用房委會其他廠廈單位，可獲三個月免租期，每名租戶也可額外獲發特惠津貼。

中原測量師行董事經理黎堅輝指出，隨尠本港經濟向好、金融業暢旺，近年對寫字樓的需求大增，九龍灣工廠大廈位於市區，又鄰近九龍灣企業廣場、九龍灣展貿中心及MegaBox等大型商場，若有關土地推出拍賣，估計可為庫房帶來至少二十五億元收入。

租戶：難覓地方復業
在九龍灣工廠大廈經營機械工程公司的劉先生指出，他之前在房委會的新蒲崗工廠大廈營業，兩年前該工廠大廈宣布清拆，他便透過房委會的安排，搬到九龍灣工廈，劉先生亦有心理準備九龍灣工廈亦會清拆，但他擔心再難找到合適的地方重新復業。他表示，房委會工廈的租金較私人工廈便宜一大截，希望房委會可再安排廠房供他搬遷。

在該工廈一樓經營金屬塑膠製品的區伯則表示，自己公司是第一批進駐該工廈的廠房，至今已有三十多年，對於該工廈將要清拆感到十分悲哀。房屋委員會商業樓宇小組下周四將開會討論九龍灣工廠大廈的清拆事宜，以及檢討明年屬下停車場的租金水平。

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Skyline towers above rest for saving power and money
Sino Estates' Kowloon Bay office block is a winner thanks to its environmentally friendly curtain wall design
20 November 2007
South China Morning Post

Kowloon Bay's Skyline Tower, a 35-storey office building, was among the first commercial buildings in Hong Kong to be recognised for its energy efficient design.

The curtain wall design of the building, managed by Sino Estates, has a 10,000 sqft roof-top garden to reduce the heat trapped in the building.

Sino Estates introduced integrated air-conditioning control to Skyline Tower last year, using a building management system to monitor the temperature. The air-conditioning system has cut down energy loss, reducing the costs of electricity used by 9.5 per cent. In the car park area and printing rooms, where air circulation is poor, air treatment devices have been installed to filter out air pollutants and eliminate dust.

Skyline Tower has a gross floor area of 909,633 sqft, 333 parking spaces and is now four years old. The Electrical and Mechanical Services Department awarded the company in October last year after it met five codes set under the Hong Kong Energy Efficiency Registration for Buildings Scheme. These codes cover all aspects of energy saving: lighting, electrical installations, air-conditioning, and lift and escalator installations.

There is an additional code based on performance, which focuses on a building's total energy consumption as opposed to the energy budget of a building that meets all the code requirements.

Skyline Tower saved an estimated HK$340,000 last year from various environmentally friendly measures.

Although green factors such as saving energy and protecting the environment are fundamental to the architectural and interior design of the tower, Sino Estates associate director Sunny Yeung Kwong said that without the participation of the tenants saving energy would have been difficult.

"We have kept the message simple and practical when saving energy and recycling," Mr Yeung said. "In the past, our messages were delivered in such a way that they were more focused on the technical issues and scientific facts. So sometimes these messages didn't get across to the tenants. Now we make sure everything is user-friendly."

Skyline Tower has 105 tenants. Since last year, each floor of the tower has been equipped with recycling points to separate different types of waste.

The company collected 24 tonnes of paper for recycling from its tenants last year.

Sino Estates won a gold award for another office building, the 16-year-old Pacific Centre in Tsim Sha Tsui. It has 19 floors and a floor area of 239,583 sqft. There are 69 tenants in the building of which 36 are clinics.

As a result, Sino Estates has centralised the waste collection to ensure the safe disposal of medical waste and syringes.

Sino Estates also won certificates of merit for three other properties under the commercial and industrial buildings category: the Centrium in Central, Sino Plaza in Causeway Bay and Futura Plaza in Kwun Tong.

It also won a certificate of merit for Grand Palisades in Tai Po under the private housing category.

To make sure tenants are aware of the different ways of preventing pollution, Sino Estates issues news bulletin and distributes handouts which offer useful advice, ranging from choosing various versions of energy efficient light bulbs and boilers to encouraging tenants to walk instead of drive. Some of these brochures are distributed by e-mail or e-notice.

Sino Estates also organises many green activities such as supporting organic produce and replanting potted flowers and tangerine plants bought for the Lunar New Year.

Mr Yeung believed these green activities initiated by Sino Estates and its staff would involve the younger generation who would play an important role in protecting the environment in the future.

[Manila-X]

There are already some nice office buildings sprouting around Mega Box. Would expect to see more in the future.

[hkskyline]

Originally Posted by WANCH

There are already some nice office buildings sprouting around Mega Box. Would expect to see more in the future.

There is actually a lot of land available for redevelopment around Megabox. The land immediately north of Megabox is empty right now, while the block after Enterprise Square III (Esprit) is now being filled in with a skyscraper. The Yip On Factory Estate one more block down might be torn down for redevelopment. There's plenty of potential still there for this area.

[hkskyline]

Emperor buys East Kowloon building
15 January 2008
South China Morning Post

Emperor International Holdings has agreed to acquire the Oriental News Building in Kowloon Bay for HK$525 million to capitalise on the anticipated boom for office space in East Kowloon.

The 11-storey industrial property at Wang Tai Road has a total floor area of 311,704 square feet, The accommodation value - the land price in terms of the total planned floor area - is about HK$1,684 per square foot.

Emperor International executive director Donald Cheung Ping-keung said the company was lured by the potential opportunities of East Kowloon, an up-and-coming commercial and retail district.

The property is near the Hong Kong International Trade and Exhibition Centre and large shopping centres such as EMax, MegaBox and Telford Plaza.

It is expected to generate annual rents of HK$28.3 million on completion of the transaction by the end of April. The company will fund the purchase by internal resources and bank financing.

Emperor said it might redevelop the property into an office building.

Wong Leung-sing, associate director of research at Centaline Property Agency said demand for office space in Kowloon, particularly in East Kowloon, was on the rise amid limited available space in Central.

Meanwhile, property consultants Savills said paper manufacturer Leo Paper had leased two storeys or 40,000 sqft of office space in Kerry Properties' Enterprise Square Five in Kowloon Bay.

Quarry Bay on Hong Kong island is another area where companies are setting up their headquarters or back offices, according to agents.

Swire Properties said the occupancy rate of One Island East in Quarry Bay hit 75 per cent two months before completion.

"Of the 1.2 million sqft of office space with which we began our marketing campaign a year ago, just 235,000 sqft remains to be leased," said Stephan Spurr, director and general manager of Swire Properties.

Tenants come from the banking, financial securities and hospitality sectors, including United States investment bank JP Morgan, which said last week that it had rented 11 floors or 240,000 sqft of the building.

[Manila-X]

The only disadvantage I find is the public transpo system. Its still quite a distance from the MTR to Megabox and its surrounding offices.

[hkskyline]

Originally Posted by WANCH

The only disadvantage I find is the public transpo system. Its still quite a distance from the MTR to Megabox and its surrounding offices.

Yes and no. Megabox is less than 500m walk away from Telford Gardens, which is connected to the MTR station. Megabox also has a shuttle bus to Kowloon Bay MTR.

[Manila-X]

Originally Posted by hkskyline

Yes and no. Megabox is less than 500m walk away from Telford Gardens, which is connected to the MTR station. Megabox also has a shuttle bus to Kowloon Bay MTR.

It does but I find it inefficient One time I waited for around 20 mins for the shuttle. I could have walked but it was raining at that time. That's why I rarely go to Megabox to shop

[hkskyline]

Originally Posted by WANCH

It does but I find it inefficient One time I waited for around 20 mins for the shuttle. I could have walked but it was raining at that time. That's why I rarely go to Megabox to shop

The Megabox shuttle departs from the lobby, which is covered and the lines are within covered areas. Yes, there are a lot of people waiting, but that's typical for the rest of Hong Kong. Even if you're in the farther reaches within Central it'll easily be an exposed 500m walk to the MTR station.

Transport is not the source of Kowloon Bay's accessibility woes. Now that the industrial estates are slowly being redeveloped, the big issue of sustainability will have far bigger implications on the success of retail in the area. Nobody lives in that stretch of Kowloon Bay. The residentials at Telford are already serviced by the mall right downstairs. There isn't much sense to walk out through the empty streets at night to go to Megabox to buy something. All this new development hinges on Kai Tak and the prospects of having a monorail connecting it with Kowloon Bay / Kwun Tong.

[EricIsHim]

There is already a proposal to build a footbridge connecting Telford MTR Station and MegaBox connecting 9 more buildings in between. When it's done, it should be a lot more ped friendly.

[Manila-X]

In the long run, Kowloon Bay might end up as a more important business hub in Kowloon compared to Union Suare.

[hkskyline]

Originally Posted by WANCH

In the long run, Kowloon Bay might end up as a more important business hub in Kowloon compared to Union Suare.

Kowloon Bay is not going to be anywhere near as important as Union Square. The functions relocating there are back-office people who don't need to be at HQ, so they can be 'outsourced' / 'dumped' to lesser-known locations that charge cheaper rents.

Union Square is attracting the front-line people, not the back-office staff. The client-facing activities are far more important in an organization since they generate revenues and profits. Then you manage and squeeze the back-office in Kowloon Bay even though the client's money are pouring in.

Easy to say which one is more important now, right?