HK Land

HK Land: the biggest landlord in HK’s Central district, said yday that it would spend HK$560m to knock down commercial building The Forum to build a 7-flr office tower in its place.

Raymond Chow, executive director of commercial property, said HK Land had yet to see any weakening of rents in its portfolio of 4.4m sf of office space in Central.
Chow also said the vacancy rate for the co's office space, at 2.2% at the end of Oct, from 2.5% in Jun, had not increased since then.
That flies in the face of reports from brokers, who say Central is bearing the brunt of a drop in rents as invmt banks and large MNCs cut headcounts. Savills last week forecast a 5% drop in Central Grade A office rents in 4Q, although that would still leave them up 8% for the year. The brokerage predicted a 10% drop in Central rents next year.

The redevelopment of The Forum, which currently houses restaurants and shops, will mark HK Land's first new office building in Central since 2006, when it unveiled York House.
HK Land will start work this month to demolish The Forum, with the new building due for completion at the end of 2013. It will have 5 floors of office space, with a total of 48.5k sf - an increase of 15% over the current building.
Govt restrictions on gfa precluded building a bigger tower.

Chow agreed with a forecast that int’l investors should likely steer clear of investments in HK property next year. He said office space appeared to by fully priced. Central Grade A office values rose 21% this year, after climbing 31% in 2010. "There's no capital upside," Chow said.