By Frederik Balfour, November 29, 2017, 10:56 AM GMT+8, BLOOMBERG MARKET
New World Development Co. said the office component of the HK$20.3 billion ($2.6 billion) Victoria Dockside complex in Kowloon is already 70 percent leased, and will be fully rented by March or April when the entire building opens.
Tenants include Mizuho Bank Ltd., which leased six floors and moved into the building named K11 Atelier in October, relocating from Pacific Place on Hong Kong island. The Japanese bank is the latest financial company to decamp from the island, where commercial rents are the most expensive in world.
Rents in the building are about HK$85 per square foot a month, according to realtor Prime Property, though “early bird” tenants including Mizuho and Taipei Fubon Commercial Bank Co. got lower rates, Adrian Cheng, K11 founder and executive vice chairman and general manager of New World, said in an interview while declining to give specific figures. Grade A office rents in Central are as high as HK$190 per square foot.
Hong Kong’s office market is running hot, with Li Ka-shing’s CK Asset Holdings Ltd. earlier this month agreeing to to sell its stake in The Center for HK$40.2 billion, a record for the city. Earlier this year, Henderson Land Development Co. paid HK$23.3 billion for the first commercial land sold by the government in the Central district in more than 20 years.
The Victoria Dockside development is also benefiting from a trend of companies leaving the central business district for cheaper rents in neighboring and outlying areas.
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Cheng, the 38-year-old heir apparent to take over the reins of New World from his billionaire father Henry Cheng, said the project is aiming to attract millennials, and the firms they work for, by offering an environment that promotes “spiritual and physical wellness.” That includes providing lunchtime classes in team building, pilates, yoga and meditation, and a detox center.
The 66-story building has 15 floors of office space. The tower will also house a 27-floor, 398-room hotel, while the top 19 floors will be occupied by Rosewood Residences, 199 longer-stay units, according to Rosewood Hotel Group, a unit of New World. Both are slated to open in 2018.
Cheng said the group is spending $2.5 billion to develop the Hong Kong K11 Atelier tower and others in seven mainland Chinese cities, including Beijing, Tianjin and Shenzhen.